To end the premium subsidy for any property purchased after the date of enactment of this Act.

Cap and Trade Revenue

Mr. GREGG. Madam President, I rise on a separate subject that is
coming at us that is of even greater significance in many ways because
it is going to impact the entire structure of the economy and the lives
of everyone in the United States, and that is how we get a handle on
the issue of global warming and the issue specifically of the emission
of toxic materials from plants which generate energy. The term ``cap
and trade'' is applied to a bill that is going to be brought forward
supposedly in early June. Cap and trade is a concept of basically
creating areas where energy companies are required to start reducing
their emissions but the manner in which they do so is tied to the
trading of rights of basically emissions and what sort of chemicals can
be emitted through a trading process between different regions and
within different communities of emitters.
This cap-and-trade proposal, which is known as the Warner-Lieberman
bill, is a huge readjustment of our economy. It represents a massive
cost to our economy as well as, hopefully, a massive improvement, if it
would work right, in the amount of toxic emissions which we incur and
which occur as a result of our production of electricity specifically.
The cost of the cap-and-trade program, through the purchasing and
selling of allocations of what can be emitted, is estimated to be about
$1.2 trillion over the first 10 years of the proposal. This cost,
obviously, is going to have a major impact on our economy. It is going
to have a major impact on the people who consume the electricity,
because the cost is going to be passed on to the people who use
electricity in their homes, primarily, and businesses. There are a lot
of issues raised by this bill on the substance of whether cap and trade
can work--for example, issues of foreign competition, whether the
technology necessary to meet the conditions for reduction will be
available in time, issues as to whether certain segments of our
industrial society are going to be unnecessarily handicapped and create
a rush to move jobs offshore. These are big policy issues. I didn't
want to address those. I don't want to address the substance of how the
actual cap and trade will work. What I want to address instead is the
ancillary, sidecar issue of the generation of this huge cost of $1.2
trillion, and it will go on 40 years. So we are talking about literally
trillions of dollars passed on to consumers through higher energy
costs. It is estimated those energy costs will increase anywhere from
$30 to $500 a month.
In any event, the costs are dramatic, and that has two effects. One,
the Federal Government is going to make a massive amount of income as a
result of these costs. Two, the consumers, the homeowners are going to
see their electrical rates go up which is essentially a tax as a result
of these costs. So the way I conceive of this is that the Federal
Government is going to get a lot of new revenue, and what do we do with
that revenue is the first question. Secondly, what about the consumers
who are going to have to pay this new consumption cost through the
increase in the price of electricity which is essentially a consumption
tax.
The bill itself that is being discussed in committee and is
supposedly going to be reported on the floor will take the $1.2
trillion over that 10-year period and essentially spend it all, spend
it all in a variety of ways. But a large amount of that spending would
involve the expansion of Government. It would be a huge infusion of
funds into the Federal Treasury at the expense of the consumer who pays
those funds.
Barack Obama, who is running for President, who appears to be close
to successful in winning his quest for the nomination, has suggested he
would pay for an additional $300 billion in new spending annually. He
has proposed over $300 billion in new spending annually. He would pay
for a large amount of that through generating $30 to $50 billion
annually in taxes as a result of cap and trade. It is estimated by some
that that revenue to the Federal Treasury might exceed that number and
be actually up to $100 billion a year annually of income to the Federal
Treasury. But Barack Obama has already suggested that we spend it on
the expansion of the Federal Government.
The bill itself proposes that it be spent on the expansion of
Government as well as on various other initiatives which the bill
suggests we should pursue.
I suggest a different approach. I suggest that if we go down the path
of cap and trade and if we end up raising well over $1 trillion over a
10-year period from consumers, we should return those dollars to
consumers in some way. I believe since we are basically creating a
consumption tax and we are essentially shifting the burden of the
Government significantly onto the user of electricity, especially the
homeowner, they should receive a commensurate reduction in taxes that
they pay in other places. It makes sense to me that if you are going to
shift what amounts to a $1.2 trillion increase in consumption taxes,
you ought to take those revenues and use them to reduce income taxes to
working Americans by pretty much an equal amount. I believe if we did
that, if we took the revenue from the consumption tax and moved it over
and reduced the income taxes so working Americans could benefit from
that reduction in their income taxes, you could end up dramatically
reducing income tax rates on working Americans.
That should be our goal with these dollars. We should not use these
dollars to significantly expand the size of the Federal Government. If
we are going to create this brandnew consumption tax in order to try to
energize the effort of the marketplace to control emissions which may
be causing global warming,

[[Page S3862]]

then we ought to use the revenues which are the result of a new tax
burden, a consumption tax burden on people using electricity, to reduce
the tax burden on working Americans in other places. We should not use
it as a windfall to the Federal Government which would expand the size
of the Federal Government and expand the size of Government. It is not
right to do that.
The overall tax burden on the American people is already significant.
It is going to grow, regrettably, over the next few years. If we listen
to some of our colleagues on the other side of the aisle, it is going
to grow a lot. In fact, the budget that passed this Congress suggests
it will grow by almost a trillion dollars over the next 5 years. We
don't need to throw on top of that increased burden of taxation, which
Americans are already paying, a brandnew consumption tax, the revenues
from which are then taken to expand the size of the Federal Government.
Rather, let's take those revenues and put them toward a reduction in
income taxes. In fact, there are many people who look at tax policy and
would argue that this is an intelligent way to structure this, to
basically begin the shift from an income tax system to a consumption
tax system is a much more efficient way for us to collect revenues and,
secondly, a better way to collect revenues from the standpoint of
energizing a strong and vibrant economy. But independent of that
argument, which has been raging for years, whether a consumption tax
makes more sense than an income tax, what doesn't make sense is to
raise consumption taxes through cap and trade by $1.2 trillion over 10
years and then spend it to increase the size of Government. Let's use
that money to reduce the tax rate on working Americans, to reduce the
income tax. That should be our goal as we move forward and debate the
issue of cap and trade and how we are going to use the revenues which
that bill will generate.
I appreciate the courtesy of the Senator from Louisiana and yield the
floor.
The PRESIDING OFFICER. The Senator from Louisiana.

Amendment No. 4706, as Modified, to Amendment No. 4707

Ms. LANDRIEU. Madam President, I ask unanimous consent that the
pending amendment be set aside and I call up amendment 4706, as
modified, at the desk.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The legislative clerk read as follows:

The Senator from Louisiana [Ms. Landrieu] proposes an
amendment numbered 4706, as modified.

Ms. LANDRIEU. I ask unanimous consent that reading of the amendment
be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment, as modified, is as follows:

(Purpose: To improve the Office of the Flood Insurance Advocate)

Strike section 131 and insert the following:

SEC. 131. FLOOD INSURANCE ADVOCATE.

Chapter II of the National Flood Insurance Act of 1968 is
amended by inserting after section 1330 (42 U.S.C. 4041) the
following new section:

``SEC. 1330A. OFFICE OF THE FLOOD INSURANCE ADVOCATE.

``(a) Establishment of Position.--
``(1) In general.--There shall be in the Federal Emergency
Management Agency an Office of the Flood Insurance Advocate
which shall be headed by the National Flood Insurance
Advocate. The National Flood Insurance Advocate shall--
``(A) to the extent amounts are provided pursuant to
subsection (n), be compensated at the same rate as the
highest rate of basic pay established for the Senior
Executive Service under section 5382 of title 5, United
States Code, or, if the Director so determines, at a rate
fixed under section 9503 of such title;
``(B) be appointed by the Director without regard to
political affiliation;
``(C) report to and be under the general supervision of the
Director, but shall not report to, or be subject to
supervision by, any other officer of the Federal Emergency
Management Agency; and
``(D) consult with the Assistant Administrator for
Mitigation or any successor thereto, but shall not report to,
or be subject to the general supervision by, the Assistant
Administrator for Mitigation or any successor thereto.
``(2) Qualifications.--An individual appointed under
paragraph (1)(B) shall have a background in customer service,
accounting, auditing, financial analysis, law, management
analysis, public administration, investigations, or
insurance.
``(3) Restriction on employment.--An individual may be
appointed as the National Flood Insurance Advocate only if
such individual was not an officer or employee of the Federal
Emergency Management Agency with duties relating to the
national flood insurance program during the 2-year period
ending with such appointment and such individual agrees not
to accept any employment with the Federal Emergency
Management Agency for at least 2 years after ceasing to be
the National Flood Insurance Advocate. Service as an employee
of the National Flood Insurance Advocate shall not be taken
into account in applying this paragraph.
``(4) Staff.--To the extent amounts are provided pursuant
to subsection (n), the National Flood Insurance Advocate may
employ such personnel as may be necessary to carry out the
duties of the Office.
``(5) Independence.--The Director shall not prevent or
prohibit the National Flood Insurance Advocate from
initiating, carrying out, or completing any audit or
investigation, or from issuing any subpoena or summons during
the course of any audit or investigation.
``(6) Removal.--The President and the Director shall have
the power to remove, discharge, or dismiss the National Flood
Insurance Advocate. Not later than 15 days after the removal,
discharge, or dismissal of the Advocate, the President or the
Director shall report to the Committee on Banking of the
Senate and the Committee on Financial Services of the House
of Representatives on the basis for such removal, discharge,
or dismissal.
``(b) Functions of Office.--It shall be the function of the
Office of the Flood Insurance Advocate to--
``(1) assist insureds under the national flood insurance
program in resolving problems with the Federal Emergency
Management Agency relating to such program;
``(2) identify areas in which such insureds have problems
in dealings with the Federal Emergency Management Agency
relating to such program;
``(3) propose changes in the administrative practices of
the Federal Emergency Management Agency to mitigate problems
identified under paragraph (2);
``(4) identify potential legislative, administrative, or
regulatory changes which may be appropriate to mitigate such
problems;
``(5) conduct, supervise, and coordinate--
``(A) systematic and random audits and investigations of
insurance companies and associated entities that sell or
offer for sale insurance policies against loss resulting from
physical damage to or loss of real property or personal
property related thereto arising from any flood occurring in
the United States, to determine whether such insurance
companies or associated entities are allocating only flood
losses under such insurance policies to the National Flood
Insurance Program;
``(B) audits and investigations to determine if an
insurance company or associated entity described under
subparagraph (A) is negotiating on behalf of the National
Flood Insurance Program with third parties in good faith;
``(C) examinations to ensure that insurance companies and
associated entities are properly compiling and preserving
documentation for independent biennial financial statement
audits as required under section 62.23(l) of title 44, Code
of Federal Regulations; and
``(D) any other audit, examination, or investigation that
the National Flood Insurance Advocate determines necessary to
ensure the effective and efficient operation of the national
flood insurance program;
``(6) conduct, supervise, and coordinate investigations
into the operations of the national flood insurance program
for the purpose of--
``(A) promoting economy and efficiency in the
administration of such program;
``(B) preventing and detecting fraud and abuse in the
program; and
``(C) identifying, and referring to the Attorney General
for prosecution, any participant in such fraud or abuse;
``(7) identify and investigate conflicts of interest that
undermine the economy and efficiency of the national flood
insurance program; and
``(8) investigate allegations of consumer fraud.
``(c) Authority of the National Flood Insurance Advocate.--
The National Flood Insurance Advocate may--
``(1) have access to all records, reports, audits, reviews,
documents, papers, recommendations, or other material
available to the Director which relate to administration or
operation of the national flood insurance program with
respect to which the National Flood Insurance Advocate has
responsibilities under this section;
``(2) undertake such investigations and reports relating to
the administration or operation of the national flood
insurance program as are, in the judgment of the National
Flood Insurance Advocate, necessary or desirable;
``(3) request such information or assistance as may be
necessary for carrying out the duties and responsibilities
provided by this section from any Federal, State, or local
governmental agency or unit thereof;
``(4) require by subpoena the production of all
information, documents, reports, answers, records (including
phone records), accounts, papers, emails, hard drives, backup
tapes, software, audio or visual aides, and any other data
and documentary evidence

[[Page S3863]]

necessary in the performance of the functions assigned to the
National Flood Insurance Advocate by this section, which
subpoena, in the case of contumacy or refusal to obey, shall
be enforceable by order of any appropriate United States
district court, provided, that procedures other than
subpoenas shall be used by the National Flood Insurance
Advocate to obtain documents and information from any Federal
agency;
``(5) issue a summons to compel the testimony of any person
in the employ of any insurance company or associated entity,
described under subsection (b)(5)(A), or any successor to
such company or entity, including any member of the board of
such company or entity, any trustee of such company or
entity, any partner in such company or entity, or any agent
or representative of such company or entity;
``(6) administer to or take from any person an oath,
affirmation, or affidavit, whenever necessary in the
performance of the functions assigned by this section, which
oath, affirmation, or affidavit when administered or taken by
or before an employee of the Office designated by the
National Flood Insurance Advocate shall have the same force
and effect as if administered or taken by or before an
officer having a seal;
``(7) have direct and prompt access to the Director when
necessary for any purpose pertaining to the performance of
functions and responsibilities under this section;
``(8) select, appoint, and employ such officers and
employees as may be necessary for carrying out the functions,
powers, and duties of the Office subject to the provisions of
title 5, United States Code, governing appointments in the
competitive service, and the provisions of chapter 51 and
subchapter III of chapter 53 of such title relating to
classification and General Schedule pay rates;
``(9) obtain services as authorized by section 3109 of
title 5, United States Code, at daily rates not to exceed the
equivalent rate prescribed for the rate of basic pay for a
position at level IV of the Executive Schedule; and
``(10) to the extent and in such amounts as may be provided
in advance by appropriations Acts, enter into contracts and
other arrangements for audits, studies, analyses, and other
services with public agencies and with private persons, and
to make such payments as may be necessary to carry out the
provisions of this section.
``(d) Additional Duties of the NFIA.--The National Flood
Insurance Advocate shall--
``(1) monitor the coverage and geographic allocation of
regional offices of flood insurance advocates;
``(2) develop guidance to be distributed to all Federal
Emergency Management Agency officers and employees having
duties with respect to the national flood insurance program,
outlining the criteria for referral of inquiries by insureds
under such program to regional offices of flood insurance
advocates;
``(3) ensure that the local telephone number for each
regional office of the flood insurance advocate is published
and available to such insureds served by the office; and
``(4) establish temporary State or local offices where
necessary to meet the needs of qualified insureds following a
flood event.
``(e) Other Responsibilities.--
``(1) Additional requirements relating to certain audits.--
Prior to conducting any audit or investigation relating to
the allocation of flood losses under subsection (b)(5)(A),
the National Flood Insurance Advocate shall--
``(A) consult with appropriate subject-matter experts to
identify the data necessary to determine whether flood claims
paid by insurance companies or associated entities on behalf
the national flood insurance program reflect damages caused
by flooding;
``(B) collect or compile the data identified in
subparagraph (A), utilizing existing data sources to the
maximum extent practicable; and
``(C) establish policies, procedures, and guidelines for
application of such data in all audits and investigations
authorized under this section.
``(2) Annual reports.--
``(A) Activities.--Not later than December 31 of each
calendar year, the National Flood Insurance Advocate shall
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on the activities of the
Office of the Flood Insurance Advocate during the fiscal year
ending during such calendar year. Any such report shall
contain a full and substantive analysis of such activities,
in addition to statistical information, and shall--
``(i) identify the initiatives the Office of the Flood
Insurance Advocate has taken on improving services for
insureds under the national flood insurance program and
responsiveness of the Federal Emergency Management Agency
with respect to such initiatives;
``(ii) describe the nature of recommendations made to the
Director under subsection (i);
``(iii) contain a summary of the most serious problems
encountered by such insureds, including a description of the
nature of such problems;
``(iv) contain an inventory of any items described in
clauses (i), (ii), and (iii) for which action has been taken
and the result of such action;
``(v) contain an inventory of any items described in
clauses (i), (ii), and (iii) for which action remains to be
completed and the period during which each item has remained
on such inventory;
``(vi) contain an inventory of any items described in
clauses (i), (ii), and (iii) for which no action has been
taken, the period during which each item has remained on such
inventory and the reasons for the inaction;
``(vii) identify any Flood Insurance Assistance
Recommendation which was not responded to by the Director in
a timely manner or was not followed, as specified under
subsection (i);
``(viii) contain recommendations for such administrative
and legislative action as may be appropriate to resolve
problems encountered by such insureds;
``(ix) identify areas of the law or regulations relating to
the national flood insurance program that impose significant
compliance burdens on such insureds or the Federal Emergency
Management Agency, including specific recommendations for
remedying these problems;
``(x) identify the most litigated issues for each category
of such insureds, including recommendations for mitigating
such disputes;
``(xi) identify ways to promote the economy, efficiency,
and effectiveness in the administration of the national flood
insurance program;
``(xii) identify fraud and abuse in the national flood
insurance program; and
``(xiii) include such other information as the National
Flood Insurance Advocate may deem advisable.
``(B) Direct submission of report.--Each report required
under this paragraph shall be provided directly to the
committees identified in subparagraph (A) without any prior
review or comment from the Director, the Secretary of
Homeland Security, or any other officer or employee of the
Federal Emergency Management Agency or the Department of
Homeland Security, or the Office of Management and Budget.
``(3) Information and assistance from other agencies.--
``(A) In general.--Upon request of the National Flood
Insurance Advocate for information or assistance under this
section, the head of any Federal agency shall, insofar as is
practicable and not in contravention of any statutory
restriction or regulation of the Federal agency from which
the information is requested, furnish to the National Flood
Insurance Advocate, or to an authorized designee of the
National Flood Insurance Advocate, such information or
assistance.
``(B) Refusal to comply.--Whenever information or
assistance requested under this subsection is, in the
judgment of the National Flood Insurance Advocate,
unreasonably refused or not provided, the National Flood
Insurance Advocate shall report the circumstances to the
Director without delay.
``(f) Compliance With GAO Standards.--In carrying out the
responsibilities established under this section, the National
Flood Insurance Advocate shall--
``(1) comply with standards established by the Comptroller
General of the United States for audits of Federal
establishments, organizations, programs, activities, and
functions;
``(2) establish guidelines for determining when it shall be
appropriate to use non-Federal auditors;
``(3) take appropriate steps to assure that any work
performed by non-Federal auditors complies with the standards
established by the Comptroller General as described in
paragraph (1); and
``(4) take the necessary steps to minimize the publication
of proprietary and trade secrets information.
``(g) Personnel Actions.--
``(1) In general.--The National Flood Insurance Advocate
shall have the responsibility and authority to--
``(A) appoint regional flood insurance advocates in a
manner that will provide appropriate coverage based upon
regional flood insurance program participation; and
``(B) hire, evaluate, and take personnel actions (including
dismissal) with respect to any employee of any regional
office of a flood insurance advocate described in
subparagraph (A).
``(2) Consultation.--The National Flood Insurance Advocate
may consult with the appropriate supervisory personnel of the
Federal Emergency Management Agency in carrying out the
National Flood Insurance Advocate's responsibilities under
this subsection.
``(h) Operation of Regional Offices.--
``(1) In general.--Each regional flood insurance advocate
appointed pursuant to subsection (d)--
``(A) shall report to the National Flood Insurance Advocate
or delegate thereof;
``(B) may consult with the appropriate supervisory
personnel of the Federal Emergency Management Agency
regarding the daily operation of the regional office of the
flood insurance advocate;
``(C) shall, at the initial meeting with any insured under
the national flood insurance program seeking the assistance
of a regional office of the flood insurance advocate, notify
such insured that the flood insurance advocate offices
operate independently of any other Federal Emergency
Management Agency office and report directly to Congress
through the National Flood Insurance Advocate; and
``(D) may, at the flood insurance advocate's discretion,
not disclose to the Director contact with, or information
provided by, such insured.

[[Page S3864]]

``(2) Maintenance of independent communications.--Each
regional office of the flood insurance advocate shall
maintain a separate phone, facsimile, and other electronic
communication access.
``(i) Flood Insurance Assistance Recommendations.--
``(1) Authority to issue.--Upon application filed by a
qualified insured with the Office of the Flood Insurance
Advocate (in such form, manner, and at such time as the
Director shall by regulation prescribe), the National Flood
Insurance Advocate may issue a Flood Insurance Assistance
Recommendation, if the Advocate finds that the qualified
insured is suffering a significant hardship, such as a
significant delay in resolving claims where the insured is
incurring significant costs as a result of such delay, or
where the insured is at risk of adverse action, including the
loss of property, as a result of the manner in which the
flood insurance laws are being administered by the Director.
``(2) Terms of a flood insurance assistance
recommendation.--The terms of a Flood Insurance Assistance
Recommendation may recommend to the Director that the
Director, within a specified time period, cease any action,
take any action as permitted by law, or refrain from taking
any action, including the payment of claims, with respect to
the qualified insured under any other provision of law which
is specifically described by the National Flood Insurance
Advocate in such recommendation.
``(3) Director response.--Not later than 15 days after the
receipt of any Flood Insurance Assistance Recommendation
under this subsection, the Director shall respond in writing
as to--
``(A) whether such recommendation was followed;
``(B) why such recommendation was or was not followed; and
``(C) what, if any, additional actions were taken by the
Director to prevent the hardship indicated in such
recommendation.
``(4) Responsibilities of director.--The Director shall
establish procedures requiring a formal response consistent
with the requirements of paragraph (3) to all recommendations
submitted to the Director by the National Flood Insurance
Advocate under this subsection.
``(j) Reporting of Potential Criminal Violations.--In
carrying out the duties and responsibilities established
under this section, the National Flood Insurance Advocate
shall report expeditiously to the Attorney General whenever
the National Flood Insurance Advocate has reasonable grounds
to believe there has been a violation of Federal criminal
law.
``(k) Coordination.--
``(1) With other federal agencies.--In carrying out the
duties and responsibilities established under this section,
the National Flood Insurance Advocate--
``(A) shall give particular regard to the activities of the
Inspector General of the Department of Homeland Security with
a view toward avoiding duplication and insuring effective
coordination and cooperation; and
``(B) may participate, upon request of the Inspector
General of the Department of Homeland Security, in any audit
or investigation conducted by the Inspector General.
``(2) With state regulators.--In carrying out any
investigation or audit under this section, the National Flood
Insurance Advocate shall coordinate its activities and
efforts with any State insurance authority that is
concurrently undertaking a similar or related investigation
or audit.
``(3) Avoidance of redundancies in the resolution of
problems.--In providing any assistance to a policyholder
pursuant to paragraphs (1) and (2) of subsection (b), the
National Flood Insurance Advocate shall consult with the
Director to eliminate, avoid, or reduce any redundancies in
actions that may arise as a result of the actions of the
National Flood Insurance Advocate and the claims appeals
process described under section 62.20 of title 44, Code of
Federal Regulations.
``(l) Authority of the Director To Levy Penalties.--In
addition to any other action that may be taken by the
Attorney General, upon a finding in any investigation or
audit conducted by the Office of the National Flood Insurance
Advocate under this section, that any insurance company or
associated entity has willfully misappropriated funds under
the national flood insurance program, the Director may levy a
civil fine against such company or entity in an amount not to
exceed 3 times the total amount of funds shown to be
misappropriated.
``(m) Definitions.--For purposes of this subsection:
``(1) Associated entity.--The term `associated entity'
means any person, corporation, or other legal entity that
contracts with the Director or an insurance company to
provide adjustment services, benefits calculation services,
claims services, processing services, or record keeping
services in connection with standard flood insurance policies
made available under the national flood insurance program.
``(2) Insurance company.--The term `insurance company'
refers to any property and casualty insurance company that is
authorized by the Director to participate in the Write Your
Own program under the national flood insurance program.
``(3) National flood insurance advocate.--The term
`National Flood Insurance Advocate' includes any designee of
the National Flood Insurance Advocate.
``(4) Qualified insured.--The term `qualified insured'
means an insured under coverage provided under the national
flood insurance program under this title.
``(n) Funding.--Pursuant to section 1310(a)(8), the
Director may use amounts from the National Flood Insurance
Fund to fund the activities of the Office of the Flood
Advocate in each of fiscal years 2009 through 2014, except
that the amount so used in each such fiscal year may not
exceed $5,000,000 and shall remain available until expended.
Notwithstanding any other provision of this title, amounts
made available pursuant to this subsection shall not be
subject to offsetting collections through premium rates for
flood insurance coverage under this title.''.

Ms. LANDRIEU. Madam President, Senator Wicker, Senator Vitter,
myself, and Senator Cochran to some degree have been working for months
literally on this bill. It is a very important bill--as has Senator
Nelson of Florida--a very important bill to Mississippi and Louisiana
that felt the brunt of these last storms that we will be marking the
third anniversary of this August, not too far from today, and in
September for Hurricane Rita. As I was saying earlier this morning,
thousands and thousands and thousands of homeowners are having a
difficult time, the causes of which are very different. In some parts
of the country people extended debt beyond what was wise and reasonable
and find themselves losing their homes and in some instances it is
partly their fault.
In some places, some consumers had bad deals thrust at them, and
maybe through fraud or some other abuse they find themselves losing
their homes. The people I represent didn't do either of those two
things. The people I represent in Louisiana and along the gulf coast
did nothing but basically play by the rules, have insurance if they
were required to, didn't have insurance when they were not required,
for the most part. There were some families who should have had
insurance who did not, but that is another subject for another day. But
the bulk of the people did exactly what they were supposed to do, and
they are still going to lose their homes because of two reasons: The
Federal levees that should have held didn't and the insurance paradigm
we have established is not sufficient. That is what this bill is about.
To describe this in very clear graphics, I wish to put up this poster
that shows why we are on the floor today: $17.53 billion; that is a lot
of money. That is why this bill is on the floor today, because we have
to ``reform the system'' because it is obviously not working. We set up
a flood insurance program and for years it would basically break even
because of the way it was structured. Then in 2004, it went into debt a
little bit, $225 million. Then we went into debt a little bit more,
$300 million, but still manageable. Then Katrina and Rita hit and the
debt goes up to almost $20 billion. So make no mistake about it, that
is why this bill is on the floor. This is a taxpayer bailout of $20
billion. At the same time the taxpayers are bailing out the insurance
industry, I wanted to show you what the insurance industry profits are.
Everybody--some Republicans and a lot of Democrats--has been on this
floor talking about oil companies. I guess I can understand why oil
companies are making profits, because prices are high. That is a whole
other subject for another day. But I wonder how insurance companies can
make profits when you are supposed to have a record loss. I understand
profits when prices are high; I don't understand profits when losses
are great. There is something wrong with this system.

So, in 2005, the insurance profits went up to $48 billion. Katrina
and Rita hit; they don't go down. The profits go up. Because it is
basically a system where insurance companies just cannot lose money.
People can lose money. People can lose their houses. Businesses lose
their businesses. Businesses lose their contents and their markets. But
for some reason, in this insurance bill we are operating under,
insurance companies make money in the middle of a disaster. Some of my
constituents, including myself, would like to know how this happens.
As to the National Flood Insurance Program, the GAO did a report that
says: ``Greater Transparency and Oversight of Wind and Flood Damage
Determinations Are Needed.'' They just issued this report. I would say
so, since the taxpayers are going to pick up the $20 billion bill.
You heard the Senator from Florida, Mr. Nelson. They were so
desperate in

[[Page S3865]]

Florida, the State had to sort of insure itself, which, thank goodness,
Florida is big enough and maybe wealthy enough to do. It is very risky
for the State of Florida to do that. If they have four our five
hurricanes in one season, like they did a couple seasons ago, it could
bankrupt the State. I am sure this debate went on in the Florida
Legislature. But they were so desperate, they actually had no recourse
because the Federal Government will not come up with a plan that will
work for everyone.
So Florida had a choice: They could either shut down every commercial
business, shut down every homebuilder, completely stop the housing
market in Florida, or they could self-insure themselves. It was a
pretty desperate situation, so Florida went ahead and did that.
But let me explain, Louisiana is not a rich State, and we are not a
big State. We cannot insure ourselves that way. If we had another
Katrina, the whole State would go bankrupt and our kids could not go to
universities, our hospitals would shut down. I know people think I am
making this up, but it is the truth. We cannot assume that risk onto
ourselves, and neither can Mississippi, and I would suggest neither
could Alabama. Maybe California could do it, maybe New York could do
it, maybe Texas could do it, and maybe Florida could do it because they
are big States, but our little States would go bankrupt.
So our GAO says the insurance business needs some more transparency
and oversight. I will tell you why. As shown on this chart, this is
what is in the report. As you know, maybe by word of explanation, under
the current system--as unbelievable as this might sound--you have the
real estate agents who are in the private sector writing wind insurance
for their companies, which they can make a profit on. It is private.
They are writing the flood insurance policies. So it is ``write your
own'' policy. So the same people who write the Federal, taxpayer-
guaranteed flood program write the private program.
So right now--and this bill does not fix this; this bill does not do
anything to fix this--right now, according to our own GAO, Government
Accountability Office, which is completely neutral, not political:

In certain damage scenarios, the WYO [write your own]
insurer that covers a policyholder for wind losses can have a
vested economic interest in the outcome of the damage
determination that it performs when the property is subjected
to a combination of high winds and flooding.

Which, hello, most often happens in a hurricane. You have winds and
water. So it always happens that way.

In such cases, a conflict of interest exists--

Let me underline ``a conflict of interest exists''--

with the WYO insurer as it determines which damages were
caused by wind, to be paid by itself. . . .

So if a house is destroyed and the person comes in and says: This
house was destroyed by wind 85 percent--if that is the case--then I
have to pay it out of my pocket. If it is actually 85 percent flood,
then the Government can pay it. The poor taxpayers can pick up this
tab, so the insurance companies move their liability to the taxpayer.
I know, Madam President, as a former auditor, you can most certainly
appreciate and understand this situation.
So it says:

In such cases, a conflict of interest exists with the WYO
insurer as it determines which damages were caused by wind,
to be paid by itself, and which damages were caused by
flooding, to be paid by NFIP [the National Flood Insurance
Program].

Which is basically the taxpayers.

Moreover, the amount WYO insurers are compensated . . .

In addition to that obvious conflict of interest, which is not
corrected in this bill, the insurers are compensated for servicing a
flood claim, and it increases as the amount of the flood damage
increases. So their compensation, their percentage is increased. So if
the flood insurance is more, they get a little bit of a premium.
So this bill has been in committee being worked out through the House
and Senate, it is finally on the floor, and this problem has not been
corrected. So that is why I offer my amendment to try to correct some
portion of it.
Let me show you one of the actual transactions we have uncovered.
This is an actual blowup of a claim, the paperwork that was done. It
talks about the flood that occurred on August 29. Damage appears to be
the result of the general condition of flooding. The first inspection
revealed an exterior waterline of 15 to 20 feet, an interior waterline
of 8 to 12 feet. Damage was extensive. It lists this.
That sounds wonderful and great. That is kind of what one of these
documents would look like. The problem is, the adjuster who turned in
that document said--this is under oath in one of the court proceedings
that is slowly moving through the courts--``I did not put those numbers
in there.'' ``There was no house to measure a waterline.'' ``I did not
prepare that letter.'' ``They didn't call me about that letter.''
``That is the document that is sent to the Federal Government.'' This
is an adjuster. We have blocked his name out because he would probably
get in trouble if they knew he was sharing this information with us.
So, in other words, again, this is not complicated, because I know
insurance can be complicated. I do not really like the subject very
much, but I have had to learn more about it than I care to know because
of what we are going through.
But we have a system which we are getting ready to vote on right now
that allows the same insurance companies to write their own personal
policies or their own business policies, and they do the Government a
``big favor'' by writing the flood insurance policies. They decide when
their houses are destroyed, how much they have to pay out of pocket, if
it was done by wind, or how much we have to pay if it was done by
flood. These documents are barely ever audited, or this system is
barely ever audited.

When we went and checked, as shown on this chart, this was the house
that supposedly had a water line. Of course, you can see this address.
There was no house. There could not possibly have been any measurement
because there are no walls to measure. So this is just an example of
hundreds that are coming out as these court cases move forward all
along the gulf about the very serious problems related to the way the
U.S. flood insurance program works.
Now, I know we need a flood insurance program. My State benefits
tremendously from having one that is fair and equitable to the people
who are paying the premiums, to the homeowners and businesses who rely
on it. I also have an obligation to taxpayers generally in this country
to support a program that is honest and fair. What I am suggesting is
that the bill we are about to vote on--which is probably why I am going
to vote no--does not do anything to change this.
So I am going to put up my ``$20 billion'' sign again. This $20
billion debt exists in large measure because of this system I have just
described. Now, this bill is going to pass, and magically the Federal
Government is going to just absorb the $20 billion so we kind of get
back to even. The bill, then, generally said, to make up for that, we
are going to raise rates. But do you know on whom they raise rates? Not
on the insurance companies that have already made record profits. Do
you know on whom they raise rates? People who cannot afford the rates
today. In the underlying bill, they can raise rates 15 percent a year
or 25 percent a year.
When we ask the committee to please consider that the people of
Mississippi and Louisiana and Alabama cannot afford higher insurance
rates, couldn't we possibly consider some kind of catastrophic plan--
because we might have hurricanes, but Memphis is going to have an
earthquake someday, and Seattle is going to have a tsunami; in 1938, a
hurricane 5 slammed into Long Island--we are told no. We cannot even
consider such a thing.
So there are many things wrong, and I really cannot correct them. I
tried to hold this bill up as long as I could, and everybody decided we
needed to have a flood insurance bill, so I said: Fine. Let the bill
come to the floor, but I am going to talk against it. That is what I
plan to do.
So the purpose of this bill is for the taxpayers to eat $20 billion,
to let insurance companies have record profits, and the end result is
the people of Alabama, Mississippi, and Louisiana get rates raised
every year from now until who knows. And I am supposed to just

[[Page S3866]]

sit here and say this is a great bill the committee came up with?
So the amendment I am offering--which is not going to fix this bill,
but it might fix one problem with this bill--is to establish an
ombudsman.
Oh, and this is really ironic, what is in the underlying bill. In the
underlying bill, there is a provision that establishes an office to
register complaints. It is a flood insurance advocate section of this
bill. If I had the section, I would read it. But in the underlying
bill, there is a section that talks about that if anybody has a
complaint, they could call a 1-800 number and complain.
Now, I have e-mails up to my ceiling in my office from people--not
complaining, crying--not complaining, crying because they are getting
ready to lose their business or lose their house. But they could, in
the underlying bill, call a 1-800 number and make a complaint. But the
language is so weak and flimsy, there is really not anything they can
do other than complain.
So I have taken that section and strengthened it. That is what my
amendment does. It does not just establish a complaint counter. It
establishes an office that has some teeth. It establishes an
ombudsman's office. We kind of took the language from some of our IG
legislation which will allow the establishment of an office with some
significant funding attached to it that can review and audit more
carefully this National Flood Insurance Program.
I would hope the leaders of this committee would look carefully at
this amendment and know that I offer it in very good faith. Again, I do
not believe the underlying bill, in this provision just establishing an
office to complain, is enough considering the gravity of the situation
we are dealing with.
I offer this amendment in good faith. I offer it with Senator Nelson
from Florida as a cosponsor. It establishes an office that would
conduct audits to ensure that only flood losses are being allocated to
the flood insurance program. It ensures that write-your-own insurers
are preserving the necessary documentation to justify their payments,
to conduct any other examinations to protect the financial integrity of
the program, and to prevent fraud and abuse and conflicts of interest.

Now, again, our Government Accounting Office has already established
there is an inherent conflict of interest in the current program. So we
are not guessing that there might be a conflict of interest; there is a
conflict of interest. It says so according to the GAO:

In certain damage scenarios, the insurer that covers a
policyholder for wind losses can have a vested economic
interest in the outcome of the damage determination that it
performs when the property is subjected to a combination of
high winds and flooding. A conflict of interest exists, as it
determines whether it says your house was damaged by wind.

So let me go ahead and pay your claim on it, or the insurer says: No,
I think it was damaged by flood, which then the taxpayers can pay for,
and my insurance company gets off Scot-free. And maybe, just maybe,
that might explain why in the worst disaster in the history of the
United States, at least recently, taxpayers have to pick up $20 billion
and insurance companies file record profits.
Is there anything in this underlying bill that might suggest that we
could watch the taxpayers' money a little more carefully? No. They put
in an office, a 1-800 number where people might complain.
So instead of the 1-800 number where people might complain, I would
like to put in an office where, if something is wrong, people can be
criminally prosecuted. If there is fraud, people can be penalized with
civil penalties and criminal penalties.
I know this is very tough language, but I am not suggesting this
particular document suggests that there is any stealing or any crime.
But there is something wrong in our system of justice where somebody
goes into a grocery store and steals $100 and gets 3 years in jail, and
we have companies that--``fudge'' is the word. They didn't really use
the word ``steal,'' but they will fudge a little and take $20 billion
out of the Treasury and they get nothing--not a slap on the wrist, not
a fine. The only thing that happens is the poor homeowners and
businesses get increased premiums. So that is one of the things this
amendment does.
I hope my colleagues, whether they vote for the bill--I probably will
not vote for the bill unless it is amended substantially, which it may
be between now and the time we vote on final passage--but I hope my
colleagues will look very carefully at this amendment that I offer with
Senator Nelson. It establishes basically an IG ombudsman within this
program to make sure the taxpayers don't pick up another $20 billion in
costs.
I know people will say: Well, Senator Landrieu, if we don't have this
bill, your people won't have flood insurance. Well, I understand that,
but our people have--we are between a rock and a hard place. We need
flood insurance, but we need flood insurance that we can afford. We
would like to believe we have a flood insurance program that operates
honestly. I am not sure that we do. So that is what this amendment
does, amendment No. 4706.

Amendment No. 4705, as Modified, to Amendment No. 4707

I have one final amendment to offer. If I can, I would like to send
the amendment, as modified, No. 4705, to the desk.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Louisiana [Ms. Landrieu], for herself, Mr.
Pryor, and Mrs. Lincoln, proposes an amendment numbered 4705
to amendment No. 4707.

Ms. LANDRIEU. I ask unanimous consent to dispense with the reading of
the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

On page 10, strike line 3 and all that follows through page
10, line 16, and insert the following:
(c) Study on Mandatory Purchase Requirements.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Comptroller General shall conduct
and submit to Congress a study assessing the impact,
effectiveness, and feasibility of amending the provisions of
the Flood Disaster Protection Act of 1973 regarding the
properties that are subject to the mandatory flood insurance
coverage purchase requirements under such Act to extend such
requirements to properties located in any area that would be
designated as an area having special flood hazards but for
the existence of a structural flood protection system.
(2) Content of report.--In carrying out the study required
under paragraph (1), the Comptroller General shall
determine--
(A) the regulatory, financial and economic impacts of
extending the mandatory purchase requirements described under
paragraph (1) on the costs of homeownership, the actuarial
soundness of the National Flood Insurance Program, the
Federal Emergency Management Agency, local communities,
insurance companies, and local land use;
(B) the effectiveness of extending such mandatory purchase
requirements in protecting homeowners from financial loss and
in protecting the financial soundness of the National Flood
Insurance Program; and
(C) any impact on lenders of complying with or enforcing
such extended mandatory requirements.

Ms. LANDRIEU. Madam President, I send this amendment to the desk,
which is actually on behalf of myself, Senator Lincoln, and Senator
Pryor, that addresses the mandatory coverage requirements in the
underlying bill. I hope my colleagues will not think again that this
bill only affects the gulf coast because there are some provisions in
this bill that are going to affect the entire country.
One of the provisions is, it is going to be mandatory as FEMA maps
home and businesses located beyond levees and dams and floodwalls and
other manmade structures into residual risk areas. Once these homes and
businesses are mapped into such areas, the legislation would require
them to purchase flood insurance.
Now, levees and dams don't just exist in New Orleans, although we
have quite a few of them because we are a low-lying area. But we have
14,000 miles of Federal levees throughout the country along many
rivers. In fact, I see the Senator from North Dakota, and he himself
has had very significant experience with one of his towns being
demolished, devastated, almost completely destroyed, I think it was
maybe 15 years ago, when their levees broke. So he is well aware.
Whether you are in Michigan or Illinois or Missouri or in many places
where there are levees and dams, there are 14,000 miles of Federal
levees, 79,000 dams, and 22 percent of all counties

[[Page S3867]]

and parishes have a levee. So it is one out of every four that will be
affected by the underlying bill; that is, once FEMA finishes mapping
the whole United States, which they are doing and which we need to do.
We need to have better maps using new technology to try to determine
who is near sea level and who is above sea level and who is at risk. I
have no problem with that. But this bill will mandate that everybody
behind those levees pays insurance.
So my amendment will basically establish before that requirement goes
into place--and, again, it may be necessary--that there be adequate
study about the issue. The amendment strikes the mandatory purchase
requirement. In its place, it requires the GAO to study the cost, the
regulatory, financial, and economic impacts of extending the mandatory
purchase on the cost of home ownership, the actuarial soundness to this
program, to the local communities, insurance companies, and local land
use; the effectiveness of sending such a purchase requirement in
protecting homeowners from financial loss and protecting the financial
soundness of the program.
Now, I know this was debated in committee. I am not sure that it has
gotten a lot of coverage, but my phone has been ringing off the hook
from other Senators who are just waking up and saying: Well, Senator, I
thought this flood insurance program only affected those places along
the coast, and now I am realizing this flood insurance ``reform'' bill
is going to raise fees--not necessarily taxes but premiums--on
thousands and thousands and thousands of homeowners and businesses
throughout the country.
We may have to do that. We may have to do that. But let's do it after
GAO has studied and laid out what the impact and ramifications are, and
let's do it in a system that is fair so it is not just the homeowners
who have to pay premiums, the taxpayers who bail them out when there is
a problem, and insurance companies that can't lose money under the
current system. That is basically the system that we have.
So, again, 43 million people are affected by the underlying bill with
this new provision. Twenty-two percent of all counties in the country,
and in our case parishes, have levees; 79,000 dams and 14,000 miles of
Federal levees.
So these are the two amendments that I offer. This has been done in a
package with Senator Wicker and Senator Vitter. We have offered a
package of amendments trying to fix and expand wind coverage to this
bill, to lift the coverage limits.
Again, a big problem with this bill is it has not kept pace with
inflation and only covers homes valued up to $225,000. That might sound
like a lot, but it is not keeping pace with inflation. Our amendment
would lift the coverage to homes over $325,000.
Then my ombudsman amendment and this mandatory coverage reprieve
would be the other amendment.
Mr. DORGAN. Madam President, I wonder if the Senator would yield for
a question.
Ms. LANDRIEU. Yes, I will.
Mr. DORGAN. The last amendment that the Senator sent to the desk, my
understanding is that it is an amendment very similar to something I
was intending to offer, but I am not certain I understand your
amendment, so if I could just work through it with you.
My concern about the underlying bill with respect to the mandatory
coverage areas is that it requires the expansion of areas of special
flood hazards to include areas of residual risks, including areas that
are behind levees, dams, and other manmade structures.
Is your amendment designed to strike that provision?
Ms. LANDRIEU. It doesn't strike the mapping requirement. It doesn't
strike the mapping requirement, but it strikes the mandatory coverage
provision until there is a study done about what the economic impact
will be to people living behind those levees and dams.
Mr. DORGAN. But, if I might inquire further, is it the intention of
the amendment to provide that there shall not be mandatory requirements
on all of these levees, dams, and other manmade structures, which the
underlying bill would require?
Ms. LANDRIEU. Yes, it does. That is the intent of the amendment.
Madam President, there are many Senators who feel as though this is a
very abrupt requirement. They are not sure of what the outcome of these
premiums might be to people who are already struggling with higher
costs. And because there is no estimate to my knowledge, we thought it
would be better to offer an amendment that would basically require a
study so more discussion can be had, and then perhaps later we could
insist on mandatory coverage or phase it in as is appropriate. But is
that the Senator's concern?
Mr. DORGAN. Madam President, I believe I looked at the amendment, and
it does not strike what is in the underlying bill--all of section 7--
which I was intending to do with my amendment. I didn't quite
understand the consequences of striking just a portion of it. But if
the Senator from Connecticut who is on the Senate floor--when the
Senator from Louisiana concludes, I would like to make a couple of
comments about the reason for my concern about this matter, and perhaps
we can visit. If our amendments have exactly the same impact, there is
no reason for me to offer mine.
Ms. LANDRIEU. I would be happy to. I appreciate the Senator raising
it. I will review the way this amendment is structured. But, again, I
would be happy to work with the Senator so we could offer something
together because there are many Senators who are concerned, and rightly
concerned, about this particular section.
If the Senator would allow me to finish, I will be happy to yield the
floor for further discussion because I am about ready to finish my
remarks. There are no votes scheduled. There are other amendments that
are going to be offered. But, again, a package has been put together by
several Senators, both Republicans and Democrats.
I have to say again, in conclusion, I don't like the underlying bill.
I did a great deal to keep this bill bottled up in committee for over 2
years. But I have been convinced the better way to proceed is to have
this bill come to the floor, which is what I allowed with Senator
Vitter and Senator Wicker, as long as we can offer amendments and have
some time to air our grievances. The chairman of the committee and the
ranking member of the committee have been men of their word and allowed
us to do so.
So at some point, Madam Chair, I would request that the Senate vote
on these amendments together as a package, but individually the one
regarding wind, the one regarding the increased coverage, the one
regarding the ombudsman, and the amendment regarding the mandatory
coverage, and then the additional coverage options. So there are five
amendments in this package that we have been working on. At some point,
when that can be agreed to, we can move this bill forward.
In the meantime, I will be happy to work with my colleague from North
Dakota to see if the language he has suggested is the same as ours. If
not, perhaps we can modify our amendment to accommodate that, or
perhaps he will offer the amendment with our acquiescence.
With that, I yield the floor to my friend from North Dakota.
The PRESIDING OFFICER. The Senator from North Dakota is recognized.
Mr. DORGAN. Madam President, I was surprised by what is section 7 in
the underlying bill. I understand the substitute at the desk has it on
a different page. I am talking about the same provision the Senator
from Louisiana spoke about briefly; that is, an expansion of the
requirement to have flood insurance in areas of special flood hazards,
to include areas of residual risk, areas that are located behind
levees, dams, and other manmade structures.
I am not surprised we want people to buy flood insurance if they are
at risk of being flooded. That is not my point. But let me give you a
case study, if I might, and talk about Grand Forks, ND. Eleven years
ago--in fact 11 years ago about this time--the city of Grand Forks, ND,
a city of nearly 50,000 people, was nearly completely evacuated. It was
the largest evacuation of a city since the Civil War, and it was
because of a flood on the Red River. It was a very significant flood;
some said it was a 500-year flood.
All of us who went to that city and spent time there and went to the
Air Force base--a major Air Force base--15 miles west of the city and
visited with the citizens who had been evacuated--

[[Page S3868]]

tens of thousands of people--we will never forget that. So what
happened in the last 10 years--by the way, let me speak about the
memory of not only a city being flooded and evacuated, but in the
middle of that city there was a raging fire. So there is a flood, and
then buildings in the middle of the city that are inundated by water
caught fire, and there was a major fire in the middle of the city. To
watch firefighters work in a flood to try to see if they can't, in the
middle of a significant city, put out a fire that is consuming a number
of businesses in the downtown district is quite extraordinary.
Fast forward 10 years, and I think we have spent close to $400
million over a decade to provide unbelievable flood protection for that
city. That is not going to happen again. There is a flood protection
plan in place for that city that is very significant. That flood
protection plan protects against a 250-year flood. The provisions in
this bill talk about a 100-year flood. We have now flood protection for
a 250-year flood. It is blue ribbon, first rate, brandnew flood
protection for this city. So it is a little surprising to me to see a
bill that says, by the way, we have just finished spending a lot of
money to provide very significant 250-year flood protection and now we
have one other decision; we want you to understand you should now buy
flood insurance. It is only $1 a day, $300 or $400 a year, they say.
That is going to be pretty surprising to a lot of people who are
still paying debts to fix up their houses from 10 or 11 years ago from
that flood. They are going to ask the question: Why are we asked to buy
flood insurance when you have built a very significant flood protection
plan, with 250-year flood protection for our city, and now you say to
us we all should go buy flood insurance. Are you daft? What are you
thinking of? They would not understand this. I am trying to figure out
what the requirement is.
I understand there are some manmade levees and dams and other
circumstances that perhaps have risk attached to them, which are old
structures. I understand that. There are some circumstances where those
who take a look at this believe that more should participate in the
flood insurance program. I understand all that. But to simply say that
in every circumstance, including areas located behind levees, dams, and
other manmade structures, everybody should have flood insurance, that
doesn't make any sense to me.
I don't know how you explain that to somebody who was told we
completed a terrific flood protection program that gives you a 250-year
flood protection, but you need to pony up some money to buy new flood
insurance. I think this is not a good provision, and I hope we will be
able to remove it.
Ms. LANDRIEU. Will the Senator yield?
Mr. DORGAN. Yes.
Ms. LANDRIEU. I don't know how this will be resolved. I certainly can
appreciate that, and I agree with the Senator, because one size doesn't
fit all, which has been part of the problem with this bill--that it is
pushing everyone into a one-size-fits-all requirement. It is not the
appropriate response to our situation. I hope the Senator will consider
either modifying the amendment I have laid down, or I would be happy to
actually support a narrower amendment that any communities that can
establish that they have created protection that is over and above the
average, which is 100-year flood protection, might not be subject to
this requirement.
As the Senator knows--because he is chairman of the Appropriations
Committee that funds levees in the country, so he most certainly is one
of the leading experts--the standard in America right now is not
sufficient, and it is 1 storm out of 100. Very few communities can
boast of being as protected as his community can. I suggest that most
certainly I would not object as the main author of the amendment, but
there are several cosponsors. I am sure we could work something out.
Mr. DORGAN. Madam President, in my subcommittee that I chair on
appropriations, dealing with energy and matter, we spent $2.2 billion
on Corps of Engineers construction alone, to say nothing of
maintenance, remediation, and other expenses. Just the construction in
fiscal year 2008 was $2.244 billion. So we are spending a lot of money
working on levees and dikes and other areas of protection. It seems to
me--my colleague from Connecticut indicated this and he is absolutely
correct--levees do fail, and I understand that. He is absolutely
correct about that. Levees do fail. Manmade structures, from time to
time, will fail. But it is also the case that some risks are
substantially lowered, and there are some risks that are substantially
elevated because of the condition of the levy and so on. My colleague
from Louisiana is correct when she says let's not do something that is
one size fits all.
Again, I will use the example I think is clear. If you just finished
a new flood control program that you have worked on for 10 years with a
250-year flood protection, which is more than double the protection
normally required to protect against a 100-year flood, at least
understand the difference between what you have done there with public
funding and what might exist somewhere else, where there is higher
risk. It is hard to tell somebody, by the way, you have a new flood
control plan, it works, it is terrific and it is new and it costs a lot
of money; it will protect you against a 250-year flood, but you must
buy some flood insurance, please, because we are worried that you are
going to be hit by a 100-year flood. That is the kind of thing I hope
we can avoid.

Earlier, I used a word I don't ever use. I don't know why I used it.
I used the word ``daft.'' I wasn't applying it to anybody who wrote
this legislation. I should quickly explain that.
It appears to me that, if this would pass, we may have to explain to
some people something that is not able to be explained. You now have
terrific flood protection, but we want you to buy flood insurance, even
though we protected you with public funding, with a first-class flood
protection system. It is not difficult for me to go to someone in a
circumstance where there is risk and say I understand why you have to
have flood insurance. You have to have a large number of people paying
in. You have risk and you are going to have to buy flood insurance. I
understand that.
The Senator is correct that sometimes levees do fail. We should not,
it seems to me, with this small section in the bill, on page 9,
subsection 2, under (b), we should not say, anyplace in America where
you have a levee, a dam, a manmade structure, you are all in the same
boat. That is not the right thing for us to do.
I hope that with the concurrence of the Senator from Connecticut,
perhaps, we can talk through this as we move along and make some
changes to that, which are thoughtful and address the issue of risk.
I thank my colleague from Louisiana, and I thank my colleague from
Connecticut for his patience. As I conclude, I am going to visit with
the Senator from Louisiana to see whether my amendment is sufficiently
similar to hers so maybe we can deal with one amendment. If so, I will
not add my amendment. I have filed it, but I will not call it up. If it
is not sufficiently similar, I will call up my amendment later today.
I yield the floor.
Mr. DODD. Madam President, now we have had five amendments that will
be pending at some point. At an appropriate time, after my colleague
from Alabama arrives, in consultation with others and with the
leadership, we will work out a time when we may have consideration of
these amendments and have votes. Many Members are curious about votes
this evening. We would like to give a clear indication of when the
votes are likely to occur. Let me take a few minutes and respond.
First of all, all of us in this Chamber, including myself, have
expressed ourselves over the years in terms of what has happened when
people have been devastated by natural disasters, including those in
the gulf area. I have traveled down there reviewing the area and seeing
what happened. We all care deeply about what happened to people in the
Gulf State areas, in terms of the devastation that occurred. Let me
point out quickly that is not the debate, in the sense whether we
understand it. It is what we can do about it.
The bulk of this legislation, as presently written--it is a given
that most of the 5.5 million properties that are going to be covered
are in the Gulf State areas. FEMA borrowed money

[[Page S3869]]

from the Federal Government to pay the $17 billion in claims. The flood
insurance program generates about $2.5 billion each year as a result of
premiums as part of the fund, and about $1 billion of that goes to
administrative costs. There might be a legitimate amendment as to why
there is so much administration in that program. That is how it breaks
down. You are left with $1.5 billion to cover this. As a result of
natural disasters and floods, here we are left with a debt of $17
billion, which FEMA owes to the Federal Government. In the process of
paying that debt, they are increasing the premium costs, unless we take
action. So you can have a choice. We can drop the bill, basically--
defeat it, as some suggested, who may vote against it--in which case
the very people we are concerned about are going to end up with a
larger cost because somebody has to pay that debt. That is a bailout
otherwise, if we don't do something about it. So the idea is, how do
you do that?
The major thrust of the bill is to forgive that debt, take it off the
books, so the people who pay these premiums will not have a surcharge
added to their costs to meet that obligation. That is the fundamental
purpose of the bill, to forgive that $17 billion, which otherwise
becomes a cost to the very people paying the premiums. So I began the
discussion by saying the thrust of this bill was to do that.
The second part--Senator Nelson has it exactly right, the author of
the second part. He came to the committee a number of months ago and
asked to include a commission to deal with catastrophic natural
disasters. There is a significant debate as to how to handle this. A
significant percentage of our population lives within 100 miles of the
coast of the United States. Obviously, there are natural disasters that
occur inland as well. But how we deal with catastrophic costs, how we
set up the mechanism to deal with it is a significant debate, with
hardly unanimity around it. Rather than trying to pretend that one
committee can solve all that, Senator Nelson suggested a commission
made up of people who would bring knowledge about all this and report
back to us in 9 months their recommendations as to how we might deal
with catastrophic disasters that occur in our country.
That is the second part of this bill. There are a lot of other ideas.
I addressed some of them earlier--wind issues and the like. I don't
argue about the legitimacy of the issue. The question is, we have a
responsibility to be actuarially sound. I know that is not something we
have a great reputation on, but we try to do that occasionally, to
insist upon having a system that will allow us to collect revenue, pay
for a program, keep the costs down, and cover the kind of catastrophe
people face.
Our bill does a number of things that are more than just vague
terminology in dealing with the insurance industry. I, for one, believe
we ought to do more in this area to try to get greater accountability.
That is not an issue for debating here.
Let me mention some things we have included in the bill before we
accept the notion that nothing is here at all. No. 1, in the program we
require the insurance companies to participate in State-sponsored
mediation.
We require the insurance industry to submit all data on costs to
operate this program and require FEMA to conduct rulemaking so the
insurance companies are only paid for actual costs.
We created a flood advocate to help consumers who have problems with
the flood program so they can have direct access to it. That was one of
the major problems a few years ago.
We also direct FEMA to collect information from the insurance
industry on claims where there is both wind and flood damage. I might
add, this gets exactly at the problems raised by our colleagues from
Louisiana and the other gulf State areas. FEMA will now be required to
look at how insurance companies are dividing damages to ensure that
companies are not improperly shifting costs to the Federal flood
program.
I know others may want to add other things. But to suggest we did
nothing to require greater accountability is not to be terribly honest
about what is in this bill. Obviously, there are those who would like
to get rid of the industry altogether and maybe just have a Federal
program where FEMA becomes an insurance company. That is an option, if
people want to do it. I don't know there is a will here to do it, but
that is one option.
There is no requirement in law that an industry provide this kind of
coverage. You have to be somewhat careful that if you become so onerous
in your requirements or your indictment of them that getting these very
companies to write the policies becomes harder. If they don't write the
policies, who does? Does the Federal Government then become an
insurance company? I don't think there is a will to do that. Maybe
there are some who would like to.
Before you decide to beat this horse into oblivion, be careful about
how far you go. If you do it to such a degree there is no one there to
write the programs to begin with, we may find ourselves in deeper
trouble. But to say they ought to be able to do exactly as they want to
do, and not be mindful of some of the egregious examples my colleague
from Louisiana referred to, would also be wrong.
In this bill we tried to identify some specific areas that were the
subject of hearings that informed us where there were matters clearly
the industry and those responsible for overseeing them could demand
more and get more out of them.
I believe we have done a good job in this bill on those issues. Could
you add some more things? I am not going to argue that. We did try to
do our best. Again, we had a unanimous vote in our committee after
significant debate on this bill. But the idea of having an ombudsman
going in and basically drawing a conclusion about things before
actually determining it--be careful what you wish for. If in fact we
don't end up with people coming in to provide the coverage, we could
find ourselves in even worse shape than we are in today. I invite my
colleagues to look at the legislation and the specific provisions I
just mentioned that we have included in the legislation to require
greater accountability out of the industry.
Now let me address the second point, and that is the mandatory
requirement that people within certain high-risk areas be required to
pay some premiums. I ask my colleagues to think about the consequences
of this amendment should we strike the portion of the bill that
requires people who live in areas behind levees or downstream of dams
to purchase flood insurance. Currently, home and business owners in
these residual risk areas, as they are called, are at great risk of
flooding. There are over 122 levees and dams that have already been
categorized as weak, failing.
With all due respect to my colleague from North Dakota--and I have
been to his community where these problems exist--these manmade
projects do not always work. So the fact that taxpayers in Connecticut
and elsewhere have paid to build them is a good thing. Maybe we ought
to be talking about how those costs of premiums ought to reflect the
quality of the levee or the dam that has been built in those areas. But
to suggest somehow that since we built the levee anybody living in that
residual risk area should not assume any responsibility if it breaks
down is maybe going to far.
Let me tell you what we are talking about. Most cost less than $1 a
day to cover this. What you get for that is roughly $250,000 to cover
structures and $100,000 to cover the contents. That is $350,000 in most
cases for less than a dollar a day, for living in a residually high-
risk area where a levee or dam exists. This idea somehow that we all
can get our levees built and dams built and we bear no other
responsibility for trying to cover against those risks and the costs,
when they occur, if that levee or dam breaks and it gets flooded out
and there is no insurance requirement in those areas--who pays for that
damage? Again, we are right back here draining the Treasury instead of
requiring an insurance program. A dollar a day for roughly 350,000
dollars' worth of coverage, I do not think that is overly burdensome.
I know people don't like any additional cost. But if you are asking
me to craft a program that is actuarially sound, that allows us to
build up that fund so we do not have to drain the Treasury or forgive a
debt that is now

[[Page S3870]]

owed by FEMA to the National Government, then requiring some
responsibility--I have it in my own State of Connecticut. The
Connecticut River in Hartford, we have a huge levee, a dam there. I
certainly think my constituents who live along that have to pay
something. They made the choice to be there. Some don't make the
choice. They live there. But asking for less than $1 a day for over
$350,000 in coverage for structure and contents in order to bear some
responsibility--Lord forbid it breaks down--I don't see that as being
overly burdensome, as some would suggest.
What percentage of problems occur in this area? We are told here--
again, I am relying on data that has been given to us--we all know that
dams fail, levees fail. What better evidence than what happened to our
colleagues from Louisiana, the failure of the levees and the problems
that ensued from it. I will provide the lists and put them in the
record of the 122 levees we know are failing today. One percent of all
flood policies are outside the 100-year floodplain, many of these in
residual risk areas. This 1 percent of policies accounts for 25 percent
of flood claims. Let me repeat that. One percent of the policies
accounts for 25 percent of the flood claims. So 1 percent of policies
not currently in mandatory purchase areas are responsible for 25
percent of all the claims that come in--one-quarter of them.
You could just persist in this and say we are not going to have
anybody pay anything at all. Yet 25 percent of the entire fund is going
off to provide coverage in areas where, again--it is only 1 percent of
the policies that are being written. Clearly, the risks outside the
100-year floodplain are significant--25 percent of all claims are
coming from them, despite the dams and the levees we have here. We
should ensure that adequate insurance coverage for all homes and
businesses in these risky areas are covered. That is what we are trying
to do.
Flood insurance should not be viewed as punitive. It is a cost to
insure against a known risk. Flood insurance premiums for homeowners in
these residual risk areas are not prohibitively expensive. The maximum
amount of coverage--$250,000 for structures and $100,000 for contents--
will cost less than $1 a day. That is the maximum insurance. For a
majority of people, the cost will be much less, less than $1 a day to
ensure a family can rebuild from a flood.

I ask my colleagues to look at recent experiences in New Orleans, as
well as the recent flooding in Missouri along the Black River, in
Nevada near Reno, and in Lake County, IN. These are just a few
examples, but each caused devastation when levees did not provide the
needed protection.
I also ask my colleagues to look at the U.S. Army Corps of Engineers
review of levees last year. That review identified 122 levees at risk
of failure in the country. Surely, people who believe they are
protected should know of their risks and should carry affordable
insurance to hedge against those kinds of devastating events that occur
even when significant efforts have been made to protect people in those
areas.
No one likes to vote for something where you have to have a fee
charged. We bear the responsibility of having a program that works,
that is actuarially sound, that makes a difference, that doesn't put us
in a position of having to constantly bail out--in this case FEMA--as a
result of these claims coming in. If there were a way of doing this
where I could wave a magic wand and no one would have to pay a nickel
and somehow this would all be done by someone else, I would love to
achieve that. But miracles do not exist when it comes to costs. We
tried to minimize those costs and have a good program that doesn't
drain the Treasury and doesn't expose all taxpayers to these costs and
asks people to contribute in some degree to get the kind of protection
we are looking for. That is what we have designed.
If this bill fails--and there are those recommending by their vote it
ought to fail--then those premiums are going to go up, and the very
people we are talking about bear a tremendous financial burden. In the
absence of this bill, they will pay a tremendous amount to pay off that
debt to FEMA. It is not a free charge unless we take action to excuse
that obligation.
Then, second, that commission to examine these other very important
issues, and then the provisions in this bill itself to achieve greater
accountability within the insurance industry--that is why this bill
passed unanimously out of the committee, Democrats and Republicans,
people from coastal States and noncoastal States working together to
craft the legislation that Senator Shelby and I put together.
I realize we are not going to write something that everybody agrees
with every dotted i and crossed t. That is beyond my capabilities. What
you have asked me to do as chairman of the committee, with Senator
Shelby, is craft a bill that will allow people to have reasonable
costs, get some real help and relief, protect against these kinds of
problems that are obviously going to occur again, but this time we will
have done something about it ahead of time instead of waiting for it to
happen and be back here again trying to come up with some supplemental
appropriation where billions of dollars are being asked for out of the
Federal Treasury to pay for the damages that might have otherwise been
paid for under an intelligent insurance program, balanced and sound.
I apologize if I can't make everybody happy with this bill, but we
did our very best to craft legislation that I think accommodates the
fundamental points.
If you want me to craft legislation that allows money to be spent and
no one has to pay a nickel for it, you are going to have to find
someone else. I can't do that for you. I have a proposal of less than
$1 a day for 350,000 dollars' worth of coverage. I do not believe that
is unreasonable for people living in residual risk areas, particularly
where 25 percent of the claims are coming out of those areas where only
1 percent of the policies are being provided for.
With that, at the appropriate time we would like to have some votes
on these amendments. I will be urging my colleague to reject these
amendments. I appreciate the intentions behind those who offer them,
but in good conscience we need to pass a bill that can make some sense,
become the law of the land, and provide some protection we are seeking
with this legislation.
Madam President, I ask unanimous consent the list of levees of
maintenance concern be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

U.S. ARMY CORPS OF ENGINEERS LEVEES OF MAINTENANCE CONCERN, FEBRUARY 1, 2007
----------------------------------------------------------------------------------------------------------------
District                  Project Name           Segment Name            State             City
----------------------------------------------------------------------------------------------------------------
Detroit.......................  Erie Township / Grodi  Grodi Road...........  Michigan........  Erie Twp.
Road.
Detroit.......................  Labo Island..........  Labo Island..........  Michigan........  Brown Twp.
Detroit.......................  Milliman Island......  Millman Island.......  Michigan........  Brown Twp.
Detroit.......................  Sebewaing, MI Flood    Sebewaing Flood        Michigan........  Sebewaing.
Control Project.       Control Proj..
Huntington....................  Levisa and Tug Forks   Matewan, WV LPP......  West Virginia...  Matewan.
and Upper Cumberland
Basin.
Huntington....................  Maysville, KY........  Maysville, KY, LPP...  Kentucky........  Maysville.
Louisville....................  Brookport Local Flood  Brockport LFPP.......  Illinois........  Brockport.
Protection Project.
Louisville....................  Levee Unit No. 8.....  Levee Unit No. 8.....  Indiana.........  Plainville.
Louisville....................  Shawneetown Local      Shawneetown LFPP.....  Illinois........  Old Shawneetown.
Flood Protection
Project.
Nashville.....................  Loyall, KY Local       Loyall, KY Local       Kentucky........  Loyall / Rio
Protection Project.    Protection Project.                      Vista.
Nashville.....................  Pineville, KY Local    Pineville, KY Local    Kentucky........  Pineville.
Protection Project.    Protection Project.
Nashville.....................  Wallsend, KY Local     Wallsend, KY Local     Kentucky........  Pineville.
Protection Project.    Protection Project.
Pittsburgh....................  Kittaning............  Kittaning LFPP.......  Pennsylvania....  Kittaning
Borough.
Pittsburgh....................  Oil City.............  Oil City LFPP........  Pennsylvania....  Oil City.
Pittsburgh....................  Vintondale...........  South Branch           Pennsylvania....  Vintondale
Blacklick.                               Borough.
Memphis.......................  White River Levees...  Augusta to Clarendon,  Arkansas........  Agriculture.
AR.
Baltimore.....................  Anacostia River......  Left Bank Anacostia    Maryland........  Town of
River.                                   Bladensburg.
Baltimore.....................  Anacostia River......  Right Bank Anacostia   Maryland........  Town of
River.                                   Hyattsville.
Baltimore.....................  Washngton, DC........  National Park Service  District of       Washington, DC.
Section.               Columbia.

[[Page S3871]]

Baltimore.....................  Washington, DC.......  Potomac Park Levee...  District of       Washington, DC
Columbia.
Baltimore.....................  Washington, DC.......  US Naval Air Station   District of       Washington, DC.
Section.               Columbia.
Baltimore.....................  Wiliamsport-South      South Williamsport...  Pennsylvania....  Borough of South
Williamsport.                                                   Williamsport.
New England...................  East Hartford, CT....  East Hartford, CT....  Connecticut.....  East Hartford.
New England...................  Lincoln, NH..........  Lincoln NH...........  New Hampshire...  Lincoln.
New England...................  West Springfield, MA.  West Springfield, Ma.  Massachusetts...  West
Springfield.
New England...................  Canton, MA...........  Canton, MA...........  Massachusetts...  Canton.
New England...................  Chicopee, MA.........  Chic Riv Dike/Wall...  Massachusetts...  Chicopee.
New England...................  Lowell, MA...........  Lakeview.............  Massachusetts...  Lowell.
New England...................  Springfield, MA......  Conn River segment...  Massachusetts...  Springfield
New England...................  Torrington, CT (E.     Torrington, CT (E.     Connecticut.....  Torrington.
Branch).               Branch).
New England...................  Torrington, CT (W.     Torrington, CT (W.     Connecticut.....  Torrington.
Branch).               Branch).
New England...................  Waterbury-Watertown,   Upper Naugatuck Dike.  Connecticut.....  Waterbury and
CT.                                                             Watertown.
New England...................  Woonsocket, RI         Lower Mill River Dike  Rhode Island....  Woonsocket.
(lower).
New England...................  Woonsocket, RI         Singleton St Dike....  Rhode Island....  Woonsocket.
(upper).
Kansas City...................  Bartley..............  Bartley..............  Nebraska........  Bartley.
Kansas City...................  Ft Leavenworth,        Ft. Leavenworth......  Kansas..........  Ft. Leavenworth
Kansas.                                                         Airport.
Omaha.........................  Marmarth.............  Marmarth FCP.........  North Dakota....  Marmarth.
Portland......................  Clatsop County         Blind Slough.........  Oregon..........  Brownsmead.
Drainage District
No. 1.
Portland......................  Clatsop Diking         Youngs River.........  Oregon..........  Agriculture.
District No. 9.
Portland......................  Sunset Drainage        Nehalem..............  Oregon..........  Agriculture.
District.
Portland......................  Svensen Island Diking  Prairie Channel/       Oregon..........  Agriculture.
District.              Svensen.
Seattle.......................  Green River Upper      Upper Russell........  Washington......  Kent.
Russell.
Seattle.......................  Cedar River Getchman.  Monk.................  Washington......  Kent.
Seattle.......................  Cedar River Rainbow    County Road #8.......  Washington......  Kent.
Bend.
Seattle.......................  Green River Monk.....  Getchman.............  Washington......  Renton.
Seattle.......................  Cedar River Alquist..  Rainbow Bend.........  Washington......  Renton.
Seattle.......................  Cedar River Herzman..  Alquist..............  Washington......  Renton.
Seattle.......................  Cedar River WPA......  Herzman..............  Washington......  Renton.
Seattle.......................  Tolt River Frew......  WPA..................  Washington......  Carnation.
Seattle.......................  Tolt River Hwy to      Frew.................  Washington......  Carnation.
Bridge.
Seattle.......................  Green River County     Hwy to Bridge........  Washington......  North Bend.
Road #8.
Seattle.......................  SF Snoqualmie River    Stanly Carlin........  Washington......  North Bend.
Stanly Carlin.
Seattle.......................  SF Snoqualmie River    Prairie Acres........  Washington......  North Bend.
Prairie Acres.
Seattle.......................  SF Snoqualmie River    McConkey.............  Washington......  North Bend.
McConkey.
Seattle.......................  SF Snoqualmie River    Reif Road............  Washington......  North Bend
Reif Road.
Seattle.......................  SF Snoqualmie River    Si View..............  Washington......  North Bend.
Si View.
Seattle.......................  SF Snoqualmie River    Bendigo Left (upper).  Washington......  North Bend.
Bendigo Left (upper).
Seattle.......................  SF Snoqualmie River    Bendigo Left (lower).  Washington......  North Bend.
Bendigo Left (lower).
Seattle.......................  SF Snoqualmie River    Bendigo Right (lower)  Washington......  North Bend
Bendigo Right
(lower).
Seattle.......................  SF Snoqualmie River    Bendigo Right (upper)  Washington......  North Bend.
Bendigo Right
(upper).
Walla Walla...................  Ballantyne...........  Ballantyne...........  Idaho...........  Mountain Home.
Walla Walla...................  Milton-Freewater.....  Milton-Freewater.....  Oregon..........  Milton-
Freewater.
Walla Walla...................  Sweetwater...........  Sweetwater...........  Idaho...........  Sweetwater.
Alaska........................  Salmon River Levee...  Salmon River Levee...  Alaska..........  Hyder (unincor
orated).
Alaska........................  Skagway River Levee..  Skagway River Levee..  Alaska..........  Skagway.
Honolulu......................  Hanapepe River FCP...  Hanapepe River FCP...  Hawaii..........  Hanapepe.
Honolulu......................  Moanalua Stream FCP..  Moanalua Stream......  Hawaii..........  Moanalua Valley.
Honolulu......................  Waimea River FCP.....  Waimea River FCP.....  Hawaii..........  Waimea.
Jacksonville..................  C&SF Part IV--Herbert  Reach 7..............  Florida.........  Agriculture
Hoover Dike.                                                    area.
Jacksonville..................  C&SF Part IV--Herbert  Reach 2..............  Florida.........  Clewiston.
Hoover Dike.
Jacksonville..................  C&SF Part IV--Herbert  Reach 3..............  Florida.........  Clewiston, S
Hoover Dike.                                                    Bay, Belle
Glade.
Jacksonville..................  C&SF Part IV--Herbert  Reach 1..............  Florida.........  Pahokee.
Hoover Dike.
Jacksonville..................  Humacao..............  Sec. 205.............  Puerto Rico.....  Punta Santiago.
Jacksonville..................  Portugues & Bucana     Sec. 205.............  Puerto Rico.....  Ponce.
Flood Control.
Jacksonville..................  Sabana Grande........  Sec. 205.............  Puerto Rico.....  Sabana Grande.
Jacksonville..................  Vega Baja............  Sec 205..............  Puerto Rico.....  Vega Baja.
Savannah......................  Macon Levee..........  Macon Levee..........  Georgia.........  Macon.
Wilmington....................  Roanoke, VA,           Roanoke Floodproofing  Virginia........  Roanoke Sewage
Floodproofing of STP.  of STP.                                  Treatment.
Albuquerque...................  Granada, Arkansas      Granada, Arkansas      Colorado........  Granada.
River.                 River.
Albuquerque...................  Abeytas to Bernardo,   Abeytas to Bernardo,   New Mexico......  Bernardo.
Rio Grande.            Rio Grande.
Albuquerque...................  Albuquerque Unit,      Albuquerque Unit,      New Mexico......  Albuquerque.
Middle Rio Grande      Middle Rio Grande
Levee.                 Levee.
Albuquerque...................  Creede, Willow Creek.  Creede Willow Creek..  Colorado........  Creede.
Albuquerque...................  Glenwood, Whitewater   Glenwood Whitewater    New Mexico......  Glenwood.
Creek, Levee           Creek.
Rehabilitation.
Los Angeles...................  Santa Maria River....  Santa Maria River....  California......  Santa Maria
Sacramento....................  Bear Creek Project...  Bear Creek, Stockton.  California......  Stockton.
Sacramento....................  Buchanan Dam (Eastman  Chowchilla River Ash   California......  Madera.
Lake).                 and Berenda Sloughs.
Sacramento....................  Duck Creek...........  Duck Creek...........  California......  Farmington,
Stockton.
Sacramento....................  Fairfield Vicinity     Fairfield Vicinity     California......  Fairfield.
Streams.               Streams.
Sacramento....................  Farmington Reservoir   Littlejohn Creek.....  California......  Stockton
Project.
Sacramento....................  Green Valley Creek,    Green Valley Creek,    California......  Vacaville.
Solano County.         Solano County.
Sacramento....................  Merced County Stream   Merced County Stream   California......  Merced.
Group.                 Group.
Sacramento....................  Middle Creek.........  Middle Creek.........  California......  Upper Lake.
Sacramento....................  Mormon Slough........  Mormon Slough........  California......  Stockton.
Sacramento....................  North Fork Pit River   North Fork Pit River   California......  Alturas.
at Alturas.            at Alturas.
Sacramento....................  Pine Flat Lake &       Pine Flat Lake &       California......  Riverdale,
Kings River.           Kings River.                             Hanford.
Sacrament.....................  Redmond Channel......  Redmond Channel......  Utah............  Redmond.
Sacramento....................  Sacramento River       Chico & Mud Creeks, &  California......  Chico.
Flood Control.         Sandy Gulch.
Sacramento....................  Sacramento River       City of Marysville...  California......  Marysville.
Flood Control.
Sacramento....................  Sacramento River       Deer Creek, Tehama     California......  Vina.
Flood Control.         County.
Sacramento....................  Sacramento River       Elder Creek, Tehama    California......  Gerber.
Flood Control.         County.
Sacramento....................  Sacramento River       Interceptor Canal,     California......  Sutter.
Flood Control.         East, West.
Sacramento....................  Sacramento River       LD2-Glenn County.....  California......  Princeton.
Flood Control.
Sacramento....................  Sacramento River       L03-Glenn County.....  California......  Butte City.
Flood Control.
Sacramento....................  Sacramento River       RD 0150-Merritt        California......  Agriculture.
Flood Control.         Island.
Sacramento....................  Sacramento River       RD 0307-Lisbon.......  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 0349-Sutter.......  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 0369-Libby-McNeil.  California......  Walnut Grove.
Flood Control.
Sacramento....................  Sacramento River       RD 0501-Ryer Island..  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 0556-Upper Andrus.  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 0563-Tyler Island.  California......  Walnut Grove.
Flood Control.
Sacramento....................  Sacramento River       RD 0755-Randall......  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 0827-Elkhorn......  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 1600-Mull.........  California......  Agriculture.
Flood Control.
Sacramento....................  Sacramento River       RD 2098-Cache & Haas   California......  Agriculture.
Flood Control.         Slough Area.
Sacramento....................  Sacramento River       Service Area 6.......  California......  Knights Landing.
Flood Control.
Sacramento....................  San Joaquin River      RD 0404-Boggs........  California......  Stockton.
Flood Control.
Sacramento....................  San Joaquin River      RD 0524-Middle         California......  Agriculture.
Flood Control.         Roberts Island.
Sacramento....................  San Joaquin River      RD 2063-Crows Landing  California......  Agriculture.
Flood Control.
Sacramento....................  San Joaquin River      RD 2064-River          California......  Ripon.
Flood Control.         Junction.
Sacramento....................  Walnut Creek, Contra   Walnut Creek, Contra   California......  Walnut Creek,
Costa County.          Costa County.                            Concord.
San Francisco.................  Redwood Creek at       Redwood Creek at       California......  Orrick.
Crick.                 Orrick.
Little Rock...................  Conway County Levee    Conway County Levee    Arkansas........  Atkins.
District No. 8.        No. 8.
----------------------------------------------------------------------------------------------------------------

Mr. DODD. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.

[[Page S3872]]

Mr. SHELBY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Tester). Without objection, it is so
ordered.

Amendment No. 4706

Mr. SHELBY. Mr. President, I rise in strong opposition to the
amendment offered by Senator Landrieu, my friend from Louisiana, which
would allow the mandatory purchase provision for areas behind levees
and dams to be eliminated.
Currently, the flood insurance program suffers from a $17 billion
deficit, mostly as a result of payments made to individuals living
behind manmade structures such as levees and dams.
The fact that people behind manmade flood protections do not have to
purchase flood insurance clearly sends the wrong message. As we all
know now, flood protections sometimes fail. Telling people they need
not protect themselves from the risks associated with those failures
provides a false sense of security.
Keep in mind that all of these individuals will be required to pay a
rate that reflects the risk associated with living behind flood
mitigation devices. Currently the rates behind many of these structures
would suggest an individual homeowner would pay approximately $316 for
coverage up to $350,000. That is less than $1 per day for full flood
protection; $1 dollar a day. This bill eliminates the entire debt
associated with this program that is owed to the Federal Government,
but it also demands that in the future people begin to pay a fair price
for the risk associated with living in high-risk areas.
This amendment would require that we undertake a study as to the
effect of requiring insurance behind manmade structures. I believe we
have learned all we need to know about the risk associated with living
behind manmade flood protection devices.
The insurance premium takes into account the real risk properties
face. Levees fail. They fail all the time. They do not eliminate all
risk. Flood insurance protects people against unforeseen risk.
These amendments do not recognize that fact. A prudent course is
risk-based premiums for everyone at risk. I strongly oppose this
amendment. I urge my colleagues to do the same.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. BUNNING. Mr. President, I wish to speak for a few minutes on the
bill itself.
The PRESIDING OFFICER. The Senator has that right.
Mr. BUNNING. I wish to speak about the flood insurance bill before
the Senate and about the program in general.
The flood insurance program is one I care about a great deal. It is
vitally important to States such as Kentucky that are surrounded and
crossed by major rivers and exposed to flooding.
In 2004, former Senator Sarbanes, Senator Shelby, and I sat down to
make some important changes to the program and we did. My bill was a
step in the right direction for fixing the program. Our reforms
established a mitigation program to reduce further losses, charge
higher premiums if property owners refused to reduce their risk.
Unfortunately, we were not able to address all of the problems in the
bill, but I am glad some of the things we wanted to do back then are
being done in this bill before us today.
As we saw from the storms of 2005, the flood insurance program is not
financially sound. This bill builds on the reforms of the 2004 law by
ending the subsidy for the most costly and least deserving properties.
It requires more at-risk people to purchase flood insurance, and
increases penalties on the lenders for not following the law.
It also sets up a reserve fund to keep the program from going into
debt in future years with significant flood losses. This bill does not
fix all of the problems in the program, but it is a strong bill which I
support. While I do not like forgiving the program's debt, it is a
necessary step to stop policyholders in Kentucky and across this
country from having to foot the bill for the gulf coast's problems.
Every Senator should think about that $18 billion we are forgiving
when they consider the additional cost of amendments being offered. We
have 40 years of experience that says the Government is a terrible
insurance company. Adding wind insurance will drive out private
insurers and put the taxpayers throughout the entire country on the
hook for the risks taken by those who choose to live in the path of
hurricanes.
The sponsors of the amendment claim premiums will reflect the actual
risk, but I would point out to them the 18 billion reasons why I do not
believe that will happen. Several other amendments are worth
mentioning. One would create a Federal backstop for State disaster
insurance funds. I understand why the Gulf Coast States would want a
Federal backstop for the risk, but I do not understand why my State or
anyone else's State should be put on the hook for the decisions of
coastal State legislators who choose to socialize insurance.
Other amendments would increase coverage limits or decrease the
amount policyholders would have to pay. One would even make a certain
earmark for an area in Illinois for lower premiums. Those amendments
would defeat the entire purpose of this bill. Instead of making the
program more financially sound, they would make the current problems
worse by charging policyholders less than their actual risk.
After some version of this bill becomes law, we will have to keep an
eye on how FEMA acts on these reforms. It took FEMA more than 2 years
to implement some of the 2004 reforms, and they did that only after the
Vice President and the Secretary of Homeland Security intervened. We
must make sure the program is run the way Congress intended, not as the
bureaucrats think it should be run.
I congratulate Senator Dodd and Senator Shelby and their staffs for
writing a good bill. I also thank former Senator Sarbanes for his help
in writing the 2004 bill and setting the foundation for this bill
today.
Finally, I wish to say I am glad Senator McConnell has brought up the
important issue of energy. The American people are watching gas prices
go through the roof, and this summer electric bills are going to do the
same. I have heard the other side talk about energy before, but I have
not seen them do one thing about the problem. The problem is, we do not
have enough supply. The solution is expanding domestic production of
energy any way we can. We can drill for oil safely in Alaska, we can
get more natural gas from the Gulf of Mexico.
But beyond the usual ways to increase production, we can use new
technologies to change the game for energy prices. That is why I have
supported and will keep pushing coal-to-liquid fuels. We are sitting on
hundreds of years' worth of coal, and through a proven and
environmentally sound process, we can turn that coal into gasoline for
our cars, diesel for our trucks, and jet fuel for our planes.
I have met with the Air Force many times. This is one of the most
important security issues they face. We cannot rely on Middle Eastern
oil to provide fuel for our jet fighters and our tanks. With secure
domestic alternative fuels, we can guarantee the military the fuel they
need.
The American people deserve a Congress that takes action. Every
barrel of fuel made in America is a barrel of fuel we do not have to
buy from the Middle East. Increasing production of energy in America
will bring down energy costs and protect jobs.
For too long we have heard about manufacturers and companies moving
good-paying jobs to China or the Middle East because of cheap energy.
Today, with this package we can do something about it. We can give
American companies the energy they need to build cars, fly planes, and
produce goods with American workers.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, parliamentary inquiry: What are we on
now?
The PRESIDING OFFICER. The Senate is considering amendment No. 4705
offered by Senator Landrieu.

American Energy Production Act

Mr. DOMENICI. We have been setting aside the pending amendments?
The PRESIDING OFFICER. That is correct.
Mr. DOMENICI. I plan to speak for about 15 or 20 minutes here, for
those who might be interested.
I rise not to talk about the work that has been done by the committee
on

[[Page S3873]]

flood insurance, although it is obvious that is important, and they
have done a great job and we ought to be finding our way through that
thicket before too long. But attached to that bill, for the purpose of
making an issue and seeing to it that we give everybody in this body an
opportunity to vote for the production of more American energy for the
American people, for the automobiles that drive on our streets, the
trucks that drive on our streets, the airplanes, both domestic and
military, that fly, and all other sources of energy, we are going to
have a chance to vote on whether we want to produce more energy which
we now import, either crude oil or crude oil products or substitute
products that can be produced in the United States. Do we want to do
that?
The Democrats today had a press conference after we have been talking
about this bill that we call the American Energy Production Act, and
they are talking about what they might want to do. I regret I cannot
talk in detail about what they propose, but I will say I will be very
surprised if the sum total of their suggestions produces one new barrel
of oil or one cubic foot of natural gas, one cubic foot of American-
produced natural gas, because it seems to me they are too busy trying
to find out what they can do to the oil companies of the United States
and windfall profits and those kinds of things.
But we are going to give everyone this opportunity, an opportunity to
take a look at some very simple propositions that could yield large
quantities of crude oil, natural gas, derivatives of coal that can be
used in trucks, diesel fuel in airplanes, for military and the domestic
airplanes.
I want to suggest the following: Last week I introduced a bill which
would fundamentally change America's reliance upon foreign oil in a
shorter time period than I have seen of any proposal thus far.
The American Energy Production Act is cosponsored by 19 of my
colleagues and would produce a minimum of 24 billion barrels of
American oil. Americans, in my opinion, are sick and tired of such high
prices for gasoline, and unless we take action, the situation is going
to only get worse. One can talk all one wants about why it is, but the
biggest reason the price is going up and continues up--and we do not
even know where it will stop--is because the demand for crude oil in
the world is getting bigger than the production of crude oil in the
world. So supply and demand is principally the reason for the
increasing cost of crude oil.
There may be other things we have to do, but essentially the only way
to alter that rising price and cause it to come down and, thus, give
the American people some relief is to produce more crude oil and
derivatives of coal and otherwise that we can use to take the place of
crude oil products. So if the American people are sick and tired of
paying high prices and want to know what can be done, we are telling
them we think it is time we face up to the fact that we can produce
much more in America. But for some reason, we have decided to vote no
on some very imposing and powerful supply sources. It is time we take
another look at those, especially with crude oil at $120 a barrel and
rising.
What we have done is looked around at what we have refused to do in
the past, new things we could do that would accomplish what I have
suggested. Congress has made a great deal of progress already in
promoting conservation and developing renewable energy technology such
as wind and solar. I am for doing more of those, if we can and when we
are ready. I stand ready to work on those. I have been leading the
charge on those fronts as either chairman of the Energy Committee or
ranking member. I believe we should develop all our energy sources as
soon as we can.
The bottom line is that America is not going to stop using oil in the
near term, so we need to take action to make sure the oil we do use is
produced domestically, all of it we can, rather than coming from
unstable regions. Congress has not done such a good job in this area.
In fact, almost every time we have tried to boost domestic production,
Democrats--mostly Democrats--have blocked our efforts. But with oil now
at $122 a barrel and rising, I implore my colleagues on the other side
of the aisle to rethink their position. Times have changed. Now
America's response needs to change as well.
The American Energy Production Act, which is an amendment on this
bill, which I indicated we will vote on one way or another before this
bill is finished, is an excellent place to start. The bill allows for
States on the Atlantic and Pacific coasts to petition the Federal
Government to opt out of a broad moratorium that for two decades has
locked up America's assets and forced us to turn to unstable foreign
nations to power our lives.
Together, the Atlantic and Pacific Oceans contain oil reserves of up
to 14 billion barrels, and that is a minimum. We know it is a minimum,
and we have not been allowed to spend the money to do an in-depth
evaluation which I believe would show much more. The reserves of
natural gas are thought to be 55 trillion cubic feet. These regions
contain substantially more oil and gas than the areas we opened in 2006
in the Gulf of Mexico Energy Security Act. The area that is left, that
we had this moratorium on for more than 20 years, is much bigger than
the area we opened as part of the Gulf of Mexico Energy Security Act,
much bigger, much larger space, and much more in reserves.
This legislation also opens 2,000 of the 19 million acres of the
Arctic Plain of ANWR for oil and gas leasing.
Over the past week, I have heard Members from the other side of the
aisle say that ANWR won't help because it will take 8 to 10 years to
bring it on line. That is the same thing they have been saying for two
decades. Had we acted when we had a chance, we would have 1 million
barrels of oil a day available to us, oil that we are now forced to buy
overseas.
I heard a Member of the Senate from the other side of the aisle, the
Senator from New York--the Senator from New York who is not running for
President--say that if we could get the OPEC cartel to just add 500,000
barrels of production, it would have a big impact on bringing down the
price of oil. If that is the case, if we had a million barrels of oil a
day coming from ANWR, that surely would do as much or more. It would
bring down the price just as well, if not more than the Senator was
speaking of from oil the cartel would produce. That is because it is a
supply-demand situation he is talking about. ANWR would yield more than
the 500,000 barrels to which he alluded.
Additionally, even after revenue sharing, ANWR oil could bring over
$2 billion to our Federal Treasury annually. It is past time that we
started producing our own oil and generating revenues for our own
Government instead of buying foreign oil and sending billions of
dollars to unstable, unfriendly regimes.
The Republican bill I have talked about also makes it easier to build
refineries. We haven't built a new refinery for 30 years, and our
Nation cannot afford to go 30 more years without doing so. We provide
some incentives and some very natural ways to cause that to happen.
While I have resisted calls to suspend filling the Strategic
Petroleum Reserve in the past, I have indicated to the chairman of the
subcommittee on which I serve, the Energy and Water Committee, I have
told the Senator who is promoting discontinuing filling of the SPR for
6 months to a year, providing 70,000 additional barrels of light sweet
crude a day to the marketplace, that I would support him on that at
this time because the price of oil is so high that it is worth doing.
That is in this bill. By its very nature, this 70,000 barrels from SPR
is just a fraction of the oil that would be gained through the OCS
production and ANWR production, but in today's environment every small
amount helps.
In the area of alternative resources, this bill requires studies on
ethanol to help ensure that smart decisions are made as we move toward
cellulosic and other advanced biofuels. This bill also provides
incentives for the advancement of breakthrough energy technologies such
as battery-powered vehicles. That is necessary and something we could
do. It is ready and right.
It is also important to mention that this bill will promote the use
of coal-to-liquids technologies, as long as it results in no more
greenhouse gases than the fuels we are already using. Bringing 6
billion gallons of this fuel to market, if we started immediately
working

[[Page S3874]]

on it, could be done quickly. They are already doing it in South
Africa. It would reduce our projected imports by 4 percent by the year
2022. The coal-to-liquids mandate is just one-sixth the size of the
ethanol mandate placed into law last year. To push the coal-to-liquids
technology, we must send a signal to the marketplace that America is
serious about using some of its abundant, reliable American energy
resource--coal.
In addition, this bill repeals the moratorium on oil shale
regulations that was put into an omnibus appropriations bill in the
dark of night, when those of us who had been involved were not around
and could not object. The shale beneath our Western States amounts to
three times the conventional oil reserves in Saudi Arabia. We need to
accelerate this project's resources and repeal the $4,000 fee for
drilling permits which hit America's smallest family-owned oil and gas
companies the hardest. This, too, was done in an appropriations rider.
It is time to take it off, while we talk about producing more rather
than less. We don't need more taxes and fees on American producers if
we want to produce more.
It is my sincere hope that we can act soon on this measure. I have
not talked about every provision, but they all are directed at
producing more energy rather than directed at more attacks against
energy companies and those things included in today's proposal by the
Democratic leadership.
The United States needs to send a message to the marketplace, to
OPEC, and to consumers that we will no longer continue to let billions
of barrels of oil sit underground within our own domain while the price
at the pump goes up and up. We must end the cycle of dependence and the
flow of money overseas for foreign oil. We must do it as quickly as
possible. If we can do it now, we should do it now.
I thank the Republican leader for bringing up this important issue. I
urge my colleagues to think about it and ultimately to support it. What
a message it would send.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, I am about to make a unanimous consent
request dealing with a series of amendments we are going to vote on.
Then following my unanimous consent request, I know the Senator from
Alabama would like to be recognized. I ask unanimous consent that he be
recognized at the conclusion of my request.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. Mr. President, I ask unanimous consent that at 6 p.m., the
Senate proceed to a vote in relation to the following amendments:
Wicker amendment No. 4719; Vitter amendment No. 4722; Vitter amendment
No. 4723; Landrieu amendment No. 4705, as modified further; further, I
ask that there be 2 minutes of debate equally divided prior to each
vote and that there be no second-degree amendments in order prior to
the votes. Finally, I ask consent that the first vote be a 15-minute
rollcall vote and the remaining votes be 10-minute votes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. I thank the Chair and my colleague.
The PRESIDING OFFICER (Mr. Webb). Under the previous order, the
junior Senator from Alabama is recognized.
Mr. SESSIONS. Mr. President, I see Senator Thune, who wanted to have
4 minutes to file an amendment. I ask unanimous consent that he be
recognized when I finish my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, I so much appreciate the remarks of
Senator Domenici. He has given his career in the Senate to dealing with
energy issues. There is no one here who is more deeply steeped in those
issues and the history of how we got here and how we could be in better
shape today than Senator Domenici. We don't want to be in a blame game.
We don't want to be saying, ``I told you so.'' In fact, I will admit
that I have made decisions, when the price of a barrel of oil was $30
and $40. It is different when it is now $120, as the Senator from New
Mexico pointed out. We are facing a crisis, and we need to do some
things. We don't need to do a piece of legislation that is pending on
this floor, that came out of the EPW Committee, that not only won't
help us deal with our crisis in energy but will actually surge the cost
of energy, which is the only big piece of legislation I know relevant
to the question that is now pending, other than legislation Senator
Domenici offered.
Gas today is over $3.60 a gallon. That is well over what it was 2
years ago. People are spending $60 to fill up with a tank of gas. The
average family who has two cars is spending no doubt $50 to $100 more a
month for the same amount of gasoline they were purchasing the previous
few years. It is an enormous cost to that family. It is an impediment
to economic vitality. It is a very significant, if not the most
significant, factor in the economic slowdown we are dealing with.
Electricity also will be going up. One expert has said that we could
basically be seeing a $100-a-month increase in the average family's
electricity bill. If we pass this cap-and-trade bill, it will be a lot
more than that. Diesel priced fuel is up--too high, in my view. I can't
understand why it is consistently 60 cents more per gallon than regular
gasoline. An airline official told me not long ago that jet fuel is
double.
So we have a problem. We really do. I know everybody has goals and
visions about how we can solve this problem. Senator Domenici and I
share a deep belief that nuclear power can be a primary source in the
years to come to deal with this crisis. In fact, he has written a book
about it. We have advocated this for some time. I think that reality is
beginning to dawn more clearly on us today. But it is going to be maybe
7, 8, 10 years to get a new nuclear plant up and running. But we can
generate large numbers of them if we follow smart procedures and have
that come on line. But the point I think we are trying to make is: That
is 10 years down the road. It may take 10 years to do ANWR. We can
bring on coal-to-liquid technology. That can happen, but it takes some
time. But we need to get started.
We are so hopeful we can do more with conservation. I supported the
bill last year to raise our fuel standards, CAFE standards, automobile
mileage standards up to 37, 35 miles per gallon, the entire fleet,
including trucks. That is going to be difficult to achieve, but it will
conserve a tremendous amount of fuel and be good for us. But that is
not going to solve our problem either.
So what must we do? I think we must have a long-term policy. I
believe that policy should focus on investing in the ideas and concepts
that have potential to be breakthrough technologies to confront this
problem. There are a number of them out there.
Hydrogen. President Bush pushed hydrogen for our automobiles, but
from what I can understand, that is coming along slower than we would
like. There are a number of very difficult technical problems with
hydrogen. It takes some time. We would love to see the hybrid
automobiles be able to be converted to plug-in hybrid automobiles, and
progress is being made in that regard that is pretty exciting. We may
be getting closer there than we think. That would convert from liquid
fuel that runs our automobiles to electricity. We can utilize
electricity generated in nuclear plants that emits no CO<inf>2</inf>,
no pollution into the atmosphere, and do that at night when they are
not fully engaged and be able to drive, for most people, all they need
to drive that day on a battery charge at night, utilizing no fuel in
their automobile. What a great thing that would be.
We also have, as Senator Domenici has pointed out, though, great
reserves of oil and gas and energy in our country. The sad fact is, we
are not going to be able to get away from fossil fuels in the next few
decades. We are just not going to be able to get away from that. People
seem to have no problem that we buy it from foreign countries, some of
which are not friendly to us. We can just buy from them. But if you
talk about producing that oil and gas here in the United States, in our
country, they get, for some reason, to objecting. We have seen it time
and time again.
I was so pleased that last year, under Senator Domenici's
leadership--the year before last, I guess--we passed legislation to
open 8.5 million acres in the Gulf of Mexico. But we left closed to
drilling huge areas in the Gulf of Mexico, some of which have
tremendous reserves of oil and gas. We have opened

[[Page S3875]]

none off the Pacific coast, where there are huge resources, and none
off the Atlantic coast. We have shown in the Gulf of Mexico that even
with this powerful hurricane, these billion-dollar rigs can sustain the
storm and not provide economic destruction or damage to the gulf. We
can do that around the world. So the question is, Are we going to take
that step? This legislation helps us go in that direction.
We have seen and shown you can convert coal. We have huge reserves of
coal-to-liquid that can burn in our automobiles. That is technology
which is ready to go today basically. We just need to prove it out in a
large commercial area, and the Government should help establish that
technology. But the point I would like to make is that would produce
huge amounts of energy we can utilize in our vehicles and keep the
money at home.
So there are many other things we can do and are doing.
I believe the concerns over ethanol raising food prices are
exaggerated. Even President Bush, who has been somewhat skeptical of
this--his own administration said they thought about 2 percent to 3
percent of the price of food was as a result of ethanol being produced
from corn and soybeans for biodiesel. It is not the main factor in the
rise of farm prices. But it certainly helped us not to have to import
lots and lots of foreign oil into the United States.
I will recall for my colleagues that according to the Congressional
Research Service, this year we will import into America $400 billion-
plus worth of oil. Probably, the next year from this day--the next 12
months--it would be over $500 billion worth of oil. This is the
greatest wealth transfer in the history of the world. It is money we
have, as American citizens, that is ending up in the pockets of
countries--small countries, some of them, building more skyscrapers
than they have apartment complexes--unbelievable displays of wealth. We
can do better about that. We need to produce more energy here at home,
energy that we have. If we do so, we can reduce our dependence on
foreign oil. And if we can reduce that amount through conservation,
through local American production, the result could be that we could
knock down the high demand that is out there, and we might even see the
price of oil drop more than people think. Historically, it has been
boom and bust in the oil industry. Some say we will not have a bust
again because of the world demand, and they may be right. But I think
there are some realistic possibilities we can.
So there are biofuels and solar and wind and biomass and new
batteries. All of this is good, and I would support research and
development on them. But I do not believe we ought to press down on the
brow of the American working man some theoretical beliefs about clean
energy that will not work or are exceedingly expensive and create only
a burden on working families in America. We have to be careful about
that.
So I am excited about the proposal that has been put forth. I believe
we have great potential to produce more American oil and gas off our
Continental Shelf. I have seen it right off from the coast where I live
in Alabama. I have seen that production come in for decades now.
We know ANWR has great potential. It could reduce our imports by as
much as 10 percent if it is brought on line.
We know coal-to-liquid can be done today for far less than the world
price of oil. We know oil can be produced from these huge oil shale
deposits in the West for less than the world price of oil today.
We know nuclear power has the potential to help us transform our
vehicular traffic from fossil fuels to electricity. But we have to get
busy doing it. We have not built a nuclear plant in 30 years. Since I
have been in the Senate, for 12 years I have talked about nuclear
power, how critical it is to our future. We have done nothing really to
make that happen--until Senator Domenici, 2 years ago, as chairman of
the Energy Committee, finally pushed through some legislation that took
us from having zero applications for nuclear plants to over 30 today.

I think we have the potential to see a renewal of nuclear power. The
British just announced they are going to build five new nuclear plants.
France has 80 percent of their power or more from nuclear power. Japan
does.
We also need to figure out how to deal with the question of
recycling, which is not at all impossible to do. The British, the
French, the Japanese, the Russians recycle. We want to work on
legislation to create recycling of nuclear waste. That will both help
us create more fuel and reduce the danger of the waste that is left.
These are things we can do. But it is time to get busy and do it, not
have a policy of creating a massive bureaucracy, some cap-in-trade
bureaucracy that has not worked in Europe. It just has not worked. A
massive tax increase is what it amounts to in sheep's clothing.
So, Mr. President, I thank the Chair.
Mr. DOMENICI. Mr. President, before the Senator leaves the floor,
will he answer a question?
Mr. SESSIONS. Yes.
Mr. DOMENICI. I ask the Senator, do you know what the price of a
barrel of oil was when we sent the ANWR bill to the President of the
United States, which was vetoed? Do you know how much it was per
barrel?
Mr. SESSIONS. Mr. President, I know it was less, but I do not know.
Mr. DOMENICI. Nineteen dollars a barrel.
Mr. SESSIONS. Nineteen.
Mr. DOMENICI. So for those who do not think it is worth another try--
that is, to have a vote and seriously consider ANWR--just think of the
difference in economic impact on the United States of tying up that
resource when we did it compared to now.
Also, we were estimating only 1 million barrels of oil as the
production per day. We have not upped that, brought that current for
$120-a-barrel oil. It might very well be that it is more than a million
barrels a day just based upon price because it would justify far more
investment in that little 2,000-acre footprint. Clearly, with such an
increase in price, you probably will get more.
But I think some of the American people may have favored holding that
2,000 acres hostage and saying you cannot use it--they might have said,
well, that is all right when it is $19 a barrel--but when we are
suffering with $120-a-barrel oil, it may be a very close call even for
those who have exaggerated in their dilemma and fear about ANWR. To say
we can afford $19-a-barrel oil--lock it up--but should we lock it up
for $120 a barrel is a very good question.
Mr. SESSIONS. That is six times as expensive.
Mr. DOMENICI. Right.
Mr. SESSIONS. It has increased six times in price since you first
began to discuss it.
Mr. DOMENICI. So a million barrels a day becomes a different thing. A
million barrels a day was $19 million. But now a million barrels is 120
times that. That is what you are losing to foreign countries.
You have alluded to the fact that maybe the American economy is
suffering irreparable harm. You said it a different way than I. But I
happen to believe--and have spoken to it two or three times on the
floor--I think we are experiencing irreparable damage to the American
economy because of the enormous price of crude oil and our inability to
find a way to get along without it. We are just depleting our vitality,
and we do not know quite how to figure it out. We do not know why the
economy is having trouble. There are just all kinds of things we do not
know. But I have an answer for most of them: It is too many dollars
going overseas to get crude oil. That is an enormous drain on this
economy, as strong as it is. That, plus the big debt we have accrued is
hanging out there to be bought by the Chinese and others. You add them
up, and it is frightening. If we can do something about it, we should.
Isn't that why we are here?
Mr. SESSIONS. I could not agree more, I say to Senator Domenici.
Mr. DOMENICI. I yield floor and thank the Senator.
Mr. SESSIONS. It is very troubling to me. I say to the Senator, I
know you also are knowledgeable--I do not know if you have a minute; I
think you mentioned it in your remarks. But you have pointed out, as I
understand it, in the West, in the shale oil areas of the West, we can
actually produce shale oil for far less than $120 a barrel; is that
correct?

[[Page S3876]]

Mr. DOMENICI. That is correct.
Mr. SESSIONS. Under current technology. I assume it will get better
in the years to come, but even right now with the technology we have?
Mr. DOMENICI. There is no question. One of the major oil companies
has invested a huge amount of money. I think the initial investment
allowed was $4 billion to experiment with a project that would in situ,
on sight--rather than picking mines, they would boil the oil in the
ground and siphon it out. That price was put around $50, $50 to $60
before they would consider it feasible to invest money. We are long
past that, for that kind of an experiment. If it works, then the next
steps have to be taken. It will be expensive, but $50 a barrel versus
$120, there is a lot of room for play.
Mr. SESSIONS. That keeps the money at home, hiring American workers
who pay taxes to the United States of America.
Mr. DOMENICI. Yes. And this bill we are talking about here tonight
has a provision in it about it. Because in the dead of night, in an
appropriations bill in the Department of the Interior, somebody in the
House--we think we know who--decided to put a moratorium on the final
regulations for shale development, even though in the Energy bill you
helped us write, the comprehensive bill, we provided for oil shale
leases of the right size to permit activity, permit this research, this
experimentation. Well, they put a moratorium on it and that thwarts the
company that is putting the investment in it. This bill says no, that
has to come off. So I don't know whether we will have a chance to vote
on it another way, but maybe since it is one year at a time, we may
take it off of appropriations. I don't know.
Mr. SESSIONS. Senator Domenici has some interest. We have had talks
about coal to liquids. It is my understanding--is it yours--that we
have technology today that can take our massive coal reserves and
convert that to a good liquid fuel for our automobiles at less than
$120 a barrel, the world market price of oil today?
Mr. DOMENICI. Well, I choose to take one step back on that and say,
there is no question but that South African technology is available to
convert clean coal into liquid diesel. Its principal use at that point
would be American airplanes, both commercial and military, American
military equipment, and that would be a huge amount. This bill limits
it to 9 million, the equivalent of 9 million barrels a day is what we
would produce. That would be so we could be sure we weren't having a
negative impact on the environment. How do we do that? Well, the energy
produced by the conversion would not contribute any more than the crude
oil we would buy would contribute and we would use it anyway, so we
don't think we are harming the environment. But we are not going to go
all out and produce the whole amount that coal can produce but, rather,
learn how to do it, do it well, and send a signal that the great
American ingenuity is ready to do something, and do something big. That
is what that one would be, a big one that would frighten those who have
us captive, because they would say they are finally going to do
something and something that is important.
The same thing would happen if we had a breakthrough on oil shale.
There is no question, that would be an enormous signal. Now I am not
saying that is as ready as coal to liquid. One is ready rather quickly,
the other one would take a little while. But we only put things in that
are doable and that are important, and if they are not doable
immediately, they are doable in the sense of sending a signal that the
country is doing something.
I thank the Senator for yielding.
Mr. SESSIONS. I thank the Senator.
The PRESIDING OFFICER. The Senator from South Dakota is recognized.
Mr. THUNE. Mr. President, what is the pending business?
The PRESIDING OFFICER. The Landrieu amendment No. 4705 is pending.
Mr. THUNE. Mr. President, I ask unanimous consent to be able to call
up amendment No. 4731 which I filed earlier today with my colleague
from South Dakota, Senator Tim Johnson.
The PRESIDING OFFICER. Is there objection?
Ms. LANDRIEU. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. THUNE. Mr. President, I wish to congratulate the Senator from New
Mexico for his comprehensive energy bill which he introduced. It is a
solution we need to take a hard look at, perhaps moving to it sometime
in the not too distant future here in the Senate. I think his bill
starts the debate.
Unfortunately, he has tried over and over and over again to start the
debate here in the Senate. The legislation he introduced--and I am a
cosponsor of that bill last week--is comprehensive in that it addresses
the supply issue. We can't address America's high energy costs absent
addressing the issue of supply. We are sending, as was already noted,
$1.6 billion every single day outside the United States and, in some
cases, to countries that would do us harm, in order to meet our demand
for energy here at home. The Senator from New Mexico has put forward a
solution which is broad based and which addresses the supply issue by
making available some of the reserves we have in this country on the
North Slope of Alaska, on the Outer Continental Shelf, and he addresses
the need for additional refinery capacity. We haven't built a refinery
in 30 years, since 1976. He also addresses some of the new technologies
such as coal to liquid, which was talked about earlier.
I should say he changes a definition that was modified very late in
the Energy bill debate last year that precludes forest waste residues
from being a source of cellulosic ethanol because in many respects, the
future of renewable energy in this country is transitioning from corn-
based ethanol to cellulosic ethanol. We have enormous biomass available
in this country in forests in the form of switchgrass that can be grown
in abundance on the prairies in this country and other forms of biomass
that can be available and can be converted into cellulosic ethanol. So
his solution is to create additional supply--the supply of fuels but
also the capacity of refineries--in order to be able to process more of
those natural resources into refined gasoline. If we don't do that, we
are going to continue to send billions and billions and billions of
dollars every single year to countries outside the United States which,
in many cases, use those very dollars to turn around and fund terrorist
organizations that attack Americans, that to the tune of about almost
$500 billion. Half a trillion dollars last year left the United States
in order to meet the demand we have for energy here at home.
I congratulate the Senator from New Mexico and hope we can get a
debate going here in the Senate that addresses the supply issue.
I am all for conservation measures. There are some conservation
measures as well, and there are lots of steps we can be taking. Last
year as part of the Energy bill, we created the first change in a long
time--something like 20 years--in fuel efficiency standards. That is
something we need to be pursuing as well. But at the end of the day,
our appetite for energy in this country and the world's appetite for
energy is not going away. In fact, the Department of Energy estimates
that even with intensive conservation efforts in place, maintaining our
economic growth through the year 2025 will require a 36-percent
increase in energy supply, including a 39-percent increase in oil
consumption. Sixty percent of our oil is currently imported. So as
demand rises and domestic supply is not increased, we are subject to
prices that are set by foreign countries, including, as I mentioned,
some hostile regimes.

Senator Domenici has put forward several ideas in his plan that are
not new. Some of them have been debated previously, some of them
blocked by bipartisan politics. But I hope that $3.50, $4-a-gallon
gasoline will change some of that. In my State of South Dakota, the
average price of gasoline today is $3.60. Oil, of course, traded at an
all-time high of $122 per barrel. Diesel is $4.18 a gallon. As the
farmers in my State continue another planting season, they are faced
with those diesel fuel costs that are substantially higher than
previous years. They are faced with higher fertilizer costs because
natural gas prices have gone up.
This is a crisis that reaches into the pocketbooks of every American.
I was talking in my State of South Dakota

[[Page S3877]]

this week with someone in the tourism business who was saying the
numbers this year are already down 11 percent from the previous year. I
think that is a sign of more to come in terms of the economic hardship
that is going to be imposed on the economy all across this country. My
State of South Dakota, because it is so energy dependent as a result of
tourism and agriculture and some of the industries that are very energy
intensive, is particularly hard hit. Since I was first elected to
Congress over 10 years ago, we voted on opening a small section of ANWR
at least five times. Most recently, in the 2006 Defense appropriations
bill, we had that vote.
It is important to note at that time the Senate Democrats blocked oil
and gas exploration in ANWR oil was trading for just over $50 a barrel.
Well, now it is at $122 a barrel, and at that time it was argued it
would take at least 10 years to develop the resources in ANWR. But I
think it is high time we began the process of authorizing that
exploration and production. We have up to 16 billion barrels of oil, we
are told, up there, or a million barrels of oil each day that could be
coming into our pipeline in this country and taking pressure off of gas
prices. So I hope the fact that today the high price of gasoline is
impacting more and more consumers across this country, more and more
small business owners, more and more families, we will see a change in
the mindset that will enable us to move forward with legislation such
as that introduced by my colleague from New Mexico that will get at the
heart of this problem. The problem is we don't have enough supply to
keep up with the demand either at home or around the world, but at a
minimum, we ought to be coming up with those solutions that are
domestic, that are home grown, and by that I mean the oil reserves we
have here in the United States or off our shores, the infinite amounts
of coal we have that can be converted into fuels, the enormous
potential we have out there for renewable energy such as ethanol made
not only from corn but from other sources of biomass, and that we take
steps to add refinery capacity.
It is absolutely critical, in my mind and in my view, that we start
moving in this direction. I heard a report earlier today that some
projections are that oil prices could get up to somewhere around $200 a
barrel. I can't imagine that happening or what the impact would be on
our economy, but it is never too late to do the right thing, and we
need to move quickly now and decisively on an energy policy that will
increase our supply, our domestic supply, take pressure off of oil
prices and prices at the pump that American consumers are dealing with
every single day.
I congratulate again the Senator from New Mexico for his bill. I am
happy to be a cosponsor of it. I hope we are able to get a vote on it,
and I hope we can do something once and for all about high gas prices
and bring some relief to the American consumer.
Mr. President, I yield the floor.
Ms. CANTWELL. Mr. President, I rise to join in this discussion. I
know my colleagues on the other side of the aisle have been out here
talking about energy issues and the high price of gasoline.
I certainly know when the Senate works together on energy policy, we
get things done. The 2000 Senate Energy bill is an example of that, of
how we worked in a bipartisan fashion. That bill, when it is fully
implemented over the next 20 years, will save families over $1,000 a
year at gas stations. That is because we put a good policy into place.
The question is where we are going to go from here. I have listened
to some of the things my colleagues on the other side of the aisle have
said, and I hope when we are done with our statements, we can sit down
and work together on trying to implement more legislation that will
help the American consumer. But I think the notion that where we are
today is a rational market and that supply and demand is driving what
we are seeing, a 100-percent increase over last year in oil prices, is
not correct.
We just had a hearing in the Commerce Committee where airline
executives were testifying, and they said they don't think this is
supply and demand, and it has obviously caused a great impact on their
industry. They would like us to be more aggressive in policing the
markets, and they offered some suggestions. But many of my colleagues
have been out here talking about opening drilling in the Arctic
Wildlife Refuge. Well, we have had this debate. We have had it numerous
times. I always like the administration's own Energy Information Agency
that says drilling in the Arctic Wildlife Refuge would result, when it
is fully implemented 10 or 20 years from now, in 1-penny-per-gallon
savings. So that means when you take the average driving of a consumer
at 400 or 500 gallons of gasoline in a year, you would have saved $5 on
your annual gas bill from drilling in the Arctic Wildlife Refuge.
God only gave the United States 3 percent of the world's oil
reserves. We are not going to drill our way out of this situation. But
I ask my colleagues to look at what is causing this problem because we
have oil company executives who are saying oil should be at $50 to $55
a barrel. This is the oil companies testifying in April. So they are
saying the market isn't functioning correctly when it is at $120 a
barrel.
The PRESIDING OFFICER. The Senator's time has expired.
Ms. CANTWELL. I thank the Chair.

Amendment No. 4719

Mr. KENNEDY. Mr. President, The issue of wind coverage is important
and is a concern of many families across the country and in my home
State of Massachusetts and the Cape. Legislation must be developed that
helps those families facing the threat of wind damage without harming
those who already have flood insurance. I have the assurance from the
chairman of the Banking Committee, my friend the senior Senator from
Connecticut, that this is his intention as well and that he intends for
a commission to study the issue and present to Congress a set of
responsible recommendations for addressing this need.
For this reason, I oppose the Wicker amendment at this time in order
to allow further study of the matter and that a consensus approach may
be put forward in the Senate in the near future.

Amendment No. 4719

The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided prior to the vote in relation to
amendment No. 4719 offered by the Senator from Mississippi, Mr. Wicker.
Who yields time?
The Senator from Mississippi is recognized.
Mr. WICKER. Mr. President, I understand we now have 1 minute each to
close on the amendment; is that the order of the day?
The PRESIDING OFFICER. The Senator is correct.
Mr. WICKER. Mr. President, I tell my colleagues that this is a
multiple perils amendment to the National Flood Insurance Program. It
is backed by the National Association of Realtors.
The CBO will tell you it is budget neutral because the premiums have
to be based on risk and actuarially sound. There are changes that could
be made to make a good amendment perfect. We might not have those
tonight. But I can assure my colleagues of this: The passage of the
Wicker amendment tonight will ensure that a solution will come quicker
to the problem of millions and millions of Americans not being able to
ensure against wind and water damage at the same time. I urge passage
of the Wicker amendment for that reason, if for no other.
I yield the floor.
The PRESIDING OFFICER (Mr. Brown). The senior Senator from
Connecticut is recognized.
Mr. DODD. Mr. President, I have great respect for our colleague from
Mississippi. The point we wish to make on this amendment is not that we
disagree. The simple question, as pointed out by Senator Nelson from
Florida, is that this amendment, as presently crafted, could end up
costing billions more than we anticipated. There were $17 billion in
claims in excess of the $1.5 billion in funds. Some predict this could
be as much as $60 billion to $100 billion.
We have a commission we are working on as part of the bill. We have
to grapple with wind. We have to have an actuarially sound program. The
last thing we want to do is destroy a flood program, which we could do
by overwhelming it as a result of claims under

[[Page S3878]]

wind, without standards under which we judge those conditions and
concerns. Based on what happened in 2005, the claims under wind might
have been five times $17 billion.
I am determined as a member of the committee to spend more time on
this. In fact, we would have spent more time but for the foreclosure
crisis to try to come up with answers. At this juncture, to adopt this
amendment would cause the program to be put in great jeopardy.
The PRESIDING OFFICER. The question is on agreeing to amendment No.
4719.
Mr. SHELBY. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton),
the Senator from Maryland (Ms. Mikulski), and the Senator from Illinois
(Mr. Obama) are necessarily absent.
I also announce that the Senator from Delaware (Mr. Biden) is absent
because of illness.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and
the Senator from Virginia (Mr. Warner).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 19, nays 74, as follows:

[Rollcall Vote No. 117 Leg.]

YEAS--19

Chambliss
Cochran
Craig
Graham
Isakson
Landrieu
Lautenberg
Lincoln
Martinez
McConnell
Menendez
Murkowski
Nelson (FL)
Pryor
Schumer
Snowe
Stevens
Vitter
Wicker

NAYS--74

Akaka
Alexander
Allard
Barrasso
Baucus
Bayh
Bennett
Bingaman
Bond
Boxer
Brown
Brownback
Bunning
Burr
Byrd
Cantwell
Cardin
Carper
Casey
Coburn
Coleman
Collins
Conrad
Corker
Cornyn
Crapo
DeMint
Dodd
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Grassley
Gregg
Harkin
Hatch
Hutchison
Inhofe
Inouye
Johnson
Kennedy
Kerry
Klobuchar
Kohl
Kyl
Leahy
Levin
Lieberman
Lugar
McCaskill
Murray
Nelson (NE)
Reed
Reid
Roberts
Rockefeller
Salazar
Sanders
Sessions
Shelby
Smith
Specter
Stabenow
Sununu
Tester
Thune
Voinovich
Webb
Whitehouse
Wyden

NOT VOTING--7

Biden
Clinton
Hagel
McCain
Mikulski
Obama
Warner
The amendment (No. 4719) was rejected.
The PRESIDING OFFICER. The majority leader is recognized.
Mr. REID. Mr. President, I have had a number of conversations with
Senator McConnell today. I have had a number of conversations with the
two managers of the bill. I think we have a plan for finishing this
legislation tomorrow. We have had good cooperation on both sides.
What we are going to try to do is finish this bill. There are a
number of Senators who want to offer amendments tonight. We can have
the votes tonight or in the morning. The way things are looking, we can
have them after morning business in the morning because there are not a
lot of amendments.
It is our goal to finish this bill tomorrow. If that is the case,
then we wouldn't have to be in Friday. We have a lot of things to do
legislatively, hearings, and other such business. What we will do is
come in Monday and vote on the amendment that has been filed by the
Republican leader dealing with energy. It is the Domenici energy
package. We will have a side-by-side. I already explained to the
Republican leader and others what that will be. It should be fairly
direct and to the point. We will have a 60-vote margin on both of
those.
Following that, we will move to legislation that is bipartisan in
nature. We will need to invoke cloture on it. It is the Judd Gregg
firefighters legislation. That will get us through Monday.
We have 2 weeks left. Hang on to your hats; we have a lot to do. We
do not know if we are going to get the supplemental next week. We
thought we would early next week, but we have learned today there may
be some problems developing in the House. We are doing our very best to
do that.
I congratulate Senators Harkin and Chambliss and Senators Baucus and
Grassley. We think--we don't think, we know the farm bill has been put
to rest. We are going to be able to bring a bipartisan conference
report to the Senate floor, hopefully, next week. There is no reason we
should not be able to do that next week. Those are just a few of the
moving parts we have.
The supplemental is not going to be easy, as it never is. Once we get
it from the House, we can do our job over here fairly rapidly.
Mr. DOMENICI. Mr. President, can the leader explain how he is going
to handle the two Energy bills? It seemed he was saying we would be
finished with this bill before that. That is not the case, is it? These
two amendments will be voted on as part of this bill.
Mr. REID. What we would like to do--we certainly will work with the
distinguished Republican leader at a later time. I don't think Senators
Shelby and Dodd want energy to be part of this bill. If we can get 60
votes on it, we will be happy to stick it in this bill.
What Senator McConnell and I talked about--I think it is fair, and we
do a lot of business with 60 votes around here. We are not trying to
stop anybody from doing anything.
Mr. DOMENICI. It is going to be freestanding.
Mr. REID. Absolutely.
Mr. DOMENICI. As long as there is ample time to discuss it.
Mr. REID. Absolutely.
Mr. DOMENICI. I thank the Senator.
Mr. REID. Mr. President, I say to Senator Domenici, even though he
and I have disagreed on a few issues over the years--few in number--I
personally know how strongly the Senator from New Mexico feels about
this energy issue. I hope the Senator doesn't get 60 votes, but we will
do everything we can to ensure he gets a vote.
Mr. President, able staff, both on the majority and minority side,
say I may not have phrased everything right regarding the energy
legislation. But I think Senator McConnell and I understand we are
going to have two votes on energy Monday night. The exact terminology
procedurally, I may not have outlined it properly, but I think we know
where we are going.

Amendment No. 4722

The PRESIDING OFFICER. Under previous the order, there is now 2
minutes for debate equally divided prior to a vote on amendment No.
4722 offered by the junior Senator from Louisiana. Who yields time?
The junior Senator from Louisiana is recognized for 1 minute.
Mr. VITTER. Mr. President, this amendment is very simple and modest.
It simply updates the coverage limits available for a flood policy
which have not been updated at all since 1994. It does not even take
into account all inflation since then, just most inflation. It is what
the House did. And under the CBO study of the House bill, the CBO said
it does not increase the cost of the bill because people will obviously
pay significantly higher premiums for the higher limits.
This is a very modest updating of the limits. I ask for the support
of my colleagues.
I reserve the remainder of my time.
The PRESIDING OFFICER (Mr. Casey). The Senator from Alabama.
Mr. SHELBY. Mr. President, I oppose the Vitter amendment. The purpose
of the Dodd-Shelby bill is to increase the actuarial soundness of the
flood insurance program. This amendment by Senator Vitter would
undermine greatly that effort. The amendment would extend flood
insurance subsidies, crowd out private markets, and lead to larger
program losses down the road.
I urge my colleagues to join Senator Dodd and me in opposing the
Vitter amendment.
Mr. VITTER. Mr. President, reclaiming the remainder of my time, again
I think it is very important to note the CBO analysis, with regard to
this issue in the House bill, said it does not cost any more. It does
not get in the way of actuarial soundness at all. This is only updating
the limits for less than inflation since 1994.
The PRESIDING OFFICER. The time of the Senator has expired.

[[Page S3879]]

Mr. SHELBY. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is
sufficient second.
The question is on agreeing to the amendment. The clerk will call the
roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton),
the Senator from Maryland (Ms. Mikulski), and the Senator from Illinois
(Mr. Obama) are necessarily absent.
I also announce that the Senator from Delaware (Mr. Biden) is absent
due to illness.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and
the Senator from Virginia (Mr. Warner).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 27, nays 66, as follows:

[Rollcall Vote No. 118 Leg.]

YEAS--27

Bingaman
Boxer
Burr
Cantwell
Coburn
Cochran
Feinstein
Graham
Harkin
Hatch
Hutchison
Klobuchar
Landrieu
Lautenberg
Lincoln
Martinez
Menendez
Murkowski
Murray
Nelson (FL)
Pryor
Salazar
Schumer
Stabenow
Stevens
Vitter
Wicker

NAYS--66

Akaka
Alexander
Allard
Barrasso
Baucus
Bayh
Bennett
Bond
Brown
Brownback
Bunning
Byrd
Cardin
Carper
Casey
Chambliss
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Grassley
Gregg
Inhofe
Inouye
Isakson
Johnson
Kennedy
Kerry
Kohl
Kyl
Leahy
Levin
Lieberman
Lugar
McCaskill
McConnell
Nelson (NE)
Reed
Reid
Roberts
Rockefeller
Sanders
Sessions
Shelby
Smith
Snowe
Specter
Sununu
Tester
Thune
Voinovich
Webb
Whitehouse
Wyden

NOT VOTING--7

Biden
Clinton
Hagel
McCain
Mikulski
Obama
Warner
The amendment (No. 4722) was rejected.
Mr. DODD. Mr. President, I move to reconsider the vote and move to
reconsider the previous vote as well.
Mr. LEAHY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided prior to a vote in relation to
amendment No. 4723 offered by the Senator from Louisiana, Mr. Vitter.

Amendment No. 4723

Mr. VITTER. Mr. President, periodically new flood maps are issued by
FEMA. When a new flood map comes out, some properties that used to not
be in a flood zone may now be in a flood zone, or move from a lesser to
a more severe part of a flood zone.
This amendment would simply say we are going to charge higher
premiums, absolutely, but we will transition that over 5 years instead
of the 2 years in the bill. The 5 years is the same provision as in the
House bill. I think it is a reasonable transition, still getting to
that new higher premium.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Mr. President, I oppose the Vitter amendment No. 4273.
Most homes mapped into the mandatory coverage areas will only see
limited increases in their premium rates.
Homes or properties mapped into the higher risk areas should pay
higher rates to match the reality of higher risk. Out-of-date maps that
have vastly underclassified risk need to be updated, and delay in
requiring property owners to pay their full freight is an extension of
the inadvertent subsidies provided by inaccurate maps.
I urge my colleagues to join Senator Dodd and me in opposing the
Vitter amendment.
I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton),
the Senator from Maryland (Ms. Mikulski), the Senator from Illinois
(Mr. Obama), and the Senator from Nevada (Mr. Reid) are necessarily
absent.
I also announce that the Senator from Delaware (Mr. Biden) is absent
because of illness.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and
the Senator from Virginia (Mr. Warner).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 23, nays 69, as follows:

[Rollcall Vote No. 119 Leg.]

YEAS--23

Boxer
Cantwell
Cochran
Cornyn
Craig
Crapo
Durbin
Feinstein
Harkin
Hutchison
Landrieu
Lautenberg
Lincoln
Martinez
McCaskill
Menendez
Murray
Nelson (FL)
Pryor
Schumer
Stabenow
Vitter
Wicker

NAYS--69

Akaka
Alexander
Allard
Barrasso
Baucus
Bayh
Bennett
Bingaman
Bond
Brown
Brownback
Bunning
Burr
Byrd
Cardin
Carper
Casey
Chambliss
Coburn
Coleman
Collins
Conrad
Corker
DeMint
Dodd
Dole
Domenici
Dorgan
Ensign
Enzi
Feingold
Graham
Grassley
Gregg
Hatch
Inhofe
Inouye
Isakson
Johnson
Kennedy
Kerry
Klobuchar
Kohl
Kyl
Leahy
Levin
Lieberman
Lugar
McConnell
Murkowski
Nelson (NE)
Reed
Roberts
Rockefeller
Salazar
Sanders
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Tester
Thune
Voinovich
Webb
Whitehouse
Wyden

NOT VOTING--8

Biden
Clinton
Hagel
McCain
Mikulski
Obama
Reid
Warner
The amendment (No. 4723) was rejected.
Mr. DODD. I move to reconsider the vote.
Mrs. LINCOLN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendment No. 4705, as Modified

The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided in relation to amendment No. 4705, as
modified, offered by the Senator from Louisiana, Ms. Landrieu.

Amendment No. 4705, as Further Modified

Ms. LANDRIEU. Mr. President, I ask unanimous consent that amendment
No. 4705 be modified further with the changes at the desk and that
Senators Dorgan, Lincoln, and Pryor be added as cosponsors.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment, as further modified, is as follows:

On page 9, strike line 12 and all that follows through page
10, line 16, and insert the following:
(c) Study on Mandatory Purchase Requirements.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Comptroller General shall conduct
and submit to Congress a study assessing the impact,
effectiveness, and feasibility of amending the provisions of
the Flood Disaster Protection Act of 1973 regarding the
properties that are subject to the mandatory flood insurance
coverage purchase requirements under such Act to extend such
requirements to properties located in any area that would be
designated as an area having special flood hazards but for
the existence of a structural flood protection system.
(2) Content of report.--In carrying out the study required
under paragraph (1), the Comptroller General shall
determine--
(A) the regulatory, financial and economic impacts of
extending the mandatory purchase requirements described under
paragraph (1) on the costs of homeownership, the actuarial
soundness of the National Flood Insurance Program, the
Federal Emergency Management Agency, local communities,
insurance companies, and local land use;
(B) the effectiveness of extending such mandatory purchase
requirements in protecting homeowners from financial loss and
in protecting the financial soundness of the National Flood
Insurance Program; and
(C) any impact on lenders of complying with or enforcing
such extended mandatory requirements.

Ms. LANDRIEU. Mr. President, if this amendment does not pass,
significant portions of many States will be

[[Page S3880]]

required to have flood insurance which has never been required before.
The underlying bill says everywhere there is a dike, a dam, or a levy,
regardless of the situation behind the dike, dam, or levy, regardless
of how strong the dike, dam, or levy is, you will be required to have
flood insurance. That is a very different jump from where we are today.
Our amendment strikes that language and instead says there shall be a
study and evaluation to make better determinations.
This is a tough issue because we were behind levees that broke. It
would have been a good idea, but this is a tax and fees on people
without the appropriate study. That is what our amendment does.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, let me take 30 seconds to say to Members, if
they have any amendments on this bill, I will stay around this evening.
Anyone who has an amendment, we will consider them this evening. There
will be no votes until tomorrow, but I will stay around tonight to
engage in debate on amendments.
Let me express my opposition to the Landrieu amendment. This is less
than $1 a day; at the most it is $350 a year for 350,000 dollars' worth
of insurance. Twenty-five percent of all the claims against the flood
insurance program come out of residual risk areas. One percent of the
policies are coming out of that area. If we are going to have an
actuarially sound program, you have to ask people to contribute.
Here is a list of dikes and dams that are failing right now. There is
no guarantee these are going to last forever. We learned that painfully
in Louisiana. When they don't, just like homeowner policies, you want
to have something in place that will allow people to get back on their
feet again other than coming to raid the Treasury to do so. Again,
$350,000 for the maximum of less than $1 a day is very little to ask
for a program that is actuarially sound. That is what we are trying to
do with this bill so we don't end up raiding the Treasury in the long
run.
I urge defeat of the amendment and ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the amendment. The clerk will call the
roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton),
the Senator from Maryland (Mrs. Mikulski), the Senator from Illinois
(Mr. Obama), and the Senator from Nevada (Mr. Reid) are necessarily
absent.
I also announce that the Senator from Delaware (Mr. Biden) is absent
because of illness.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and
the Senator from Virginia (Mr. Warner).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 30, nays 62, as follows:

[Rollcall Vote No. 120 Leg.]

YEAS--30

Baucus
Bingaman
Cantwell
Cochran
Coleman
Conrad
Cornyn
Dorgan
Durbin
Harkin
Hutchison
Inhofe
Klobuchar
Kyl
Landrieu
Lautenberg
Levin
Lieberman
Lincoln
Martinez
McCaskill
Menendez
Murray
Nelson (FL)
Nelson (NE)
Pryor
Stabenow
Tester
Vitter
Wicker

NAYS--62

Akaka
Alexander
Allard
Barrasso
Bayh
Bennett
Bond
Boxer
Brown
Brownback
Bunning
Burr
Byrd
Cardin
Carper
Casey
Chambliss
Coburn
Collins
Corker
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Ensign
Enzi
Feingold
Feinstein
Graham
Grassley
Gregg
Hatch
Inouye
Isakson
Johnson
Kennedy
Kerry
Kohl
Leahy
Lugar
McConnell
Murkowski
Reed
Roberts
Rockefeller
Salazar
Sanders
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Thune
Voinovich
Webb
Whitehouse
Wyden

NOT VOTING--8

Biden
Clinton
Hagel
McCain
Mikulski
Obama
Reid
Warner
The amendment (No. 4705), as further modified, was rejected.
Mr. DODD. I move to reconsider the vote, and I move to lay that
motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Florida.

Amendment No. 4709 to Amendment No. 4707

(Purpose: To establish a National Catastrophe Risks Consortium and a
National Homeowners' Insurance Stabilization Program, and for other
purposes)

Mr. NELSON of Florida. Mr. President, I send amendment No. 4709 to
the desk. It has been filed, and I call it up.
The PRESIDING OFFICER. Without objection, the pending amendments are
set aside.
The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Florida [Mr. Nelson], for himself, Mrs.
Clinton, Mr. Martinez, and Ms. Landrieu, proposes an
amendment numbered 4709 to amendment No. 4707.

(The amendment is printed in the Record of Tuesday, May 6, 2008,
under ``Text of Amendments.'')
Mr. NELSON of Florida. Mr. President, this is an amendment to
recognize what we have been discussing on this floor earlier: that the
big one is coming. The big one is either a category 5 hurricane that is
hitting an urbanized area of the coast, of which there is some loss of
$50 billion of insurance losses in wind losses, or it is an 8.5
earthquake on the Richter scale that hits downtown San Francisco or
downtown Memphis--either one of which no one State could withstand that
kind of economic loss. There is no one insurance company that can
withstand that economic loss.
It is clear that the package of bills Senator Martinez and I--and he,
by the way, is a cosponsor of this amendment--the package of bills we
have filed to address the plethora of subjects having to do with
catastrophic risk--a national catastrophe fund is one of those bills.
That is not going to pass. The White House opposes it. But what could
pass is what has already passed the House of Representatives and is
down here and is the essence of this amendment; that is, it sets up two
things. It sets up, on the one hand, a consortium whereby if a State's
catastrophe fund goes dry and they need additional bonding, that State
then has set up a consortium where it is easy to go into the private
bond market for catastrophe bonds and get that bonding back to the
State catastrophe fund. That is one part of this bill. The other part
of this bill is also where the State has a State catastrophe fund.
What is a catastrophe fund? It is a reinsurance fund. It reinsures
insurance companies against the catastrophic risk. In the case of
Florida, it is hurricanes. In the case of California, it is
earthquakes. In the case of Memphis, TN, it is earthquakes. In the case
of the gulf coast, the Atlantic seaboard, it is hurricanes. That is
what a State catastrophe fund is.
Florida has that fund. There are a lot of other States that do not.
So this amendment would only apply to those that set up and address the
catastrophic risk at the State level first. Therefore, if a State has a
State catastrophe fund, it would have another opportunity to have the
Federal Government help it. If the well ran dry in its State
catastrophe fund and was out of money, it then could borrow cash from
the Federal Government at market rates to replenish the cash until it
could get its own cash reserves replenished by its mechanism which, in
the case of Florida, is that they assess all of the policyholders--the
property and casualty policyholders--in the State. Now, that is the way
Florida does it.
This is not a new Federal program. This is a Federal incentive to the
States solving this problem but recognizing that the big one is
coming--either a hurricane or an earthquake--that when the big one
does, if the State catastrophe fund, the reinsurance fund cannot handle
it, the Federal Government is going to step in but only to the extent
of helping the State catastrophe fund facilitate getting bonds in the
private marketplace--catastrophe bonds--or, No. 2, help the State
catastrophe fund have ready quick access to cash from the Federal
Government but lent at fair market rates.
Now, this is utilizing the private marketplace. This is not a new
Federal

[[Page S3881]]

program. It is a commonsense solution. It has already passed the House
overwhelmingly. This is the vehicle that we have to offer it all. Even
though this is a flood insurance bill, it is an insurance bill. We are
not trying to monkey around with the flood insurance program; we are
merely trying to have a vehicle by which we can bring this up.

Now, they are going to say it is not germane because it is not flood
insurance. So that means we are going to have to get the 60-vote
threshold to waive a point of order that it is not germane, and that is
a high threshold. But nevertheless, we have to try.
I notice my colleague from Florida is here, and he is a cosponsor. I
wish to thank him for that cosponsorship.
I ask unanimous consent that a detailed explanation of my amendment
be printed in the Record at this point.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Summary of the Homeowners Defense

The Homeowners Defense amendment establishes a Consortium,
a non-Federal entity that States may choose to join. The
Consortium is designed to encourage and facilitate the
transfer of catastrophe risk from State catastrophe
reinsurance facilities/funds into the private markets,
notably, the catastrophe bond markets.
In addition the bill also creates a Federal loan program to
provide financing for qualified reinsurance programs and
state residual insurance market entities that choose to
participate to help cover the cost of paying out in the event
of a disaster.
The bill includes general eligibility and underwriting
requirement provisions that would:
Ensure that the savings realized form Titles I and II are
passed through to primary policy holders
Encourage compliance with loss mitigation requirements
Ensure that actuarial rates are charged
Ensure that State reinsurance programs only underwrite
truly catastrophic events (i.e. Katrina)

Title I--The National Catastrophe Risk Consortium

Title I establishes the National Catastrophe Risk
Consortium, an organization that States can choose to join
for the purposes of transferring catastrophe risk to the
private market. To be clear, the Consortium would not assume
the States' disaster risk. The risk transfer would be
achieved through the issuance of risk-linked securities
catastrophe bonds) or through negotiate reinsurance
contracts. The consortium is designed to function as a
conduit, so that at no time would risk transfer either to or
from the Federal government.
The Consortium would be governed by a board comprised of
Federal and participating State representatives with all
members having a single vote. All States are eligible to
join. Much of the Consortium's needs for risk modeling,
financial consulting, and relations with the capital markets
would be arranged for on a contract basis rather than
provided by a permanent staff.
The Consortium offers States and private market
participants a unique opportunity to benefit from combining
catastrophic risks diversified by the type of peril and
geographic regions. The Consortium staff would work in
coordination with participating States to catalogue
inventories of catastrophic risk.
Catastrophe bond underwriters and other market participants
would be able to access this database to structure bonds or
reinsurance contracts and treaties.
The Consortium would serve as a conduit issuer of
catastrophe bonds on behalf of the participating States, but
not actually take possession of any bond proceeds, coupon
payments, or underlying risk. Through the aggregation and
maintenance of market statistics, the Consortium would
develop industry standards for the catastrophe bond and risk
transference markets. Such standards include, but are not
limited to, the terms of bond offerings, the nature of
triggers used and the definitions of risks.
$20,000,000 per year is authorized to cover the costs of
the establishing and administering the consortium.

Title II--National Homeowners Insurance Stabilization Program

This title creates a National Homeowners Insurance
Stabilization Program within the Department of Treasury
designed to ensure a stable private insurance market by
extending Federal loans to qualified reinsurance programs in
States wishing to participate in the program. Specifically,
the program would make two types of loans of last resort
available: liquidity loans and catastrophic loans.
Liquidity loans would be extended to qualified reinsurance
programs that have a capital liquidity shortage due to and
following an insured catastrophic event.
The amount of the loan cannot exceed the ceiling coverage
level for the reinsurance program. The liquidity loan would
have an interest rate set at 3 percentage points higher than
marketable obligations of the Treasury having the same term
to maturity of between 5 and 10 years.
Catastrophic loans would be extended to a qualified
reinsurance program when it has sustained losses above its
maximum underwriting capacity. The catastrophic loan will
have an annual interest rate set at 0.20 percentage points
higher than marketable obligations of the Treasury having the
same term to maturity and maturity of no less than 10 years.
As a transitional measure, during the first five years of
the program, States that do not have a qualified reinsurance
plan would be eligible to participate in the Title II program
through their residual insurance market entities. Currently
36 states have a residual market entity that would meet the
requirements of this bill.

Mr. NELSON of Florida. Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Florida is recognized.
Mr. MARTINEZ. Mr. President, I thank Senator Nelson, my dear
colleague from the State of Florida, for bringing this bill forward, of
which I am a cosponsor. I wish to associate myself with his comments
regarding this very important proposal for the State of Florida. What
already passed in the House ought to be given an opportunity to be
considered by the Senate. I believe it could make a big difference to a
lot of Florida homeowners who today are hurting because of high
insurance costs because of unavailability of insurance and this is a
way of safeguarding and actually it is a way of planning ahead for the
inevitable storm.
Senator Nelson likes to say the big one is coming. The fact is it is
inevitable that we will have other storms and some of them are going to
be substantially large storms. As that occurs, the Federal Government
will have a response. Inevitably, FEMA will be there, and there will be
other responses to help people. Wouldn't it make much more sense to
have a Federal backstop to an insurance program that could then
provide, in an orderly way, the relief that surely will come to Florida
or whatever other State is afflicted by the big natural disaster as we
know Katrina was and other terrible storms can be.
I met today with the Director of the National Hurricane Center. I
presume Senator Nelson may have met him as well. He was coming around
to tell us about their programs, the terrific job they do of
forecasting, but it is also a reminder that the hurricane season is
upon us. About a month from now will be the official beginning of the
hurricane season. As that happens, surely I will join with Senator
Nelson in saying the big one is sure to come, and when it does it will
be nice to have the kinds of funds the Klein-Mahoney legislation
envisions and which I fully support.
I thank the Chair and I yield the floor.
Mr. DODD. Mr. President, pending some language to be drafted on a UC
request, let me respond to the comments of Senators Nelson and Martinez
of Florida.
First, I commend Bill Nelson and the two House Members who crafted
this legislative proposal to deal with the national catastrophe events.
I commend them because they thought about this in a constructive way as
to how they can possibly get resources to come into the States to deal
with national catastrophes. Every one of us is confronted with this
problem, whether you are in Florida with hurricane season, or in the
Midwest with cyclones and tornadoes and floods, or whatever else may
occur. We have all been confronted with how to deal with devastating
natural disasters. It has been a long-time interest of mine.
Some years ago, going back almost 20 years, Senators Stevens, Inouye,
others, and I tried to craft exactly something like this. We didn't get
very far back in those days. The idea was to try to come up with a
national plan that would allow us to be able to deal with these issues.
I begin my comments about the Nelson amendment as a complimentary
one. We tried to accommodate it to some degree, because there are a lot
of different ideas on how to do this. The authors of the original idea
in the other body have a very creative idea. I welcome that. And there
are others; it is not the only one. Rather than trying to adopt this in
the middle of a flood insurance bill, as you heard Senator Nelson talk
about earlier, we adopted a commission study for 9 months to examine
these various ideas, and to come back to us with recommendations within
that 9-month period. So we will

[[Page S3882]]

look clearly at this idea, but there are others as well. That is the
intention.
We also included in the legislation several other ideas to try and
deal with some of these problems. Two initiatives particularly, I
admit, don't address the overall problem. They assist homeowners in
communities faced with these problems. One is to provide a tax credit
to homeowners who live in coastal areas--and it is not in the bill; it
is a separate piece of legislation--who have seen property insurance
rates substantially increase. That is certainly the case in Florida,
where they have seen significant increases in those rates.
The bill I have introduced would give homeowners an immediate relief
to offset part of the rise in premiums as we grapple with the long-term
solutions. Again, it is not an answer, but it is some financial relief
before we sort out this issue. I hope it will be on an appropriate
vehicle, and I hope we will have an opportunity to offer that idea in
the next several weeks.
I have also introduced a bill to provide grants and loans to home and
business owners to undertake mitigation efforts. The best we can do for
people in harm's way is to help them lessen the risk in the first
place, with things such as storm shutters, hurricane clips, elevating
essential utilities, and even elevating an entire house, in some cases.
That will not only reduce insurance costs but save lives.
Mitigation costs are not inexpensive. We thought it might be a great
help to assist in this so when problems arise, there is an effort to
reduce the amount of damage that would occur. First, I admit these are
not solutions to the issue raised by our colleague from Florida. I urge
my colleagues at this juncture to add a specific idea such as this. But
this is going a little beyond where we are prepared to go. That is my
note of caution.
There is a vote on this tomorrow. I will be voting against the
amendment offered by Senator Nelson, but not because I am opposed to
the idea. In fact, I would make a case that I believe there may be
legal authority that exists today to do some things already that he is
talking about in his amendment. Some may be redundant based on what
existing law would allow States to do to assist with funds in these
areas. Some would clearly require new authority.
I urge colleagues, when considering this, not to give up. We will get
to it. We have to. I think the best way to approach it is in a more
comprehensive fashion. I thank them for their ideas, and I commend the
two House Members of the Florida delegation, the principal authors of
this idea. I commend Senator Martinez, as well, for addressing these
issues. I met with both of the House Members in my office several weeks
ago and, ironically, at the time they came to my office, the chief
executive officer of the Travelers Insurance Company, Jay Fishman, a
very good friend of mine, a good fellow, was in the office, and he has
authored his own idea that has attracted broad-based interest. Despite
the fact that somebody would say it has come from the CEO of an
insurance company, he is an original thinker; he thinks outside of the
box. In fact, both of the members of the Florida delegation were quite
taken with his idea and thought it was very creative as a national
model. That is one other idea that is out there that we happened to
discuss that day in the lengthy conversation we had on this issue.
There are many ideas, a lot of which have very sound merit, but they
need to be thought out. I am a little uneasy about taking an idea and
adopting it as an amendment as part of a flood insurance bill without
understanding the full implications of what is involved in it. For
those reasons, I will be objecting, or at least asking my colleagues to
turn down this particular approach--not because it is a bad idea or it
may not work but because we are not quite ready to accept that at this
juncture.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.

Amendment No. 4711 to Amendment No. 4707

Mr. DeMINT. Mr. President, I wish to call up two amendments and then
make some brief comments about them. The first amendment is amendment
No. 4711, which I believe is at the desk.
The PRESIDING OFFICER. Without objection, the pending amendments are
set aside.
The clerk will report.
The legislative clerk read as follows:

The Senator from South Carolina [Mr. DeMint] proposes an
amendment numbered 4711 to amendment No. 4707.

Mr. DeMINT. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To require the Director to conduct a study on the impact,
effectiveness, and feasibility of amending section 1361 of the National
Flood Insurance Act of 1968 to include widely used and nationally
recognized building codes as part of the floodplain management criteria
developed under such section)

At the end, add the following:

SEC. ____. REPORT ON INCLUSION OF BUILDING CODES IN
FLOODPLAIN MANAGEMENT CRITERIA.

Not later than 6 months after the date of the enactment of
this Act, the Director of the Federal Emergency Management
Agency shall conduct a study and submit a report to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate regarding the impact,
effectiveness, and feasibility of amending section 1361 of
the National Flood Insurance Act of 1968 (42 U.S.C. 4102) to
include widely used and nationally recognized building codes
as part of the floodplain management criteria developed under
such section, and shall determine--
(1) the regulatory, financial, and economic impacts of such
a building code requirement on homeowners, States and local
communities, local land use policies, and the Federal
Emergency Management Agency;
(2) the resources required of State and local communities
to administer and enforce such a building code requirement;
(3) the effectiveness of such a building code requirement
in reducing flood-related damage to buildings and contents;
(4) the impact of such a building code requirement on the
actuarial soundness of the National Flood Insurance Program;
(5) the effectiveness of nationally recognized codes in
allowing innovative materials and systems for flood-resistant
construction; and
(6) the feasibility and effectiveness of providing an
incentive in lower premium rates for flood insurance coverage
under such Act for structures meeting whichever of such
widely used and nationally recognized building code or any
applicable local building code provides greater protection
from flood damage.

Amendment No. 4710, as Modified, to Amendment No. 4707

Mr. DeMINT. Mr. President, my next amendment is actually a
modification which I need to send to the desk. It is amendment No.
4710.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from South Carolina [Mr. DeMint] proposes an
amendment numbered 4710, as modified.

Mr. DeMINT. Mr. President, I ask that the reading of the amendment be
dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

On page 8, line 13, strike ``and''.
On page 8, line 16, strike ``policy.''.'' and insert the
following: ``policy; and
``(3) any property purchased on or after the date of
enactment of the Flood Insurance Reform and Modernization Act
of 2007.''.

Mr. DeMINT. Mr. President, if I could take a couple of minutes to
explain these, my hope is that I can even get the chairman's support of
this.
Amendment No. 4711 is actually a study that I hope we can all agree
on. It is a study that would try to determine the feasibility of using
incentives of lower flood insurance rates when consumers or businesses
have their homes or business locations comply with nationally
recognized building codes. A number of codes are out there. If we could
encourage better construction of buildings, to make them more resistant
to storms, it is likely we could save the flood insurance program a lot
of money. So this amendment would simply study the feasibility of those
incentives and what it might do to insurance rates, as well as to
saving Government money.
My second amendment, No. 4710, ends the practice of permanently
subsidizing premiums for older homes in flood zones, which can be as
large as 65-percent. The bill does a good job phasing out these
subsidies for just about every other property: businesses, vacation
rentals, and primary residences that have been renovated since the
flood zone mapping was determined. But there are a number of homes that

[[Page S3883]]

are grandfathered into subsidies up to 65 percent. These are homes that
were built before 1975 or when their area's flood mapping was actually
done. These primary residences enjoy this subsidy, and will continue to
under the current bill.
What my amendment does not do is change the insurance rates or the
subsidy for those who are grandfathered into the current rate that we
call pre-firm, or before flood insurance rate maps were completed; in
other words, these are folks who could legitimately have said they did
not know they were in a flood plain when they bought their home. I
think their rates and subsidies should stay the same.
What my amendment does is make the premiums for pre-firm properties
sold after this bill's enactment the same actuarial rates of homes that
were built after the new mapping was complete, or post-firm. So it is a
relatively simple amendment, and I think it gives more equity to the
total bill by making sure all properties are eventually treated
equally.
So I will provide more detail tomorrow, but I hope the chairman will
consider both of those amendments because I would love to have his
support.
With that, I yield the floor.
Mr. DODD. Mr. President, I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

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