U.S. House passes a delay to flood insurance rate increases

The congressional fight to avoid potentially skyrocketing flood insurance rate increases in Louisiana and elsewhere made its first tangible gains Thursday.

The House approved legislation that would delay the rate hikes on “grandfathered” properties by a year.

The amendment delaying premium hikes for one-year was sponsored by Rep. Bill Cassidy, R-Baton Rouge. It was added to the Homeland Security appropriations bill at close to 11 p.m. Wednesday after Rep. Cedric Richmond, D-New Orleans, and others helped win over 187 Democratic votes.

Cassidy called it a “victory for homeowners” in the National Flood Insurance Program, or NFIP, after Congress last year reauthorized the NFIP with reforms that Cassidy argued allowed for “capricious rate increases” of 20 percent or more per year.

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 due to payments made after hurricanes Katrina and Rita in 2005.

“We’ve worked hard the last 48 hours — really worked hard — to bring it all together,” Cassidy said. “I think, in the end, as many Republicans came on board and as many Democrats came on in a bipartisan way, that hard work really paid off.”

The fear is that proposed flood maps will cost Louisiana residents and business owners a lot more in the congressional effort to make the flood insurance program more self-sustainable. The proposed flood maps are still under federal review but more parts of the state’s coast are becoming high-risk velocity zones, or V-zones, where insurance rates increase more.

The program also starts phasing out “grandfathered” rates next year. The term pertains to the subsidized rates on properties that were built before the NFIP started in 1968.

“The potentially crippling impact to homeowners across the country should be corrected, and this (Cassidy) amendment is the first step in accomplishing this,” St. Tammany Parish President Pat Brister said in a prepared statement. “We all understand the need to reform a broken program, but not at the cost of families losing their homes and banks going into default.”

Plaquemines Parish President Billy Nungesser praised Cassidy’s amendment but he also heaped compliments on Sen. Mary Landrieu’s efforts on the Senate side to delay premium increases that came along with making the NFIP more self sustaining. “That’s why I’m so glad Sen. Landrieu is speaking up, warning about this problem and leading the fight in Congress to fix this program so it works,” Nungesser said.

Now that the House has approved a delay in the increases for many, the legislation next moves to the Senate. Cassidy is challenging Landrieu, D-La., in her re-election next year.

A big key in the House was winning the support of U.S. Rep. Maxine Waters, D-Calif., who cosponsored last year’s reauthorization, Cassidy said. “She and Cedric did a good job of getting their side on board,” Cassidy said.

The fight was a “harder sell” with Republicans who are more concerned about the “taxpayer being exposed” to greater federal expenses, Cassidy said. GOP members had to be convinced that the flood insurance program is still on its way toward being more financially self-sustainable even with the amendment attached, he said.

The NFIP delay amendment was approved on a 281 to 146 U.S. House vote with support from the entire Louisiana House delegation.

“This is a win for south Louisiana and the nation,” Richmond said in a prepared statement. The changes under the NFIP reauthorization dramatically increased flood insurance rates for south Louisiana homes.

“They would also be devastating for coastal communities around the country,” Richmond said. The full Homeland Security appropriations bill was approved on a 245 to 182 vote which won the support of Richmond and only 24 other Democrats.

A state Senate effort led by Landrieu and supported by Sen. David Vitter, R-La., to amend a three-year delay of the rate hikes onto the federal farm bill failed Thursday. Neither Republicans nor Democrats could agree on which proposed amendments should receive votes.

Sen. Pat Toomey, R-Pa., was blocking Landrieu’s NFIP amendment and she, in response, blocked every GOP amendment. But Senate Majority Leader Harry Reid, D-Nev., successfully led an effort Thursday to end consideration of all the other proposed farm bill amendments, including Landrieu’s NFIP one, because no compromise was reached. Landrieu and Vitter both conceded Thursday and voted with Reid to end amendment votes on a 75 to 22 vote.

Landrieu argued that a “lot of progress” is still being made in the Senate because Toomey is no longer opposing a vote on an NFIP amendment, although it came too late on the farm bill. So that opens the door to amend it onto other legislation coming to the Senate floor soon.

Landrieu also said Thursday’s House vote is a step forward.

“That is a very positive step. Now, theirs (in the House) is only a one-year reprieve, which isn’t long enough,” Landrieu said. “But it is better than nothing, and we’re going to build on that.”

While a legislative fix is needed, critics have argued that the Federal Emergency Management Agency is not properly accounting flood-protection structures that are not approved at the 100-year level in its mapping. As a result, even home and business owners who have never experienced serious flooding are facing major rate hikes.

Vitter also filed a new bill Thursday with Sen. Thad Cochran, R-Miss., called the Responsible Implementation of Flood Insurance Reform Act that would delay the period of phasing in rates, give flexibility for state and local governments to assist with subsidizing flood insurance and “reform” FEMA’s flood-mapping procedures.

The other plan is for Landrieu to amend the three-year delay into the Homeland Security appropriations bill from her position as chairwoman of the Senate Appropriations Homeland Security Subcommittee.

Although she said she might want to start from scratch on the NFIP reauthorization, Landrieu said she knows that is not politically viable. “We do believe that we can fix, amend or modify to mitigate against some of these extraordinary increases in a smarter, more compassionate, fiscally smart way, and we just need time to figure that out,” Landrieu said.