Kevin Putnam holds onto his parents' 15 year-old cat Sophie in the yard outside their house in Brattleboro, Vermont August 29, 2011. [Photo/Agencies]

Reform battle

If FEMA can not find a way to generate more revenue, thenthe only other hope for dealing with its debt is politicalreform. As with anything else in Washington, that is easier saidthan done.

In July, the US House of Representatives, in a raredisplay of overwhelming bipartisan unity, passed an NFIP reformbill on a 406-22 vote.

The US Senate, faced with the September 30 end of the currentlegislative session, will almost certainly not even bring thatbill, or its own differing version, to a vote.

The House bill would make changes to requirements formandatory flood purchase, as well as long-sought reforms to boththe terms and rates of flood policies.

The Senate, on the other hand, is focused on its ownmeasure, modeled on one that passed in 2008 but went nowherethereafter. One of the cornerstones of that bill, unusuallyenough in the current deficit-cutting environment, isforgiveness: writing off the NFIP's unsustainable debt entirelyand essentially starting the program over from scratch.

"There is no solution that doesn't gore somebody's ox," saidDrew Sachs, vice president of disaster services at WittAssociates and an eight-year FEMA veteran himself.

But the man who ran the flood program during the Katrinabailout, and who spent 25 years running his own insuranceagency, said the solution should be obvious.

"The debt should have been forgiven five years ago. The debtwas an obligation of the federal government. The program didexactly what it was designed to do," said David Maurstad, whowas administrator of the NFIP from 2004 to 2008.

Maurstad, who is now the national director of water policyand planning for infrastructure services company Atkins NorthAmerica, said it made little sense for the government to bailout insurers like AIG during the financial crisis and yet leaveits own insurance program with an unsustainable debt.

Yet neither chamber is even close to agreeing with theother, which means that sometime before September 30, Congress islikely to do what it has done annually in recent years - pass aone-year reauthorization for the NFIP that solves nothing butlets the program stay in business.

"Irene will highlight the need for renewal (of the NFIP),but it will not remove the obstacles to passage," said RobertGordon, senior vice president for policy at the PropertyCasualty Insurers Association of America.

The other complication is immediate cost. If NFIP does needmore money, House Republicans quickly made clear those fundswould have to be at the expense of something else.

"We'll find other places to save so that we can fund thiskind of role that the federal government needs to play," HouseMajority Leader Eric Cantor told Fox News this week. "Ininstances like this, yes, there's a federal role, yes, we canfind the money. We're just going to need to make sure there aresavings elsewhere to continue to do so."