Flood Insurance Reform and Modernization Act of 2006
FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2006
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Mr. PEARCE. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I rise today to offer an amendment to the Flood Insurance Reform and Modernization Act, H.R. 4973.
Chairman Baker's bill make some great strides in helping insure the stability of our Nation's flood insurance system, yet, like most legislation, there is room for improvement. For that reason, I am offering an amendment that helps insure the National Flood Insurance Program has the resources it needs to cover all its costs.
We have a duty to find savings wherever possible to make sure the National Flood Insurance Program has sufficient resources to cover all its costs by phasing out subsidies for pre-FIRM nonresidential properties, vacation and secondary homes. The committee has already agreed that these subsidies are a luxury we can no longer afford. I agree with the committee's premise that these subsidies should be eliminated.
However, I believe that we can go further and eliminate these subsidies now. We should not wait another half decade to restore fiscal responsibility to the program. When the next flood strikes, how will we explain to those who have lost everything that help is tight because we are still subsidizing someone's vacation home? In the wake of the Katrina disaster, with the flood insurance program facing liabilities of between 23 and $25 billion, why should we continue to subsidize flood insurance for vacation homes? My amendment will inject $335 million into the flood insurance program next year.
While the committee predicts that their phase-in saves $1.5 billion from 2007 to 2016, I respectfully submit that the Pearce amendment will save much more much sooner. While I respect my chairman's commitment to phasing out these subsidies, I believe we can and should, for the good of the program, eliminate them now.
I hope my colleagues will join me supporting this amendment to eliminate those costly subsidies and help bring the NFIP back into sound fiscal condition.
Mr. Chairman, I reserve the balance of my time.
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Mr. PEARCE. Mr. Chairman, as I listen to the arguments of the other side, I would just note that the people in the Second District of New Mexico generally average under $30,000 a year net income; $70,000 would buy most homes in the Second District of New Mexico. To explain to those people why they are subsidizing vacation homes on coastlines, many times they are seeing on TV the same reports that I am seeing that someone with a 4 or $500,000 home gets to rebuild it multiple times. It is very difficult for me to explain that to my constituents. Just understand and appreciate the gentleman's argument that it could provide a severe economic impact.
Frankly, to tax the lower income people of the rest of the country to avoid those impacts seems to me that we are making choices that are not ours to make.
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Mr. PEARCE. Mr. Chairman, you have heard the gentleman from Massachusetts speak against this amendment. He highlights his interest in preserving a phase-in period included in the underlying bill. I have the utmost respect for him, but I must disagree.
At a time when the flood insurance program system is facing record borrowing and interest payments, we have the responsibilities to remove luxuries from the program.
The final point we should make is simple. This amendment will result in an additional $335 million in premium payments to the flood insurance program. This will help preserve the financial stability of the program and reduce the burden on taxpayers. This is a good amendment, and I urge all my colleagues to vote ``yes.''
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