WASHINGTON — Two federal efforts aimed at lowering the cost of homeowners insurance in coastal states are heading to the House of Representatives floor but face opposition from the White House, some sectors of the insurance industry and lawmakers from states not prone to hurricanes.
As soon as Thursday, the House is poised to take up the first bill, which would expand the nation's flood insurance program to include wind damage, a bill pushed by Rep. Gene Taylor, D-Miss., who lost his home to Hurricane Katrina.
But the White House signaled Wednesday its intent to veto the bill if the windstorm insurance is included. It's unclear, given the level of Republican opposition, whether the bill could override a presidential veto.
"The administration strongly opposes the expansion ... to provide coverage for new risks, as this bill does for windstorm damage," the White House said in a statement. "Shifting liabilities for windstorm damage from the private sector to the national flood insurance program would be fiscally irresponsible."
The other measure — which could take months to come before the full House — cleared the House Financial Services Committee 36-27 on Wednesday after several hours of often testy debate.
The bill, authored by Florida Democratic Reps. Ron Klein and Tim Mahoney, would create a voluntary, market-driven national catastrophe fund designed to lower the cost of insuring homes in areas where the threat of hurricanes, earthquakes and other perils can send premiums skyrocketing. It also would make federal loans available to assist in the rebuilding of states hit by natural disasters.
Florida lawmakers have pushed unsuccessfully for similar federal legislation since Hurricane Andrew slammed into south Florida in 1992. Klein called the committee approval a "truly historic victory for Florida families."
"With the rising number of catastrophes throughout the United States, ranging from states like New York and California to the Midwest, more and more people are realizing this is an issue that cannot be ignored," Klein said.
Like the provision to add windstorm insurance to the federal flood program, the national catastrophe fund faces intense opposition from the White House, which opposes government interference in the private market.
But House Democratic leaders are championing the bill. Committee chairman Barney Frank, D-Mass., said he hopes to have it heard by the full House before the end of the hurricane season.
Like the flood insurance legislation, there is no companion legislation in the Senate. Several members of the committee suggested that the Senate is likely to embrace a bill that only creates a commission to study the issue.
But Florida lawmakers opposed attempts to scale back the measure.
"I'd like to see a strong vote to send a loud and clear message to the Senate," said Rep. Ginny Brown-Waite, R-Fla. "The Senate just wants to study. We don't want to see a study, we want to see some action."
Opponents, largely members of Congress from states far from the coast, argued that the legislation will result in interior states picking up the dime for beachfront living.
"People in New Mexico are going to be required to pay for homes where people are making triple what they are, where people are choosing to build in very dangerous areas,'' said Rep. Steve Pearce, R-N.M. "I'm not sympathetic to tagging people in New Mexico with the cost."
But Florida lawmakers suggested all taxpayers end up paying now — after the fact.
"We are dipping into the federal treasury every time there's a disaster because we're Americans, we take care of each other," Klein said. "But we can do it better by underwriting some of the risk.
"It's been studied to death for a decade or so, let's get on with it,'' he said.
Mahoney noted the bill has the support of the National Association of Realtors and mortgage brokers, but environmentalists are opposed.
The National Wildlife Federation said it fears the program could "inadvertently result in continued encouragement of risky development" in coastal areas and flood plains.
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