National Defense Authorization Act for Fiscal Year 2014

Floor Speech

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Mr. WICKER. Madam President, I thank my colleague from Louisiana for asking that question.

What I am hearing from Mississippi, and what I think we are going to be hearing from all across the United States of America, is that this is about to be a disaster for property owners in the United States of America. So I join my colleagues today--and perhaps there will be others besides the three of us on the floor--in saying we need to address the very real problem of increases in flood insurance premiums, which will unfairly hurt homeowners and businesses in my home State of Mississippi and across the United States of America.

I appreciate my colleague presenting the map to show that this is indeed a national problem and not just a regional or coastal problem. The severe onset of unaffordable rates--unaffordable rates--could have a devastating impact on the livelihood of homeowners and communities throughout the Nation and on our economy. Moreover, they could jeopardize the long-term solvency of the National Flood Insurance Program, which covers some 5.6 million Americans.

There is no doubt that NFIP faces enormous challenges. The damages wrought by storms such as Katrina, Rita, and Sandy have left the NFIP in the red for nearly a decade, amounting to nearly $24 billion at the last count.

In the early years of the NFIP, when bad storm years were roughly offset by light storm years, taxpayers effectively carried policyholders through years because of the NFIP's authority to borrow from the Treasury. However, the catastrophic 2004-2005 hurricane seasons put the program more than $20 billion in debt and disproved the notion that the finances would balance out over time.

The principles for NFIP reform are worthy goals. Premiums need to reflect risks more accurately, flood risks must be projected and mapped more accurately, and the purchase of flood insurance needs to be encouraged and enforced in order to enlarge the risk pool.

We cannot expect the NFIP to continue as a viable program without addressing the huge imbalance between premium revenue and payments for losses. At the same time, Congress cannot sit by in the face of these dramatic unaffordable rate increases facing many Americans.

The manner in which these reforms are being implemented is alienating the very people the program is intended to help. The new rates penalize people who have followed the rules, while placing the heaviest burden on those who are only now recovering from recent disasters.

In communities still recovering from recent Mississippi River flooding and in communities along the gulf coast, where the aftermath of Katrina still lingers, a financial burden of this magnitude could force homeowners either to leave their property unprotected or to move away altogether.

Ensuring the long-term success of the NFIP means taking an honest look at how the reforms Congress enacted last year are being implemented and whether they are unfairly hurting citizens--and I contend they are. Allowing rates to go from a few hundred dollars to tens of thousands of dollars is hardly a reasonable approach to reform.

Reform should not be unnecessarily painful, unfair, or counterproductive to the goal of solvency. Premium increases that make the coverage literally unaffordable could lead to a net loss in program revenue. Nobody benefits from that. Nobody benefits, neither the homeowner nor the taxpayer, when NFIP premium increases result in foreclosure.

I am concerned that NFIP may well have overestimated net revenue increases. They may have underestimated the burden of the program going forward. That alone would be a good reason to delay the increases, if a longer phase-in would result in a net increase in revenue to the program, as I suspect it would.

A delay would also allow time to study the effects of premium increases and it would allow us, as policymakers, to look for less harmful approaches to reform. The Federal Emergency Management Agency should be able to complete an affordability study and ensure that its technologies and methodologies accurately assess risk.

I thank my colleague from Louisiana and I thank my colleague from Florida for joining us. I urge all of my colleagues to support action that provides immediate relief to Americans facing these steep rate hikes.

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