[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[House]
[Pages 1865-1869]
[From the U.S. Government Publishing Office, www.gpo.gov]




 NATIONAL FLOOD INSURANCE PROGRAM ENHANCED BORROWING AUTHORITY ACT OF 
                                  2006

  Mr. NEY. Mr. Speaker, I move to suspend the rules and pass the Senate 
bill (S. 2275) to temporarily increase the borrowing authority of the 
Federal Emergency Management Agency for carrying out the national flood 
insurance program, as amended.
  The Clerk read as follows:

                                S. 2275

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Flood Insurance 
     Program Enhanced Borrowing Authority Act of 2006''.

     SEC. 2. INCREASE IN BORROWING AUTHORITY.

       The first sentence of subsection (a) of section 1309 of the 
     National Flood Insurance Act

[[Page 1866]]

     of 1968 (42 U.S.C. 4016(a)), as amended by the National Flood 
     Insurance Program Further Enhanced Borrowing Authority Act of 
     2005 (Public Law 109-106; 119 Stat. 2288), is amended by 
     striking ``$18,500,000,000'' and inserting 
     ``$20,775,000,000''.

     SEC. 3. EMERGENCY SPENDING.

       Amendments made pursuant to this Act are designated as 
     emergency spending, as provided under section 402 of H. Con. 
     Res. 95 (109th Congress).

  The SPEAKER pro tempore (Mr. Gillmor). Pursuant to the rule, the 
gentleman from Ohio (Mr. Ney) and the gentleman from Massachusetts (Mr. 
Frank) each will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.
  Mr. NEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it is a pleasure to be here with my colleague from 
Massachusetts on an important bill. It is designed, of course, to 
increase the borrowing authority of the National Flood Insurance 
Program.
  In the immediate aftermath of Hurricane Katrina, I introduced H.R. 
3669, the National Flood Insurance Program Enhanced Borrowing Authority 
Act of 2005. That piece of legislation increased insurance by $2 
billion, which went a long way in helping the Department's flood 
insurance response.
  The bill before us today would provide a total of about $20.775 
billion in borrowing authority to help ensure that the NFIP have 
sufficient funding on a cash basis in the short-term. This bill would 
allow FEMA to continue paying claims resulting from Hurricanes Katrina, 
Rita and Wilma, while the administration further evaluates the extent 
of the damage and the most appropriate means to cover all potential 
future claims.
  These claims from those whose homes and businesses have been damaged 
or destroyed by Hurricanes Katrina, Rita and Wilma are not a new 
obligation. They are the result of a legal promise we made to these 
homeowners and business owners, a commitment we made when Congress 
passed the National Flood Insurance Act of 1968 and subsequent 
revisions.
  Homeowners and business owners across the country agreed to pay 
premiums, communities agreed to adopt building codes to mitigate flood 
dangers, and the Federal Government agreed to provide insurance 
coverage to policyholders after a disaster. Every single one of these 
claims represents someone who has taken the responsible course of 
action by purchasing flood insurance and paying premiums to the 
government.
  We not only have a legal obligation to honor our commitments, we have 
a moral obligation to provide the coverage we promised to provide to 
these people. I think the thrust of this bill is so important for 
people. I understand the argument some of my colleagues are making 
about the need to have further reforms for the National Flood Insurance 
Program.
  I note the Committee on Financial Services held a markup in November 
of 2005 that addressed several reform initiatives to enhance 
accountability and ensure 2004 reforms are implemented. We had the 
support of Chairman Oxley and our ranking member Mr. Frank of 
Massachusetts on a bipartisan basis.
  Mr. Speaker, I just want to make it clear, we had reforms. This is 
not going to be the last of these bills that we are going to see, and 
we will work towards having some reforms.
  In addition, the Subcommittee on Housing and Community Opportunity 
held four hearings on this important program last year, including an 
August field hearing in rural Ohio, in my district. The Housing 
subcommittee will have continuous oversight of this important program, 
NFIP and look for all possible legislative solutions that will make 
this program as efficient and responsive as it can be.
  Floods have been and continue to be one of the most destructive and 
costly natural hazards to our Nation. Early last year, there have been 
three major floods in the district that I represent, all three of these 
incidents qualify for Federal relief granted by the President, and this 
flooding event, in January of last year, resulted in historic levels of 
damage in several communities.
  Now, we have a major disaster of the likes of which we haven't seen 
before down in the gulf, and the national flood insurance is a valuable 
tool in addressing the losses incurred throughout the country due to 
these floods. I urge the support of this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I want to reinforce what the gentleman from Ohio, the 
chairman of the subcommittee, said. In the Committee on Financial 
Services, on a bipartisan basis, we marked up a bill that would 
authorize increased funding, but accompanied that with some reform. Let 
me go back to a couple of years ago, when, at the initiative of a 
bipartisan pairing of Members, our former colleague, Mr. Bereuter of 
Nebraska and our continuing colleague, the gentleman from Oregon (Mr. 
Blumenauer) took up the cause of reforming the flood insurance program.
  We began that process. Frankly, I find it a little ironic. Some of 
those who have been critical recently of the flood insurance program 
were some of those who resisted our efforts to make tougher reforms 
back then. But at the insistence of those two Members who I mentioned, 
the chairman of the full committee, the gentleman from Ohio (Mr. 
Oxley); the chairman of the subcommittee Mr. Ney and I and others 
worked hard. We did insist on some reforms. We didn't get everything we 
wanted.
  This year, as the gentleman from Ohio pointed out, or last year, in 
this Congress, we again had a very serious markup in our full 
committee. It was controversial. One or two items that some of us 
supported were defeated, but we worked this out, and we had a bill to 
come to the floor that would have increased borrowing authority, but 
would also have further reformed the program, and this is a case, by 
the way, where environmentalism and protecting the taxpayers go 
together. It is not in anybody's interest to have buildings put into 
places inappropriately.
  Unfortunately, the Senate did not show any interest in doing the 
same, and we have heard some comments from some Members of the Senate 
about reform, but their preference for reform seems very abstract. It 
does not often make its way into legislation.
  The Senate sent us a bill, which, as I understand it, they intended 
to keep going until July. Frankly, that troubled me, because if we were 
to extend this program until July, given this being the even year of 
the session, with all that implies, the likelihood of our getting to 
the reforms would have diminished. What I like about this bill, and I 
hope it is a reassurance to some of those who want reforms, our 
understanding is you can't be precise if you don't know exactly how the 
spendout is going to be, but this should run out in May. That means 
that we have got to pass legislation again on this subject, as the 
gentleman from Ohio said.
  I want to serve notice now, and I think I speak for the Members on my 
side, and I know this is something that both the subcommittee chairman 
and the full committee chairman agree with in desirability, we need to 
do further reforms. We are not talking about depriving people of the 
benefit of this program, we are talking about improving it from an 
environmental and efficiency standpoint.
  By the way you do people no favor if you encourage them to build 
where they are then going to be the victims of a diaster. I know the 
chairmen of the full and subcommittee feel strongly about this.
  Let me speak for myself. I will support this bill. I will not support 
a further grant of increased borrowing authority unless we have had a 
chance to deal with the reforms. If some of the changes that I support 
are voted on, and I am defeated, I accept that.
  But to be confronted with a situation where the Senate sends us 
legislation that simply extends the money without any consideration of 
reform will be unacceptable to me. I don't want to victimize the people 
who are there, but it is simply does not comply with our duties to the 
taxpayers, to the environment, and elsewhere, to the public interest, 
to simply continue to put more

[[Page 1867]]

money into this program without further reforms.
  As I said, we did begin the process. So I will support this now. I am 
pleased that the chairman of our committee has noted we have a bill 
which was marked up in our committee, which has some reform. I hope we 
will bring our further bill to the floor with those reforms and let 
Members work their will on it and send it to the Senate.
  But I again want to stress, I agree with those who say we need more 
reforms. I congratulate the leadership of the committee who have scaled 
this back in terms of how long it will last, so that we will not get an 
extension that makes it unlikely that we will be able to do some 
further reform.

                              {time}  1115

  I do not plan to support a further increase in funding to keep this 
program going until both Houses have dealt seriously with the need for 
reform.
  Mr. Speaker, I reserve the balance of my time.
  Mr. NEY. Mr. Speaker, I yield 4 minutes to the gentlewoman from 
Michigan (Mrs. Miller).
  Mrs. MILLER of Michigan. I appreciate the gentleman yielding.
  Mr. Speaker, today this Congress is being asked to raise the amount 
of money that the FEMA flood insurance program is allowed to borrow 
from $18.5 billion to $21.2 billion.
  Now, obviously, we all understand that the disaster of Katrina was 
unprecedented in the history of our Nation. And our Nation responded by 
appropriating unprecedented funds to deal with this catastrophe. But at 
some point enough is enough, and today I rise to express my concerns 
about the fairness of this program.
  I have a very difficult time allocating any additional funds to the 
FEMA flood insurance program because of the way that program is 
treating the people of Michigan. FEMA is currently going about a 
remapping of communities in my State that will bring thousands more of 
my constituents and perhaps tens of thousands across the State of 
Michigan into the flood plain. This will force those with federally 
guaranteed mortgages to purchase FEMA flood insurance.
  Mr. Speaker, let me share a few numbers with you and ask you to 
determine for yourself whether or not Michigan needs to pay more into 
this insurance pool.
  Since 1978, that was the year Michigan actually opted into the 
program, the people of Michigan have paid premiums totaling over $138 
million; and in that same time, FEMA has paid outside claims totaling 
less than $38 million. So since 1978, as you can see through this 
chart, Michigan has subsidized this program to the tune of over $100 
million. And the people of FEMA seem to agree.
  In fact, there was an article I think last week in the Detroit Free 
Press which quoted FEMA spokesperson Eugene Kinerney saying this about 
Michigan's participation in the program. He said, ``You guys subsidize 
other policies in other parts of the country, absolutely.'' That is 
what FEMA said. So in what appears to me to be a grab for even more of 
our money, along comes FEMA saying, even though you have never had a 
flood, you live in a flood plain and you need to purchase insurance, 
even though the Great Lakes are at historically low levels; even though 
my State of Michigan has only had claims totaling 27 percent of what we 
have paid into the program; even though only eight other States 
received a lower percentage in their premiums than Michigan.
  If a private insurance company tried to do this same thing, they 
would be hauled in front of our State insurance commissioner and have 
to beg to keep their license. I refuse to support any more legislation 
that enables this type of irresponsible management that seems to be the 
norm in the FEMA flood insurance program. In fact, one of my 
constituents who is a township supervisor in a township called Clay 
Township, this is a community on St. Clair River going in to Lake 
Huron; this is a community that is going to be hit very hard by this 
remap, I asked him, what do you think about FEMA remapping our area? He 
said, why would FEMA want to come here and raise the elevations when 
our water levels are at low levels? Well, they are broke, are they not?
  I know this: my district is along the shore of Lake St. Clair, the 
St. Clair River and Lake Huron. We also have many rivers and 
tributaries, and they occasionally flood, but not as often as the 
amount of these claims paid shows.
  We also look down at the water, not up like they do in places like 
New Orleans. We do not need any more of my constituents forced into 
this program, and we do not need others across the State of Michigan 
forced into it either.
  In Michigan we are struggling economically. We have been hit by an 
economic hurricane of higher energy costs, low-cost foreign-
manufactured goods, and competition from lower-wage States, many of 
which are recipients of the subsidy that the people of Michigan provide 
to the FEMA flood program. We have the highest unemployment in the 
entire Nation, and our citizens can absolutely not afford to continue 
to pay higher costs for insurance that they do not even use. Yet once 
again we are being asked to subsidize the insurance payouts to people 
in other States.
  Before we allow this to happen, FEMA must show the methodology behind 
this program and show how it makes sense. I think this is an issue of 
basic fairness; and until that time, I will not support any expansion 
of the program; and I urge my colleagues to do the same.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 5 minutes to the 
gentleman from Oregon (Mr. Blumenauer), who has been one of the two 
leading Members of Congress in recent years to try to improve this 
program.
  Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentleman's courtesy in 
permitting me to speak on this measure and I appreciate the leadership 
that has been exhibited by Mr. Frank of Massachusetts, Mr. Oxley, and 
Mr. Ney. The Committee on Financial Services is trying to get this 
right. It provides a back drop as the story of Katrina continues to 
unfold.
  Our Republican colleagues are going to put together a critique that 
is somewhat hard hitting. But the real failure is not just limited to 
the administration's response and problems with FEMA. The real failure 
is a much greater policy failure.
  Over a long period of time, a variety of circumstances have put 
people at risk. The tragedy is that we are not better equipped today. 
There will be another catastrophic natural disaster before we have 
actually finished the job with Katrina. God forbid that there be a 
terrorist act on top of it.
  Now, this bill provides an opportunity for a simple mid-course 
correction that would be a longer-term reform of the flood insurance 
program. As Mr. Frank of Massachusetts mentioned, I have been working 
on this for the last 6 years officially with some limited success. I 
understand some of the difficulties and the reluctance, I am pleased 
that we are making some progress, but it is long past time to be timid. 
We know what to do. We face a disaster zone from the California coast 
to the tip of Florida. Drought, flames, storms, a whole mixture of 
issues are what we are going to be facing. We should be having 
something on the floor soon like the bill offered by our colleague from 
Louisiana, Mr. Baker. And for heaven's sake, we need to be trying to 
look in a comprehensive form to be sure that we do not end up making 
the same sort of mistakes.
  Today we are going to vote on increasing the borrowing authority. It 
is appropriate. I will vote for it. There is no way that we can have 
the rate payers absorb these catastrophic events. But I am extremely 
disappointed that somehow the bill we have before us does not have the 
measures to include more people to participate in the program, spread 
the financial risk, make people safer, and make participation 
mandatory.
  In the hearings that took place in the other body this month, there 
was near unanimous support from groups as wide ranging as the National 
Taxpayers Union, the Association of Floodplain Managers, the National 
Wildlife

[[Page 1868]]

Federation, the Consumer Federation, on and on. They know that we want 
to reduce or eliminate subsidies for people living in the most 
hazardous areas and for second homes.
  We need to expand the mandatory purchase requirements for people who 
live behind levees and experience residual risk. We need to fully 
support FEMA's efforts to update flood plain maps and include areas 
beyond the hundred-year flood plain.
  We finally have implemented the reforms made in the Flood Insurance 
Act of 2004. I appreciate the hard work that the Financial Services 
Committee did in putting the spotlight on FEMA and working with our 
friends in other committees. But we need now for FEMA to promulgate the 
regulations to implement it, otherwise the reform is meaningless.
  We cannot overstate the importance of mitigation. FEMA and the Multi-
hazard Mitigation Council just released a report on the benefits of 
mitigation, which found that for every dollar spent, our government 
saves an average of $4. The insane system we have here now, however, is 
that mitigation costs Mr. Obey and costs Mr. Lewis of California hard 
dollars. If it is in a supplemental, billions of dollars come in and 
they are off budget and that is easier. We have got to change that as 
well.
  We do ourselves no favors by lowering our sights, tempering our 
expectations, and failing to do what we know how to do in the best 
interests of the taxpayer and the people who are in harm's way. Delay 
will simply mean more lives lost, more property damage. It will cost 
the taxpayer more money, not under the limits that the Appropriations 
Committee operates under; but it will be taxpayer money nonetheless.
  We continue the cycle of responding after the fact to disasters 
instead of doing everything beforehand to fulfill our obligations and 
to act in the best interests of our constituents everywhere.
  I echo the words of Mr. Frank of Massachusetts: I hope this is the 
last time we have legislation of this nature before us. I appreciate 
the subcommittee's hard work, and I for one will support it today; but 
I add my voice as someone who will fight like the devil one more 
suboptimal effort.
  Mr. NEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I do not have any additional speakers. I want to thank 
the gentleman from Oregon, and I also want to point out just a few 
things.
  We had the Bunning-Bereuter-Blumenauer provisions in our bill to have 
FEMA enforce the 2004 that the gentleman from Oregon had mentioned was 
in there, also increased insurance coverage. We had raising the 
penalties on lenders who do not enforce the regs. So there were a lot 
of the reforms that we had in there.
  I am going to tell you today, we have a commitment, of course, and I 
know the gentleman from Oregon understands that and we all do here 
today, we have a commitment to these people that paid in and we need to 
pay back to these people because they paid their money; but we need to 
have the reforms.
  The other thing is if anybody stands here today and says this is 
going to last us, we will be okay until August, I want to tell you we 
will not be okay until August. This will not take us through to August. 
I predict to you today FEMA can say what it wants, it can communicate 
what it wants. This will not last maybe 2 months or more. I predict we 
will be back. We have to do the reforms. I personally commit to work 
with you on it.
  Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?
  Mr. NEY. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Speaker, I understand there probably 
has been some confusion about how long things are going to go. I will 
say I am now convinced that the problem is FEMA has no idea of what the 
spend-out rate is, and this is a further indication.
  While we are on the subject, since we are talking about FEMA, I do 
have to say it is not on a related subject, it is not related, but the 
decision by FEMA to evict people who have lost their homes, who are 
living in hotels because some of them did not fill out the right forms, 
is the single cruelest most senseless public policy I have seen. It 
serves no purpose. It is an infliction of further misery on people who 
have already been beset. And it is an example of incompetence and 
callousness compounding each other.
  Let me get back to this. Here I sympathize with my friends on the 
majority who have the responsibility of trying to make sense out of 
what they are hearing. We do not want to cut off the people who need 
help. I appreciate what the gentleman said. Let me say we have put a 
bill out. I hope we will see that bill on the floor soon, that we will 
get to vote on it, that we will send it to the Senate. And until and 
unless we get Senate consideration on the kinds of things we are 
talking about, I will vote for this one, but for no further ones.
  Mr. NEY. Reclaiming my time, I predict we will be back here within 60 
days, 60 or 90 days, I will bet that we will be back here, so we will 
have to work towards the reforms. Also, our subcommittee was the first 
committee of the House to go down to New Orleans and to Gulfport, 
Mississippi. We went down with our ranking member, the gentlewoman from 
California (Ms. Waters). Some Democrats and Republicans on the staff 
went down there and they did a fine job. They saw what we saw. This is 
going to be a long, long process.
  I will tell you we will be back here within 90 days again because 
they can say it will last, but it will not last.
  Mr. FRANK of Massachusetts. I think, given the calendar, we should do 
it as quickly as possible.
  Mr. HENSARLING. Mr. Speaker, I would like to insert the following 
letter into the Record of the debate on S. 2275, National Flood 
Insurance Program Enhanced Borrowing Authority.

                                               Washington, DC,

                                                February 14, 2006.
     Hon. Dennis Hastert,
     Speaker of the House, The Capitol, Washington, DC.
     Hon. John Boehner,
     Majority Leader, The Capitol, Washington, DC.
       Dear Speaker Hastert and Majority Leader Boehner: As you 
     know, the President's Fiscal Year 2007 budget requests a $5.6 
     billion increase in FEMA's borrowing authority because its 
     flood insurance program, the National Flood Insurance Program 
     (NFIP), is unable to cover current claims against it from the 
     unprecedented losses resulting from Hurricane Katrina.
       Since 1968, the NFIP has offered property owners in coastal 
     and river areas federally subsidized flood insurance. It 
     currently insures approximately 4.7 million homeowners, 
     renters and other policyholders, who pay premiums for 
     coverage. Total insured assets are above $800 billion with 
     some 20,100 communities participating. In heavy loss years, 
     when losses exceed its premiums, FEMA is authorized to borrow 
     from the U.S. Treasury up to $1.5 billion. This borrowing has 
     historically been repaid with interest within very short time 
     periods from NFIP premiums and fees.
       However, the catastrophic damage and losses resulting from 
     the 2005 Gulf Coast hurricanes is far exceeding the available 
     resources in the National Flood Insurance Fund. Consequently, 
     Congress last year eventually raised FEMA's borrowing 
     authority to $18.5 billion. But despite this, flood damage 
     claims from the 2005 hurricanes are now estimated to be in 
     excess of $20 billion and growing, surpassing all combined 
     payments in the program's history. This will again 
     necessitate Congress raising the limit on FEMA's borrowing 
     authority to pay these claims. And, if additional flooding 
     occurs in 2006, these costs will only grow higher.
       Unfortunately, this new borrowing will likely never be 
     repaid by the beneficiaries. According to CBO, it ``is highly 
     unlikely that the program will be able to repay that amount 
     of borrowing out of its income from premiums and fees.'' It 
     is estimated that the interest expenses alone from these 
     loans would consume a large portion of the program's annual 
     revenues for the foreseeable future. It would take decades to 
     repay these costs, assuming no other flooding--undoubtedly, 
     these payouts will be forgiven at some point.
       Lacking this ability to repay within a reasonable period, 
     we view deficit-financed spending from any additional FEMA 
     borrowing above its current $18.5 billion level to be 
     essentially identical to those of a conventional federal 
     spending program. Therefore, spending flowing from additional 
     federal borrowing authority should be fully paid for by 
     spending reductions elsewhere in the federal budget.

[[Page 1869]]

       In addition, any long-term extension must include 
     comprehensive structural reforms to the program. The 
     hurricanes of 2004 and 2005 have made it clear that 
     legislative action is urgently needed to make the NFIP 
     actuarially sound and able to build sufficient cash reserves 
     to cover higher than expected losses. For instance, 
     comprehensive reform would better align premium rates with 
     the policyholder's associated risk while reducing direct 
     subsidies of over $1.3 billion annually, starting with the 
     elimination of all subsidies for vacation homes, and address 
     the repetitive loss problem, where subsidies flow to homes to 
     be rebuilt over and over after multiple flood losses, while 
     ensuring proper flood mitigation measures and mapping are in 
     place, enforced and used to reduce losses from future floods. 
     We believe these and other reforms are critical to reducing 
     the taxpayers' risk exposure while strengthening and 
     improving the flood insurance program.
       This week, Congress is scheduled to extend FEMA's borrowing 
     authority through April. While this spending should be 
     offset, we appreciate your work with House conservatives to 
     ensure this a short-term extension that will allow 
     substantial time for a vigorous and comprehensive reform of 
     the flood insurance program over the coming months. If this 
     imperative reform effort falters, we will oppose any future 
     increases to FEMA's borrowing authority that are not fully 
     offset.
       We look forward to working with you and committee 
     leadership to ensure that this component of federal 
     assistance is both timely and fiscally responsible, and that 
     any package of reforms continues to meet core federal 
     responsibilities.
           Sincerely,
     Mike Pence,
       Member of Congress.
     Jeb Hensarling,
       Member of Congress.

  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of S. 2275, 
to temporarily increase the borrowing authority of Federal Emergency 
Management Agency, FEMA, for carrying out the National Flood Insurance 
Program NFIP.
  The National Flood Insurance Program was developed in 1968 in 
response to private insurers' unwillingness to issue flood insurance to 
homeowners residing in areas prone to flooding. The program makes 
available federally subsidized insurance policies for purchase to 
communities willing to comply with NFIP standards. Those standards 
include the adoption of floodplain mapping and building regulations. 
Currently, over 20,000 communities, supporting 4.7 million people, 
participate in the program. Statistics show that compliance with NFIP 
guidelines works--Communities in compliance, suffer 80 percent less 
property damage than that those not in compliance.
  The act before us today will increase FEMA's borrowing authority for 
administration of the program from $18.5 billion to $21.2 billion. Two 
point seven billion dollars may seem like a lot, but it is a necessary 
step towards prevention, and prevention should be our ultimate goal. It 
is important remember that the $2.7 billion is not a handout--it must 
be repaid by profits made from premiums and interest accrued from the 
loan.
  Hurricane Katrina opened everyone's eyes to the importance of flood 
insurance. Flooding is not a problem that just comes around when a 
hurricane hits, neither is it going to disappear after the damage 
inflicted on the gulf coast is repaired.
  Most are unaware that the United States suffers $2 billion of damage 
annually. In fact, in my home district of Houston, from 1978 to 1995, 
almost $300 million in flood insurance claims were made. If those facts 
are not startling enough, consider that the NFIP, the arm of FEMA that 
makes coverage available to communities in need, is now bankrupt.
  Even more alarming is the fact that current evidence indicates that 
the insurance industry has acted irresponsibly, without compassion, and 
only in the interest of profits. In 2004, the insurance industry had a 
record year netting $800 billion in policy holder premiums. The 
insurance industry must realize that they have a responsibility to the 
public, as well as to generate profits for their companies, and that 
they must find a way for the two to coexist. A staggering 40 percent of 
property owners along the gulf coast do not have flood insurance 
coverage. As we have now been reminded in the wake of Katrina, the 
absence of coverage creates a difficult situation.
  The NFIP was created to serve as a safety net to those unable to 
purchase flood insurance from private companies, and their services are 
once again in need. The act before us today is an important step in the 
right direction, but a dramatic change in national policy is the only 
way we can ensure that the necessary change will take place. I ask my 
colleagues to rise in support of S. 2275.
  Mr. GENE GREEN of Texas. Mr. Speaker, Congress should act to increase 
the borrowing authority for the National Flood Insurance Program to 
honor the debt incurred by the United States.
  If we do not act, people who have paid their flood insurance premiums 
will not receive their claims for their flood damage. No one wants to 
live in a nation that does not honor its debts.
  In addition, I am concerned that Congress is reacting to the 
unprecedented flooding damage of 2005 by blaming the victims and 
innocent parties.
  Federally backed flood insurance is necessary because the private 
sector will not supply this product since the damages are too 
concentrated geographically and chronologically for the risk to be 
sufficiently spread by private firms.
  We recently passed a Federal flood insurance reform bill in 2003 and 
many of those provisions have not come into force, so I think it is 
premature to require Congress to approve more ``reforms'' before 
honest, premium paying policy holders are allowed to receive their 
payments.
  The Katrina disaster was a tragedy, because the mass New Orleans 
flooding was probably preventable; if the levees had been built and 
maintained as they should have been.
  Now my constituents in Houston, who do not live below sea level and 
do not live on the ocean coastline, will have to pay the price.
  There are over 120,000 families in the 100-year floodplain who are 
required to have flood insurance. In Harris County we have updated our 
maps using airborne infrared radar, so they are accurate. There are 
another 155,000 families in the 500-year floodplain.
  These people did not develop irresponsibly, in fact many of them 
didn't move into the floodplain, but the floodplain moved to them. 
Subsidence and later development has expanded floodplains and put 
innocent homeowners in the floodplain.
  We should not blame these people for geographic factors beyond their 
control. Reforms of the NFIP should focus instead new development in 
floodplains, eliminating flood insurance for beach houses, and ensuring 
that the program keeps its commitments to its policy holders.
  If we greatly increase premiums or expand the number of people 
required to have flood insurance, we should take into account the shock 
this can have on low-income families, and consider my legislation, H.R. 
103, to offer 50 percent discounts for the first 5 years to low-income 
homeowners who suddenly have to pay premiums after a floodplain is 
redrawn to include them.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield back the balance of 
my time.
  Mr. NEY. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Gillmor). The question is on the motion 
offered by the gentleman from Ohio (Mr. Ney) that the House suspend the 
rules and pass the Senate bill, S. 2275, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate bill, as amended, was 
passed.
  A motion to reconsider was laid on the table.

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