As reported by the NYT Jan 29, 2014
A
major flood insurance bill was a rarity when it passed what is widely
derided as a do-nothing Congress in 2012, but a year and a half later,
there is now an enthusiastic bipartisan effort to gut it.
This week the Senate is expected to approve a measure that would block, repeal or delay many of the key provisions of the
Biggert-Waters Flood Insurance Reform Act, which was sponsored by Representative Judy Biggert, an Illinois Republican, and Representative
Maxine Waters, a California Democrat.
Tucked
into broader transportation legislation, the bill had enthusiastic
support across the political spectrum, from liberal environmentalists to
fiscal conservatives.
But
Ms. Waters is now leading an effort in the House to gut the legislation
she sponsored. And this week, the Senate is expected to pass a measure
that would stymie the law, an effort that has support from across the
political spectrum, from prominent liberals like Senator Elizabeth
Warren, Democrat of Massachusetts, to conservatives like Senator Marco
Rubio, Republican of Florida.
What happened?
It
appears to be another Washington story of unintended consequences, and a
warning, environmentalists say, of the rising costs of
climate change. Most important, the bill may be a preview of the fights to come over who will pay those costs.
The
Biggert-Waters measure sought to reform the nation’s nearly bankrupt
flood insurance program, ending federal subsidies for insuring buildings
in flood-prone coastal areas. Over the past decade, the cost to
taxpayers of insuring those properties has soared, as payouts for damage
from Hurricanes Katrina, Irene, Isaac and Sandy sent the program $24
billion into debt.
The
aim of the measure was to shift the financial risk of insuring
flood-prone properties from taxpayers to the private market. Homeowners,
rather than taxpayers, would shoulder the true cost of building in
flood zones.
Deficit
hawks liked the idea because it would curb a rapidly rising source of
government spending. Environmentalists liked the bill because they said
it would reflect the true cost of climate change, which scientists say
is ushering in an era of rising sea levels and more damaging extreme
weather, including more flooding.
But
a year after the law passed, coastal homeowners received new flood
insurance bills that were two, three, even 10 times higher than before.
In
Beach Haven West, N.J., for example, Diane Mazzuca, a furniture
showroom designer, had been paying $595 annually for flood insurance on
her $90,000 home. After Biggert-Waters ended federal flood insurance
subsidies last June, she got an updated bill — for $4,492.
“Our house never flooded before Sandy,” Ms. Mazzuca said. “The new insurance statement said we were in the storm surge line.”
Ms.
Mazzuca is still struggling with her insurance company over payments to
repair damage to her home from Sandy, and cannot pay the costs on her
own, or the new insurance rates.
“I’m going to have to walk away from my house and my life savings,” she said.
Ms.
Mazzuca has plenty of company. The insurance rate increases hit many of
the 5.5 million coastal home and business owners covered under the
National Flood Insurance Program, and came as the Federal Emergency
Management Agency, which runs the program, was updating flood maps and
placing thousands of homes inside flood zones for the first time. Last
summer and fall, homeowners near coasts, rivers and wetlands saw their
insurance rates soar and their property values plummet.
The
homeowners’ frustration erupted into a grass-roots lobbying campaign to
roll back the Biggert-Waters act, and lawmakers in Washington quickly
got the message.
“Never in our wildest dreams did we think the premium increases would be what they appear to be today,” Ms. Waters said.
Similarly,
in Louisiana, where hurricanes and flooding have devastated coastal
residents and the new insurance rates were viewed as a further affront,
Senator Mary L. Landrieu, a Democrat who faces a tough re-election fight
this fall, paid close attention to angry constituents.
Ms.
Landrieu teamed with Senator Robert Menendez, Democrat of New Jersey,
and Senator Johnny Isakson, Republican of Georgia, to sponsor a bill
that would delay most insurance rate increases by four years.
“The
Biggert-Waters bill is not going to save the flood insurance program.
It’s going to collapse it,” Ms. Landrieu said. Supporters of her effort
to delay Biggert-Waters say that the spike in flood insurance rates will
drive homeowners out of coastal zones altogether.
But
budget watchdogs, insurance groups and environmentalists are fighting
the effort. They say that while the original Biggert-Waters law was
imperfect, the effort to delay it would bankrupt the program and leave
coastal property owners more vulnerable to future damages, and that
taxpayers would be forced to pay the bill.
On
Monday, the White House released a statement criticizing the effort to
gut the law, saying it would further erode the financial position of the
national flood insurance program, and that it would reduce the
government’s ability to pay future claims. But the administration did
not threaten a veto.
The Senate bill is expected to pass on Wednesday or Thursday, after which it will head to the Republican-controlled House.
Although
the effort there is being led by Ms. Waters, she already has more than
180 co-sponsors from both parties, and House Speaker John A. Boehner,
Republican of Ohio, indicated that
G.O.P. leadership may consider the effort.