A major battle is unfolding in Congress over the troubled National Flood Insurance Program (NFIP).
The fight pits homeowners in flood-risk areas like the Mississippi Delta and the Jersey Shore against insurance companies and fiscal conservatives who are worried that the program will need another government bailout.
Sen. Mary Landrieu (D-La.) on Tuesday revealed that her 2014 Homeland Security spending bill includes a policy rider that delays increases in flood insurance premiums for one year. Congress approved those hikes last year in an NFIP reauthorization bill.
She said the language, which is still not public though the subcommittee approved the bill, is based on provisions in the House spending bill for the Department of Homeland Security.
“I’ve included some language based on what was passed in the House by a large bipartisan vote to delay only for one year the flood insurance rate increase for grandfathered properties. There is no cost to this bill, nothing was taken out of this bill to pay for it,” she said.
Landrieu has reached out to the Senate Banking Committee on the delay and said that it was needed to ensure the NFIP is “accessible and affordable to the middle-class families that are being affected all over this country by the flood maps that are coming out."
She noted that the NFIP bill last year was inserted into a larger transportation measure that also addressed cleanup of the Deepwater Horizon oil spill, preventing her from voting against the NFIP provision.
Last year’s bill ordered rate increases phased in over five years for flood policies with subsidized rates. The rate increase affects second homes, commercial properties and places that have had repetitive losses.
The 2012 legislation also ordered the Federal Emergency Management Agency to draw up new flood maps and phase in increases for homes in newly designated higher-risk flood zones over four years.
A Landrieu aide said the language only addresses increases caused by the new maps.
Opponents of the Landrieu provision say that the change will hurt policyholders with less exposure to flood risk.
“Absolutely it affects the already dire fiscal situation for the flood insurance program. Delaying rate increases discourages mitigation, which would reduce risk and reduce pressure on the program,” said Steve Ellis of Taxpayers for Common Sense.
He added that “lower-risk properties premiums will have to increase to offset the lost premium revenue from delayed increases to higher-risk properties.”
Ray Lehmann of R Street Institute said his group and other members of the SmarterSafer Coalition have been lobbying hard against the provision.
“To accommodate the delay, the rates of all other NFIP policyholders would rise enough to offset the rates that would otherwise have been phased in,” he said.
Landrieu is seeking to enact a larger NFIP bill that would repeal a provision in last year’s measure forcing new owners of homes with previously subsidized rates to pay market rates.
Original Publication URL: http://thehill.com/blogs/on-the-money/appropriations/311389-landrieu-inserts-controversial-flood-insurance-language-into-spending-bill
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