After outcry from homeowners, the House has passed legislation that would largely repeal increases to flood insurance premiums which Congress enacted less than two years ago.
According to the Congressional Budget Office, the bill would have no net effect on the National Flood Insurance Program since the cost of cancelling the premium increases would be offset by an annual surcharge of $250 for policies covering non-residential properties or second homes and $25 for all other coverage.
The Senate passed a separate bill in January that halts some of the flood insurance premium increases. It's not clear whether the Senate will accept the House bill or whether the two bodies will try to design a compromise bill.
The National Flood Insurance Program is about $24 billion in debt to the Treasury. Congress's fiscal watchdog agency, the Government Accountability Office, has warned that the program "creates a significant fiscal exposure" for taxpayers who'll likely be required to bail out it again.
Rep. Bill Cassidy, R-La., one of the House bill's co-sponsors, said Tuesday, "the people who would gain are those whose new flood map (from the Federal Emergency Management Agency) puts them at increased risk, even if they've never flooded, and for whom their premiums were going up, in some cases, thousands of dollars."
Cassidy also said the House bill creates an appeals process for FEMA flood plain maps: "If there's an absurdity of a flood map -- and some of them, frankly, are absurd -– then there's some recourse for the homeowner ... ."
But Steve Ellis of Taxpayers for Common Sense said the CBO cost estimate for the House bill doesn't reflect reality.
"Over time, the more the risk (of flooding) becomes distanced from (premium) rates, you're artificially holding down rates." But "with sea level rise and other impacts, (flood) risk is increasing, so the pressures on this program are going to be even greater. It's going to have bigger and bigger losses."