A coalition of conservative leaders today said the House should reject legislation that would continue taxpayer subsidies of flood insurance for private property owners. Taxpayers, they stress, already are on the hook for $24 billion.
“Members of the House should reject all forms of this bill and put an end to flood insurance subsidies that distort the market, belie the foundation of the National Flood Insurance Program, and expose taxpayers to further debt,” leaders of the Conservative Action Project write in a “Memo to the Movement.”
They call on conservative groups to oppose the House legislation:
The National Flood Insurance Program is currently in danger of insolvency because roughly 20 percent of homeowners pay premiums that are not based on the actual cost of their flood risk. By statute, the NFIP can simply borrow from the U.S. Treasury when it lacks the funds to settle claims.
Beginning with former Attorney General Edwin Meese III and former Rep. David McIntosh (R-IN), co-chairmen of the Conservative Action Project, the 28 signers include the heads of groups such as Heritage Action for America, Americans for Prosperity, Club for Growth, FreedomWorks, Citizens United, Tea Party Express, and National Taxpayers Union.
Florida Gov. Rick Scott is among Republican supporters of the House bill who has pushed relief for private property owners. On Monday, during a White House gathering of the National Governors Association, Scott urged President Obama to act on his own, the Tampa Bay Times reported.
“We’ve been asking the President to use his pen and stop these unreasonable, unfair increases,” Scott told reporters, straying from the conservative line against executive orders.
Heritage Foundation scholar Diane Katz detailed concerns with the House bill in a new research paper, writing:
The pending legislation would rescind reforms adopted in 2012 to stem the debt incurred by the government’s unworkable insurance scheme. But a variety of legislative alternatives exist that would assist flood-prone property owners without foisting the cost on taxpayers.
By a 67-32 vote January 30, the Senate passed the Homeowner Flood Insurance Affordability Act (S.1926), introduced by Senators Mary Landrieu (D-LA) and Robert Menendez (D-NJ).
Like the Senate bill, the conservative leaders write, the House version — the Homeowner Flood Insurance Affordability Act (H.R. 3370) — would delay reforms of the Biggert-Waters Flood Insurance Reform Act of 2012 that were designed to put the National Flood Insurance Program on a sounder footing.
The chief House sponsor, Rep. Mike Grimm (R-NY), told the McClatchy wire service: “This bill is a more comprehensive and fiscally sound approach than the Senate version and will ensure that no family is left out in the cold.”
But Katz, Heritage’s research fellow in regulatory policy, concluded that the Biggert-Waters Act was the needed reform:
It represents a major step toward minimizing government’s role in flood insurance. To retreat now would be irresponsible to both taxpayers burdened by subsidies and property owners who are restricted to the government’s irrational rates.
This story was produced by The Foundry’s news team. Nothing here should be construed as necessarily reflecting the views of The Heritage Foundation.