President Donald Trump is taking a page out of former President Barack Obama's playbook: Never let a serious crisis go to waste.

The Trump administration sent a request this week to Congress for $29 billion in funding to cover hurricane relief and swelling flood-insurance claims. The proposal includes $16 billion of debt relief for the National Flood Insurance Program, or NFIP, that would free up funds to cover a surge in claims following Hurricanes Harvey, Irma and Maria.

Yet the bill also seeks major changes to the flood-insurance program, long targeted by critics as a government boondoggle and a giant provider of unfair subsidies to homeowners in coastal areas.

Chief among the proposals is a prize sought by lobbyists for big property insurers like Progressive Corp. (PGR)  -- allowing private carriers to compete more easily with the government program, currently the provider of about 98% of flood policies.

This year is shaping up as one of the costliest on record for natural disasters, leading to tens of billions of combined losses for property insurers like Progressive, Allstate Corp. (ALL) and Chubb Ltd (CB) . While visiting Puerto Rico this week, Trump said that the cost of the federal response to Hurricane Maria had thrown the federal budget "out of whack."

Officials with the Federal Emergency Management Agency, which oversees the 49-year-old flood-insurance program, have projected that available funds to cover claims will run out within the next few weeks -- potentially leading to delays in payouts as homeowners in hurricane-hit areas like Texas, Florida and Puerto Rico struggle to repair or rebuild damaged structures. 

Those challenges may be heightened by Tropical Storm Nate, which is swirling northwest toward the Yucatan Peninsula with winds of 50 mph and expected to curve east before making landfall outside of New Orleans early Sunday. 

A hurricane watch has been issued for the region, and Louisiana Gov. John Bel Edwards has activated the state's emergency operations center.

"The NFIP requires immediate financial relief to fulfill its obligations to its policyholders, but the program must also be reformed to place it on a sound financial footing and to enable the private market for flood insurance to expand," Trump's budget director, Mick Mulvaney, wrote Wednesday to Congressional leaders.

The NFIP has gone $30 billion into debt in recent years, largely due to the government program's inability to charge premiums high enough to cover claims that have swelled since 2005 as a string of hurricanes including Katrina inflicted catastrophic losses. In 2012 Congress adopted a series of changes including higher premiums, only to have those increases halted just two years later amid a political backlash from affected homeowners.

Last week, the House of Representatives passed provisions -- attached to a Federal Aviation Administration reauthorization bill -- that would have made it easier for private insurers to compete for flood policies. Democratic leaders criticized the effort because it provided no new funding to the NFIP.

The Senate later stripped the flood-insurance provisions from the FAA bill following objections from flood-prone Louisiana's two Republican senators, Bill Cassidy and John Kennedy.

The Trump administration's plan to make new funding for the NFIP contingent on flood-insurance is in keeping with a well-worn Washington tactic -- that long-elusive political goals become possible in the wake of a major disaster. Former President Barack Obama's chief of staff, Rahm Emanuel, now mayor of Chicago, famously said after the 2008 bank bailouts that "you never want a serious crisis to go to waste."

That comment was roundly excoriated by conservative critics as evidence of the Obama administration's political opportunism.

In the latest proposal, the Trump administration seeks to assure that only low-income homeowners qualify for subsidized flood-insurance premiums, with a "means test" that would accelerate rate increases for richer customers. Property owners who file repeated claims -- a big source of the government program's losses -- could lose coverage.

The proposal also would ban the NFIP from selling policies on any new homes built after Jan. 1, 2021, in zones designated as Special Flood Hazard Areas. Such projects would then become "a risk the private market may want to insure."

Democratic lawmakers including Congresswoman Maxine Waters of New York have warned that private insurers are likely to cherry-pick the most profitable policies -- those with low flood risk or unusually high premiums -- and thus accelerate the government program's losses. 

The Trump administration's proposal would require the NFIP to turn over historical loss and claims data to private companies, another step long sought by industry lobbyists. 

Updated from 12:54 p.m. ET on Thursday, Oct. 5, 2017.

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