There’s a threat of flooding on Capitol Hill from a rising tide of crocodile tears. Ever eager to spend somebody else’s money on something, some congressman want to relieve the suffering of rich constituents who own vacation estates where they shouldn’t. Congress, in a rare burst of common sense, decided two years ago that the government shouldn’t subsidize luxury vacation villas in areas prone to frequent flooding. Republican leaders in the House have scheduled a vote Wednesday on legislation to undo everything Congress did right in 2012.
The National Flood Insurance Program was established 45 years ago to enable owners in flood-prone areas, including Florida and the Gulf Coast, to buy insurance to cover rebuilding houses ruined by rising water. Like all government schemes, it quickly spiraled out of control and has run up $24 billion in red ink. A clever few figured out how to game the system, to get an insurance subsidy for a second home with a stunning waterfront view. Sometimes the house got an in-the-water view. Congress curtailed that in 2012.
Insurance rates for low-income taxpayers who live near a river prone to flooding did not change. The changes only affected the second homes of the rich in the path of hurricanes. They have the means to move out for six months every time nature strikes while the taxpayers pay for rebuilding. The 2012 reform affected about 250,000 policies, raising rates by 25 percent until the owner began to pay for actual risks. For example, rates went up for 120 cottages in the fashionable enclave of Martha’s Vineyard, where the liberal elites summer.
Owners of vacation cottages have their congressional representatives on speed dial, and those legislators are always responsive, and quick about it, to the needs of key campaign donors. Even some Republicans who fancy themselves Tea Party patriots are eager to return to the days of vacation home bailouts. The House will vote Wednesday on a bill offered by Rep. Michael Grimm, a Staten Island Republican, that would even send rebate checks to owners who have missed subsidies since 2012. The legislation would eliminate the sensible requirement that premiums be based on current flood maps, not decades-old data.
Real-estate salesmen and house builders cheer the return of the subsidies. Cheap flood insurance rates encourage development of property in areas prone to floods, which is good for business. When those houses are washed away, it’s an opportunity to build again more and sell, sell, sell. Subsidize, rinse, repeat.
President Obama, of all people, may be the voice of reason. “The administration strongly supports a phased transition to actuarially sound flood insurance rates,” the White House said last month. “Transitioning to actuarially sound rates will help ensure that the [National Flood Insurance Program] has adequate resources to pay policyholders’ future claims without increasing the program’s debt levels.”
Lawmakers must not let themselves be carried away by the lament of wealthy campaign donors. The nation is $17.4 trillion in debt. The 1 percent can bail themselves out without the help of the rest of us.