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Flood fix to take another detour

By Jay MacDonald · Bankrate.com
Friday, February 14, 2014
Posted: 6 am ET

Homeowners encouraged by the U.S. Senate's recent approval of a sensible delay to the seriously shortsighted 2012 Biggert-Waters Flood Insurance Reform Act had their hopes for relief dashed this week by mixed and worrisome signals from the House of Representatives.

Hesitant House

First came the good news: The House announced Wednesday that it will take up Senate-approved reform of flood reform the week of Feb. 24, after passing on taking a crack at the legislation three times. What's more, Democratic backers of the Senate bill, which would delay the sharp rate increases of Biggert-Waters for four years pending further study, announced that they have 234 House votes on board, 16 more than necessary to pass a bipartisan fix and send it along to the White House.

But just as the fist-pumping was about to commence, House Majority Leader Eric Cantor, R-Va., announced that the bill he plans to present for House consideration will be, well, just a tad different from the one the Senate approved, though he didn't provide specifics.

And so, we awaken to "Groundhog Day" once again.

Fixing a flat vs. vehicle makeover

The House has made no bones about its objection to "fixing" Biggert-Waters. The party line is that we need the higher rates, gosh darn it, to shore up the National Flood Insurance Program, which remains upward of $25 billion in the hole following hurricanes Katrina and Rita and Superstorm Sandy. If a few thousand coastal locals have to figure out a way to remain in their older, subsidized homes when their flood insurance premiums jump tenfold, well, they can always move to Detroit.

Suffice to say, representatives and residents of coastal states from New York to Hawaii don't take this scenario lightly, having already experienced its potential impact on local housing markets.

They liken the unintended rate shock of Biggert-Waters to a blown tire on the freeway, and say that the thing to do is fix the tire first and drive on. By contrast, they say House obstructionists want to overhaul the engine, change the transmission and add a new paint job to the act before they'll even consider fetching the jack from the trunk.

Troubled Waters

Rep. Maxine Waters, D-Calif., who has led the charge to fix the unintended consequences of the NFIP reform she co-sponsored, was frustrated by Cantor's announcement.

"The reality is this: If not for obstruction by Republican leadership, this bill could pass the House and be signed into law today," she told reporters. "I again urge Republican leadership to immediately take up this bipartisan solution."

What's your guess? Will Cantor's flood fix bear any resemblance to the Senate's newly passed Homeowner Flood Insurance Affordability Act of 2013?

Follow me on Twitter: @omnisaurus.

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