[Congressional Record Volume 170, Number 43 (Monday, March 11, 2024)]
[Senate]
[Pages S2338-S2339]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            Flood Insurance

  Mr. CASSIDY. Madam President, I am here to talk about flood 
insurance, an issue facing Louisiana, and, I am sorry to say, an issue 
now facing the Presiding Officer's State.
  Floods can occur anywhere--for example, on the top of a mountaintop. 
People don't realize that, but you have this gully going down from the 
top to the bottom, and if it gets a big rain--boom--going down from the 
top of that mountain, you will have a flood.
  And that has occurred, unfortunately, in California. I spent several 
years in Southern California, and I can relate to that.
  But it happens regularly in my State. Now, why in my State? Well, 
folks think of hurricanes as wind, rain, and lightning, but one of the 
greatest threats is actually the risk of flooding.

[[Page S2339]]

And these floods can destroy homes, businesses and leave them--if they 
don't destroy them right away, they can leave them moist. And when it 
is moist, it begins to rot from the inside. And homes that families 
have lived in for over 50 years that have never flooded before can 
become unlivable.

  So if you come down to Louisiana or California or Pennsylvania or 
West Virginia or other things, and you ask folks in the bottom of a 
riverbed, for example, if a flood can upend their life, they will say 
emphatically yes.
  So if we know the answer is an emphatic yes, then what can Congress 
do about it, if anything? Well, we have a mechanism to address it, the 
National Flood Insurance Program which currently ensures 4.7 million 
American families. It is a Federal program, and we are the ones that 
can change it to make it more reliable, more affordable, more 
sustainable.
  But the challenge is that it is a tough topic. A lot of folks in 
Congress just don't understand the issue. And so we need to have the 
understanding, but then we also need the political will.
  Now, this has just kind of--boom--up, up, up in urgency. The Federal 
Emergency Management Agency recently implemented a new risk assessment 
called Risk Rating 2.0. Now Risk Rating 2.0 affects Louisiana, the Gulf 
Coast--frankly, all coasts and anyplace where there is a river or 
stream that can overflow, and it particularly affects folks who are 
lower income.
  Sometimes people say that the flood insurance program is a program 
for rich people. Not true; 62 percent of all NFIP policies are in 
parishes or counties where the median household income is below the 
national average of $54,000. And truth be told that, as we again just 
saw in California--what you think of as a desert State--flooding can 
occur in any State.
  So if we look here, here are NFIP claims by cost: 44 out of 50 States 
have had over $50 million of National Flood Insurance Program claims 
from 1978 to 2021. And there are only 6 States that have less than $50 
million in claims; 13 States have had over a billion in damage, and 
they are all over the map. It is Virginia--and not just the coastal 
states--it is Missouri; it is the States on the gulf; it is California; 
it is going up the northeast. This is geographically distributed.
  And, by the way, these are the States hit hardest, but they are not 
the only States. Every State has had at least an NFIP claim somewhere, 
sometime, because every State is affected by flooding.
  Now, the way the program is currently being conducted, however, is 
putting it into what is called an actuarial death spiral. Rising 
premiums mean fewer can afford the insurance. So let's set this up. 
Right now, you have people at high risk; and the way insurance works is 
it spreads it over plans over homes that have a lower risk. But if you 
raise everybody's premiums dramatically, the people who are at lowest 
risk will drop their coverage. And so you have the same amount of risk, 
but now it is concentrated upon a smaller pool of homes. That 
concentration raises the rates even more. And those who are the lowest 
risk in that pool drop their insurance, which further concentrates. 
That is called an actuarial death spiral.
  I hate to put it this way, but it is visual. Think of when you flush 
the toilet and it begins to spin, and then that spin goes down. Well, 
that spinning is that death spiral, and the water in the pool gets 
smaller and smaller and smaller until it is gone and there is no one 
left who can afford the cost for the insurance, and it ceases to exist.
  Now, by the way, this is true of every insurance program. I am 
describing the National Flood Insurance Program, but this actuarial 
death spiral is actually known to be just an insurance--that is just 
how insurance works. If your pool gets too small, risk too 
concentrated, the whole thing goes away.
  But the problem is, what is happening to the National Flood Insurance 
Program ignores the fact that the program is actually a bargain. And 
this is the real problem: When I have telephone townhalls and meeting 
with constituents, they tell me that their property--their property 
insurance, their casualty insurance--if you add that to their flood 
insurance, it is now more than their mortgage. So they are making the 
tough decision: Do I either leave my home, or do I drop my coverage?
  So let's just talk a little bit more about Risk Rating 2.0. First, 
recognize that this rate hike that we are currently going under could 
have been stopped with the stroke of a President's pen. Either 
President Biden or President Trump could have told FEMA to delay or 
cancel the implementation.
  In 2019, my staff worked with and my office worked with the Trump 
administration to successfully delay the implementation because of 
concerns about how FEMA was calculating costs. The concern remains, but 
the Biden administration has decided to go forward, ignoring the 
concerns of people in Louisiana and elsewhere.
  The results are that about 900,000 people have dropped their 
insurance because they cannot afford it--900,000. That is the beginning 
of this death spiral we spoke of.
  Now, there is some promising news. The Banking Committee recently had 
a hearing on the National Flood Insurance Program that I put forward, 
and we got excellent input. There is a consensus that no family in 
America should be forced to move because of unaffordable flood 
insurance premiums, that flood insurance premiums should remain 
affordable, accessible, and accountable to the taxpayer and sustainable 
to the future.
  So my challenge to my colleagues: Designate somebody on your staff. 
This is a complicated topic. But whether a Californian, a Virginian, a 
Missourian, you name a State that is in yellow of some tint, ask 
somebody on your staff to become familiar with the flood insurance 
program. Then let's come together and move the legislation that will 
reform it.
  The first issue is to gain understanding, then the second issue is to 
have the political will. If we do this, we can maintain a program which 
has meant so much to Americans in every State--but certainly in 43 out 
of 50 States--to enable them to maintain the coverage to protect them 
should their home flood, that they would be able to build back.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Ms. DUCKWORTH. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois.
  Ms. DUCKWORTH. I ask that the scheduled vote begin immediately.
  The PRESIDING OFFICER. Without objection, it is so ordered.