Threat by Pryor flushes step on flood insurance out of bill

— With lawmakers set to leave the Capitol for Congress’ July Fourth recess, Sen. Mark Pryor threatened to derail a combination of bills to force removal of a provision that would have required tens of thousands of Arkansans to buy federal flood insurance.

The provision, part of the Senate’s plan to reauthorize the National Flood Insurance Program, would have required people living behind dams and levees to pay into the flood insurance program because of the “residual risk” they face.

Pryor, D-Ark., said “tens of thousands” of Arkansans would have had to pay millions of dollars for flood insurance if the measure had passed. He threatened to block pending student loan and highway construction legislation until his colleagues agreed to slice the provision from the bill.

Currently, owners of homes and businesses in special flood-hazard zones must buy into the federal insurance system, but people living in areas protected by flood-control devices are exempt.

Pryor said the attempt to make participation mandatory was simply a way to keep the flood insurance program, which is managed by the Federal Emergency Management Agency, solvent. In 2005, after Hurricanes Katrina and Rita slammed the Gulf Coast, the flood insurance program paid out $17.7 billion in claims and currently owes the U.S. Treasury more than $18.5 billion.

“I’ve always suspected they were so far in the hole after Katrina and Rita they were just trying to make up the difference,” Pryor said.

Rob Rash, chief executive officer of the St. Francis Levee District in Arkansas, said the 100,000 taxpayers in the district have, over the years, spent “billions” of dollars to build and maintain levees. Requiring federal insurance on top of a levee tax “would have rejected all of that work in one total swoop,” he said.

Rash said approximately 500,000 Arkansans would have been required to buy insurance under the FEMA program if the measure was passed.

A homeowner with a house worth $50,000 in the levee district pays about $27 a year toward maintaining the levee system, he said. Under the failed mandate to require federal insurance, Rash predicted that the same homeowner would have had to pay $300 a year.

Pryor and Republican U.S. Rep. Rick Crawford of Jonesboro, whose district hugs the Mississippi River, said extensive flooding in 2011 proved that the Mississippi River and Tributary System of levees works.

“In spite of the volume of water that came through, the levees did very well,” Crawford said.

Added Pryor: “We just had a clear demonstration that levees work.”

Matt Gannon, assistant vice president of federal affairs at the National Association of Mutual Insurance Cos., isn’t convinced.

Gannon said insurance companies don’t look “in the rear-view mirror” when determining risk.

“Nobody can say ‘never,’” he said. “You can’t guarantee dams and levees won’t fail.”

Congressional leaders combined the flood insurance bill with student loan and highway construction bills into one piece of legislation.The creation of the big “must pass” bill increased the pressure on lawmakers, who had failed to pass each measure as a stand-alone bill in recent weeks.

The ticking clock also raised the stakes. Without changes provided in the student loan bill, the interest rates on such loans would increase starting Sunday. And without passage of a highway bill, state highway projects would be in limbo.

On the House floor Friday, Transportation Committee Chairman John Mica, a Republican from Florida, urged his colleagues to pass the combined bill.

“Transportation departments across the country are on the verge of giving out IOU’s,” he said.

With the week nearing a close, Pryor informed his Senate colleagues that he would invoke the chamber’s “Rule 28” if the mandatory flood insurance provision wasn’t taken out of the bill.

Rule 28 allows senators to raise a point of order if a House-Senate conference report contains language that isn’t germane to the underlying bill. Pryor argued that the flood insurance and student loan legislation weren’t related to the highway bill, which House and Senate conference committees used as a vehicle to add on the flood and loan legislation.

Gannon said the threat of Pryor’s point of order could have tied up the Senate all weekend when senators were eager to return home.

Senate leaders would have needed to corral 60 votes to defeat Pryor’s point of order, rather than the simple 50-vote majority needed to pass the three pieces of legislation combined in the conference report.

“The process in this case, really helped him,” Gannon said. “His threshold dropped from 50 to 40 votes.”

Pryor said more than 50 senators supported his provision, and he seemed certain that he had enough votes to back his threatened Rule 28 objection.

“I think I had the votes to lead that,” he said. “We worked it pretty hard behind the scenes.”

Front Section, Pages 1 on 06/30/2012

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