Bills to Delay Flood Insurance Rate Hikes Stalled

Efforts to delay implementation of changes in the federal flood insurance program have run into roadblocks on both sides of Capitol Hill.

The leaders of the House Financial Services Committee say they are standing behind last year’s bipartisan legislation to put the flood insurance program on sounder financial footing even as the implementation of the law has sparked complaints from constituents fearing spikes in premiums and plummeting home values.

In the Senate, attempts to call a quick floor vote on legislation to delay the changes in the program appear to face opposition from both Democrats and Republicans. Sen. Mary Landrieu, D-La., wants to add the measure to an unrelated defense policy bill, but Majority Leader Harry Reid, D-Nev., is restricting the ability of senators to offer unrelated amendments. Meanwhile, Republicans are unlikely to allow a vote that could give Landrieu, who faces a tough re-election bid next year, the chance to claim political credit.

Lawmakers trying to delay the law’s implementation cite horror stories of people slapped with unaffordable premium increases on modestly priced homes.

Supporters of the law say it’s mostly operating as intended, which is to hit at-risk homeowners with actuarially sound rates.

“What we’re trying to do is separate fact from fiction here. And we’re hearing a lot of rumors. And some of those rumors … it turns out are not as represented,” said Rep. Randy Neugebauer, R-Texas, who chaired a hearing on Nov. 19 for the Financial Services Committee’s housing and insurance subcommittee. “We do know that there are some people out there who are going to experience higher premiums. But, you know, that was the purpose.”

Some conservative Republicans are adopting a “tough-love” approach to implementing the law. “The fundamental question posed by the flood insurance reform bill is one of fairness. Is it fair for everyone to subsidize the insurance of a few?” asked Rep. Lynn Westmoreland, R-Ga. “The answer is simple. Taxpayers should not continue to subsidize the flood insurance of those who live in flood-prone areas. It’s not fair.”