Today the House passed a $9.7 billion package that will increase funding for federal flood insurance to pay out claims related to Hurricane Sandy. They will take up another bill in a week or two that will address further funding. According to The Wall Street Journal, Rep. Peter King (R-NY), who was nearly hysterical the other day, calls it a “good first step.”
Instead, House Republican leaders decided to take up the flood-insurance measure Friday and consider the rest of the package on its first full legislative day, Jan. 15.
The easy approval of the flood-insurance measure won muted praise from congressmen from the Northeast, many of whom had been livid after Mr. Boehner put off the vote on the larger package.
“It’s a good first step, a good down payment,” said Rep. Peter King, the Republican from Long Island, N.Y., who was among the loudest critics of Mr. Boehner’s move. “The real fight’s on Jan. 15, and I am confident we’re going to have votes on the 15th. But I’m not taking them for granted.”
Rep. Carolyn Maloney, a Democrat from Manhattan’s Upper East Side, called the move a “baby step.”
Congress had no choice but to raise the program’s borrowing authority because policyholders have valid claims that need to be paid, said Ray Lehmann, senior fellow at the R Street Institute, a free-market think tank focused on insurance issues. (Read More)
As usual, this is a government-caused problem. People living on the coast have been under-paying for flood insurance for decades as we the taxpayers subsidize them.
But in the long term, he said, it’s unrealistic to expect the flood-insurance program will ever repay its debt. “Eventually, Congress will have to bite the bullet, forgive the debt and, one hopes, institute even stronger reforms to ensure that taxpayers never again are asked to pick up this cost,” Mr. Lehmann said.
Federal law requires people who buy houses in designated flood-hazard areas with federally backed mortgages to purchase policies from the National Flood Insurance Program, though not all buyers maintain coverage for the life of the loan. Nationwide, about 5.6 million people have federal flood-insurance policies, according to government figures, with nearly 450,000 held by homeowners and businesses in Connecticut, New York and New Jersey.
So the government-backed mortgages have to be protected by government flood insurance, which is cheaper than private flood insurance. And we’re going to end up paying much more as northeast politicians on the left and right go out and throw public tantrums until they receive all of the funding they want.
Update: Maggie’s Notebook has much more on how we are all subsidizing the oceanside property of others. Of course, we don’t reap the benefits, we just get to pay for it.