House GOP in a Fix Over Fixing Flood Insurance

Rep. Jeb Hensarling (R-TX) (R) listens during a news conference on Fannie Mae and Freddie Mac in the U.S. Capitol on March 31, 2011 in Washington, DC.
National Journal
Billy House
Feb. 26, 2014, 8:20 a.m.

House lead­ers — awash in in­de­cision over how to ad­dress dra­mat­ic hikes to fed­er­al flood-in­sur­ance premi­ums dur­ing a midterm elec­tion year — ab­ruptly post­poned a Thursday vote on a bill be­cause of a lack of sup­port.

Some rank-and-file Re­pub­lic­ans had ex­pressed con­fid­ence as late as Tues­day night that the bill emer­ging in talks with Demo­crats would be ac­ted on this week — only to be told by Ma­jor­ity Lead­er Eric Can­tor dur­ing a closed-door ses­sion Wed­nes­day morn­ing that the vote is be­ing put off.

The de­vel­op­ment vividly un­der­scores how fed­er­al flood in­sur­ance — and the need to fix it — blurs the lines between tea-party and con­ser­vat­ive fisc­al polit­ics and the needs and de­mands of con­stitu­ents.

Even some mem­bers of the 40 or so usu­al “hell no” caucus — in­clud­ing many who re­fused to go along with pay­ing for Su­per­storm Sandy dam­age else­where in the coun­try — are plead­ing with Speak­er John Boehner and oth­er GOP lead­ers to take ac­tion to ad­dress the rising premi­ums be­cause of pres­sure from their dis­tricts. Even if that means un­do­ing some re­cently en­acted fisc­al re­forms to bring the pro­gram out of $24 bil­lion in red ink.

What to do was a fo­cus of a meet­ing be­ing held early Wed­nes­day af­ter­noon by the con­ser­vat­ive Re­pub­lic­an Study Com­mit­tee, a group of 175 House mem­bers.

Adding to the pres­sure, though, is that there have been warn­ings by out­side con­ser­vat­ive groups Her­it­age Ac­tion and Club for Growth that they op­pose the bill that was emer­ging this week in talks with House Demo­crats — and that they would in­clude the vote on their le­gis­lat­ive score­cards.

And some key House chair­men are also said to have more-privately pressed ob­jec­tions to that bill, ar­guing that re­cently en­acted fisc­al re­forms would be gut­ted.

The Club for Growth, in a news re­lease later Wed­nes­day, even singled out Fin­an­cial Ser­vices Com­mit­tee Chair­man Jeb Hensarling for praise in op­pos­ing the bill, which it said would un­wind and partly re­peal the much-needed re­forms en­acted in 2012.

“House Re­pub­lic­an lead­er­ship wants to stick tax­pay­ers with the bill for high­er sub­sidies to beach­front prop­er­ties, but Con­gress­man Hensarling took a prin­cipled stand,” said Club for Growth Pres­id­ent Chris Chocola.

“As the House Fin­an­cial Ser­vices Com­mit­tee chair­man, Con­gress­man Hensarling has long ad­voc­ated for re­form­ing the flood in­sur­ance pro­gram, so it’s no sur­prise that GOP lead­ers are re­fus­ing to run the bill through his com­mit­tee, and in­stead, are ne­go­ti­at­ing dir­ectly with the Demo­crats,” the state­ment ad­ded. “Re­pub­lic­ans in the House could learn a lot by fol­low­ing Con­gress­man Hensarling’s lead when it comes to pro­tect­ing tax­pay­ers and in­creas­ing eco­nom­ic free­dom.”

There was no im­me­di­ate com­ment from Boehner or Can­tor’s of­fice.

Mean­while, Rep. Bill Cas­sidy, R-La., who is run­ning for a Sen­ate seat and has po­si­tioned him­self as a lead­er in the ef­fort, down­played the delay. He said he re­mains con­fid­ent the bill will soon move for­ward and that “this is an op­por­tun­ity to put good policy be­fore polit­ics.”

“We are di­li­gently work­ing on im­prove­ments to the bill that the Sen­ate al­tern­at­ive le­gis­la­tion failed to ad­dress. We have care­fully built a co­ali­tion and draf­ted a sol­id pro­pos­al that has garnered wide­spread sup­port. Now, small changes are be­ing made to en­sure pas­sage of the bill and to en­sure FEMA im­ple­ments it cor­rectly,” Cas­sidy said.

At is­sue are pro­vi­sions of a 2012 bill co­sponsored by Rep. Max­ine Wa­ters — the rank­ing Demo­crat on the Fin­an­cial Ser­vices Com­mit­tee — and former Rep. Judy Big­gert, R-Ill. The meas­ure, passed against the back­drop of a long-term budget­ary crisis, ad­jus­ted the rate maps of the Na­tion­al Flood In­sur­ance Pro­gram and made oth­er changes de­signed to fix the pro­gram that is tens of bil­lions of dol­lars in debt (now $24 bil­lion).

But what’s en­sued are huge spikes in some flood-in­sur­ance premi­ums in coastal states like Louisi­ana, Flor­ida, and Con­necti­c­ut, and what some loc­al gov­ern­ments say has been a para­lys­is in their real-es­tate mar­kets.

The Sen­ate has already passed a bill that would out­right delay the Big­gert-Wa­ters Act’s ad­just­ments to rate maps for four years.

But many House con­ser­vat­ives say that goes too far.

At the same time, House Re­pub­lic­ans have found dif­fi­culty find­ing the right blend of tweaks to the 2012 law to deal with the fast-rising premi­ums, while also main­tain­ing the force and spir­it of its re­forms to the ail­ing flood in­sur­ance pro­gram have been dif­fi­cult.

The com­plaints about the bill that was sched­uled to be voted on Thursday in­cluded that it would un­der­mine the cur­rent law’s goal of end­ing tax­pay­er sub­sidies for the roughly one-fifth of the na­tion­al poli­cy­hold­ers who re­ceive them and would ex­tend in­to per­petu­ity sub­sidies for roughly 700,000 older primary homes, even if they are resold by the cur­rent own­er.

The meas­ure also would roll back rate in­creases for prop­er­ties that have been resold since Big­gerts-Wa­ters law was passed in mid-2012.

“This bill rep­res­ents a fun­da­ment­al be­tray­al of the free-mar­ket prin­ciples and fisc­al re­spons­ib­il­ity the House lead­er­ship claims to em­brace,” said R.J. Lehmann, a seni­or fel­low at R Street In­sti­tute, which char­ac­ter­izes it­self as a “free mar­ket” or “liber­tari­an” think tank.

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