Washington Watch: The politics of flood insurance

by jordan blum

Advocate Washington bureau

Washington Bureau writer Jordan Blum
Washington Bureau writer Jordan Blum

The fear of federal flood insurance rates skyrocketing for thousands of south Louisiana residents next year is bringing together Republicans and Democrats to work on solutions through Congress and the Federal Emergency Management Agency.

But the reality is that, when politics are involved, things often get mushy.

Congress caused the problem last year by approving the National Flood Insurance Program, or NFIP, reauthorization through the Biggert-Waters bill in the House that was tucked at the last minute into an omnibus transportation bill without any potential for proposing amendments.

The reauthorization passage was urged because the flood insurance program was about to expire and it would have brought the housing market to an abrupt halt.

All involved knew flood insurance rates would increase some because the reauthorization reined in costs on the financially untenable program.

The NFIP allows homeowners and businesses in flood zones that have trouble getting private insurance to obtain policies backed by the federal government. Nearly 500,000 people in Louisiana participate in the NFIP. The program has been in financial distress with a loss of more than $20 billion, largely caused by payments made after hurricanes Katrina and Rita in 2005.

But what many did not realize — although U.S. Sen. Mary Landrieu, D-La., did warn about the negative impacts on working-class coastal residents — is that projections are now showing that many residents could see their rates jump by 20 percent or more annually. Some projections show residents potentially paying more than $20,000 a year for flood insurance as “grandfathered” statuses are phased out by the Federal Emergency Management Agency.

Landrieu last week filed a bill in the Senate to delay the increaseses and most of the Louisiana House members teamed up with U.S. Rep. Maxine Waters, D-Calif., to do so in the House.

The Louisiana delegation and parish officials in the state are blaming FEMA for messing up pending flood maps, and for now counting only flood-protection structures built at the 100-year protection level.

The NFIP fight is going on at the same time the GOP-controlled House and the Democratic-led Senate are fighting a federal budget stalemate between the U.S. Rep. Paul Ryan, R-Wis., House plan and the Senate budget by U.S. Sen. Patty Murray, D-Wash.

While conservatives criticize the Murray budget for not balancing over a decade, the Ryan plan takes a more-austere approach and does intend to balance in 10 years.

At the same time, though, that involves the Ryan plan making even-deeper cuts to the NFIP.

The House report on the Ryan budget praises the Biggert-Waters Act for removing some flood insurance subsidies, but the budget plan argues the NFIP legislation did not go far enough.

“However, these reforms are not enough to protect taxpayers from NFIP’s financial exposure,” the House report states.

Not surprisingly, Landrieu has noticed.

“I am hearing an outcry of concern of, not just people from Louisiana, but people from all over this country about what the Republican leadership and the Ryan plan portends for homeowners, business owners across the country,” Landrieu said. “The ‘reform bill’ must be reformed.”

All of Louisiana’s Republican House members voted for the Ryan plan, including Landrieu’s 2014 re-election opponent, U.S. Rep. Bill Cassidy, R-Baton Rouge.

Cassidy said he would have to look into the effects of the House budget on the NFIP, but he blamed overall federal spending and FEMA’s mapping issues for causing the problems.

Likewise, Cassidy helped form the new Congressional Home Protection Caucus to fight the NFIP increases. Conspicuously absent in the founding membership was Landrieu.

“She’s invited,” Cassidy insisted. “As far as I’m concerned, we can all work on this together.”

U.S. Rep. Cedric Richmond, D-New Orleans, is part of the House NFIP bill and the new caucus. But he also took a little different political approach.

He spent part of last week on Air Force One traveling with the president to Morehouse College — Richmond’s alma mater — in Atlanta for Barack Obama’s commencement address. Richmond said he only got so much face time with Obama, but that he did what he could.

“With his people on the plane, we got to talk about flood insurance and flood protection,” Richmond said.

Jordan Blum is chief of The Advocate Washington bureau. His email address is jblum@theadvocate.com.