[Congressional Record Volume 154, Number 74 (Tuesday, May 6, 2008)]
[Senate]
[Pages S3779-S3784]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007--MOTION TO PROCEED


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order, pursuant to rule 
XXII, the Chair lays before the Senate the pending cloture motion, 
which the clerk will report.
  The bill clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the motion to 
     proceed to Calendar No. 460, S. 2284, the National Flood 
     Insurance Act Amendments.
         Harry Reid, Barbara Boxer, Patty Murray, Byron L. Dorgan, 
           Edward M. Kennedy, Christopher J. Dodd, Daniel K. 
           Akaka, Benjamin L. Cardin, Patrick J. Leahy, Bernard 
           Sanders, Sherrod Brown, Amy Klobuchar, Ken Salazar, 
           Sheldon Whitehouse, Max Baucus, Daniel K. Inouye.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call is waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to S. 2284, the National Flood Insurance Act 
Amendments, shall be brought to a close?
  The yeas and nays are mandatory under the rule. The clerk will call 
the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Indiana (Mr. Bayh), the 
Senator from New York (Mrs. Clinton), the Senator from Louisiana (Ms. 
Landrieu), and the Senator from Illinois (Mr. Obama) are necessarily 
absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from North Carolina (Mr. Burr), the Senator from Idaho (Mr. Craig), the 
Senator from Nebraska (Mr. Hagel), the Senator from Oklahoma (Mr. 
Inhofe), and the Senator from Arizona (Mr. McCain).
  The PRESIDING OFFICER (Mr. Sanders). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 90, nays 1, as follows:

                      [Rollcall Vote No. 116 Leg.]

                                YEAS--90

     Akaka
     Alexander
     Allard
     Barrasso
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Brownback
     Bunning
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Cochran
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Crapo
     DeMint
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Graham
     Grassley
     Gregg
     Harkin
     Hatch
     Hutchison
     Inouye
     Isakson
     Johnson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Martinez
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--1

       
     Coburn
       

                             NOT VOTING--9

     Bayh
     Burr
     Clinton
     Craig
     Hagel
     Inhofe
     Landrieu
     McCain
     Obama
  The PRESIDING OFFICER. On this vote the yeas are 90, the nays are 1. 
Three-fifths of the Senators duly chosen and sworn having voted in the 
affirmative, the motion is agreed to.
  Mr. DODD. Mr. President, I move to reconsider the vote.
  Mr. SHELBY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DODD. Mr. President, I understand now there will be a period of 
30 hours of debate on the motion to proceed. My understanding is--and 
my friend and colleague from Alabama will

[[Page S3780]]

correct me if I misspeak at all--over this evening people are going to 
be discussing the various amendments that can be offered.
  We have actually had meetings with a number of our colleagues who 
have amendments they want to offer on this bill. Our sincere hope is 
all of these amendments will be considered. I have been informed, 
Senator Shelby has by the authors of these amendments, their intention 
is to take whatever limited amount of time they need to make their 
case.
  So my hope tomorrow is we will be able to vitiate the 30 hours, get 
right to the bill in the morning, and then move forward on these 
various ideas that are going to be offered by our colleagues, with the 
goal in mind of completing the work on this legislation hopefully by 
tomorrow.
  There are a number of amendments out there, but I think as the 
authors of these amendments have indicated, they will not necessarily 
take a lot of time for debate.
  Let me also take advantage, if I can, in offering to our colleagues 
on this side of the aisle--we have heard from several members. Senator 
Landrieu has some strong interest in this legislation but others may as 
well. I have asked them to come forward if they would, either this 
afternoon or early this evening, and let our staffs know what these 
amendments are so we can go over them with them and try to set up some 
orderly process by which we can consider the amendments over the course 
of business tomorrow as well.
  I make this request of our colleagues who have amendments to the 
Flood Insurance Reform and Modernization Act: Would you please let us 
know as soon as possible what those amendments are so we can consider 
them, or at least set up a timeframe for you to offer them on the 
floor.
  With that in mind, let me offer some initial thoughts, if I can. 
First, let me thank the majority leader. We are here today because the 
majority leader has created some time for us to do this. This is an 
interest in which all of us should have a deep concern and deep 
interest; I note with obvious importance my colleague from Alabama and 
others in the Gulf State areas.
  Flood insurance is a critical issue for the coastal region of the 
country as well as other areas. This is a vitally important piece of 
legislation we are considering, S. 2284. It is the Flood Insurance 
Reform and Modernization Act of 2007. As I have indicated, it is a 
strong bipartisan bill that enhances the long-term viability of the 
National Flood Insurance Program, helping to provide critical insurance 
coverage for millions of homes and business owners throughout the 
country.
  The substitute amendment, which I will offer later, will be offered 
by myself and Senator Shelby, and contains two parts, both of which 
passed the Committee on Banking, Housing and Urban Affairs with the 
support of every member of the committee, Republican and Democrat. The 
substitute amendment contains the flood insurance reform package 
exactly as was passed by the committee as well as a bill to establish a 
Commission on Natural Catastrophe Risk Management and Insurance.
  This is a very important issue, I might point out to Members. The 
unanimous votes on these bills clearly show the importance of flood 
insurance and the strength of the bill we are considering.
  Senator Shelby and I have joined to urge our colleagues to support 
our efforts to strengthen flood insurance for three key reasons. The 
first reason is this bill provides much needed relief to hard-working 
Americans who have paid flood insurance premiums for years and through 
no fault of their own will face new stiff premium increases to reduce 
the massive debt owed by FEMA as a result of Hurricanes Katrina, Rita, 
and Wilma.
  This bill is fiscally responsible, No. 2, and greatly reduces the 
exposure of the Federal taxpayer under the flood program. No. 3, this 
bill creates environmentally sound flood policy which is needed to 
preserve our Nation's most precious natural resources.
  I want to touch on each of these three points because I think too 
often we get so into the details we miss the larger picture that is 
involved with a piece of legislation such as this. This bill is 
complicated and it makes a number of significant reforms, but taken all 
together, it contains key policies that truly help millions of our 
fellow citizens.
  As I said, this bill is needed to provide relief for those who 
suffered flood losses as a result of the 2005 hurricanes. These home 
and business owners did exactly what they were supposed to do. They 
purchased flood insurance and paid premiums--some had done so for 
decades--to cover their losses in the event of a flood. If we lay the 
entire $17 billion debt now owed by FEMA at their feet, we will force 
many of them out of the program. To pay the interest on the debt alone, 
rates would have to nearly double, and they would have to increase many 
times over to make a dent in that debt.
  Skyrocketing premiums will create massive disincentives to purchasing 
flood insurance at exactly the time we need to encourage participation. 
At this time of increased hurricane activity, our efforts should be 
focused on getting as many people to purchase flood insurance as 
possible, so they will be able to rebuild after a storm and not have 
those larger costs be spread out to people across the country.
  Discouraging the purchase of flood insurance would also increase the 
future liability of the American taxpayer. Those who flood will be 
underinsured or have no insurance at all, and they will turn to the 
Federal Government for disaster assistance.
  Prior to the inception of the National Flood Insurance Program, that 
is exactly what happened year after year after year. After severe 
flooding in the 1950s, Congress established the National Flood 
Insurance Program because there was no private flood insurance and the 
lack of coverage resulted in significant Federal disaster aid payments.
  The flood program was designed to provide insurance while requiring 
safer development so people were better protected from nature's wrath. 
And while we are now looking at a significant debt, I want to 
underscore the fact that the flood program has historically been self-
sustaining, paying claims, for the most part, through premiums.

  Hurricane Katrina, and the storms that followed, devastated the 
entire gulf region and produced flooding unlike any other storm in our 
lifetime. Millions of people were driven from their homes and over 
1,800 people were killed.
  There was no mechanism in the Federal flood program to pay for the 
losses of the magnitude experienced in the 2005 storms, so it borrowed 
funds from the U.S. Treasury to meet those obligations and ensure that 
families in Louisiana, Mississippi, Texas, Florida, and Alabama could 
rebuild.
  We are now faced with a choice, to forgive the debt so that flood 
insurance continues to be available to home and business owners 
throughout the country or substantially raise premiums on all 
policyholders, an action which would hurt the very people who are 
trying desperately to rebuild their lives after these hurricanes. The 
bill before us makes what I believe is the right choice.
  The second reason this bill is necessary is that it establishes 
fiscally responsible policies to ensure that flood insurance will 
continue to be available, while reducing the likelihood that taxpayers 
would be on the hook for those flood losses. This bill strengthens 
flood insurance so the next time a hurricane hits, whether it be in 
Mississippi, Florida, Texas, Alabama, Connecticut, or any other State 
that borders on our coasts, flood claims can be paid without relying on 
taxpayer funds across the country.
  It does this by requiring flood insurance in additional at-risk 
areas, moving the program toward actuarial soundness and requires the 
program to build up reserves to pay for losses. These changes will help 
guarantee additional premium income while maintaining affordability for 
most homeowners.
  As I also indicated, this bill contains environmentally sound flood 
policies. These reforms, especially to the flood mapping program, will 
allow communities, homes, and business owners throughout the country to 
accurately assess their flood risk and will encourage responsible and 
environmentally friendly development decisions.
  Communities cannot make decisions to protect fragile areas along our 
coasts and riverbeds if maps are not accurate and risks are unknown. 
The

[[Page S3781]]

mapping provisions contained in this bill ensure that flood maps will 
be accurate, up to date, and readily available. No longer should 
communities and homes and business owners have to rely on outdated and 
inaccurate information.
  Senator Reed of Rhode Island is to be commended for his work on the 
mapping provisions of this bill that are critical to the flood 
insurance program.
  This is a strong and needed bill which will extend the flood 
insurance program for 5 additional years, put it in a financial 
position to be able to continue to make flood insurance available to 
the millions of families at risk throughout our Nation, while at the 
same time reducing the risk of taxpayer assistance.
  I want to take a moment to let my colleagues know of the range of 
support for this bill. This is a very diverse and somewhat unique 
coalition of organizations that has come out in support of this piece 
of legislation. These organizations, I believe, are worth mentioning 
because of their diversity.
  We have the support of the following: The Consumer Federation of 
America, the American Insurance Association, the Council for Citizens 
Against Government Waste, the Competitive Enterprise Institute, the 
Defenders of Wildlife, the Environmental Defense Fund, the Financial 
Services Roundtable, Freedom Works, Friends of the Earth, the National 
Association of Mutual Insurance Companies, the National Wildlife 
Federation, the Property Casualty Insurers of America, the Reinsurance 
Association of America, and Taxpayers for Common Sense.
  That is not normally a coalition you put together around a piece of 
legislation, covering the financial services industry as well as 
environmental groups and consumer groups as well.
  I commend all of them for working with us, going through the long 
process of developing this bill in the way we figure comprehensively 
deals with this issue. I realize these groups are not normally united 
in the support of a single piece of legislation, but they have all come 
out in favor of a reasonable, balanced approach that we have taken to 
the flood insurance program.
  As I said earlier, the substitute amendment we will be offering also 
establishes a Commission on Natural Catastrophe Risk Management and 
Insurance. There has been a good deal of discussion about adding wind 
and other risks to the flood insurance program. These are arguments 
hard to answer because there is a very strong and legitimate claim to 
be made.
  However, it was the judgment of the Banking Committee that while 
these ideas have merit--and I strongly indicate and support that--they 
deserve further study so we can understand the implications of what a 
major shift would be in this program and how the natural catastrophes 
are insured.
  To that end, the committee unanimously passed legislation to 
establish a blue ribbon commission that would in very short order 
examine the availability and affordability of natural catastrophe 
insurance and make recommendations posthaste to the Congress and to the 
administration on whether, how, and to what extent additional Federal 
action in this area would be appropriate. Until we have that 
information, I honestly could not stand before my colleagues and give 
them any idea of the magnitude of the cost of this program. We would 
literally be in the dark entirely if we tried to expand it. That is not 
to suggest there is not legitimacy to the request. But we ought to deal 
with it in as thoughtful a manner as we can so we are not here again 
next year or the year after, once again forgiving debt, trying to come 
up with another program to deal with the result of a massive infusion 
of taxpayers' dollars to deal with disasters with which people are 
coping. To that end the committee unanimously passed the legislation to 
establish this commission.
  What is clear is that millions of Americans, some of whom were 
devastated by hurricanes, have seen increased premiums and constrained 
availability of insurance. We are all committed to doing everything we 
can to ensure that people at risk are able to insure their homes and 
businesses. We believe this commission will provide the information we 
need to undertake that effort in a sensible and effective way.
  I thank Senator Shelby and his staff who worked so closely with us on 
this bill. Senator Shelby has been a very strong advocate of flood 
insurance. Under his leadership and chairmanship of the committee, the 
Banking Committee passed a similar bill in the last Congress. I also 
thank Senators Reed of Rhode Island, Bunning, and Carper for their work 
on the legislation, particularly on the flood insurance portion. The 
status quo on flood insurance is not an option. Families in every State 
rely on flood insurance to rebuild when they are flooded out. The 
national flood insurance program must be reformed and strengthened. I 
urge my colleagues to support this legislation so that our constituents 
can continue to rely on a strong and stable national flood insurance 
program.
  I urge colleagues who have amendments and ideas to offer to this 
legislation to please let us know of these ideas immediately so we can 
consider them and put them in a proper order for consideration when we 
resume consideration of the legislation tomorrow.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, I rise in support of the managers' 
amendment. It is a bill that combines the Flood Insurance Reform Act of 
2008 with the Catastrophic Commission Act of 2008 that Senator Dodd has 
just outlined. Senator Dodd and I worked very closely to develop this 
important legislation in the Banking Committee, which the Senate 
Banking Committee, by the way, unanimously passed last year.
  The legislation places the national flood insurance program on a 
stronger financial footing because it requires those living and working 
in areas vulnerable to flooding to assume more of the financial risk, 
as it should be. The bill also addresses many other structural and 
fiscal weaknesses in the program itself.
  In addition, the managers' amendment creates a commission to study 
the current market for catastrophic insurance. The results of this 
commission should provide Congress with a factual basis for future 
legislative action, if we deem it necessary.
  To fully appreciate the need for significant reform of the national 
flood insurance program, we must first consider the program's history. 
The flood insurance program was established in the Congress in 1968 to 
provide policyholders with some insurance for flood-related damage. The 
intent of the program was to generate enough revenue through premium 
dollars to prevent taxpayers from paying for flood-related losses 
during an average flood loss year. At the inception of this program, 
Congress included explicit subsidies for business properties and homes 
known as preflood insurance rate map or pre-FIRM structures. It was 
determined that it was not fair for the owners of such structures 
immediately to pay actuarial prices because they received no notice 
regarding the new mandatory purchase rules.
  That said, it was also believed that many, if not all, of the pre-
FIRM structures would quickly become ineligible for the subsidies. For 
this reason, Congress never included a subsidy elimination mechanism. 
This oversight has had significant financial consequences for the 
current flood insurance program.
  More than 40 years later, a large number of these properties still 
receive explicit subsidies. Many of these properties have made the 
greatest claims on the program after suffering repetitive losses. In 
fact, the Congressional Budget Office has valued the explicit subsidy 
for grandfathered homes at $1.3 billion per year. There are other key 
factors beyond the poorly designed financial structure of the program 
that need to be addressed. For example, the size of the program has 
expanded exponentially since its inception. In 1978, 10 years after the 
program started, the program had 1.4 million policyholders and $50 
billion in risk exposure. Today there are more than 5 million 
policyholders and over $1 trillion in risk exposure.
  Finally, the maps used to determine the rates for the program are 
largely out of date just about everywhere. Antiquated maps do not 
represent accurately the risk that covered structures face.
  Without up-to-date maps and, hence, an accurate risk assessment, 
price is

[[Page S3782]]

simply reduced to guesswork. Often these guesses have been too low, and 
the taxpayers have been forced to make up the difference, oftentimes to 
very wealthy people. This program currently generates $3 billion in 
premiums, spends roughly $1 billion on administration, and has a 
liability exposure of more than $1 trillion. Let me repeat that. The 
program has a liability exposure of more than $1 trillion. In fact, the 
financial deficiencies of the program are so great that the Government 
Accountability Office placed it on a list of high-risk programs because 
it does not generate enough money to cover its liabilities.
  Furthermore, Robert Hunter, who is recognized as one of the key 
individuals in getting the program started, has stated:

       The integrity of the program [must be] restored . . . [or] 
     consideration must be given to ending this . . . hopelessly 
     administered program.

  Mr. Hunter was with the Consumer Federation of America for many 
years. Mr. Hunter's prescription for restoring the program's integrity 
is requiring greater mitigation efforts and moving toward actuarial 
soundness. This is what we have attempted to do today.
  I recognize that reforming the flood insurance program presents the 
Congress with difficult choices. We could end the program, we could 
dramatically increase fees on program beneficiaries, or we could do 
nothing. Each of those choices would be unacceptable. That is why 
Senator Dodd and I have crafted a bill that addresses what we believe 
are the most significant financial weaknesses of the program without 
dismantling its core features. We struck a realistic balance between 
the needs of the program's beneficiaries and the taxpayers on the hook 
for the program's shortfalls.
  The legislation before us strengthens the program by immediately 
eliminating subsidies on vacation homes, businesses, and severe 
repetitive-loss properties. It then paves the way for eliminating all 
subsidies in the future. It proceeds in such a way, however, that 
recognizes immediate elimination of all subsidies is not prudent 
because flood maps will not be updated for some time.

  To address the mapping deficiencies, the bill creates stringent 
standards that the program must use to complete the map modernization 
process. Once we have the most accurate and up-to-date flood mapping 
possible, homeowners will better understand and mitigate their risks.
  The program will also transition to more accurate pricing. In 
addition to eliminating subsidies, the bill requires State-chartered 
lending institutions to maintain flood insurance coverage for all 
mortgages located within the 100-year flood plain. It increases 
enforcement tools available to bank regulators at both the Federal and 
State levels by requiring escrow of flood insurance premiums throughout 
the life of the mortgage. The civil monetary penalties that regulators 
may levy against lenders for failure to comply are also increased. The 
bill creates a mandatory reserve fund to cover the cost of unusual 
events. This provision is intended to limit future reliance on the 
American taxpayer. The bill requires a rulemaking to ensure that the 
``write your own'' carriers are being reimbursed solely for their 
expenses.
  Finally, the legislation creates a commission that Senator Dodd 
outlined earlier to study the effects of natural disasters on our 
insurance system. The commission must report its findings within 9 
months.
  Some have suggested that we should add wind insurance coverage to the 
already bankrupt Federal flood insurance program. I remind my 
colleagues of certain facts: The Insurance Information Institute 
estimates that by adding wind as a covered peril, the program will take 
on an additional $14 to $19 trillion worth of risk exposure. In 
addition, a Towers-Perrin report indicates that adding wind coverage to 
the flood program could lead to an additional annual program deficit as 
high as $1 billion.
  Both of these studies point out exactly why we should have a complete 
understanding of all of the facts before we even contemplate expanding 
the Federal Government's role as an insurance provider.
  Before I conclude, I will take a moment to recognize Senator Bunning 
for all of his efforts to reform this program for the past several 
years. As Senator Dodd did, I also recognize Senator Jack Reed of Rhode 
Island and his staff for their efforts to create accurate and up-to-
date flood maps which are essential for this program in the future. 
Lastly, I thank my colleague, Senator Dodd, chairman of the committee, 
and his staff for their efforts in crafting this bipartisan 
legislation.
  I repeat something I said earlier: Reform of the program involves 
tough choices. We must make these tough choices, however, if this 
program is going to survive. For the good of the program beneficiaries 
and the taxpayer, I urge my colleagues to support this legislation.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WICKER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. McCaskill). Without objection, it is so 
ordered.
  Mr. WICKER. Madam President, this week the Senate will consider the 
reauthorization of the National Flood Insurance Program. Today, I have 
filed an amendment to this reauthorization legislation which is of 
critical need, not only to the gulf coast but to the entire country. My 
amendment would add a multiple peril insurance provision to create a 
new option in the National Flood Insurance Program of offering coverage 
of both wind and flood risk in one policy.
  The proposal would require premiums for this new coverage to be risk-
based and actuarially sound, so that the program would be required to 
pay for itself. Indeed, the Congressional Budget Office has estimated 
that the multiple peril program:

        . . . would increase premium receipts and additional 
     claims payments by about the same amount--resulting in no 
     significant net budgetary impact.

  By covering wind and flood risk in one policy, the multiple peril 
option would allow coastal homeowners to buy insurance and know that 
hurricane damage would be covered regardless of whether that damage is 
caused by wind or water.
  It has been just over 2\1/2\ years since Hurricane Katrina hit the 
gulf coast with its 30-foot storm surge and winds over 125 miles an 
hour. Katrina was the most devastating natural disaster ever to hit 
North America.
  The people of Mississippi and Louisiana have made great progress in 
rebuilding the communities along the gulf coast. Everyone knows the 
Federal Government's response was not perfect, but the Government and 
this Congress have done a lot to help to rebuild communities, homes, 
businesses, and lives along the gulf coast.
  As much as the Government and this Congress have done, there is still 
more work to be done. There are still too many destroyed homes left 
uninhabited, too many slabs of concrete that represent all that is left 
of what used to be homes and businesses. A major contributing factor to 
this problem is the cost and availability of insurance. Since the day I 
became a Member of this body, the cost of insurance has become an issue 
I continually hear about. As I stated in my maiden speech, if you can't 
insure it, you can't build it or finance it. It is that simple. The 
problem is harming the efforts of small businesses to rebuild and grow 
and succeed, and it is driving rental rates beyond affordability. It is 
increasing the cost of home ownership and, in many cases, making it 
impossible for people who lost their homes to Katrina to rebuild.
  Congress needs to act to find a workable solution to this problem, 
and the National Flood Insurance Program reauthorization gives us an 
opportunity to do so. I say this not only for the good of the people of 
Mississippi and Louisiana but also for every single American taxpayer 
and for every person who lives along the American coastline.
  This is not just an issue for the gulf coast. From Bar Harbor, ME, to 
Brownsville, TX, millions of Americans live on a coastline in the path 
of future hurricanes. As the Biloxi Sun Herald noted this week in an 
editorial in support of my amendment:


[[Page S3783]]


       More than half of the Nation's population lives within 50 
     miles of a coastline, and 50 miles is well within harm's way 
     when a major storm makes landfall.

  We have not always had a national flood insurance program. In 1968, 
Congress was forced to act to address the problems associated with 
flooding from hurricanes. Now the same problem that led to the National 
Flood Insurance Program is happening with wind. As it did in the past, 
Congress needs to act to address the problem. The National Flood 
Insurance Program was created because insurance companies quit offering 
coverage for flood damage caused by hurricanes. With competing wind and 
flood policies, the same has happened to wind insurance in these same 
areas.
  Wind versus water--that is the debate which still occurs today in 
courtrooms on the Mississippi gulf coast between insurance companies 
and storm victims. It is a debate that necessitated the multibillion-
dollar supplemental appropriations package this body approved after 
Katrina. Unless Congress changes the law, the wind versus water debate 
will result in a multibillion-dollar supplemental appropriations 
package after the next big hurricane wherever in the United States it 
may land. This is driving more and more homeowners and business owners 
into a State-sponsored wind pool, which is required to provide 
coverage. But this is not a reasonable long-term solution because too 
much risk is being placed in too small of a pool. What was initially 
conceived to be the last resort has now become the only resort for many 
Mississippians living along the gulf coast. The reality is that State 
wind pools, especially in my home State of Mississippi, are unable to 
spread the risk to balance the claims.
  As the Government Accountability Office has pointed out, these 
competing wind and flood policies provide a conflict of interest in 
determining who is responsible to pay these claims. The flood insurance 
companies say it was wind. The wind insurance companies say just the 
opposite. Because of this, my constituents on the gulf coast are paying 
thousands of dollars to the State wind pool. That doesn't count flood 
insurance or homeowners insurance on top of that.
  The picture I am painting here is quite clear: The unaffordability of 
insurance is driving people from their homes.
  Some of my colleagues may point out that every homeowner can purchase 
wind insurance. I would argue that, as a practical matter, they cannot. 
As I mentioned before, this is not just a Mississippi problem, nor is 
it just a gulf coast problem. For instance, in Massachusetts, since 
2003, 10 insurance companies have dropped homeowner coverage in the 
Cape Cod coastal area. This affects approximately 44,000 homeowners in 
Massachusetts. The Massachusetts State insurance backstop is now 
insuring 44 percent of the market.
  I hope my colleagues from the following States, in addition to 
Mississippi and Louisiana and Massachusetts, will pay attention to this 
debate. States such as New York, Maryland, Virginia, South Carolina, 
Florida, Alabama, and Texas have all experienced the same problem. In 
North Carolina, for example, the State insurance plan known as the 
``BEACH Plan'' saw its liability increase over 260 percent in just 4 
years. I assure you, I would prefer that the private market write these 
policies, but this simply is not happening. Every day, more and more 
liability is being thrust upon the shoulders of the States.

  To help address this problem, the best solution available is to allow 
homeowners to purchase wind and flood insurance coverage in the same 
policy. This would spread the risk outside of defined State borders and 
would ensure available, affordable, and total insurance for coastal 
homeowners. That is exactly what my multiple peril insurance amendment 
does.
  Multiple peril insurance will allow property owners to buy both wind 
and flood coverage from the National Flood Insurance Program. 
Residential coverage would be $500,000 for structures and $150,000 for 
contents and the loss of use. For nonresidential, it would be $1 
million for structures and $750,000 for contents and business 
interruption.
  Under this amendment, property owners would be able to buy insurance 
and know in advance that hurricane damage would be covered without 
disputes over the cause of damage. No longer would home and business 
owners have to go to court to try to prove it was either wind or it was 
water that destroyed their property.
  The premiums for this new single coverage would be risk-based and 
actuarially sound, according to the terms of my legislation. The CBO 
has agreed that the program will, over the long run, pay for itself.
  Windstorm insurance would be available under my amendment only where 
local governments adopt and enforce the international building code or 
equivalent building standards. This Federal multiple peril program will 
spread risk geographically to form a stable insurance pool, compared to 
State pools that cover only a small area.
  Again, I state this issue doesn't just impact the gulf coast. It 
impacts most directly the 55 percent of our country's population that 
lives within 50 miles of a hurricane-prone coastline.
  Beyond that, however, this is a good-government issue that affects 
every single taxpayer. Multiple peril coverage would also protect the 
taxpayers by saving them from having to pay for another giant emergency 
relief package the next time a hurricane hits. It is not a question of 
if but when it happens and, I might add, where it happens again.
  With the legislation before us, the reauthorization of the National 
Flood Insurance Program, we have been provided an opportunity to take 
action to begin to correct this inequality. I believe my multiple peril 
amendment is a good start.
  I realize there are several philosophies about solving the coastal 
insurance crisis, and I am not wedded to any single approach. I would 
simply point out that this amendment has already been adopted by the 
House of Representatives in an amendment offered by my friend and 
former colleague, Representative Gene Taylor of Mississippi. What I am 
committed to is providing my constituents relief before the next 
hurricane hits. I do not believe Congress should take over the entire 
private market of all insurance. I believe in free market principles, 
and I believe Congress should look seriously at the State-by-State rate 
regulatory structure that forces insurers to set their rates on the 
basis of geographical boundaries within individual States in which they 
are admitted to do business. I believe Congress should consider other 
thoughtful proposals such as the one being advanced by the St. Paul 
Travelers Insurance Company, which would allow limited rate regulation 
relief for the purpose of creation of a coastal band. This is simply 
one of a number of good ideas that deserve consideration. But the 
status quo does not work, and that is what we have an opportunity to 
correct this week.
  Some of my colleagues will argue against my amendment for a number of 
what they see as problems. Very seldom is legislation error-free or 
exactly correct at the outset, and my amendment is no different. We 
should not, however, let the perfect be the enemy of the good.
  I ask my colleagues to remember all of the places along the coast of 
North America and perhaps invite them again to visit Hancock County, in 
my State of Mississippi, ground zero, where Katrina made landfall, and 
see for themselves why action is needed now and why we should not miss 
this opportunity on the reauthorization of the National Flood Insurance 
Program.
  This amendment is badly needed. At the appropriate time during 
consideration of amendments, I will urge my colleagues to adopt the 
amendment.
  Madam President, I yield the floor.
  Mr. COCHRAN. Madam President, I am pleased to support the amendment 
offered by my colleague from Mississippi. The amendment of Senator 
Wicker will benefit not only constituents in Mississippi but anyone who 
lives in the path of future hurricanes.
  Two-and-a-half years ago, the most devastating natural disaster in 
the history of our country, Hurricane Katrina, made landfall on the 
Mississippi, Louisiana, and Alabama coasts. The devastation that was 
caused was indescribable.
  The people of our State have made significant and impressive progress 
toward recovery since that fateful day, August 29, 2005, but there is 
still much

[[Page S3784]]

work to be done. There are far too many vacant lots and empty slabs 
that remain around our gulf coast for our recovery to be considered 
complete.
  Mississippians are appreciative of the assistance the Federal 
Government has provided to aid in their recovery from Hurricane 
Katrina. However, a significant additional opportunity to assist that 
recovery will have been lost if the issue of affordable wind insurance 
is not addressed.
  One of the most significant impediments to the recovery of the 
Mississippi gulf coast is the availability of affordable homeowners 
insurance. There are many coastal residents who simply cannot afford to 
insure their homes, and homes cannot be rebuilt until they have secured 
insurance.
  One of the most expensive components of these homeowners insurance 
premiums is coverage for damage caused by wind.
  Most coastal Mississippians are currently being forced to buy their 
wind coverage from the State-run wind pool. This wind pool is necessary 
because the private insurance industry has largely discontinued selling 
wind policies in these coastal communities.
  So a program that was designed as an insurer of last resort has 
become the only available option. Those who are able to buy coverage 
from this State wind pool have found their premiums increased 
dramatically over the last 2 years.
  Unfortunately, this is a shortsighted solution. There is simply too 
much risk, in too small of a pool, concentrated into a small geographic 
area. This is not a problem that is unique to Mississippi. Most State 
wind pools face the same problem of not being able to spread the risk 
wide enough to avoid an overwhelming loss in the event of a significant 
hurricane.
  I wish to be clear. This is not only an amendment for those who were 
impacted by Hurricane Katrina. This amendment would benefit millions of 
Americans who live on our vast coastlines and face the potential of a 
future catastrophic hurricane.
  This amendment would allow homeowners to buy insurance and know in 
advance of the storm that they will be covered without a prolonged 
dispute over whether the damage was caused by wind or water.
  This wind coverage will be available only where local governments 
enforce strict building standards to minimize future loss. The premiums 
for this coverage would be actuarially sound and would not expose the 
Federal Government to undue financial risk.
  A great deal of thought has gone into my recommendation of this 
amendment. I urge a vote in support of the amendment. If private 
insurers or the State-run wind pools could adequately address this 
problem, then I would not as vigorously advocate the Federal Government 
expanding its role in the business of insurance.
  But Senator Wicker's amendment provides the best available solution 
for this very serious problem.
  As the 2008 hurricane season approaches, I believe we should not miss 
this opportunity to address this growing problem. The Wicker amendment 
provides us with the best opportunity to make certain affordable wind 
insurance is available for those living near our coastlines.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Salazar.) The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CASEY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Casey pertaining to the introduction of S. 2980 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. CASEY. I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Mr. Menendez). Without objection, it is so 
ordered.
  Mr. REID. Mr. President, I have been very patient today. I so wanted 
to come to the floor, after the FAA bill was destroyed, wiped out by 
the Republicans not letting us go to that legislation, one of the most 
important pieces of legislation we could deal with. The reason I had to 
calm myself down, I listened to a number of Republican Senators say: 
Well, if we could have offered amendments. I did everything I could to 
allow people to offer amendments: Agree to a list of amendments; could 
we see your amendment; we will take down the tree; we will do anything 
you want; offer amendments.
  Finally, I spoke to one of the Republican leaders. I said: It is 
obvious the only reason you are not supporting this is because of the 
New York money, the final installment of the $20 billion promised the 
city of New York, the State of New York, by the President of the United 
States, George Bush. I said: It is in the President's budget.
  One of the Republican leaders said: We still oppose it.
  Then, if that were not enough, we now come to an important piece of 
legislation, flood insurance. This is a result of what happened in 
Katrina and the other devastating floods we have had in this country in 
recent years. Insurance companies have gone broke. Individual companies 
have gone broke. Individual homeowners have suffered significantly. So 
after months of working on this piece of legislation on a bipartisan 
basis--Senators Dodd and Shelby are the ones who worked to get the bill 
here--we bring the bill to the floor. We file cloture on a motion to 
proceed so we can start offering amendments. It passes 90 to 1. We have 
been waiting since 3 o'clock today to start legislating. People are 
waiting to offer amendments. I can't imagine how the Republicans can 
sleep at night, stopping this country from legislating on most 
important issues. They act as if it is not important. So in the morning 
I am going to come here, and we are going to ask consent if we can 
start legislating on this bill, or do we have to wait until 9 o'clock 
tomorrow night until the 30 hours runs out before we can start 
legislating on flood insurance. We are going to finish flood insurance 
this week. If we have to work Thursday night, Friday, Saturday, and 
Sunday, we are going to finish this bill.
  People will have an opportunity to offer amendments. Maybe they can't 
start offering amendments until 9 o'clock tomorrow night, but if that 
is the case, then we are going to start working at 9 o'clock tomorrow 
night so people can offer their amendments, because tomorrow is 
Wednesday. We wasted all day today not being able to offer amendments. 
I am told there are only a couple amendments people want to offer--
three or four. It is an issue of whether this legislation should 
include also wind. That is an issue we can debate and vote on. But we 
are going to make a decision sometime tomorrow as to when we file 
cloture, whether we do it Thursday and have a Saturday cloture vote, do 
it tomorrow and have a Friday cloture vote. We are going to finish this 
bill this week.
  We have so much to do. We have the farm conference coming. We have 
the consumer product safety conference coming. We have to do the 
budget. We have the supplemental appropriations bill and a number of 
other measures we have to do.
  I hope we can start moving to allow people to offer amendments. It 
seems not a very good legislative process dictated by the minority, the 
Republicans, when you pass something 90 to 1, and they still hold it 
up.

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