U.S. Sen. Mary Landrieu and one of the challengers to her Senate seat, U.S. Rep Bill Cassidy, both seem to think the country is on the verge of finding a solution to the steep flood insurance rate hikes that Congress started phasing in two years ago.
Their optimism comes from the expectation that the House of Representatives will vote, possibly Wednesday, to roll back the skyrocketing rate increases.
In a Monday afternoon conference call with reporters, Landrieu, D-La., used the word “victory” several times, referring to a tentative compromise Democrats and Republicans have worked out in the past several days to restore subsidies that would help homeowners pay their flood insurance premiums. The movement comes two years after Congress stripped property owners of the federal assistance.
“It looks like victory is close,” Landrieu said, saying the country is entering “the last chapter of a two-year effort to stop the draconian rate increases.”
Her most high-profile challenger in the Nov. 4 election, Cassidy, R-Baton Rouge, said in a phone interview later Monday that he’s cautiously optimistic that House members have written a bill that could pass in both chambers of Congress.
If it does, Cassidy said, it will make flood insurance “accessible and affordable,” before he added that it will represent the “triumph of good policy over politics.”
Congress has been subsidizing flood insurance policies for homeowners since the late 1960s. The subsidies made it more affordable for people to move into coastal areas and build homes near large bodies of water without having to pay the full — and often prohibitive — cost of flood insurance premiums.
The problem was that as the program grew, eventually subsidizing premiums for more than 5 million policies, the National Flood Insurance Program deficit grew to more than $25 billion.
To get a handle on that deficit, Congress passed the Flood Insurance Reform Act of 2012. The law gradually rolled back subsidized rates for properties built in flood zones. It was meant to make the program more solvent.
But there was an almost immediate backlash as people across the country saw their rates grow exponentially, with some premiums going up several thousand dollars overnight.
Detractors, including both Cassidy and Landrieu, said it also wreaked havoc on the country’s real estate market, with property buyers looking at significant rate increases as soon as they put pen to paper.
The NFIP benefits more than 5 million policyholders nationwide, including nearly 500,000 in Louisiana.
The bill House members are set to vote on seeks to end the skyrocketing, year-after-year rate increases by including a rule that individual policies cannot increase by more than 18 percent a year.
The bill also states that the Federal Emergency Management Agency, which oversees the insurance program, “must strive to keep flood insurance policies under one percent of a property’s total coverage,” meaning the federal government shouldn’t charge more than $1,000 a year for a $100,000 flood insurance policy.
Other provisions in the bill include language requiring that FEMA flood maps are accurate and reliable, along with a mechanism that would provide funding to reimburse communities that successfully appeal their FEMA flood maps.
Congress will consider paying down the NFIP debt with a $25 fee on primary residences and a $250 fee on businesses and second homes.
If the House votes on the changes Wednesday, it will be just another twist in two years worth of back and forth between the House and Senate and between Democrats and Republicans.
If it passes, the House bill would still have to be approved by the Senate before it lands on the president’s desk.
As of Monday afternoon, both Landrieu and Cassidy seemed to think that’s what will happen.
“It’s my understanding that the concerns of the Senate have been addressed,” Cassidy said.
“I think we’re close,” Landrieu said.