The Senate voted Thursday to approve bipartisan legislation that would block dramatic increases in premiums paid by some property owners covered under the federal flood insurance program.
The 72-22 vote sends the bill to President Barack Obama, who is expected to sign it. Republican Sens. Thad Cochran and Roger Wicker voted for it. The House overwhelmingly approved the legislation last week.
“We basically ended up with a really balanced compromise between some of the things the Senate wanted (and) some of the things the House wanted,” said Sen. Mary Landrieu, D-La., who championed the measure in the Senate. “But what we all wanted was affordability, and we all got it.”
Under the bill, called the Homeowner Flood Insurance Affordability Act, premiums under the National Flood Insurance Program (NFIP) could increase no more than 18 percent per property annually.
The House legislation was crafted by Republican Rep. Michael Grimm of New York in response to premiums that in some cases had increased tenfold.
A bill the Senate passed in January, authored by Sens. Robert Menendez, D-N.J., and Johnny Isakson, R-Ga., would have delayed premium increases for about four years until the Federal Emergency Management Agency completed a study on how to make the higher rates affordable.
“This bill will provide much-needed relief for families and businesses across Mississippi,” said Wicker, who pushed the bill in the Senate. “This compromise will give homeowners some peace of mind, assuring them that their flood insurance rates will not immediately soar from several hundred dollars to the thousands and tens of thousands.”
The compromise bill approved Thursday was the product of intense negotiations in the House.
“This bill is what everyday, middle-class Americans in Mississippi and across the country have been waiting for,” said Republican Rep. Steven Palazzo, who worked on the compromise.
Palazzo also is co-chairman of a congressional flood insurance caucus set up to address concerns about the increasing rates.
Supporters of the measure said the premium increases were making it impossible for many people to keep their homes or sell them.
“This bill is responsive to the Mississippians I’ve heard from, many of whom are longtime residents or on fixed incomes,” Cochran said. “Even though they followed all of the government’s rules, they were facing unfair costs and mandates that this legislation will now alleviate.”
Critics, however, say taxpayers will be left to foot the bill for the financially troubled insurance program.
The premium increases were required under a 2012 law known as Biggert-Waters that was designed to make the government’s flood insurance program financially solvent by bringing rates in line with true flooding risks.
Premiums under the program have been heavily subsidized by taxpayers, and the program is $24 billion in debt.
The measure approved Thursday also repeals a provision in the Biggert-Waters law that increases premiums — up to the full-risk rate over five years — when the Federal Emergency Management Agency adopts new flood maps.
Under the compromise, homes that met code when they were built would be protected from rate spikes due to new flood mapping.
Biggert-Waters imposed 25 percent rate hikes on some but not all properties that have received premium subsidies through the National Flood Insurance Program. The program, run by FEMA, has traditionally charged premiums at about 40-45 percent of their full cost, with taxpayers subsidizing the rest.
The compromise legislation faced opposition from some conservative Senate lawmakers, who said it was rushed to a vote.
“We’ve solved a very short-term problem and made it a long-term problem,’’ said Sen. Tom Coburn, R-Okla. “We didn’t really do our work because we were in such a hurry to take the political pressure off of the increases. …What we did is we chose politicians to win and the future to lose in this country.”
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