Sen. Mary Landrieu and Rep. Bill Cassidy aren't fans of a Wall Street Journal editorial opposing legislation to delay big hikes in flood insurance premiums. (NOLA.com | The Times-Picayune archive)
By
WASHINGTON - The Wall Street Journal has editorialized against legislation to delay flood insurance premium increases resulting from the 2012 Biggert-Waters legislation. It says the bipartisan legislation amounts to an effort to help the wealthy 1 percent who don't want insurance rates increased on their beachfront homes.
The editorial, which ran in the paper's weekend edition, is a setback for supporters of the legislative fix, given the conservative Journal editorial page is considered a must-read for many Republican lawmakers.
Louisiana lawmakers, part of a coalition of representatives from states impacted by the higher rates, argue that some projected rate increases -- two, three, even 10 times current rates -- are unaffordable and will force people out of their homes, or to make do without any flood insurance.
The Wall Street Journal editorial said that the 2012 law calls for phased-in rate increases to bring premiums slowly to actuarially sound levels.
"That's been a shock to the affluent beachcombers who are accustomed to artificially cheap insurance," the Journal editorial said.
Sen. Mary Landrieu, D-La., said most of the homeowners facing large increases in premiums are not wealthy, don't own beachfront property, but just want to stay in the communities they, and often their parents and grandparents, made home for generations.
"I would gladly invite members of the Wall Street Journal's editorial board down to South Louisiana to see why people live along this working coast," Landrieu said. "Fixing the flawed Biggert-Waters Act and making flood insurance affordable is critical so that Louisiana families can securely and affordably live where they need to work to power the country's economy, keep commerce flowing and produce the products and manufacture the goods necessary for growth."
Michael Hecht, president and CEO of Greater New Orleans Inc., took exception to the editorial, saying it is the middle class "who participate in the flood insurance program, "not the (top) one percent."
"Small businesses will also begin to see unaffordable rate increases. It is surprising to see the Wall Street Journal take a position against business owners that have played by the rules," Hecht wrote in a response to the Journal editorial.
He also said that he disputes the editorial's recitation of Federal Emergency Management stats that it expects about one in five policy holders to see higher rates as a result of Biggert-Waters. Hecht expects that number to be far higher, perhaps approaching 80 percent.
"Finally, the idea that most people live near water as a 'lifestyle' choice is simply untrue," wrote Hecht, who heads a national coalition of organizations from 27 states fighting the increases. "Fifty-five percent of the country lives near the water (including rivers), because that is where commerce takes place."
Under legislation introduced in the House and Senate, premium hikes would be delayed for four years for these three categories of policyholders:
ï® All homes with grandfathered rates, whose properties were built to code and later remapped into a higher risk area.
ï® Properties that purchased a new policy, or were sold after July, 6, 2012. Under the Biggert Waters law, those properties were to receive the higher rates immediately, without the four- or five-year phases in period for most other properties. An exception would be those that are considered severe repetitive loss, or non-primary residence.
John Cummins, spokesman for Rep. Bill Cassidy, R-Baton Rouge, joined in the criticism of the Wall Street Journal editorial.
"Dr. Cassidy is fighting to make flood insurance both accessible and affordable. The people of Louisiana deserve a long-term solution that will protect their homes, jobs and the economy of Louisiana," Cummins said. "Dr. Cassidy's amendment to delay flood insurance rate hikes passed with overwhelming bi-partisan support and that support continues to grow. Anyone who questions the impact of these catastrophic rate hikes is welcome to visit Louisiana's working coast."
Cassidy aides said the congressman is working with the House Financial Services committee, where there has been some resistance to a four-year delay in premium hikes, to tailor a bill that can pass. One area he is looking at is to lower costs by pulling back on some of the administrative costs paid to private insurers that administer the flood insurance plans -- fees that Cassidy considers too high. Cassidy is running against incumbent Mary Landrieu in the 2014 Louisiana Senate race.
The Wall Street Journal editorial quoted FEMA Administrator Craig Fugate who said he wants the program to "get to the point where we've not subsidizing rates," and moved to a "capitalist, private-sector model of managing risk.
"When Republicans hear such good sense from the Obama Administration, they ought to embrace it. They should not endorse another taxpayer subsidy for those who want to live next to the ocean while sticking others with the costs of their lifestyle."
But the Journal didn't mention Fugate's other statement at a recent committee hearing -- that it makes no sense to raises premiums to unaffordable levels. Fugate has told members of Congress that he has no leeway to keep premium increases affordable under the provisions of Biggert-Waters.
It will take action by Congress to grant premium relief, he said.
The Senate bill has 23 sponsors and co-sponsors, while the House bill has 142 sponsors and co-sponsors as of Monday afternoon.
So, far the bill's sponsors haven't picked up the support of Sen. Marco Rubio., R-Fla., whose state has 2 million flood insurance policyholders compared to 483,000 for Louisiana.
"It's an encouraging proposal to provide Floridians with immediate relief from massive rate increases, and Senator Rubio still hopes to make significant improvements to this legislation to add further protections for Floridians and ensure it doesn't create longer term problems that will eventually hit people even harder," said Brooke Sammon, the senator's spokeswoman.
No comments:
Post a Comment