A Congressional stalemate over flood insurance highlights the difficulty of enacting the type of reforms urged last week in a U.S. government report on climate change — even for Democrats, who embraced the report’s findings.
The heavily indebted National Flood Insurance Program, which provides subsidized coverage for homes in flood-prone areas, is scheduled to expire at midnight on Friday after months of debate over long-term changes. Lawmakers are trying to pass a stopgap extension while talks continue.
Chief among the sticking points is a Republican-led effort to cut the subsidies, something that experts say would be consistent with the message in the National Climate Assessment released on Nov. 23. In that document, a consensus report by U.S. government agencies, scientists warned that coastal communities must adapt more quickly to accelerating flooding and sea-level rise — including restricting development in at-risk areas, and in many cases leaving them altogether.
“Democrats talk a good game when it comes to the urgency of climate change, but then they turn right around and vote for the National Flood Insurance Program, a program that subsidizes building in known flood plains,” Republican Senator Mike Lee of Utah, a leading advocate for cutting the subsidies, said by email.
“If Democrats are really so concerned about economic damage from climate change, why are they subsidizing mansions in flood zones?” Lee said.
Democrats defended their support for below-rate flood insurance.
“We subsidize crop insurance. We certainly subsidize the oil companies…The concept of protection [for homeowners] doesn’t rankle me,” Senator Sheldon Whitehouse of Rhode Island, a state that depends heavily on flood insurance, said in an interview Wednesday. “It’s really unfair to strip them from coverage.”
Senator Bob Menendez of New Jersey, which has some of the nation’s most flood-exposed communities, said more realistic insurance rates aren’t the only way to prepare vulnerable areas for climate change. He said he wants Congress to provide more funding so officials can buy homes from people who want to leave.
“We won’t say, ‘We’ll take your home,’ but you have the incentives in place,” Menendez, a Democrat, said in an interview Wednesday.
Not all Republicans support cuts. The mostly GOP delegation from Louisiana, which is more reliant on flood insurance than anywhere in the country, has also been strident about resisting the cuts.
“There are plenty of folks in both parties that have trouble reforming the NFIP in a way that’s consistent with other positions they hold dear, whether that’s climate-change impacts or fiscal conservatism,” Rob Moore, a senior policy analyst at the Natural Resources Defense Council, said by email. “For some members of Congress, when it comes to NFIP reforms, cheap insurance trumps everything else.”
Still, R.J. Lehmann, director of insurance policy for the R Street Institute, which advocates for market-based solutions to climate change, said that Democrats who say they support the report’s findings face a particular challenge when it comes to flood insurance.
“If you say that your goal is affordability, that’s your primary goal, without concern for risk, then you’re ignoring” what’s in the climate report, Lehmann said. “I just don’t think there’s any other way about it.”
Representative Earl Blumenauer, an Oregon Democrat who’s cosponsored bills with Republicans to change the program, supports cutting the subsidies, saying the country needs “sensible reform.”
Katherine Greig, an author of the National Climate Assessment’s chapter on adaptation, said it’s appropriate to worry about the impact of higher flood insurance premiums on the most vulnerable homeowners. She said the best solution is to raise rates over time, coupled with means-tested vouchers to protect people with low incomes.
“We should communicate risk with a price signal,” said Greig, a senior fellow at the University of Pennsylvania’s Wharton Risk Center. “I think a glide path is the only way.”
The person who led the report’s adaptation chapter, Robert Lempert, said the best approach would be a mix of higher rates, more funding for coastal infrastructure, and money for buyouts.
“Price signals are probably an important part of any effective policy portfolio,” said Lempert, a principal researcher at the RAND Corp. “The perfect societal solution would combine price signals with subsidies to help people harden where they can, and then ways to relocate where you need to.”
Asked why it’s proving so hard for Congress to agree to those reforms, Lempert said, “Change is hard.”
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