This is beyond stupidity

Don't worry, we'll pay you to rebuild, right here.

Don’t worry, we’ll pay you to rebuild, right here.

A reader brought this to my attention: the government has just repealed the 2012 law that attempted to bring some sense to flood insurance rates, and has reverted to the taxpayer-subsidized scheme that brought us Sandy, and every other flood disaster of the past decades.

President Barack Obama is set to [did] sign into law a bipartisan bill relieving homeowners living in flood-prone neighborhoods from big increases in their insurance bills.

The legislation, which cleared Congress on Thursday, reverses much of a 2012 overhaul of the government’s much-criticized flood insurance program after angry homeowners facing sharp premium hikes protested.

The bill would scale back big flood insurance premium increases faced by hundreds of thousands of homeowners. The measure also would allow below-market insurance rates to be passed on to people buying homes in flood zones with taxpayer-subsidized policies.

Critics say Washington is caving to political pressure to undo one of the few recent overhauls it has managed to pass.

“While politically expedient today, this abdication of responsibility by Congress is going to come back and bite them and taxpayers when the next disaster strikes,” said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group. “Everyone knows this program is not fiscally sound or even viable in the near term.”

The hard-fought 2012 rewrite of the federal flood insurance program was aimed at weaning hundreds of thousands of homeowners off of subsidized rates and required extensive updating of the flood maps used to set premiums. But its implementation stirred anxiety among many homeowners along the Atlantic and Gulf coasts and in flood plains, many of whom are threatened with unaffordable rate increases.

The legislation offers its greatest relief to owners of properties that were originally built to code but subsequently were found to be at greater flood risk. Such “grandfathered” homeowners currently benefit from below-market rates that are subsidized by other policyholders, and the new legislation would preserve that status and cap premium increases at 18 percent a year. The 2012 overhaul required premiums to increase to actuarially sound rates over five years and required extensive remapping.

The top leaders of both parties came on board, overcoming resistance from defenders of the 2012 overhaul like House Financial Services Committee Chairman Jeb Hensarling, R-Texas, whose turf was trampled along the way.

“Members on both sides of the aisle and a broad geographic distribution got involved. And when you get enough members involved, it’s going to get the attention of the leadership, and that was a major factor,” said Rep. Charles Boustany, R-La.

If we as a country can’t even rationalize a simple insurance program, there’s really no hope for social security or medicare reform or any program that someone currently enjoys: farm subsidies, military bases, ethanol.

14 Comments

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14 responses to “This is beyond stupidity

  1. ill-Logical

    If you like your insurance company, you can keep your insurance company …..

  2. Mazama

    “If we as a country can’t even rationalize a simple insurance program, there’s really no hope for social security or medicare reform or any program that someone currently enjoys: farm subsidies, military bases, ethanol.”

    Yep, that about sums it up.

    “…no hope” No hope, that is, that elected officials as a group will do anything that REALLY reforms something or eliminates a worthless/counterproductive program (e.g., ethanol).

  3. Anonymous

    I thought you were purposely ignoring this big story since it might affect your Old Greenwich/Riverside RE business. I happen to agree that if you choose to live in a flood prone zone—well, you do so at your own expensive peril.

  4. Anonymous

    You’ve been complaining nonstop about stricter regulations for idiots that insist on living in flood zones in Riverside and OG. Now you are against them?

    • No, my point as always been that individuals should be free to build where they like, so long as other taxpayers aren’t forced to subsidize the risk of doing so. The law that was just repealed at least would have raised the cost of choosing to live on a flood plain or directly on the ocean closer to the real cost of insuring against that risk. Now we’re back to subsidies.

  5. TM

    The law they repealed must have hit too many congressmen in their wallets in the way of higher flood insurance premiums on their vacation homes. That would explain the swift action here.

    • Demmerkrat Patriot

      Bingo! You win the internet for today.

      This has everything to do with who owns affected property and their campaign donations.

  6. Libertarian Advocate

    Jim Himes in Panic Mode.

  7. TheWizard

    I hold out no hope that this bloated, puss-infested government will ever fix itself.

    I don’t know what the answer is exactly, but it won’t come from within. Far too corrupt.

  8. Anonymous

    So does this mean that the inflated rates, on homes like 14 Edgewater for example… are no longer? Back to normal rates for properties in the FEMA zones?

  9. Peg

    Welfare for the 1%; gotta love it.

    “f we as a country can’t even rationalize a simple insurance program, there’s really no hope for social security or medicare reform or any program that someone currently enjoys: farm subsidies, military bases, ethanol.”

    Christopher Fountain for President. Only problem is you are far too intelligent to ever consider taking on this job (and far too sensible and forthright to ever get elected).

  10. Anon58

    One can assume that most of those homeowners who protested about the higher (and fairer) proposed insurance rates come from the States of Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, South Carolina, North Carolina, Maryland, New Jersey, New York, Connecticut, Rhode Island, and Massachusetts. As such, this should serve as a prime example that when it comes to benefiting from government largess, there is very little, if any, distinction between the so-called Red and Blue States. All have their hands out for their share of the government dole.

  11. Chief Scrotum

    No one group gets government largesse like the 1%do – ghetto living welfare queens can only dream of what the 1%ers get away with.

    Now, how do I get into that group?

  12. towny

    How do you suppose government and politicians would react if a private insurance company offered below cost insurance rates for an extended period, long enough to put all competition out of business. Then after establishing a complete and total monopoly, raised rates 1000%. A class action may be an effective means to correct the predatory insurance writing.