After a decade-long run of bad weather that included Hurricanes Katrina, Sandy, and Ike, and a host of other river valley and storm-surge floods, the 45-year-old National Flood Insurance Program owes taxpayers about $25 billion that no analyst believes it will ever pay back. Meanwhile, by keeping rates far lower than the private market ever would for some flood-prone properties, the program encourages development in ways that endanger lives and harm the environment.

That’s why it’s disturbing that so many in Congress—including some who stand firm against government meddling in other areas of the economy—have embarked on an effort to undo modest reforms that actually move the program in the right direction. Whether Congress can stay the course on flood-insurance reform is a clear test of its willingness to put its fiscal house in order and govern in the public interest.

The reforms in question were enacted last year in the Biggert-Waters Flood Insurance Reform Act, one of the few major pieces of legislation to pass a terribly riven Congress in 2012. At a glance, they seem to offer something for everyone. Environmentalists got better maps of flood zones that reflect rising sea levels, as well as improved protection of nature. Fiscal hawks saw premium subsidies phased out for owners of second homes, business properties and houses the taxpayers had already rebuilt multiple times, as well as a transition to appropriate rates for people who have been remapped into higher-risk areas.

Private property insurers continue to get payments for servicing policies under the NFIP’s “write your own” program. The law also opened the door to privatizing at least part of the NFIP via private reinsurance and catastrophe bonds.

Realtors, local governments and developers, who would have preferred the status quo, at least got assurance that the program would continue into the future and that rates wouldn’t rise sharply for most primary residences. More than 90 percent of the program’s 5.5 million policies would see no major changes in rates.

The only real losers—people who will no longer get subsidies—are literally members of the “1 percent.” There are 130 million housing units in the country, 1.1 million of which receive subsidized flood insurance through NFIP. And of those 1.1 million, nearly 80 percent are found in counties that rank in the wealthiest quintile. And most of them won’t see their premiums rise sharply anyway.

But the reforms’ vast benefits and modest costs may not suffice. A little more than a year after passage, many who once signed off on the reforms have changed their minds. In local briefings around the country, the Federal Emergency Management Agency, which runs the NFIP, set off a panic by offering accounts of rates rocketing up to $20,000 and $30,000 per year. When about 350,000 second-homeowners (by definition, not poor) got much higher bills this past January, opposition to the reforms kicked into high gear. The National Association of Realtors, arguably the most powerful trade association in Washington, joined with developers and local governments to call for vast changes and convened a high-level committee to seek measures that would effectively gut the core provisions of Biggert-Waters.

Congress responded. Rep. Maxine Waters, D-Calif., who coauthored the reform legislation, did a U-turn, and in June the House passed an amendment to a Homeland Security appropriations bill that suspended the core flood insurance provisions for a year. Meanwhile, 23 senators have jumped on to a bill sponsored by Sens. Robert Menendez, D-N.J., and Johnny Isakson, R-Ga., that would delay all rate changes for four years, effectively punting the issue until the NFIP’s next scheduled reauthorization, at which point it’s not inconceivable that the program’s debt to taxpayers could rise as high as $50 billion. While plenty of liberals like Sen. Elizabeth Warren, D-Mass., have joined the bill, so have conservatives like Sen. David Vitter, R-La.

This isn’t to say that the reforms have no flaws or couldn’t use some changes. A handful of people of modest means who are unexpectedly remapped into much higher risk areas may be socked with larger bills they can’t afford to pay and should probably get some temporary relief as long as they occupy their homes. More seriously, a longstanding rate-setting practice of ignoring levees that don’t provide protection against 100-year floods has resulted in some people behind “decertified” or “uncertified” levees being charged much higher rates than they should be. (Developers and others blocked an effort to fix this, because it would have also required more of those behind the levees to purchase coverage.) Other broader changes—even rate freezes for people of modest means who own their own homes—probably should be part of a negotiation.

But not every problem has a government solution. Even the truly high rates—which will likely be in the neighborhood of $10,000 rather than the $30,000 figures FEMA has thrown around—may be more an opportunity than anything else. They can be a catalyst for serious discussions about mitigation or buyouts for those who face the enormous risks that justify extremely high rates. Moreover, as higher rates have rolled out, at least a half-dozen companies around the country have announced plans to go into business in competition with the government’s program. While they won’t charge subsidized rates, many of them may be able to underprice the government on unsubsidized coverage.

On balance, the reforms under Biggert-Waters are incredibly modest: More than half of the properties most at risk won’t see rate increases even if all of the reforms go into force. The private sector’s role in flood insurance for homeowners will grow only slightly. Anyone looking to privatize flood coverage in a serious way will have to make further reforms when Biggert-Waters expires in 2017.

Still, each year that subsidies for development in flood-prone areas continue, more people will move into harm’s way. As the backlash to the reforms demonstrates, once they are there, it is beyond difficult to get them out.

This has very real human costs: Undoing a modest phaseout of flood insurance subsidies almost surely would mean plucking more people off of roofs with helicopters during the next massive flood or seeing more of them perish. And things appear certain to get worse. Ocean levels have been rising for at least 10,000 years, and climate change may accelerate this process in the future.

The real problem, however, isn’t the flood insurance program itself, but rather what it represents. In the context of a $3.5 trillion budget, the NFIP’s $25 billion of unpayable debt isn’t a fiscal calamity. But Congress’ seeming inability to stick with modest reforms—even when they produce far more winners than losers—proves how hard it is for the federal government to do anything that improves the nation’s finances. If members of Congress can’t save flood insurance reform, it’s hard to believe they’ll ever be able to fix far larger fiscal ills.

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