Statement by Steve Ellis, Vice President Taxpayers for Common Sense on Senate vote on S.1926, the Menendez-Isakson flood insurance bill

Washington, DC – Today, the Senate voted 67-32 to delay risk-based rate increases, effectively forcing taxpayers to waste at least another $1 billion on the federal flood insurance program over the next several years. An alternative sponsored by Sen. Toomey (R-PA) that would have slowed the rate increases to a quarter of the previous year’s rate was rejected in a 34-65 vote.

It’s simply irresponsible for the Senate to gut reforms they overwhelmingly adopted just a year and a half ago. When they voted in the Summer of 2012 the flood insurance program was more than $17 billion in debt to the taxpayer. Today it stands at more than $24 billion in debt. It doesn’t make sense that the Senate’s response to this crushing debt is to discard responsible reforms that would ease sticker shock on the affected policyholders while protecting the rest of taxpayers. Instead they voted for an empty, feel-good, four year delay that will keep people in harm’s way, accelerate the insolvency of the program, increase uncertainty about future rates, and cost taxpayers billions. It’s empty because Speaker Boehner has already rejected this outright delay. This vote may have been good electoral politics for a handful of lawmakers, but it resulted in promoting bad, irresponsible public policy that will hurt their constituents and taxpayers.

The House will have to craft a solution that is both helpful to the subset of flood insurance policy holders affected by the increases to risk-based rates and mindful that taxpayers have been subsidizing many of these policies for decades and bear the burden of the debt. In total, there are 5.6 million flood insurance policies nationwide. But there are 130 million housing units. Lawmakers have a responsibility to the vast majority of their constituents that are picking up the tab, not just the relative few that have chosen to live in harm’s way.

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