WASHINGTON — Congress will consider final approval Friday for a massive, omnibus transportation bill that would direct billions of dollars in BP fine money to Louisiana but also cut more than $650 million in federal health care funds for Louisiana’s poor.
The $22 billion federal highways bill also includes the legislation to keep interest rates low on federal college student loans, the RAMP Act to set aside more dollars for river dredging and port projects and the five-year revamp and reauthorization of the National Flood Insurance Program.
The Senate initially had planned a vote on Thursday night. But that vote had not taken place at press time.
The bicameral transportation conference committee managed to squeeze everything into one bill with federal transportation funds set to expire and with student loan interest rates to double after Saturday. Also, the NFIP expires after July.
But Sen. Mary Landrieu, D-La., complained Thursday that the NFIP legislation by Sen. David Vitter, R.-La., was included in the overall bill before it could be properly debated and amended.
Landrieu said the plan increases flood insurance rates too much for Louisianians and potentially also could prevent many coastal residents from rebuilding their homes because of their designations in high-velocity zones, called V-zones.
Landrieu wanted amendments to help residents in V-zones rebuild at higher elevations and still be insured and to set aside $10 million to help low-income residents ease into the upcoming 15 percent annual increases on NFIP premiums.
“Flood insurance is not just about business and commerce; it’s about culture …” Landrieu said, arguing that people should not be uprooted from their homes when floods strike in certain areas.
The NFIP allows homeowners and businesses in flood zones that have trouble getting private insurance to obtain policies backed by the federal government.
About 500,000 people in Louisiana participate in the NFIP. The program has been in financial distress with a loss of $18 billion, mostly due to payments made after hurricanes Katrina and Rita in 2005.
As for the BP fines, the RESTORE Act provisions originally sponsored by Landrieu guarantee that 80 percent of the fines collected from the April 2010 BP oil leak — an amount that could reach $20 billion — would be distributed for coastal restoration to the five states along the Gulf: Louisiana, Mississippi, Florida, Texas and Alabama.
The biggest negative news for Louisiana was the sudden cut into Louisiana’s Medicaid dollars as a means to help pay for the transportation bill.
The $651 million cut in federal Medicaid funds includes $425 million for the upcoming fiscal year and $226 million for the 2013-14 year, according to Landrieu.
As for student loans, the interest rates on federal Stafford loans were lowered from 6.8 percent to 3.4 percent five years ago. Extending the lower Stafford loan rate would save $79 million for 83,243 Louisiana residents expected to take out the loans, according to White House figures. That makes for an average savings of $949 per student.