Senate passes four-year flood insurance delays, but House is the real hurdle

The U.S. Senate passed a four-year delay in flood insurance premium hikes Thursday as attention now turns to the GOP-controlled House, where prospects appear rockier.

By a vote of 67-32, Senators approved a halt to most of the biggest increases for four years, during which time a federal agency would be required to study the affordability of policies and review accuracy of new flood maps.

Stories of premiums shooting from $4,000 to more than $40,000 in one stroke have raised alarms that they will kill real estate sales and damage a recovering economy. It’s an especially big deal in Florida, which has two of every five policies issued by the federal program.

Delays would “grant homeowners and businesses some relief from the huge, gargantuan – sometimes tenfold – increases in flood insurance premiums,” said Florida Democratic Sen. Bill Nelson.

The state’s Republican senator, Marco Rubio, also voted yes.

“The current increases have paralyzed the real estate sector in much of Florida,” Rubio said. “We should first pass a suspension of the scheduled rate increases and then begin work on a long term solution to this issue along the lines of this proposal.”

The National Flood Insurance Program, created in 1968, covers 5.6 million policyholders. Approximately four out of five homeowners pay full rates now, but much of the controversy is about the 20 percent of policies that are losing subsidized rates as part of a plan to help the program get out of $24 billion in debt.

In addition, many homeowners, including some in Palm Beach County’s western suburbs, could be forced by lenders to buy flood insurance for the first time as federal officials redraw maps. Many communities are appealing early versions of the maps and say they don’t belong in high-risk zones.

Florida’s Republican governor, Rick Scott, last week stopped in Palm Beach to say Washington needs to take action to stop unfair increases. He praised Senate passage Thursday and said, “I encourage their colleagues in the House to also support this common sense measure.”

Backers of a four-year delay say they have 180 House co-sponsors from both parties, but opponents say the real agenda is to kill rate increases needed to get the program out of debt. Those fighting delays have been encouraged by remarks from House Speaker John Boehner, R-Ohio, that the House will not take up a four-year delay but might consider more modest changes.

The R Street Institute in Washington, D.C., said it was “disappointed” by what it called a Senate vote to gut reforms but expressed optimism that House leadership will take a “more responsible” approach. The group also pointed to a White House Office of Management and Budget statement raising concerns that the delay would “further erode the financial position of the NFIP, which is already $24 billion in debt.”

The Florida Association of Counties praised Nelson and Rubio and called for “long-term solutions that can bring solvency to the NFIP without unduly burdening homeowners, businesses and taxpayers.”

Congress last month agreed in a budget bill to delay by almost a year premium increases for homeowners who would have seen them under new flood maps.

But that is not enough and does not help property owners already slammed, said Rep. Maxine Waters, D-Calif. She called the Senate vote a “huge step” but said “the thousands of families reeling from flood insurance hikes will see no assistance unless the House of Representatives brings this measure up for a vote.”

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