Insurance House Flood Water

Conservative Committee Chairman Sidelined in His Own Area of Jurisdiction

Rep. Jeb Hensarling (R-TX) 84% is the House Financial Services Committee chairman, which means he has jurisdiction over flood insurance policy.  Yet, despite Speaker John Boehner’s promise committee chairmen would lead on policy in the House (sub. req’d), Hensarling is being sidelined by House leadership because they are “determined to protect politically vulnerable lawmakers during this election year.” (sub. req’d)

This week, the House will consider legislation delaying the Biggert-Waters Reform Act of 2012, which makes necessary reforms the National Flood Insurance Program (NFIP).  Specifically, Biggert-Waters was designed to begin the process of requiring homeowners in flood-prone regions to pay actuarially sound flood insurance premiums, rather than subsidized rates courtesy of the taxpayer.

The Biggert-Waters reform bill was also designed to encourage private insurance companies to enter the market, which is currently dominated by the federal government through the NFIP.  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 the program has borrowed 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.

At Heritage Action’s Conservative Policy Summit, Rep. Hensarling explained his position this way (sub. req’d):

I will not be part of any program, policy, act that hastens the bankruptcy of a program that is already underwater.

Hensarling is also spearheading a bill to wind down the bailed-out mortgage giants Fannie Mae and Freddie Mac without establishing a new government guarantee for mortgages in their place.  

Not surprisingly, this sound policy proposal has its political foes.  The question is whether leadership will fail to lead on this front as well.

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#FloodInsurance needs to be reformed, but political considerations seem to be winning this round.

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Ignoring policy concerns, House playing politics on #FloodInsurance.

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Taxpayers are on the hook for billions because the NFIP needs real reforms politicians refuse to make.

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