Toomey flood insurance amendment would protect taxpayers
The Senate voted 86-13 Jan. 27 to open debate on S. 1926, which would delay for four years rate increases required by the Biggert-Waters Flood Insurance Reform Act of 2012. The two-year-old law phases out premium subsidies for roughly 400,000 businesses, second homes and repetitive loss properties; eliminates subsidies for about 700,000 more primary homes when they are resold; and phases in rate changes to reflect updates to flood insurance rate maps kept by FEMA.
S. 1926 would effectively repeal Biggert-Waters by delaying the increases until after the NFIP’s statutory authorization is set to expire in 2017. Though it appears to have strong support in the Senate, both the White House and House Speaker John Boehner, R-Ohio, have declared opposition to the measure as written.
By contrast, Sen. Toomey’s proposed amendment would look to address affordability concerns raised by some NFIP policyholders, while still preserving reforms to the program, which is nearly $25 billion in debt to U.S. taxpayers and hasn’t made any payments against its principle in four years.
“This amendment also includes a vital offset to ensure that it does not add any net burdens for taxpayers,” the free-market groups wrote in a letter to members of the Senate. “By adding a modest surcharge to NFIP policyholders, the Toomey provision would protect taxpayers by keeping the costs of lengthened subsidy phase-outs confined within the program.”
As drafted, the non-partisan Congressional Budget Office estimates S. 1926 would increase the federal budget deficit by $900 million over the next five years, decrease revenues to the NFIP by $2.1 billion over the next decade and cause the program to exhaust its $30 billion borrowing cap. Sen. Toomey’s amendment would offset any lost revenue to the program with a $40 surcharge on NFIP policies, or $80 for those held by high-income policyholders.
In addition to R Street, other signatories to the letter include the American Consumer Institute, Americans for Prosperity, Americans for Tax Reform, the Coalition to Reduce Spending, ConservAmerica, the Cost of Government Center, Council for Citizens Against Government Waste, FreedomWorks, Less Government, National Taxpayers Union, Taxpayers for Common Sense and the Taxpayers Protection Alliance.
Read the full letter here: