WASHINGTON (Jan. 7, 2013) – As the U.S. Senate prepares to consider changes to the Biggert-Waters Flood Insurance Reform Act, the R Street Institute urges an open process to allow amendments that would preserve the legislation’s important reforms.

The Senate is expected to move as early as Jan. 8 to consider legislation that would delay for four years any phase-outs of premium subsidies for second homes and business properties insured by the National Flood Insurance Program. The bill also would halt efforts to update the NFIP’s Flood Insurance Rate Maps and to phase-in appropriate risk-based rates for those properties whose designations have changed.

Because the NFIP’s statutory authority is scheduled to expire at the end of 2017, a four-year delay would effectively gut reforms that were passed by Congress by overwhelming margins in 2012. The NFIP remains roughly $24 billion in debt to U.S. taxpayers and hasn’t repaid any principal on its loans since 2010.

R Street Senior Fellow R.J. Lehmann said if senators are to make changes to the Biggert-Waters Act, they should be limited and means-tested, such as by phasing in the reduction of premium subsidies for resold properties or lengthening the phase-in of risk-based rates for remapped properties.

“While it is reasonable for Congress to address hardships that could make flood insurance unaffordable for lower-income homeowners, a blanket delay would mean continuing to subsidize beach homes for the wealthy, as well,” Lehmann said.

“The Senate should be careful not to throw the baby out with the bathwater,” he added. “To avoid that fate, Senate leadership must allow an open amendment process, so that more targeted compromises may be considered.”

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