R Street responds to planned House flood insurance vote
WASHINGTON (Feb. 13, 2014) – With U.S. House leadership announcing it will take up consideration of the Homeowner Flood Insurance Affordability Act, the R Street Institute expressed optimism that a commitment to reform and to certain market and budget principles will guide the House’s deliberations.
House Majority Leader Eric Cantor, R-Va., announced late Feb. 12 that the chamber will take up a modified version of the legislation, which delays crucial flood insurance forms for at least four years, when it returns the week of Feb. 24 from the Presidents Day recess.
“Without legislative text in-hand, it’s impossible to know precisely what modifications the House might consider, but we do find it encouraging that Leader Cantor recognizes the Senate bill ‘irresponsibly removes much needed reforms and imposes additional costs on taxpayers,'” R Street Senior Fellow R.J. Lehmann said.
Lehmann added that whatever legislation the House ultimately considers, it is crucial that it not roll back the phase-out of subsidies for second homes, business properties and severe repetitive loss properties; that it keeps all properties on the path toward eventually paying risk-based rates; that it not weaken the National Flood Insurance Program, which is already $25 billion in debt; and that it impose no new net burdens on taxpayers.
“We understand and accept that the schedule of rate increases for remapped properties is likely to be lengthened, and that some phase-in of risk-based rates might be necessary for resold properties,” Lehmann said. “What is crucial is that we keep moving in the direction of reform, rather than stalling or moving in the opposite direction. The reason the Biggert-Waters Act was passed is that the flood program is bankrupt, subsidizes risky and environmentally destructive development, and disproportionately benefits higher-income property owners. None of those facts have changed.”