GOP, Waters reach deal on flood bill

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Reforms to flood insurance approved by Congress in 2012 would be scaled back under a deal reached Monday by House Republicans and Democrats.

The rare bipartisan deal, which GOP leaders plan to bring to the floor for a vote on Tuesday, responds to complaints from flooded-out constituents who said the 2012 law would require them to pay much more for federal flood insurance.

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But the deal, which GOP leaders made with Rep. Maxine Waters (D-Calif.), will face criticism from the right.

Conservative groups have accused GOP leaders of backing away from reforms that were meant to slowly reduce the $24 billion in debt racked up by the National Flood Insurance Program (NFIP).

Several conservative groups are calling on members of the House to vote down the bill, and say the 2012 reforms should stay in place to help reduce the NFIP's debt. Groups like the Heritage Foundation, the Club for Growth, the National Taxpayers Union and others have come out against the bill.

The Senate has already approved its own flood bill, one that delays the 2012 reforms until an affordability study is done. But passage of the House bill could prompt the Senate to accept the House language, especially given the difficulty the House has had moving any bill.

If the newest House version finally becomes law, it would allow the government to avoid imposing higher rates on homes and businesses. It would also require the Federal Emergency Management Agency (FEMA) to study the issue for two years, and then report to Congress on how best to continue rate hikes in a way that keeps homes and businesses affordable.

After receiving the report, Congress would have to decide whether to approve or amend FEMA's recommendations, setting up another likely debate on how balance needed reforms with affordability.

Last week, House Republicans had to pull a draft compromise bill after it became clear it couldn't pass. That led them to negotiations with Waters, in the hope she could bring Democrats on board.

Waters said the compromise strikes the right balance between allowing flood insurance premiums to rise, but not so much that it will price people out of their homes.

"I am pleased that after months of hard work, Democratic lawmakers were able to reach a bipartisan agreement that will ensure relief for hundreds of thousands of homeowners living in flood prone regions," she said Monday. "I believe that today, we have struck a reasonable compromise that will address affordability concerns, bring accountability to FEMA and ensure the stability of the National Flood Insurance Program."

Rep. Bill Cassidy (La.), who has worked on the bill from the GOP side, also praised the bill on Monday. "This is the next step in providing affordable and accessible flood insurance for homeowners and for strengthening the flood insurance program," he said.

House Republicans have tried for the last few weeks to find a deal on flood insurance. Late last month, the GOP floated a bill to repeal crucial 2012 reforms, such as increased flood insurance rates based on flood risk.

That bill also eliminated language from the 2012 reform bill that ended flood insurance subsidies for homes once they are sold — many complained that this was making it impossible to sell homes.

The initial GOP draft repealed these measures, and replaced them with a standardized rate increases that would be lower than those dictated by the 2012 reform bill. The bill required a minimum increase of 5 percent per year on average, with a cap on rates equal to an average of 15 percent within each flood risk category.

Last week, Democrats complained that this average increase could leave open the door to much higher insurance premium increases for some people, even though the average rate increase might be 15 percent. In a simplified example, Democrats feared that a rate hike as high as 30 percent could be allowed, as long as it was offset by a 0 percent rate hike elsewhere.

Over the weekend, Republicans announced a modification to this language that would cap individual rate increases to 18 percent per year.

According to a House aide, Democrats succeeded in getting another change to the bill — a requirement that FEMA try to limit the number of insurance policies that annually cost more than 1 percent of the value of the property being insured. A House aide said these were among the changes that were important to getting enough Democrats to support the bill.