Flood insurance rate delay is backed by broad coalition of politicians
By: Bruce Alpert | The Times Picayune | 10/29/2013
WASHINGTON — Surveying the geographically diverse, bipartisan group of senators and House members promoting legislation Tuesday to delayflood insurance premium increases for four years, Sen. Charles Schumer, D-N.Y., suggested someone snap a photo of the “rare” occurrence for this gridlocked Congress.
While the unusual coalition is a positive sign for the newly drafted legislation, there is no guarantee of success for the effort to delay premium increases under the 2012 Biggert-Waters Act.
A far more limited House amendment, which would delay some premium increases for just one year, could muster only 94 Republican votes out of 229 cast; it passed because 187 out of 198 Democrats voted yes. It hasn’t reached a vote by the full Senate.
Despite the reluctance of House GOP leaders to bring up bills that need Democratic votes to pass, there was optimism about the prospects of the new legislation, with 82 members signing up by late Tuesday when the bill was introduced,
“We have a real chance of getting this passed,” said Rep. Steve Scalise, R-Jefferson, who is meeting individually with GOP lawmakers who previously opposed delays in the premium increases resulting from the 2012 Biggert-Waters Act. Scalise said he has already won some converts, including several from Colorado, who no doubt were swayed by the state’s recent unprecedented flooding.
“This effort transcends party affiliation and reaches down to the core of our purpose in Congress, which is to draft legislation that protects our constituents,” said Rep. Cedric Richmond, D-New Orleans. “For Louisiana’s communities bearing the brunt of these insurance hikes, especially the River Parishes, today is a big step toward a solution.”
Rep. Bill Cassidy, R-Baton Rouge, another supporter of the delay, said he has discussed the issue with House Majority Leader Eric Cantor, who expressed a willingness to consider delaying legislation, though he made no commitments.
Sen. Mary Landrieu, D-La., a co-sponsor of the Senate legislation and Cassidy’s opponent in the 2014 Senate race, has suggested adding the legislation to must-pass legislation to ensure its quick enactment. With five GOP co-sponsors, it appears backers can get the 60 votes needed to pass most legislation in these partisan times.
The bill unveiled formally on Tuesday would delay for four years many of the rate increases being implemented under the Biggert-Waters legislation adopted last year by large margins in both the House and Senate. Here’s who would benefit:
- Owners of homes and businesses that are currently “grandfathered.” These are properties that were built to code and later remapped into a higher risk area.
- Owners who bought a new flood insurance policy after July 6, 2012, before they were legally required to purchase insurance.
- Owners of properties purchased after July 6, 2012, when Biggert-Waters took effect. These new homeowners and business owners will continue to receive the same treatment as the property’s previous owner unless they trigger another provision in Biggert-Waters such as severe repetitive loss claims or substantial damage, or they use the property as a non-primary home.
Despite the bipartisan, bicameral introduction of the bill, there’s already opposition. SmarterSafer.org — a coalition of insurers, environmental groups, taxpayer advocates and businesses that perform mitigation work to minimize flood risks — urged Congress to resist delaying the “reforms” of Biggert-Waters, saying that would impede efforts to make the flood insurance program more fiscally sound.
Landrieu said most of the homeowners facing large increases in premiums are not wealthy and don’t own beachfront property, but just want to stay in the communities they, and often their parents and grandparents, called home for generations.
“Today, a bipartisan coalition is here to tell the nearly 500,000 insurance policy holders in Louisiana and 5.5 million across the country that we have a solution to skyrocketing flood insurance rates,” Landrieu said.
The bill would delay increases until two years after FEMA completes an affordability study, which isn’t anticipated for another two years.
Sen. David Vitter, R-La., said without congressional intervention, “flood insurance is simply going to be unaffordable for middle class families. Homeowners will literally have to turn in their keys and in some cases walk away from their homes,” he said.
Sen. Johnny Isakson, R-Ga., lead Republican sponsor of the bill, said the Biggert-Waters bill had “noble intentions” — to make the flood insurance program, now $24 billion in deficit, mostly because of payouts for Hurricane Katrina and Super Storm Sandy, more solvent. But he said the law has been “disastrous in its application.”
Sen. Robert Menendez, D-N.J., said the law could have the effect of leaving homeowners who were able to rebuild after Super Storm Sandy, which hit one year ago Tuesday, with no choice but to give up their homes because they can’t afford the new flood insurance premiums.
Sen. Jeff Merkley, D-Ore., said he finds it ironic that some of his constituents are now more afraid of their flood insurance premiums than of potential flooding.
About 20 percent of the 5.5 million flood insurance policyholders in the United States face increases under Biggert-Waters, and some of those increases are double, triple, even 10 times what the residents are paying now.
“This bipartisan legislation provides a solution to the immediate affordability challenges presented by the Biggert-Waters Act, which currently threatens taxpaying citizens across America who have done nothing but played by the rules” said Michael Hecht, president and CEO of Greater New Orleans, Inc. “Delaying dramatic premium increases until the Congressionally mandated FEMA affordability study is complete and Congress has time to consider its recommendations adheres to the spirit of the Biggert-Waters Act, and protects home and business owners from potential economic ruin.”
Rep. Maxine Waters, D-Calif., who was a lead sponsor of Biggert-Waters, said she never envisioned the scope of some rate increases being implemented under the law. “From the moment I learned of the unintended consequences of the Biggert-Waters legislation, I have made clear that I would lead the effort to resolve the problems that have resulted,” Waters said.
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