WASHINGTON -- The Senate on Thursday passed legislation to delay steep increases in homeowners' federal flood insurance premiums, which were put in place less than two years ago to stabilize the federal flood insurance program.
The bill would delay the rate increases for four years while the Federal Emergency Management Agency completes an affordability study and certifies that new maps of flood zones are scientifically based. The vote was 67-32, with strong bipartisan support.
But the legislation's fate in the Republican-controlled House was uncertain. House Speaker John Boehner, R-Ohio, has not said whether he will bring a companion bill to a vote. Mr. Boehner's office has said only that the House "may consider changes to the law in the weeks and months ahead that both help homeowners and protect taxpayers."
The flood insurance premium increases went into effect starting last year under the 2012 Biggert-Waters Flood Insurance Reform Act. That law required FEMA to develop new rates for flood insurance premiums that more accurately reflected flood risks. The law's intent was to stop losses to the National Flood Insurance Program, which has a $24 billion deficit.
The Congressional Budget Office reported that the Senate's flood insurance legislation would reduce revenues to the Treasury by $2.1 billion over 10 years.
The sharp rate increases raised an outcry from many of the 5.5 million policyholders across the nation, who complained that they were unable to sell their homes because buyers would be stuck with higher insurance costs of thousands of dollars per year. Some supporters of the legislation said the real estate industry had been hit hard in coastal areas.
The bill the Senate passed would delay the rate hikes and protect federal flood insurance policyholders who have no annual cap on their rate increases, including homes and businesses that were built to code and later remapped into a higher-risk area and those built before flood maps were released.
Sen. Robert Menendez, D-N.J., who sponsored by measure along with Sen. Johnny Isakson, R-Ga., said it was designed to "make sure that we don't drive people out of their homes."
The office of Sen. Kay Hagan, D-N.C., said one Outer Banks resident said her premium rose from $450 to $8,500. "North Carolinians who have played by the rules shouldn't face financial ruin because of sharp increases in flood insurance rates," Ms. Hagan said in a statement.
The legislation is an example of the difficult crosscurrents facing Washington policymakers as they balance the need to rein in $17 trillion in federal debt with the political blowback that can accompany tough restructurings of federal programs.
The White House said in a statement Monday that it opposed the Senate bill.
Sen. Patrick Toomey, R-Pa. -- with support from taxpayer, consumer and environmental groups -- called for moderating the rate increases, but his amendment was voted down. Mr. Toomey said the program would careen to insolvency while wealthy people benefited.