How controversial Biggert-Waters flood insurance bill became law
Sen. Mary Landrieu, left, and Rep. Steve Scalise discuss the now very controversial 2012 flood insurance law
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WASHINGTON -- When the last Congress passed the Biggert-Waters flood insurance legislation, there was hardly any opposition. All Louisiana congressional members voted yes. It passed the House 406-22, and later was incorporated into a transportation funding bill that easily passed both the House and the Senate.
There were few warnings the bill might lead to the large premium increases now being reported by homeowners in Louisiana and other coastal communities. Now, the same Louisiana members who voted for Biggert-Waters are offering legislation to delay some of the law's premium increases -- at least for a year.
As the bill passed the House and Senate in June, 2012, part of an omnibus bill that included transportation funding and the Restore Act, only one Louisiana member, Sen. Mary Landrieu, D-La., publicly warned the bill would need to be "fixed" later. On the Senate floor, just before the vote, she expressed regret the measure didn't have an "affordability clause" to protect homeowners from being charged premiums they couldn't afford.
Still, Landrieu joined the rest of the Louisiana delegation in voting yes, explaining it was part of a larger bill that included the Restore Act, the delegation's top legislative priority. It transfers 80 percent of Clean Water Act fines from the 2010 BP oil spillto the five Gulf States and could be worth billions of dollars to Louisiana.
Still, some Louisiana homeowners are asking why the acquiescence to the flood insurance measure when it was a stand-alone bill two years ago in the House of Representatives.
Rep. Steve Scalise, R-Jefferson, said the flood insurance program needed to be reauthorized to bring stability to a flood insurance program that had lapsed 18 times in previous years - causing several interruptions in the program that prevented new policies from being issued. Several times, house closings had to be postponed when home buyers couldn't purchase a required flood insurance policy.
"We wanted a clean reauthorization (without the bigger increases authorized by the bill), but there weren't the votes," Scalise said. He said the consensus by a large number of House members from both parties was that the premiums needed to be brought closer to actuarial levels.
Some House members wanted to go further and kill the program outright because it was $18 billion in debt, largely due to payouts made after Hurricane Katrina. One member called it a Ponzi scheme. "I would say that this is a program that would make Bernie Madoff blush," said Rep. Candace Miller, R-Mich.
Her amendment to kill the program was defeated and the House went on to allow bigger yearly increases - 20 percent, instead, of 10, to bring premiums for some policyholders closer to actuarial rates.
Still, some House members argued, as did Landrieu in the Senate, that it was a mistake to require such big hikes in premiums.
"If homeowners get hit with annual premium increases in excess of 10 percent, I am concerned that that they will decide flood insurance is something they can do without," said Rep. Russ Holt, D-N.J. "And when a catastrophic event occurs, taxpayers will pick up the tab with disaster aid."
But an amendment to remove language authorizing premium increases of 20 percent a year was easily defeated.
Rep. Judy Biggert, R-Ill., the chief sponsor of the legislation, spoke for the majority opposed to the amendment.
"One of the core goals of this bill is to move the National Flood Insurance Program towards a more actuarially sound, proper functioning program, and any amendment to slow down that effort must be opposed," she said.
On the Senate side, Sen. David Vitter, R-La, worked with Sen. Jon Tester, D-Mont, on the Senate flood insurance legislation. Their bill, which allowed for slightly lower annual premium increases than the House bill, made it through the Senate Banking Committee, but no further, as the Senate ultimately took up the House-passed legislation.
Vitter said he negotiated "more reasonable phase-in time" to reach actuarial rates, and a new levee certification process that would take that financial burden from local communities.
As the House flood insurance bill came up for a vote in late June in the House and Senate, Landrieu argued, unsuccessfully, for it to be separated from the larger transportation/Restore Act bill, so it could be debated and amended.
"Flood insurance is not just about business and commerce; it is about culture; it is about a way of life; it is about preserving coastal communities; it is about being resilient in storms," Landrieu said just before the vote. "I am certain we will be back here within the year, after the elections -- regardless of who wins and who loses-fixing some provisions that should have been fixed, but because there is not going to be a debate on the Senate floor will not be."
The flood insurance legislation had very powerful backers.
Biggert, R-Ill, the sponsor of the House bill, went down the list of influential supporters:
American Insurance Association, American Land Title Association, Building Owners and Management Association, CCIM Institute, Chamber SWLA, Council of Insurer Agents and Brokers, The Financial Services Roundtable, Independent Insurance Agents and Brokers of America, Institute of Real Estate Management, International Council of Shopping Centers, Manufactured Housing Institute, Mortgage Bankers Association, National Association of Home Builders, National Association of Mutual Insurance Companies, National Association of REALTORS, National Ready Mix Concrete Association, and the U.S. Chamber of Commerce.
Rep. Bill Cassidy, R-Baton Rouge, who is challenging Landrieu in the 2014 Louisiana Senate race, explained his support for Biggert-Waters this way:
"As you know, the Biggert-Waters Act was the only way to make it (flood insurance) available at the time. In fact several stakeholder groups, including the National Realtors Association, urged passage of Biggert-Waters. Unfortunately, it has been implemented in a way by FEMA (Federal Emergency Management Agency) to make the insurance unaffordable, which includes flood maps that do not account for non-accredited levees and other flood protection features."
FEMA said it is following the law, though the agency has agreed to incorporate non-federal levees on maps - a move that should reduce flood risks, and therefore cancel out some of the projected premium hikes.
Biggert, who lost her 2012 re-election bid, is no longer in the House. Rep. Maxine Waters, D-Calif., the other lead sponsor, is now backing efforts to avert some of the largest increases, at least temporarily.
"As one of the primary authors of the Biggert-Waters Flood Insurance Reform Act and a longtime advocate for the people of southern Louisiana, I can state that it was never the intent of Congress to impose the types of punitive and unaffordable flood insurance premiums that residents of southern Louisiana are currently facing," Waters said. "I am committed to working with my colleagues in Congress and with the Federal Emergency Management Administration (FEMA) to solve this problem."
On Tuesday, Garret Graves, chair of Gov. Bobby Jindal's Coastal Protection and Restoration Authority, tweeted that the flood insurance program hasn't been the drain on taxpayers claimed by proponents of Biggert-Waters. He said the program collected $65.3 billion in premiums since 1978, but only paid out $56.4 billion to policyholders.
"FEMA says Natl Flood Insur Prog (NFIP) is 10s of billions in the red. not a math wiz, but #s show a different stor," he tweeted.
With friends like Maxine Waters and former rep. Biggert, send in the firing squad.
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