Congress Realizes It Fixed Flood Insurance: Repeal Imminent

Sandy damage

“Yeah, but it’s got a great ocean view. so we’re gonna rebuild. When do I get the check?” Hurricane Sandy took a bite out of this New Jersey house, just like subsidized flood insurance takes a bite out of the federal budget. (Photo by RetroRed/Flickr)

Representative Maxine Waters, Democrat of California, was in a state of high dudgeon, last November, as she pilloried the director of the Federal Emergency Management Agency (FEMA) at a committee hearing in Washington. He had been dragged before the committee to explain why his Federal Flood Insurance Program was racking up rates for policies on water-soluble buildings in flood-prone coastal and riverine areas. “The harm that has been caused to thousands of people across the country,” she raged, “is just unconscionable.” Director Craig Fugate might be forgiven for being nonplussed. He had raised the rates at the explicit direction of Congress, which just 16 months previously had decided to end the existing flood-insurance madness with the Biggert-Waters Act. Which bears not only a wonderfully punny name for a bill dealing with floods, but the name of its co-sponsor, one Maxine Waters.  

Previously, on Profiles in Discouragement: private, free-enterprise insurance companies began charging home- and building-owners at the water’s edge rates commensurate with the hideous risk they were taking by locating there. And they began to refuse to insure some properties at all, for example where homes had been destroyed by floods over and over again.

These actions cut into the profits of waterfront developers and the trust funds of waterfront beach-house owners, who called their Congresspersons and demanded action. Which was forthcoming in 1968 in the form of the Federal Flood Insurance Program, which not only granted coverage to water-soluble buildings and frequently-underwater properties, but did so at ridiculously low rates. Satisfied, the free-enterprise developers developed apace on all the beaches and flood plains they could find, and prospered.

In the wake of Katrina, and Sandy, and Irene, along with various other derechos and tornado swarms and superstorms, the insurance program’s debt is approaching $30 billion dollars. It has less chance of being repaid than the worst of the subprime mortgages issued in the previous free-enterprise era, and the storms keep on coming.

Congress, for reasons no one can explain, rose to the occasion in 2012, and directed FEMA to start charging appropriate rates for flood insurance, not only to stanch the financial hemorrhaging, but to discourage rebuilding properties that are certain to be destroyed again. FEMA obeyed.

Last fall, the new insurance bills began to land on the desks of the developers and trustees. Simultaneously, the phone lines to Washington lit up like the wires in a toaster. Representative Waters, and many many other pols, were outraged. This week, the Congress is almost certain to spike the Biggert Waters Act until it can be studied, and the study can be studied, and hearings held on the study of the study. We shall never hear its name again.

Heck of a job, Maxie.


See also: “Wait, What? Congress Fixed Flood Insurance?

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2 Responses to Congress Realizes It Fixed Flood Insurance: Repeal Imminent

  1. What a perfect report.

    I’ve blamed everyone else, so nice to include Congress now.

    Succinct, cynical, and such a worthy target.

  2. Michael says:

    Typical behavior of our out of touch elitist politicians so it is not really surprising. The vast majority are totally focused on getting the money to keep getting reelected. Their job is job one. Things like logically tackling problems or at least providing a range of practical solutions seem to be beyond them. I have spent most of my life arguing against term limits since voters should have enough sense to elect responsible representatives; however, I am beginning to realize one of the few possible solutions to better government might lie in eliminating the professional politician class. They seem to be clueless at best and just plain stupid at worst. As the old adage goes, “Common sense is not so common…” In Washington it is nonexistent. Thank you for your continued reporting on a range of items and issues that ought to matter to all of us, but are unfortunately woefully under reported.