R Street optimistic House will preserve responsible NFIP reform
WASHINGTON (Jan. 30, 2014) – The R Street Institute is disappointed by today’s U.S. Senate vote gutting reforms of the National Flood Insurance Program, but expressed optimism that U.S. House leadership will take a more responsible to affordability issues.
The Senate voted 67 to 32 to delay for four years rate increases called for under 2012’s Biggert-Waters Flood Insurance Reform Act. The chamber moved to the vote after waiving a Budget Act point of order and defeating a compromise alternative sponsored by Sen. Pat Toomey, R-Pa.
“We felt Sen. Toomey offered a reasonable alternative and are disappointed by both the final vote and the failure of his amendment,” R Street Senior Fellow R.J. Lehmann said. “However, we’re encouraged that most of the Senate’s Republican caucus supported the Toomey amendment, and feel that, together with other approaches to means-testing, it can serve as the basis for any legislation that might be considered by the House.”
House Speaker John Boehner, R-Ohio has said the House will not take up a four-year delay of Biggert-Waters, but that he is open to more modest changes to address affordability concerns. The White House Office of Management and Budget also has raised concerns with the Senate legislation, noting in a statement of administration policy that the delay would “further erode the financial position of the NFIP, which is already $24 billion in debt.”
In addition, the Consumer Federation of America has illustrated that a continuation of the NFIP’s subsidized rates and inaccurate maps does not actually serve the purpose of consumer protection.
“Consumers are not well served when the government runs an ‘insurance’ program that is not true insurance, but rather, as the NFIP had become, an unwise and untargeted subsidy program that mislead consumers into putting their homes, businesses and lives at risk in areas that are dangerously flood-prone and that often unfairly subsidized affluent individuals and contractors who do this building,” the CFA’s J. Robert Hunter, who served as administrator of the NFIP from 1974 to 1979, wrote in a Jan. 30 letter to the Senate.
