Posted by Benji Riggins on April 6, 2011 under Flood | 
A key House subcommittee plans to mark up its final version of legislation to reauthorize and reform the federal flood insurance program this Wednesday.
Rep. Judy Biggert, R-Ill., who chairs the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, launched hearings on the the National Flood Insurance Program (NFIP) last month. Last Friday, Biggert unveiled a revised version of her legislation to reform the NFIP after hearing testimony from Craig Fugate, the Federal Emergency Management Agency administrator, who oversees the program.
Biggert’s bill, H.R. 1309, the Flood Insurance Reform Act of 2011, provides for a five-year reauthorization of the NFIP and includes reforms meant to improve the program’s finances, move rates towards actual costs, reduce the burden on taxpayers, and increase private sector participation in the flood insurance market.
H.R. 1309 reflects changes made to the draft that Biggert released last month. Among the changes are clarifications regarding risk mapping standards and FEMA’s authority to consider the demolition or rebuilding of certain properties as an eligible activity for mitigation assistance. Also, new language was added to the bill to clarify FEMA’s authority to utilize private reinsurance, as well as a requirement that the agency seek and report on proposals from the private market for assuming risk within the program.
The NFIP is more than $17.75 billion debt; much of the debt is attributable to the 2004 and 2005 hurricanes.
“NFIP is deeply in debt, and its current structure simply cannot provide the reliable protection that homes and businesses need without putting taxpayers at extraordinary risk,” said Biggert. “By putting the program on sound financial footing and encouraging private sector participation within the market, our bill addresses the concerns of homeowners, businesses, industry experts, and taxpayers.”
Last reformed in 2004, the program has been widely criticized for under-pricing risk and promoting development in flood-prone areas that are more suitable for conservation.
“We need to restore the financial integrity of NFIP, and that requires better flood maps, actuarially sound pricing, and direction for FEMA to better manage risk,” said Biggert.
The measure is co-sponsored by subcommittee members Maxine Waters, D-Calif., Scott Garrett, R-N.J., Robert Dold, R-Ill., Shelley Moore Capito, R–W.Va., and Steve Stivers, R-Oh.
Lawmakers hope to pass the bill before the current authorization for the program expires this September.
April 4, 2011
Posted by Benji Riggins on February 23, 2011 under Flood |
The Federal Emergency Management Agency (FEMA) is seeking a top-to-bottom review of the efforts to reform the nation’s flood insurance program. The National Association of Mutual Insurance Companies (NAMIC) has offered a set of reform proposals designed to improve the National Flood Insurance Program’s (NFIP) financial standing while ensuring protections for homeowners and businesses.
In comments submitted to the FEMA, which oversees the NFIP, NAMIC said that the existing structure provides a strong foundation on which to build the program into one that maximizes this role, is viable, and is financially sustainable. NAMIC outlined a series of steps that could be taken to improve the program, including long term reauthorization, the implementation of actuarially sound rates with direct subsidies for those unable to afford coverage, the use of updated flood zone maps and the forgiveness of the NFIP’s debts from the 2005 storm season.
The following is an edited version of NAMIC’s submission to FEMA.
Congress created the NFIP in 1968 to address the increasing costs of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods. Recognizing that the private market simply could not underwrite the highly concentrated and costly risk of massive floods, the federal government stepped in to create a program to provide financial protection both to taxpayers as well as citizens in flood-prone areas. The program is designed to use the premium dollars taken in every year to pay out any flood losses incurred by policyholders. While the Standard Flood Insurance Policy offered by the NFIP is sold and administered by private insurers – “Write Your Own” (WYO) carriers – the federal government retains responsibility for underwriting losses.
Over the last 40 years, the program has been instrumental in alleviating the pain of serious financial losses brought about by flooding for millions of Americans. However, the program has not been without its challenges. Subsidized premiums have been charged on a non-actuarial basis; development has increased the number of people and property exposed to flood risk; take-up rates for those in need of coverage remains extremely low; and the recent severity of flood losses has demonstrated that the NFIP is not constructed to handle major catastrophic events. The program is approximately $20 billion in debt.
Reform, Don’t Replace the NFIP
To address the concerns with the NFIP, FEMA has launched a multi-step, comprehensive analysis of the program. In the latest phase, FEMA is considering a variety of different directions reform could go: from maintaining the status quo to abandoning the program altogether. We believe that the best, most effective and viable option is maintaining the current NFIP framework while implementing reforms that address existing weaknesses.
The presence of a federal program is just as important today as it was 40 years ago. The driving force behind the creation of the NFIP – no viable private market – remains the fundamental issue.
Privatization
Flood is a unique risk. Perhaps most importantly, it is a risk that is enormously difficult to underwrite due to adverse selection. Simply put, only those people that are at risk for flooding will purchase flood insurance, making it virtually impossible to pool risk among a large enough population for a viable and affordable insurance product. In order to underwrite a risk like this, an insurer would need to charge very high premiums and maintain significant capital reserves in case of massive flooding, when all of their policyholders would be making claims. In actuality, the only people who would be able to afford coverage would likely be those that did not need it.
The question has been asked as to whether the private insurance market is ready to handle flood risk now, but nothing about the situation has fundamentally changed and primary insurers are still unable to offer this coverage. Technically, the market is already “privatized” in that there is nothing preventing companies from currently writing flood coverage and competing with the NFIP. Almost none have elected to do so.
Price controls further diminish the opportunity for a private market for flood insurance to develop. In order to achieve a fully privatized market, companies would need to be able to charge actuarially sound, risk-based rates. However, there are two main problems with this approach. First, lawmakers and/or regulators often impose restrictions that allow high-risk property owners to pay artificially low insurance premiums, forcing lower-risk property owners to subsidize the insurance costs or creating hidden cross-subsidization. Secondly, even if rating freedom was achievable the premiums would likely be much more expensive, making affordability a major issue.
Another suggestion for solving the adverse selection problem is the mandatory purchase requirement. In other words, flood coverage would be included as a required part of every homeowner’s policy. Under this proposal, the government would be mandating that citizens purchase a product that most do not need – thereby creating a massive new cross-subsidization. This situation would benefit those who choose to live in flood-prone areas at the expense of individuals who do not. It would also do much to mask the true risks of living in certain areas and incentivize overdevelopment of environmentally sensitive coastal areas and poor land use behaviors.
The questions of how the mandatory purchase requirement or the granting of rating freedom would affect the regulation of insurance are significant. Efforts to reform the NFIP should steer clear of the political debate over state versus federal regulation so as not to hinder the prospects for meaningful reform.
Optimization
NAMIC believes that the NFIP fulfills an important role for protecting citizens from financial losses due to flood. The existing structure provides a strong foundation on which to build the program into one that maximizes this role, is viable, and is financially sustainable.
We recommend a package of key reforms that should include the following:
•Long-term Reauthorization – Repeated short-term reauthorization creates uncertainty and can lead to lapses in the program as we saw in 2010. During these lapses, companies were not permitted to write new policies, issue increased coverage on existing policies, or issue renewal policies. The NFIP should be reauthorized for an extended time period in order to give more stability to the program and consumers.
•Actuarially Sound Rates – The separation of rates from the actual costs of living in a flood-prone area represents the biggest problem with the program today. In order to avoid incentivizing citizens to move to risk-prone or environmentally fragile areas, the actual price that is charged for flood coverage must reflect the actual risk. The rates charged for flood coverage should be actuarially sound in order to get the program on solid footing.
•Outside Subsidies – As noted above, the move to actuarially sound rates is likely to be painful due to the higher premiums that will be charged. For those citizens that require it, flood vouchers might be offered – independent of the NFIP – to help mitigate the costs. Any further subsidies that the government determines are necessary must be independent and transparent.
•Updated Flood Zone Maps – Additional federal funds should be allocated to the national flood hazard mapping program. Updating and improving flood maps should be a priority within FEMA to identify communities that will benefit most from updated flood maps. Speedy adoption of updated flood maps should be encouraged so that people in flood-prone areas can get the protection they need.
•Improve Take-Up Rates – Currently only 20 percent to 30 percent of property owners exposed to flood hazards actually purchase insurance. The program needs to improve these numbers dramatically in order to stay on a stable fiscal footing. There are several possible ways to improve these take-up rates:
•Stiffer Penalties – Fines should be imposed on financial institutions that fail to require flood insurance coverage for mortgages on properties in flood-prone areas or allow those policies to lapse.
•Improved Education – The NFIP should be given additional resources and a renewed mandate to improve and expand its public education programs to ensure that more people are made aware of the program and the benefits of having flood insurance coverage to protect their properties.
•Disaster Relief Waiver – Require homeowners in flood-prone areas to sign a waiver stipulating that they forfeit their right to disaster relief in the event they choose not to purchase flood insurance.
•Debt Forgiveness – The NFIP is nearly $20 billion dollars in debt. In order to retain long-term solvency the debt must be forgiven. Currently, the NFIP pays approximately $900 million a year to the Treasury in the form of interest payments. Without eliminating the debt, the future of the program is in jeopardy.
Conclusion
The FEMA process for revaluating the NFIP has been a productive one. Considering community-based or free market solutions is a goal that NAMIC shares. However, in this particular case, what may sound good on a conceptual level may create more problems than solutions.
The NFIP is in need of significant reforms in order to continue providing flood protection to those that need it. NAMIC urges FEMA to adopt the suggestions outlined above to maintain and optimize the current structure. NAMIC believes that optimization is the best way to balance all the goals of the reform effort: fiscal soundness, affordability of insurance, adequate coverage for those at risk, floodplain management with reduction of flood hazard vulnerability, economic development, individual freedoms, and environmental concerns.
NAMIC looks forward to working with the NFIP Reform Working Group and FEMA on this very important issue.
Jimi Grande is senior vice president of federal and political affairs for NAMIC. NAMIC’s 1,400 member companies write all lines of property/casualty insurance and include small, single-state, regional, and national carriers.
Read more: http://www.insurancejournal.com/news/national/2010/12/30/116030.htm#ixzz19hNfJDSj
Posted by Benji Riggins on September 24, 2010 under Flood |
The House of Representatives joined the Senate yesterday in approving a one-year reauthorization of the nation’s flood insurance program.
The measure, S. 3814, will extend the National Flood Insurance Program (NFIP) until Sept. 30, 2011. The measure now goes to President Obama for his signature.
If Congress had not acted, the program would have expired next week on Sept. 30.
The vote leaves for the future any reforms of the program, which is $18 billion in debt.
But the insurance industry welcomed the extension after several years of lapses and short term rescues. This year alone, Congress allowed the program to lapse four times. During these lapses, new flood insurance policies could not be written, and thousands of real estate closings in flood-prone regions were delayed.
“While we are pleased that Congress passed the one-year extension, there is still work to be done in the 112th Congress,” said David Sampson, president and CEO of the Property Casualty Insurers of America. “With over $18 billion in debt, the NFIP is a program that needs meaningful reform and a long-term reauthorization.”
The reauthorization will ensure that the NFIP will be there for the final two months of this year’s hurricane season and much of next year’s as well, noted Jimi Grande, senior vice president of federal and political affairs for NAMIC.
“It will not, however, fix the problems with the NFIP itself. The program is financially unsustainable and failing to address that only makes the problem worse for homeowners, insurers and the American taxpayers,” Grande said.
Blain Rethmeier, a spokesman for the American Insurance Association, expressed a similar view.
“A one year extension gives Congress the time necessary to debate the more fundamental reforms the program needs. But between now and then, homeowners living in flood-prone areas will have the stability, protection, and peace of mind to go on with their lives,” he said.
Read more: http://www.insurancejournal.com/news/national/2010/09/24/113507.htm#ixzz10SgFCVvm
Posted by Benji Riggins on July 1, 2010 under Flood |
The U.S. Senate last night approved a temporary reauthorization of the federal flood insurance program until Sept. 30. The reauthorization of the National Flood Insurance Program (NFIP) is retroactive to June 1, the date the program was halted.
The unanimous Senate vote sent the measure to President Barack Obama for his signature. The House had previously approved reauthorization.
Once President Obama signs the bill into law, the NFIP should return to normal operations, according to the Independent Insurance Agents & Brokers of America (the Big “I”). Also, since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application.
The Big “I” said that while the resumption of the program is welcome, the spring lapse — the third time this year it has been forced to halt operations– has caused difficulties for homeowners and small businesses.
“It is alarming that the NFIP was allowed to remain expired for so long, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for almost a month,” said Robert Rusbuldt, Big “I” president and CEO. “While the Big ‘I’ is appreciative of Congress extending the program on a temporary basis, we are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.”
The industry has urged Congress to enact a long term extension of the program.
“The hurricane season runs two months beyond the NFIP’s new Sept. 30 expiration date,” said Jimi Grande, National Association of Mutual Insurance Companies (NAMIC) senior vice president of federal and political affairs. “Congress must not let the program lapse again, but that’s just the minimum. The best thing they can do is take this time to pass legislation that would implement common sense reforms and help the NFIP make the first steps towards financial soundness.”
HR 5114, sponsored by Rep. Maxine Waters, D-Calif., is awaiting action by the House and would reauthorize the NFIP for five years.
Read more: http://www.insurancejournal.com/news/national/2010/07/01/111226.htm#ixzz0sRmFmA6x
Posted by Benji Riggins on June 23, 2010 under Flood |
The House of Representatives has passed another temporary extension of the National Flood Insurance Program until Sept. 30, 2010.
The program has been suspended from issuing new policies since May 31. Reauthorization provisions have been embedded in controversial legislation on jobless benefits and tax breaks that has been twice voted down in the Senate.
The newly-passed House bill, HR 5569, was sponsored Rep. Maxine Waters, D-Calif., and Rep. Walter Jones, R-N.C.
The Senate must still act on it.
The Independent Insurance Agents and Brokers of America (Big “I”) commended the House for its vote and urged the Senate to act quickly.
“The program has been expired since May 31, putting millions of consumers at risk from the economic dangers of flood right in the midst of the hurricane season and storm season in the Midwest. The expiration has also threatened to wreak havoc in both the real estate and insurance markets during a period of great economic difficulty. It is vital that the program be extended and we therefore urge the Senate to act on this bill without delay,” said Charles Symington, Big “I” senior vice president of government affairs.
The program has been unable to issue new or renewal policies since it was shut down May 31, although it is still paying claims. It is the fourth time in the past year that the program has been interrupted due to the failure of Congress to reauthorize it for an extended period.
The Big “I” and other industry groups hope that Congress will move beyond temporary extensions and pass legislation that authorizes the program for five years and makes certain reforms to it.
Read more: http://www.insurancejournal.com/news/national/2010/06/23/111009.htm#ixzz0rhwYXnlQ
Posted by Benji Riggins on June 18, 2010 under Flood |
The Senate today voted against legislation that included a provision to reauthorize the National Flood Insurance Program (NFIP).
Along with short term extensions for numerous other federal programs, the NFIP extension was passed by the House just prior to the Memorial Day recess. It was voted down by the Senate today amid concerns that other, unrelated provisions in the bill would add to the federal budget deficit. Should the Senate approve an amended version, the legislation would have to go back to the House for another vote in that chamber.
The Senate vote drew criticism from the National Association of Mutual Insurance Companies (NAMIC).
“It’s been over two weeks since the National Flood Insurance Program was allowed to expire, and the program is still being held up because of unrelated issues,” said Jimi Grande, NAMIC senior vice president of federal and political affairs. “This lack of action by Congress is unacceptable, particularly when we’re in the first few weeks of the 2010 hurricane season.”
The Atlantic storm season began June 1 and the National Oceanic and Atmospheric Administration has forecasted that 2010 will be among the most active seasons ever. The NOAA predicts that 2010 will see 14 to 23 named storms, with eight to 14 of those developing into hurricanes. Of those, the NOAA has said that three to seven may develop into Category 3 or above hurricanes with winds of over 110 miles per hour.
“We cannot afford to have political disagreements get in the way of protecting millions of Americans from flood losses,” Grande said.
Source: NAMIC
Read more: http://www.insurancejournal.com/news/national/2010/06/16/110798.htm#ixzz0rDbxnJHL
Posted by Benji Riggins on June 4, 2010 under Flood |
The National Flood Insurance Program (NFIP), which expired at midnight on May 31, is not expected to be able to issue new policies for a week or longer.
As reported by Insurance Journal last Friday, Congress left town for the Memorial Day holiday without acting on legislation to reauthorize the program and Congress is not expected to take it up again until June 7, at the earliest. Bills have been introduced in both the House and the Senate to extend the program until the end of the year, but Congress has yet to consider these measures.
The hiatus– the fourth within a year– comes at the opening of the Atlantic hurricane season, which forecasters say will be very active.
If past NFIP suspensions are any indication, it will mean frustration and delays for property owners and property buyers and insurance agents trying to serve them.
“The series of temporary extensions, last minute actions and service lapses during such a delicate period in the American economy is troubling to agents, homeowners and small businesses,” says Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers, or Big “I.”
Symington said the program is meant to provide some level of stability and protection for homeowners and businesses against unpredictable flooding events, “not to be an unpredictable ‘here one minute-gone the next’ program subject to monthly congressional action.”
Insurers also lamented the lack of federal action.
“Once again, the NFIP has become a victim of politics that have nothing to do with the program itself,” said Kathy Mitchell, National Association of Mutual Insurance Companies, federal affairs director. “Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress.”
Many in the insurance industry support a five-year extension of the program. Congress has traditionally extended the program for five year periods but in the past year it began extending the program only for short periods, from 30 days to six months, as the reauthorization has become tied up with controversial legislation involving unemployment benefits, tax breaks, Medicare payments to doctors and other issues unrelated to flood insurance.
“Lapses in this program cause confusion and leave many homeowners and small businesses unprotected during a very dangerous time. The Big ‘I’ is also concerned that the uncertainty of temporary extensions and the numerous lapses that have already occurred in the last few months will negatively impact the market,” said Robert Rusbuldt, president and CEO of the Big “I.”
Read more: http://www.insurancejournal.com/news/national/2010/06/01/110348.htm#ixzz0poaZpNKt
Posted by Benji Riggins on May 3, 2010 under Flood |
“Homeowners can mitigate against wind damage, but they’re powerless, really, to do anything against storm surge,” says one researcher whose job it is to develop ways to determine the vulnerability of homes and other properties not only to storm surge, but wildfires, sinkholes, earthquakes and other natural perils.
Dr. Howard Botts, vice president and director of development for First American Spatial Solutions (FASS), says a recent report and model developed by his company are able to demonstrate how destructive, both physically and financially, storm surge can be.
Storm surge is “such a large scale phenomenon that doesn’t really respect construction and other kinds of things,” Botts said. “If you’re in a storm surge zone, you’re likely to be impacted by it.”
Until Hurricane Katrina in 2005, however, the impact of storm surge on the overall property losses caused by hurricanes was generally not in the forefront of concern to most residential property insurance companies. After all, storm surge was a flood loss not covered by the traditional homeowners insurance policy.
Katrina and the lawsuits that followed changed that mindset.
Insurers, and indeed the world, saw first hand the amount of damage storm surge could produce. Just three years later, Hurricane Ike blasted ashore near Galveston, Texas, with a massive storm surge that helped it become the third most costly U.S. hurricane on record, largely due to the surge.
A member of the First American Corp. family of companies, FASS has access to information on around 90 percent of all the private properties in the United States, or at least 124 million separate addresses. The group has used that information to develop a model to analyze storm surge exposure at the individual property level.
The 2010 First American Storm Surge Report released in late March illustrates the exposure of single residential structures to storm surge in 13 key geographic areas. The numbers are massive. The storm surge exposure to Miami alone in the event of a Category 5 hurricane $53.6 billion, according to the report.
Flood Coverage or Not?
Insurance agents throughout the United States, and especially those whose customers own properties near the nation’s coastlines, are painfully aware that only a fraction of residential property owners that need the protection of flood insurance actually buy it. Even homeowners in areas that are high risk for flooding sometimes are reluctant to spend the extra money, although the coverage is far less expensive than traditional property insurance.
Botts said the information provided by the storm surge hazard model could be a useful tool for agents and insurance companies to use to educate insureds about the danger of storm surge in vulnerable coastal areas — and in informing property owners of the need to buy flood insurance.
“What we do is we build large, hazard risk data sets, tax data sets, sales and use tax, premium tax for the insurance industry. And we combine these very granular risk-hazard or tax databases with a geocoder that we developed, which takes an address and can get you right down to, literally, the rooftop,” Botts said.
What this means for insurers, and agents, is that they can visibly show owners of properties along and near the hurricane prone coastlines just what the impact of storm surge from a Cat 1 or Cat 5 hurricane, or any size storm in between, would be on a particular insured’s property.
For example, storm surge report released in March was designed “to look at 13 major residential property markets in the Gulf and Atlantic coastal region and understand, at a property-by-property level, which of these properties were in a storm surge potential area or would be exposed to storm surge,” Botts explained. Then property-by-property the dollar value of those single family homes — the buildings only, not the contents — in potentially affected areas was determined.
A Ton of Water
“Storm surge moves with the forward speed of the hurricane — typically 10–15 mph,” the report states. “One cubic yard of sea water weighs 1,728 pounds — almost a ton.”
Adding to the impact of rushing water, the trees, pieces of buildings and other debris that are typically caught up in the swirl act as a battering rams when they come into contact with a stationary object, such as another building.
Even areas that are not in direct path of a hurricane can be hugely impacted, as evidenced during Hurricane Ike, when its storm surge powered north up Galveston Bay, along the east side of Houston.
Botts says natural and man-made channels and barriers can add to the destructive possibilities.
“What’s going to facilitate inward movement? Creeks, bayous, drainage ditches,” he said, adding that un-raised highways and railroad rights-of-way can also serve that purpose. Meanwhile, natural and man-made barriers, such as hills, levees, even mounds of earth can keep the surge from flowing out of inland areas.
“We spend an enormous amount of time looking at what happens once that water gets onshore, what are the likely areas of inundation,” Botts said.
Listen to Insurance Journal’s interview with Dr. Howard Botts online at http://www.insurancejournal.tv/videos/3622/.
By Stephanie K. Jones
April 30, 2010
Posted by Benji Riggins on April 16, 2010 under Flood |
Congress Thursday voted to restore jobless benefits for hundreds of thousands of Americans who had lost them during a partisan standoff in the Senate over spending.
[The bill also reauthorizes the federal flood insurance program until the end of May and restores federal COBRA health insurance subsidies.]
The House of Representatives voted 289-112 to restore the lapsed programs and sent the measure to President Barack Obama, who signed it into law. The Senate had approved it earlier in the day after weeks of delay.
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With the unemployment rate at 9.7 percent, some 6.1 million Americans rely on jobless benefits. Those benefits, which average roughly $300 a week, expired for more than 200,000 Americans on April 5 after Republican Senator Tom Coburn blocked a vote shortly before Congress left town on a two-week break.
The standoff also has disrupted a federal flood insurance program, which has held up 1,400 home sales each day in flood-prone areas and slashed emergency loans to small businesses, Democrats said.
COBRA health insurance subsidies for the unemployed and payments to doctors under the Medicare health program have also been disrupted.
[The provision reauthorizing the federal flood insurance program is effective retroactively to Feb. 28 and extends the program until May 31, 2010, the day before the new hurricane season officially starts.
The Independent Insurance Agents & Brokers of America (Big "I") said it is concerned that Congress has only extended the program for a brief period again.
"It is alarming that the NFIP was allowed to expire, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for more than two weeks," said Robert Rusbuldt, Big "I" president and CEO. "The Big 'I' is greatly concerned that these short expiration periods, coupled with the uncertainty of temporary extensions, will negatively impact the market."
Since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application, according to the agents' group.
"This series of temporary extensions, last minute actions and service lapses during such a delicate period in our economy is of great concern to our agents, homeowners and small businesses," said Charles Symington, Big "I" senior vice president of government affairs. "Though we are grateful that Congress extended this program, we are increasingly frustrated by these repeated one-month extensions and the periods of expiration that sometimes result from them."]
REPUBLICAN OBJECTIONS
Coburn and other Republicans argued that Congress should find a way to pay for the unemployment benefits program rather than letting it add to a budget deficit that could hit a record $1.5 trillion this fiscal year.
“Our debt and deficits are as much of an emergency as unemployment, yet Congress continues to pretend it can spend and borrow without restraint,” Coburn said in a statement.
The Senate voted down Coburn’s proposal to redirect $20 billion from other government programs.
Democrats said jobless aid had always been considered emergency spending during times of high unemployment.
Three Senate Republicans — Susan Collins and Olympia Snow of Maine and Ohio’s George Voinovich– voted for the bill. In the House, Republicans were divided, with 49 voting for the bill and 112 voting against it.
Jobless benefits normally expire after six months, but Congress has extended the program several times during a slump marked by high levels of long-term joblessness.
Obama said he was “grateful” that Congress had moved forward on the temporary extension but urged lawmakers to extend the benefits further.
“As I requested in my budget, I urge Congress to move quickly to extend these benefits through the end of this year,” Obama said in a statement.
“I also urge Congress to move forward on legislation to help small businesses grow and hire and other measures to increase the pace of job growth,” he said. “This is my top priority, and I will fight day and night until every American who wants a good job has one.
The bill passed by the Senate would extend benefits through June 2 and apply retroactively to those cut off last week. It would cost $18.2 billion, according to the nonpartisan Congressional Budget Office.
Democrats have been extending the program on a month-to-month basis as they work on a longer-term fix.
That has given Senate Republicans plenty of opportunity for disruption.
Republican objections forced the Senate to spend most of the week on a measure that had been handled on a routine basis in the House. Democrats can expect to face similar delays on other spending measures that are not offset with spending cuts elsewhere, Coburn said.
REGULAR DEBATE TOPIC
The debate over spending is likely to resurface on a regular basis as the November congressional elections approach.
Republicans have pointed to record deficits and last year’s $863 billion economic stimulus package to paint Democrats as reckless spenders unconcerned with the country’s mounting debt.
Democrats say the country’s dire fiscal situation can be traced in large part to tax cuts, wars and an expansion of Medicare that were enacted when Republicans were in control.
“Those who talk about balancing budgets who have not balanced them in the past should not be trying to do so on the backs of hundreds of thousands of unemployed in our beloved country,” said Democratic Representative Sander Levin, who chairs the tax-writing Ways and Means Committee.
(Additional reporting by Deborah Charles; Editing by Eric Walsh and Peter Cooney)
By Andy Sullivan
April 15, 2010
Posted by Benji Riggins on March 29, 2010 under Flood |
As insurance and real estate agents and homeowners feared, Congress left Washington without extending the federal flood insurance program.
Congress adjourned until April 12 after failing to agree on an unemployment benefits bill that included a provision with an extension of the National Flood Insurance Program.
As a result, the federal flood insurance program’s authority to write new policies ends on Sunday, March 28 at midnight. After that time, insurance agents will not be able to provide new or renewal flood insurance policies, which are required by lenders to close on some real estate sales.
Senator Tom Coburn, R- Okla., blocked the Senate from voting on the bill to extend the jobless benefits arguing that to do so would add to the deficit. Democrats argued that the measure qualified as emergency spending.
A similar impasse occurred at the end of February and the NFIP was closed for several days until Congress renewed it on March 2.
But this time the hiatus will be longer.
Congress could reinstate the NFIP and other affected programs retroactively when it returns on April 12.
The NFIP expiration last month caused headaches for insurance agents and their customers as well as delays for some consumers waiting to close on the sale of a property within a flood hazard area.
While no new policies can be issued during a lapse in NFIP authorization, consumers with current flood insurance policies remain covered. Claims payments are not affected.
The NFIP has issued guidance for operating during an interruption.
FEMA is expected to issue updated guidance soon.
