WASHINGTON -- The House Tuesday voted to approve legislation that sponsors say will avert unaffordable flood insurance premiums for the vast majority of the program's 5.5 million policyholders.
The bill, which required a two-thirds vote for passage, received more than 75 percent of the votes, with a final tally of 306-91. Voting yes were 180 Democrats and 126 Republicans; 86 Republicans voted no, along with five Democrats.
The question now is whether the Senate, which passed legislation delaying most of the premium, increases for four years, will pass the House bill, or seek to negotiate differences between the two bills.
After the vote, Reps. Steve Scalise, R-Jefferson; Bill Cassidy, R-Baton Rouge, and Cedric Richmond, D-New Orleans, urged the Senate to act quickly to pass the House bill to provide peace of mind to hundreds of thousands of people worried whether they'll be able to continue to afford flood insurance.
On Jan. 30, the Senate passed a different bill, delaying most of the premium increases for four years. The Senate can seek negotiations with the House to resolve differences between the two bills, or do as the Louisiana House members urged, and pass the House bill -- sending it directly to President Barack Obama for his signature.
The large increases are a result of 2012 legislation, known as Biggert-Waters, which was intended to make the program, now $24 billion in debt, fiscally solvent. But some of the projected rate increase -- double, tripe, even 10 times and more current premiums -- generated anger from constituents, which led to a rare bipartisan effort to find a solution.
"Because I'm the Waters of the Biggert-Waters flood insurance reform act, I felt a responsibility to make sure we deal with the concerns that were coming to us from our constituents all over the country. The rate increases were unimaginable," said Rep.Maxine Waters, D-Calif.
The legislation limits yearly premium increases to an average of 15 percent per year for each of the nine property categories listed by FEMA, and stipulates that no individual policyholder pay an increase of more than 15 percent per year. It calls on FEMA to "strive" to reach the goal that most policyholders have a premium of no more than 1 percent of the value of their coverage -- in other words, $2,000 for a $200,000 policy.
The bill also reinstates the flood insurance program's grandfathering provision, meaning that homes that complied with previous flood maps would not be hit with large increases when new maps show greater risk of flooding.
It is paid for largely with a $25 surcharge or residential properties and $250 for non-residential properties or non-primary residences.
Debate on the bill turned emotional at times, with supporters calling it a fiscally responsible way to keep people in their homes, and opponents labeling it a financial giveaway.
"Sending somebody a $10,000, or $20,000-a-year bill on a $200,000 house that never flooded is not an actuarially sound rate, it's a death sentence," Scalise said.
But Rep. Jeb Hensarling, R-Texas., said it is irresponsible to continue expensive subsidies to Americans who choose to live in areas with a high risk of flooding. Hensarling is chair of the committee with jurisdiction over flood insurance, but when he wouldn't come up with a remedy to sharply higher premiums, the issue was taken away from him by House Majority Leader Eric Cantor. Cantor and his aides negotiated directly with members wanting relief for constituents. Some Republicans warned him that GOP incumbents would pay a price on Election Day if the higher rates weren't blocked.
Hensarling called for the bill's defeat.
"The program uses a faulty model that under-measures flood risk. at the end of the day, the program forces roughly 96 percent of all Americans to subsidize the remaining 4 percent regardless of income or need. That means a single mom in Dallas where I live, who's working hard as a cashier at a grocery store, may be forced to subsidize the flood insurance for some millionaire's beach-front vacation home," Hensarling said. "If that's not the definition of unfair, I don't know what is."
Richmond, D-New Orleans and Cassidy, R-Baton Rouge, urged support for the bill.
"We often hear in this chamber over and over again a talk of a financial bankruptcy that is plaguing or potentially plaguing our country. We miss one thing -- that we're on the verge of a moral bankruptcy in this country," Richmond said. "You talk about homeowners who played by the rules, saved their money, bought a piece of the American dream, and then all of a sudden, years if not decades later, we come back with a well-intentioned bill that had unfortunate, unintended consequences that would strip the American dream and homeownership right from under them."
Said Cassidy: "People are getting 2,000-percent premium increases and they will drop off -- that puts it into a death spiral. This is the fiscally responsible thing that puts it on a path to actuarial soundness and benefits."
Proponents of the House legislation, sponsored by Rep. Michael Grimm, R-N.Y., faced opposition from conservative advocacy groups, including the Club for Growth and Americans for Prosperity. They called the the legislation fiscally irresponsible.
Scalise said he told Waters, the lead Democratic sponsor, that he hoped to deliver 120 Republicans and was happy to walk up to her later with the final roll call showing 126 Republican "yes votes." Richmond said he had a lot of people to thank.
"I want to thank the 180 of my Democratic colleagues for their vote tonight, and for the faith they placed in me to negotiate a good bill," Richmond said. "When challenged with a major problem for our constituents, (they) stepped to the plate to provide a real solution. They didn't provide excuses or shrink in the face of the detractors.
"I'd also like to thank the people of Louisiana, especially those residing in my district. We bore the brunt of this storm together, and today's vote is a testament to their work."
Cassidy said the effort was helped because, unfortunately, hardly a House district didn't have constituents facing unaffordable rate increases, including a member from a largely-desert community in New Mexico. "This just wasn't a Louisiana or coastal issue," he said.
Sen. Mary Landrieu, D-La, who endorsed the House bill Monday after "affordability" provisions were added, called the vote an important victory for those urging fair treatment for homeowners facing large increases through no fault of their own.
"This vote is an important milestone in our two-year effort to overturn the most pernicious parts of the 2012 law, but we are not yet at the finish line," Landrieu said. "The Senate will carefully review the details of the House bill and will move the process forward. After Senate action and the President's signature, committees in the House and the Senate should immediately ready themselves for strong oversight and stakeholder groups should remain organized for the addition work necessary in the 2017 reauthorization."
Sen. David Vitter, R-La., also called on the Senate to pass the House bill.
Michael Hecht, president and CEO of GNO, Inc. on behalf of the national Coalition for Sustainable Flood Insurance, said when he and others began advocating for changes in Biggert-Waters last year, "Many in Congress were unaware of the serious challenges” that “threaten to devastate economies across coastal and riverine America."
"However, through the leadership of Congressmen Scalise, Cassidy, and Richmond, as well as Congressman Michael Grimm and Financial Services Ranking Member Maxine Waters, we now have legislation that will address the most pressing needs of our coalition, including protecting people who played by rules, and settling real estate markets," Hecht said.