LLPH urges all senators to vote against S. 1926 (Homeowner Flood Insurance Affordability Act of 2014), offered by Senators Menendez (D-NJ), Landrieu (D-LA), Isakson (R-GA), and Vitter (R-LA). It is time to phase out these massive subsidies that the federal government has no reason to be funding.
Heritage Action wrote:
When Congress reauthorized the National Flood Insurance Program (NFIP) in 2012, it also required the phase out of subsidies on insurance premiums so that policyholders would eventually begin paying actuarially sound rates. The innocuously named Homeowner Flood Insurance Affordability Act would delay the start of that much needed reform for four years, setting a terrible precedent that this promising reform may never be allowed to go into effect and taxpayers would be left holding the bag.
A transition to the private sector is essential for the protection of taxpayers. Flood insurance payouts have meant huge financial losses for the NFIP, which means Congress has had to borrow huge amounts of additional money from the U.S. Treasury. Indeed, as of September 30, 2013, the NFIP owed the U.S. Treasury $24 billion.
Real reforms to the NFIP are needed now, not arbitrary delays. Heritage explains homeowners should pay “the appropriate actuarial premium rather than subsidized rates” for flood insurance. They add this would “encourage insurance companies to enter the market and would set the stage for an eventual move of the entire program to the private sector.” Currently, flood insurance is provided only by the government. Subsidies allow property owners to take more risks because taxpayers are paying for their risks.
Taxpayers should not be forced to continue subsidizing high-risk development of flood-prone areas. The Biggert-Waters Flood Insurance Reform Act of 2012 increases financial accountability among homeowners and removes an undue burden on taxpayers. Its reforms should not be delayed.
It is time to get the government out of these subsidies for flood insurance. The Constitution does not give the government any reason to be subsidizing flood insurance. It is time to get the government out of this business. We oppose this bill and may include it in our scorecard. As usual, any motions to proceed and cloture motions on this bill may also be included as well as any amendments that we see fit. Let’s start saving the government some money and stop these massive subsidies.