National Flood Insurance Program Enhanced Borrowing Authority Act of 2005

Mr. Speaker, preliminarily, I yield myself 1 minute just to introduce as our first speaker the gentleman from Oregon (Mr. Blumenauer).

The gentleman from Ohio correctly noted that we made our committee and the Congress follow some very substantial improvements from the standpoint both of fiscal responsibility and environmental sensitivity to the flood insurance program. Now, we obviously did not have in mind at that point something of this particular disastrous consequence, but we did put into the law, for the first time really, some of the environmentally important issues that should be there. I am hoping that elsewhere, as we go through the appropriations process, that program will be fully funded, particularly in the proposals for mitigation.

But on our side, it was a genuinely bipartisan issue. The former Member, the gentleman from Nebraska (Mr. Bereuter), collaborated with the gentleman from Oregon (Mr. Blumenauer).

Mr. Speaker, I yield 3 minutes to the gentleman from Oregon (Mr. Blumenauer), who was the main co-author of that important reform in flood insurance.

Mr. Speaker, I yield myself such time as I may consume.

Obviously, there is a great degree of support in the Congress for getting the money out right away. We have people who were victims of this flood, and they have been victims in a number of ways. This is one small piece of the compensation that goes to them. There will be people who will be uncompensated, people who did not have flood insurance, people who are not able to make the kind of partial payment that is required, but the least we can do is to make this payment.

But as we vote quickly to send this money, we need to work in the next few weeks and months to deal with and resolve some broader questions.

I believe that the country has suffered over the past decade, and it is particularly suffering now, from a philosophy that has undervalued the need for us as a civilized people to come together and work together on some things. We are a society run, to a great extent, according to the principles of the free market of private capital. It is a wonderful system for generating wealth. The goods and services that are produced through the free market system benefit all of us, and that free market system leads to the best possible production.

The problem comes with people who are so enamored of that system that they value it not only for what it does, but for what it does not do, is not supposed to do, and should not be burdened with trying to do. That is, there are in this society a number of very important values that we have as civilized people with a moral commitment to each other's well-being that can only be done if we pool our resources.

Let us take the specific issue we are now talking about: insurance. The insurance industry is a private industry. It is an industry that provides important services to people, that provides jobs for people, that pools resources and provides investment capital. But even in the area of insurance, we have recognized historically, there are some gaps.

The very existence of the Federal Flood Insurance Program, which we are here today financing, is an acknowledgment that there are limits to the private system. Private insurance, we have decided as a society, cannot handle the flood question, so the government must step in. I say that because it has become fashionable to denounce government, to take credit for less government. Well, less government, what does that mean? Less FEMA, less flood insurance, less for the Corps of Engineers?

This is an example. We are here today to provide more government. We are here today to provide public resources, $2 billion. By the way, this $2 billion, we are authorizing the flood insurance program to borrow it. They are going to borrow it from the Treasury. They will be borrowing it from the Treasury which will, of course, in turn borrow it from the capital markets, from the American people, from China, and from everybody else who lends us money. That is the second point I want to make.

As we now acknowledge after this terrible disaster and an inadequate response to the disaster, partly caused by a failure to appreciate the importance of our coming together through government to perform important functions, we will be spending a great deal of additional money. We are adding this $2 billion, I assume, to the deficit, let us be clear.

We are not having any offsets. And this is a very small part of what we are doing. The time has come to recognize that we have over these past years left this Federal Government with too little in the way of resources to carry out our purposes. And we talk a lot about values and about the moral purposes we seek to achieve. I believe strongly that morality ought to be an element of public policy. I believe that we have not fulfilled our moral duty to the poorest people and working people and lower middle income people in New Orleans and elsewhere who have not been treated fairly as they were victimized.

That is a moral question. It is a moral question when people are left behind because they do not have the resources to leave and other people leave. It is a moral question when people are not rescued when they could be rescued. It is a moral question when we let people live now in conditions brought about by this flood that are not decent conditions for human beings.

And part of the answer, not all of the answer, but a necessary part of the answer is for the government to have the resources. And those who subscribe to the view that we must here in this House carry out our moral duty to each other should understand one of our moral duties right now is to go to people in need, to people who are frail, who are ill, who are young, who are old, who are in good health, but who have been reduced by physical forces to circumstances that no one of us would want to live in.

And only if we come together through this mechanism called government, and only if we give this mechanism called government resources, tax money, because that is where the money comes from, will we have the capacity to discharge our fundamental moral duty. We talk a lot about family values. Let us value the families that have been so badly battered by this hurricane and whose condition was exacerbated by an inadequate response by the rest of the country.

I cannot think of a better demonstration of family values than to go to the families living in Astrodomes and Superdomes and other places, hardly adequate for a family to live in. Let us go show our family values by doing whatever we can. We can never make people whole in the situation, but let us try to alleviate their misery.

Well, again, we are borrowing $2 billion today, and I am glad we are doing that because we need to get to their aid. But it is a very small part of what we need to do. But I hope that this $2 billion will not stay borrowed. This $2 billion, a very small piece of what we need to do, underlines the importance of our, let me put it this way.

We have, I think, a greater recognition of the value of government than we used to. I have not heard anybody today boast about how much they have reduced government. Indeed, I have heard virtually universal insistence that the government has got to do more in housing. We have got to do a better job with the Corps of Engineers, and we have got to do a better job with the EPA to deal with the terrible environmental problems that will result from this. We have to increase Medicaid funding at the Federal level for some of the States that are receiving people. We have to provide more funding for education. We are going to have to rebuild streets; we are going to have to pay police officers overtime.

There will be enormous demands on this government for money. And what does that mean? It means enormous demands that we recognize our moral obligation to each other and each other's families to alleviate the effects of the disaster. Let us not just borrow that money. Let us not just add it to the deficit. The time has come to say that we have left ourselves inadequately prepared to deal with this.

For anyone, an individual, a company, a nonprofit institution or a government to live deliberately and consciously on the edge is irresponsible, but that is what we have done to ourselves in this country. We have so reduced the resources available to this Federal Government that when this terrible disaster hit, we left ourselves inadequately prepared financially to deal with it. We did not do enough because of financial problems in the past.

But let us now say, okay, we now understand this. There is a war going on in Iraq. I opposed it, but the war is there, and it imposes costs on us. There is still an effort in Afghanistan which I supported. Now we have this disaster. The time has come to recognize that this government, the instrument of our collective moral capacity in this instance, and volunteers will be very helpful, and I salute the volunteers who have done this.

But no one thinks that individual volunteerism is going to resolve this crisis. There needs to be a common effort, coordinated and organized; and that means government. So for those who have joined in the insistence that we spend more, we have spent $50 billion in the supplemental, $2 billion here, and then we will do more in housing. And the gentleman from Ohio (Mr. Ney), who has been a great leader for us in the housing area, his committee. As we sit here today and stand here today, in another part of this complex a meeting is going on. The gentleman from Ohio, to his credit, convened all of the groups dealing with housing, low-income advocates, public officials, manufactured housing, homebuilders, people who finance housing. They are giving us an important set of ideas about how to respond.

Now, some of them can be done by cutting red tape and by giving flexibility. They do not all cost money. But some of them cost money. You cannot take people who have lost physical homes and house them decently without money. So we have in every area

virtually where the Federal Government is involved a need to spend more money. The height of irresponsibility would be, it seems to me, to join in this insistence on spending more money and to refuse to address the revenue problems of the government.

How can you be in favor of spending hundreds of billions perhaps, certainly well over a hundred billion extra in addition to everything else we have been spending, but say, oh, and by the way let us cut some more revenue from the government. Let us leave the government less able to do this. And understand that people said, well, it will be a deficit and we can live with a deficit.

This absence of resources puts a constraint on spending. Of course spending should not be wasteful. But it is clear, if you look, I have been here, we have done these appropriations, and appropriations chairman after appropriations chairman has come up and said, you know, I agree, we do not have enough money here. I wish we had more money for housing. I wish we had more money for transportation. I wish we could have done more for medical research. I wish we could have done more for environmental cleanup. But given the budgets, that is all we could do.

In other words, the self-imposed restriction has hurt us. Previously, it was maybe a philosophical debate. Today, it is a moral necessity. It simply is not, it seems to me, morally acceptable, it is not in consonance with family values to continue to deprive ourselves of the resources we need to meet these needs. And so I support this two billion, and I will support many billions more, tens of billions more. But I will also support changing some of the policies of the past.

The wealthiest people in this country, people who make more than $500,000 a year in income, I think it is reasonable for us to say to them, you know, over the past few years, your taxes have been reduced and you have profited. The time has come for us to undo some of those tax breaks. Leave in place everything up to $500,000, if that is what you want to do. I would change it even further. But at the very least can we not say that people's incomes above $500,000 should no longer get the tax reduction they got? None of them will be hurting. None of them will be competing for space in the shelters. None of them will need any reconstruction of their homes. And if we do not do that, no matter how much we say, oh, we do not care, we will just add it to the deficit. We do not care. We will care because nobody is so irresponsible as to totally disregard that deficit impact.

And so if we are going to be true to what we have been saying we want to do, if we are true to our own moral profession, then we have two obligations, one, sensibly, thoughtfully, not wastefully, to spend the resources it is going to take to deal with this problem. And by the way, let us be clear. We do not want to alleviate this problem by exacerbating others. We do not want people from this area to go and take housing that is already scarce and knock other people out or knock other people's schools out or compete for scarce Medicaid dollars.

We need to increase what we are doing. We need to do a better job of preparing for this in the future. This will take, we all agree, a very large amount of money. It may be fun to spend the money, or at least it is popular. It would not be morally appropriate to spend all this money and to take credit for spending the money without going back and undoing some of the tax reductions so that some of the wealthiest people in this country who have enjoyed great prosperity lose a little of their tax breaks and contributed so at the very least this additional spending will not add to the deficit, will not be a burden for the future; and the fact that it is a deficit will not be a constraint on our willingness to spend what is necessary.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I look forward to continuing to work with the gentleman from Ohio who has been one of the Members who has not been willing to give up our responsibility, and we will work together.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. President, I call up my amendment, which is at the desk.

Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. President, I understand that under the order, I will be recognized for 20 minutes.

I might reserve a little bit of time. I may have other colleagues who will come over to speak.

Just to refresh memories, when this continuing resolution was passed at the end of September, I came on the floor and offered an amendment that would have kept whole the Community Services Block Grant program. That is a program that administers the LIHEAP program, administers a lot of Head Start programs, Even Start programs, Older Americans Act programs, elderly transportation programs, emergency shelter programs, weatherization assistance--you get the idea. Most of the programs really help a lot of poor people in this country. Last year's level was $636.8 million.

The amendment I offered in September would have kept the funding of the Community Services Block Grant program at that level. You might say that was a continuing resolution. A continuing resolution keeps things at last year's level. Therein lies the problem.

The House sent us a continuing resolution that said: We will continue programs at last year's level or at the level of the House budget, whichever is less. The House budget cut the Community Services Block Grants Program down to less than $320 million. They cut it in half. That is the level it was in 1986.

I said in September that it was unfair for poor people to have to have theirs cut right away down to that level because winter was coming and you need the heating energy assistance and things like that.

At that time, at the end of September, there was a lot of talk. We couldn't accept this amendment because the House had gone out. As long as the House was out and if we changed the continuing resolution, that meant the entire House of Representatives would have to come back to Washington, DC, and do something about this. I said at the time on the floor, big deal. They came back for a lot of other things; they could come back for this, too.

Obviously, my arguments did not prevail. The amendment was defeated; whereupon, however, the chairman of the Appropriations Defense Subcommittee, the Senator from Alaska, Mr. Stevens, said that he was going to take my amendment that continues the community services block grants at last year's level and put it on the Defense appropriations bill, which he did and for which I commended him. We all thought that the Defense appropriations bill would zing through here right away. Fine.

Here we are. It is November 18, and the Defense appropriations bill has not been passed--and we don't know when; probably next month, I suppose, before the end of the year.

We have another continuing resolution. The continuing resolution expires today at midnight. We know that. The continuing resolution is the same. It is at either last year's level or the House budget level, whichever is less. That means the Community Services Block Grant program is still cut down to the level it was in 1986.

The amendment I am offering today basically says--it is the same amendment, basically--for the purposes of this continuing resolution, the community services block grant shall be based on the rate that it was last year, which is $636.6 million.

On November 8, barely a week and a half ago, 58 Senators from both sides of the aisle cosigned a letter saying we want to keep the Community Services Block Grant Program at the Senate level, at last year's level. That is what we did in our bill, and 58 Senators a week and a half ago signed this letter to keep it at the same level. Yet today we are going to pass a continuing resolution that cuts it in half. This continuing resolution is until December 18.

There is another unique feature about the Community Services Block Grant Program that I wish to bring to the Senate's attention. Unlike a lot of programs, such as education, for example, wherein the money goes out basically next summer, if we use that language--the lower of the House level--it doesn't mean a lot because the money is not going to go out until next summer, and we probably will fix this prior to going home for Christmas. I think. I don't know. We have had CRs going into January and into February. That is not unusual around here.

So we have a continuing resolution before us today that says until December 18, and we think it will be done by then. It may not be. I don't know how many people around here would like to bet a dollar to a dime on that one. Maybe yes; maybe no; get it done by December 18. It could go into next year.

Here we have a situation, unlike education, where the money goes out next summer, and we will fix it before then, certainly. The Community Services Block Grant program goes out quarterly. Every quarter, the money goes out and is used. That means right now we are about 7 weeks into this quarter, and the entire nationwide Community Services Block Grant program has been operating at the level of $320 million. That is bad enough. If we extend that another month, it could be disastrous, or another 2 months, because it is not like they can draw down some money somewhere and say: We are going to get it next year, we will make up for it. They can't just go to the bank and borrow the money. They do not have it. If they don't have the money for weatherization or for Head Start programs or for low-income energy assistance programs, they just do not do it.

We have had vote after vote here when Members supported the Low- Income Energy Heating Assistance Program. It is vitally needed. But if you do not have the people to administer the program and get the goods and hire the people to administer it, what good does it do? That is what the Community Services Block Grant program does.

You may hear talk that the Community Services Block Grant program is just one part of the picture because there are State and local governments that help. That is true. There are private charities that help. That is true. That is the good thing about this program--it brings a lot of different stakeholders into play. But there is the anchor, there is the anchor of the money. If that is not there, they do not even have the people to go out and do anything.

I ask Senators to think about this. Here is a program that is widely supported; 58 Senators signed a letter a week and a half ago. We passed it in our Labor, Health and Human Services Appropriations Subcommittee when it was on the floor at last year's level, $636.8 million. No one talked against that. It just passed. We all supported it. As a matter of fact, if I am not mistaken, I think it was later supported by the House, even though their numbers were less. The conference report

that was rejected by the House at least had this high figure in it.

So we find ourselves in an odd situation with another continuing resolution in the dead of winter when the homeless need a lot of help, when poor people are put to the extreme in terms of buying enough food, energy to heat their homes, get clothes for their kids, finding enough money for rent, going to food banks when the food stamps run out.

Any Senator here who has been to the food banks in their State knows that the food bank demand is up over what it has been in the past because food stamps are running out about the third week of the month, and poor families are going to the food banks to get food. I say to any Senator, go to your food bank--any State, I don't care which State it is--go to your food banks, food pantries, and ask them whether the demand for food is up over what it was last year or just a few months ago. That is the program administered by the Community Services Block Grant program.

The argument that was made in September is we could not do this because the House would have to come back, and they cannot do it, la- de-da, and all that stuff. Well, the House is in session today--they may be in session tomorrow, I don't know. But they are in session today. We could pass this amendment; say, no, the one program we are going to exempt from the 50-percent cut of the House of Representatives is Community Services Block Grant program. Send it back to the House, let them bring it up and pass it and send it to the President. The argument that we could not do it because of the time pressures does not hold any longer.

This is just a matter of simple justice. If this were a program that could make up the money later on next year, it would be different. This is now. People need help now for housing, for rental assistance, food banks, heating energy assistance, Head Start, foster grandparents, rental assistance.

One of the things the Community Services Block Grant program does for people includes if they are evicted and they need someplace to stay. Think of the single mother with two or three children. The husband has left her and gone off someplace. They have been in an apartment, maybe there has been an illness in the family for which they are not covered--who knows what kind of calamities could have hit--and they find themselves evicted. They can go to the local community action agency in their area. One of the things they will do is they will find them a place to live. They will give them rental assistance to get them established and a place to live. That is what this program does. What I just described happens 10 times a day in 1,000 cities across America-- 100,000 times a day.

I hope we can pass this amendment. It is very simple and straightforward. Leave the Community Services Block Grant program at last year's level. We have all said that is where we want it. We need to get that money out there. The House is in session. They can pass it and send it to the President.

How much time remains?

I reserve the remainder of my time.

How much time total?

How much time on the other side?

Parliamentary inquiry: I understand I had 20 minutes to speak and there is no time on the other side to speak on this amendment?

There are a couple of other points.

The amendment is a straight failure. Senators understand it. But I will point out, because of a quirk in the law, there are some States that are cut more than others.

Here is what that means. This gets a little complicated, but I think the States that are going to be voting need to know this. If the total funding for a fiscal year is less than $345 million, then no State shall receive less than one-fourth of 1 percent. Now, last year, since we cut it back to $320.6 million, that means there are 13 States-- Alaska, Delaware, Hawaii, Idaho, Maine, Montana, Nevada, New Hampshire, North Dakota, South Dakota, Utah, Vermont, and Wyoming--that are not cut by 50 percent; they are cut by 75 percent. Because of a quirk in the law, 13 of our smallest States have a 75-percent cut. That is what they are operating at right now in those States.

I say to the Senators from those States, this may not be knowledge to a lot of Members. I happen to know about this program because I am on both the committees that administer it, but this is a program that helps the poorest in our country.

I anticipate there may be some other reasons people do not want to vote for this, but as long as 58 Senators signed the letter a week and a half ago, as long as the House is in session, it seems to me we could vote on this and let the House do it.

As I said, this is the dead of winter. We were told at the end of September that the Defense appropriations bill would be acted upon. This amendment was included. But it has not been acted on. We are now told we have a continuing resolution until December 18, but will we really act on it by December 18? As I said, who can bet on that around here?

These are the poorest of our poor people. Can't we at least say we are going to hold them a little bit harmless in this? It is not that we are holding them harmless, we are holding them at last year's level, which means it is cut a little bit simply because of the cost-of-living increase. But to be cut 50 percent, and in 13 States to be cut by 75 percent, is grossly unfair.

Let's do the moral thing. Let's do the right thing. This is a very small matter, a small thing to do, to pass this amendment and send it to the House and have them pass it on.

I ask unanimous consent to have printed in the Record the letter I discussed.

I yield back the remainder of my time and ask for the yeas and nays.

Mr. Chairman, I want to thank the gentleman from Massachusetts, the gentleman from Ohio.

Mr. Chairman, not everything our Nation does is wrong. And one of the things our Nation does that the private sector wouldn't do or chose not to do was insure people against flooding. And that is a very good program.

When you consider that the predictions are that within the next 50 years 80 percent of all Americans will live within 50 miles of a coast line, then protection from flood insurance, protection from hurricanes is very important.

In southern Mississippi I have had very, very few complaints about the Federal flood insurance program. I have had tens of thousands of complaints about how people were treated by the wind coverage. So I want to commend the gentleman from Massachusetts and the gentleman from Ohio for raising the amounts that people can buy coverage for.

Most of southern Mississippi had older homes. People had lived in them for decades. And now they, and I, are going through simultaneous sticker shock. Houses that you may have bought 20, 30 years ago for $50,000, you have now got to replace for a heck of a lot more than that. So by raising the amount that people can cover themselves from $250,000 to $335,000 is a huge improvement. Also, raising the contents up to $135,000 again is a huge improvement. I think as people put a pad to their contents after they woke up the next morning and discovered that they were gone, I think everyone was surprised that they owned more than they thought they did and they lost more than they thought they did. So again this is a move in the right direction.

I want to commend the committee for putting in the money for the new flood maps. Water in Bay St. Louis got to be 26 feet above sea level in some places. That was unprecedented since the Europeans landed over 300 years ago. And the Navy Oceanographic Lab tells us we are in for 10 years of this. So, again, since this is a public entity funded with taxpayer dollars, I think it is very important, whether it is Pensacola, Florida, or Gulf Shores, Alabama. Anywhere in coastal America I think it is important that we know the propensity to flood, take adequate steps to minimize losses in future hurricanes.

I would also like to commend the committee for working with me on trying to address the Katrina fraud. Citizens of this country are noticeably upset that some of the generous money given to them, either as taxpayers or through groups like the Red Cross, was abused, that people milked the system, in some instances, to do things like a sex- change operation.

I happen to think the biggest fraud of all, though, Mr. Chairman, came from the insurance industry. And I will walk you through this. Under the National Flood Insurance Plan, we count on the private sector not only to sell the insurance policy; we count on the private sector to adjudicate the claim.

Now, wind damage is paid for by a private company. Flood damage is paid for by the Nation through the National Flood Insurance Plan.

So imagine yourself, a 25-year-old insurance adjuster. You have visions of being a company man or getting that next promotion. You may even own stock in your company. You are sent out to adjudicate a claim on a house that is no longer there, knowing that if you said the wind did it, it is coming out of your company's pocketbook. If you say the water did it, it is coming out of the taxpayers' pocketbook.

The FBI says that fraud is a crime of opportunity. And I think under this system, we have given the insurance industry the opportunity to stick the bill to the taxpayers every time there was any question. And I think they did.

Is it a coincidence that the insurance industry reported $44 billion in profits last year, in the same year that the National Flood Insurance Program lost $25 billion? Are they that much better at what they do? I don't think so.

I think they took claims that legitimately should have been paid by the wind policies and stuck it to the taxpayer to the tune of millions, if not billions, of dollars. And I am going to

offer an amendment in a little while to ask for an Inspector General's report to see if that is true. And if it is true, then we need to come back and change the system so that we don't just count on an insurance adjuster blindly sending the bill to the government and the government paying it every time.

Think about it. If the Members in this room want to be reimbursed for their trip to the airport, they have got to turn in a taxi receipt for 15 or 20 bucks. But in the case of the National Flood Insurance Program, Allstate, State Farm, Nationwide, fill in the blank, can bill the government for hundreds of billions of dollars, and we pay that claim without even bothering to look into this. That is wrong. It is a system ripe for abuse. And I am convinced it has been abused.

Last, and several other speakers have touched on this, we need to rethink the whole flood insurance program. Whether you are from Florida, Georgia, Alabama, Mississippi, any coastal State, we don't need people who have invested their life savings in their houses getting abused by their insurance company. And let me tell you, it is happening every day.

Senator Trent Lott, one of the most powerful men in the Senate, feels like the only way he is going to get justice out of his insurer is to sue them.

Federal Judge Lou Guirola had to drop hearing cases, like Senator Lott, so that he could sue his insurance company.

Now, when U.S. Senators and Federal judges feel like the only way they are going to get justice is to go to court themselves, what is it like for the grandmas and grandpas out there? What kind of fair shake are they going to get? And the answer is they are not getting one.

So if the private sector is not going to do it fairly, if they are not going to do it right, then maybe we need to expand the National Flood Insurance Program and call it the National Hurricane Insurance Program. Because let me tell you what I think is going to happen. We spend a lot of money to send the hurricane hunters out there for the Air Force, a lot of money to tell us where these storms are going to hit and when. We have satellites up in space to tell us about these storms. Why do we do that? So that people will get the heck out of there before a storm hits.

Based on what has happened, based on the tens of thousands of southern Mississippians who have been denied legitimate claims for their wind coverage, I am convinced in the next hurricane people are going to die needlessly because they stay behind in their home with a camcorder so they can prove to the insurance adjuster whether it is wind or water. That is wrong. It is completely contrary to why we fund the hurricane hunters; it is completely contrary to why we put those satellites in space. A person should not have to die on his property to get justice from his insurance company. And although there is no Federal regulation of the insurance industry, maybe the abuses that took place after Katrina will cause some of my colleagues to rethink this.

So, again, the bill takes some very important steps on allowing people to purchase more flood insurance, to purchase more contents insurance. It is taking the right step on getting the flood maps much more accurate, not so much for the guys who have lived there for 20 or 30 years, but for all the new folks who are moving to the coast who need to know if their property has a propensity to flood.

So I am grateful for what has been done. I have offered some observations of what needs to be done.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, when the National Flood Insurance Program was put together, a couple of steps were taken to minimize the administrative costs of that program. One, under the National Write Your Own Program, allowed the private sector, companies like Allstate, State Farm and Nationwide, to sell this policy, get a fee for selling this policy, but the cost of actually paying the claims would be borne by the Federal Government. There is really nothing wrong with that. The problem came in when at the same time they allowed the same companies to adjudicate the claim in the aftermath of the storm.

The example I used earlier is that you have got a young claims adjuster. He is a company man. He works for State Farm; he works for Allstate or Nationwide. He has visions of being promoted to a manager. He has stock in that company. He wants to go far.

He is sent out to what is now a slab that just a few days ago was someone's home. There is nothing there. And he has to determine whether that house was destroyed by wind or by water.

In the case of south Mississippi, the Navy Oceanographic Lab tells us we had 6 to 8 hours of maximum hurricane winds before the water ever got there. In the case of the little town of Bay St. Louis, that meant you had winds for 6 to 8 hours from 100 miles an hour up to 150 miles an hour before the tidal surge came in and destroyed the evidence of what the wind did.

So this claims adjuster, who wants to go far with the company, can decide whether his company is going to pay

that claim through the wind pool, or whether the taxpayers are going to pay through the flood insurance program.

The FBI says that fraud is a crime of opportunity. No matter how well-intended Congress was when they wrote this, they created the opportunity for a heck of a lot of fraud. In fact, I think the biggest fraud that occurred after Hurricane Katrina wasn't people getting an extra FEMA check or two or three extra checks from the Red Cross, although that is deplorable. The biggest fraud occurred at the corporate level where the insurance industry made a corporate decision to, whenever possible, blame flooding every time and stick the taxpayers with bills that they should have paid.

Mr. Chairman, last year the insurance industry reported a $44 billion profit after everything. Last year Federal flood insurance lost $25 billion. That is the reason this bill is on the floor today. I don't think it is a coincidence, because I think what happened was whenever given the opportunity, the insurance industry stuck the taxpayer with bills that they should have paid.

So what I am asking for is for the Inspector General to look into this and hopefully use the Fraudulent Claims Act, which requires treble damages for anyone who submits a false claim to our Nation, in addition to a $5,000 or $10,000 fine every time a false claim is submitted. Because I am convinced that is precisely what happened.

Mr. Chairman, after we are told that that is what happened, I hope this Congress will come back and find a way to where we as a Nation won't just blindly accept the claims of an insurance industry when we pay that bill.

I used the analogy before. If Mr. Oxley, if Mr. Pickering, any Member of this body wants to be reimbursed for their trip to the airport, they have got to submit a claims ticket from that taxi driver for the 15 bucks, or they don't get paid.

But in the instance of national flood insurance, these insurance companies submitted claims for $100,000, $200,000, $250,000, and the taxpayer paid it every time without anyone second guessing. That is the opportunity for fraud, and I believe that fraud took place.

So, Mr. Chairman, I don't know of anyone who in their right mind could oppose this, I don't know of anyone who wants to see our tax dollars used unwisely, and I don't know of anyone who wants to see the National Flood Insurance Program defrauded or the subject of fraud.

So, again, it is my understanding that Mr. Oxley will accept this amendment. I very much appreciate that. I hope that when the Inspector General report comes back 6 months from now that the next Congress will take steps to take away this opportunity for fraud.

I yield to the gentleman from Ohio.

Again, Mr. Chairman, I very much thank the gentleman from Ohio, and I thank the gentleman from Massachusetts.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I appreciate the gentleman's courtesy in permitting me to speak on this, and for his leadership, along with the chairman, Mr. Oxley, and my friend, Mr. Baker. This is truly important bipartisan legislation to address the flood insurance program's challenges both in the short term and the long term.

I strongly support this legislation and appreciate the willingness of the committee staff to work with people outside the committee to be a part of the process. Those of us here on the floor have known for a long time that the flood insurance program, while an invaluable asset to communities in the floodplain, is not functioning as originally designed. Hurricane Katrina taught us we cannot just let the status quo continue, or the flood insurance program will cease to function. It will be in bankruptcy or people will lose their tolerance for Federal bailouts.

This bill is an excellent start, but you can be guaranteed that it is not the last time we will be talking about these changes on the floor. There are differing views about what needs to be done. Some have recommended making the program actuarially sound, and I agree with those measures. But one thing we have learned from Mr. Baker and from Mr. Taylor is that we have to be sensitive to the people who live in flood-prone areas. They are not just statistics of repetitive flooding, and they are rarely homeowners who are gaming the system. These are people caught up in the cycle of flooding and rebuilding who want to take steps to reduce their vulnerability.

In 2004, we did pass a bill to provide mitigation assistance to severe repetitive-loss property owners. We found that these repetitively flooded properties, which constitute just 1 percent of all the properties in the program, accounted for 25 percent of the flood loss dollars. Addressing these properties, we wanted to help move people out of harm's way, either literally, by buying them out, or helping them take mitigation actions, such as elevation.

Unfortunately, the repetitive-loss pilot project in the 2004 bill had not been fully implemented and we were not able to see the positive impacts before Hurricane Katrina. That is why I am glad the bill before us extends the pilot program so that it will have a chance to work. It also goes further to strengthen the flood insurance program and make it more fiscally sound over the next 50 years.

Some have argued that all properties owners who enjoy artificially low flood insurance rates should be required to pay actuarial rates. This would increase the premium enough to make the program more actuarially sound, saving $1.3 billion. But while I agree the program should move closer to risk-based rates, the response of policyholders to the loss of the subsidy is unclear.

The CBO estimates that some would reduce their amount of coverage or drop flood insurance all together. Many of these subsidized properties are second homes or vacation homes, and the legislation addresses these and I think is a good compromise. Phasing in risk-based rates for second homes will also ensure that families in New Orleans and Mississippi and other flood-prone areas that rely on flood insurance won't be forced to pay artificially high rates to subsidize somebody's second home or vacation home.

The bill also helps encourage participation in the program. Many people living in the floodplains do not have flood insurance now. Less than 40 percent of the property owners who are required to buy insurance actually do so.

In parts of Mississippi and Alabama, hit hardest by Katrina, the coverage rate was only 15 percent. That means that people did not have access to insurance payouts to make them whole, and they are relying on grants and loans from the disaster relief programs that are paid by the taxpayer.

The challenge is figuring out how to make sure that more people who are supposed to have flood insurance do so, and this bill helps the situation by increasing the penalties levied for nonenforcement of Federal mandatory purchase requirements.

It also includes an important study on how to better enforce mandatory flood insurance.

The bill also addresses the inaccuracy and inadequacy of flood insurance maps. We are going to talk a little about this later in the day.

Current flood insurance is required only where there is a 1 percent chance of a flood on an annual basis and not in other low-lying areas where surges are likely to follow major storms. Many of the people who flooded in Katrina did not technically live in the floodplain. They were out of this 100-year cycle, or they lived behind levees and did not realize they should have flood insurance.

These updated maps are important, because FEMA uses them to issue flood elevation requirements. Communities want to have the confidence that their residents are paying the right amount for flood insurance, and we should be loathe to tinker with that.

In addition to directing FEMA to develop more sophisticated maps, this legislation authorizes FEMA to study the implications of requiring flood insurance behind the levees. This is a very important part of the bill. I don't think it has been given the proper attention by more of us in Congress. I hope that we will move towards requiring flood insurance for those situations.

The saying goes, there are only two kinds of levees, those that fail and those that will fail. But this study moves us in the right direction.

While this bill, I think, sets the stage, for moving us in the right direction, simple, common-sense steps strengthen the program and bring together a vast, diverse range of people, from environmentalists to fiscal conservatives, people in real estate, and most important, most important, people whose lives we saw torn apart living in flood-prone areas.

I deeply appreciate the work of this committee and our colleagues in making important steps that are going to make a difference for people for generations to come.

Mr. Chairman, I seek time in opposition to the amendment.

Let me say, I appreciate the intent that is offered by the sponsors of this amendment. I was prepared, however, to argue rather strongly in opposition in terms of the reimbursement mechanism that was involved, but I understand that that has been stripped out and it is now just purely a notification. While I am hopeful that, as this works its way through the process, we can deal with making sure that the notification process doesn't get in the way of trying to move this in an orderly fashion, I am not prepared to demand a rollcall or be cranky about it, because I do think you have adjusted your amendment so that it loses its onerous nature in the way that it was originally filed.

I appreciate the direction you are going and would look forward to working with the gentlemen to make sure that this furthers the public notification but does not bog down the process unnecessarily. As I say, I appreciate the direction that you are going.

I yield to the gentleman from California.

I personally feel more comfortable about that. I didn't know it when I claimed time in opposition because I had some outdated information. I didn't realize how fast this legislative train was rolling, but I feel better now.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I would claim the time in opposition.

Mr. Chairman, I would yield myself 3 minutes.

Let me say, I appreciate the gentleman's deep interest in making sure that we are moving forward with reform in the flood insurance program and that we are dealing with some of the idiosyncratic ways that there are some folks that never get out of being an exception. With all due respect, that the approach that has been adopted by the committee is one that over the long run is going to be the most advantageous.

I share your concern, but as I have been working with the floodplain managers from the various States around the country, the people on the ground are concerned about the impact that the rapid movement towards dealing with these other subsidized residential properties would have. There is a very real problem because a lot of these properties do change hands frequently, in knowing what the impact is, and that many people would end up not seeking subsidized property, that communities may opt out, all this could end up being counterproductive. Particularly as it relates to the area, and again I referenced in my opening comments being sensitized by Mr. Taylor and by Mr. Baker, about some of the practical realities, particularly for low-income communities. While it seems that this would be a way to phase it in only when the property changes hands, this would have the practical effect of discounting the value overnight to the people who own these properties, many of whom may be low income. So it would depress the price of the homes that they own because the seller would be subjected to the higher premium.

You and I know that in the long run that is a more rational policy for the taxpayer and for the people who hold those policies, but there is a psychology that is at work with some communities and with some owners and it may well be counterproductive.

So, with all due respect, I would suggest that what we ought to be doing is looking for ways to phase it in over time with these communities, that we deal with emphasizing mitigation like we had in the 2004 legislation, because I fear there may be a double whammy, where communities are less interested in participating and that you may be penalizing some of the very low-income property owners in a way that I don't think any of us want.

So while I sympathize with the approach, while I applaud the committee for advancing the boundaries, this is one area where I would suggest that this, what looks like a simple phase-in, actually may not be a simple phase-in and may have unintended consequences.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 1 minute to the gentleman from Massachusetts (Mr. Frank).

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I appreciate what the gentleman is saying. I have spent the last 6 years trying to inject some fiscal responsibility into the program. I have supported the work that the committee has done. But along the way, I have been sensitized to some of the impacts that we don't want to have that are unintended in terms of discouraging participation.

So as you are working with the committee in terms of refining this, I would hope that there would be some sensitivity, if this amendment passes, to the impact on low income.

For instance, one of the unintended consequences may be driving people who are in this circumstance to be seeking financing from sub prime lenders there by avoiding flood insurance, by very expensive financing mechanisms. It ought to go hand in hand with what we do in terms of having more mandatory coverage so there aren't people that are sort of drifting along, and that it doesn't have unintended consequences for having people and communities opt out, or for low- income people, being unduly disadvantaged. I sympathize with what you are saying, and I would be happy to work with you as well.

Mr. Speaker, I thank the gentleman for yielding me time, and I appreciate him and the gentleman from Wisconsin working together on this package and bringing it to the floor. It is incredibly important to a lot of people that are suffering.

I have to begin my remarks by telling a little bit about myself and what I have been doing, to give you an idea that I know from what I speak. I was raised on the gulf coast. I have been through many hurricanes. I have watched responses to many hurricanes. I have watched the ability to respond to many hurricanes. I understand what the response is supposed to be.

I also in this particular case come from Houston, Texas, and I am incredibly proud of my fellow citizens in the Houston-Galveston region in opening their arms and their compassion and wallets and resources and homes to those that are in need, especially our brothers and sisters from Louisiana.

But we also consider that the third disaster. The first disaster was the hurricane, the second disaster was the floods in New Orleans, and the third disaster was what do you do with over 2 million people in a very short period of time? And in just days, Houston put together a virtual city for 60,000 people.

Then I went through the same frustrations that many of those on the ground in New Orleans and Mississippi and Louisiana and Alabama went through, because you are dealing with the same things; you are dealing with the same people, FEMA, the Federal Government, State government, city government, all governments, and you run into the same frustrations.

So, as is normal about me, I decided to do something about these frustrations, and I went to Baton Rouge where the control center was. I wanted to see the organization, the system, how was it working, what was going on on the ground.

I get into Baton Rouge, and I quickly realize that Baton Rouge was the biggest brunt of the third disaster because Baton Rouge, which I think is a city of about 500,000 people, all of a sudden saw within one day their population double. Double. And yet they were able to handle it. Sure, there were problems. Sure, there was suffering. But Baton Rouge citizens opened their arms and brought these people in. That was the first place that people could come, coming out of New Orleans.

Then from there they went to Lafayette, and they received another big brunt of the third disaster, and they handled it. Sure, there were frustrations all over the place and there was, frankly, a breakdown in the system.

The system is designed, if it works properly, from the bottom up. The system depends on the local government, whether it be mayor or county, dealing with whatever disaster problem they have; and when they find out they cannot deal with it, they go to the next level of government, to the Governor and to the State to help them out. And then when neither the State nor the locals can deal with it, they come to the Federal Government.

That is how the system is supposed to work. That is how it is set up. And when that breaks down, everything breaks down because we have to realize that every hour is absolutely precious after a disaster. I have seen this my entire life. Every hour certain things have to happen. But when we have a situation where people will not make a decision, we have lost that hour and we are into the next hour, and then we have to circle around and come back into the first hour to clean up the mess while we are trying to handle and catch up to the other hours. And then when it really starts breaking down, entire chaos happens. And in this case, it was not entire chaos. I would describe it as organized chaos. It was pretty messy.

Now, you can look at this disaster two different ways. You can offer nothing constructive except blaming when people need services at the moment and you spend your time and your caring time pointing fingers or making assumptions or calling for complete changes in government, and you spend all your time and energy focused on that.

Or you can understand that there are problems when we have 2 million people or we have three States in dire need as if they were at war and deal with the problems and the frustrations at that time that we find them and find answers immediately and move forward and find ways to fix them and find ways to take care of these people, find them the clothes, the shoes, the diapers, the food, the water, find them the cots that they need, find them the health care system that they need, find them a military officer or a wonderful soldier to go down and pull them out of a house, find them the Coast Guard helicopter to go and pull them off the top of the house, find the wherewithal in just a day or so to plug up the levees. I mean, you can either point your finger or you can see what happened.

The mirror of America that I saw was the most incredible outpouring of America that I have seen in my lifetime. All over this country, all over this country, people immediately got trucks and filled them up and drove 2,000 miles. One of our own Members did that from Nevada. Two thousand miles. This happened all over the country. Bringing supplies, bringing their hearts, bringing themselves and putting themselves in harm's way, especially in the case of New Orleans. I mean, it was unbelievable.

Our first responders from all over the Nation are down in Mississippi and Louisiana and Alabama. People are opening their doors to the people that need it. Can the Members imagine, and I do not know exactly what the total population of the disaster is, but I would imagine it is around 4 million people, 4 or 5 million people, but this country absorbed 4 to 5 million people overnight. That is an incredible accomplishment. And we ought to be proud of that. And what are we doing in Washington? We are pointing fingers. We are talking about process. We are doing the things that, frankly, disgust people when they see it on television.

Now, we have chosen to push that all aside because there is plenty of time for that later. What is important right now, I mean we are not even out of the save-the-life phase. We still have people in New Orleans that we are finding and pulling out of these houses.

The next phase is called the recovery phase, and we are sort of in that in certain parts of the country, especially in Mississippi and in Alabama. We ought to be focused on that. These people are out in these shelters. Can the Members imagine, in the Astrodome. Look at your television. There are 10,000 people or more on the floor of the Astrodome living next to each other. That is unsustainable. We have to do something with these people. We have to give them hope for the rest of their lives. They are asking the question, What do I do tomorrow? And we have to give them that answer. What do I do next week? What do I do a month from now? How do I get my kids in school? Where do I find my wife? In some cases, where do I find my pet, my dog? What do I do tomorrow? I have no money. My bank is closed. This hit me at the end of the month, and I am out of money. What do I do?

We have got the answer because we are focused on answering those questions. We are focused on giving them

the relief that they need. We have to give them the relief they need so that they can start planning their lives. One does not sit around after a disaster and not have some way of knowing how they are going to get back into a house, how they are going to be able to have a little privacy.

They are living on the floor of the Astrodome with 16,000 other people. There is no privacy on the floor of the Astrodome. They have got to have some way of knowing what is going to happen to them tomorrow. We have focused on that. And bringing this bill to the floor pays for a lot of it.

I know the American people, some of them, are worrying about all this money. Mr. Speaker, 5 million people, 5 million Americans, deserve our finding a way to make them whole. We are not even asking to make them whole. That was a misstatement. What we are asking is to give them a little hope over the next few weeks so that we can take care of their needs and get them back up and running again.

Now, some would say we need to take over their lives and dictate to them and tell them what to do and put them back. That is not what we are talking about here. We are talking about the very essentials that we need for the recovery process and the beginning of the rebuilding process. And it is expensive because there are a lot of people, and there was an incredible amount of damage.

We are not just writing a blank check. We have got some safeguards. We have got safeguards built into this bill, and we have got safeguards built into the law that already exists so that they can only spend money on things that should be spent on and not be frivolous about it and throw it away. Sure, there is going to be wasted money. We cannot deal with 5 million people and not waste some money. But the bulk of the money is going to go to the people and the process and the property that deserve it to get back on their feet.

This is incredibly important, and it is too important to play politics with. It is too important to point fingers at. It is too important to second-guess. It is easy to be a Monday morning quarterback, but you should have been in that control room where those people were making life and death decisions, people that stayed up and got no sleep and very little food for 5 to 6 days straight trying to make the right decisions to save people.

And what happens when we come up here? They point the finger. You did not make the right decision here. You did not take care of needs there. You did not do this; you did not do that. The point is if we look at the big picture, it is a phenomenal accomplishment by everybody involved. It is unbelievable. I am constantly struck by where we are today, just a little over a week from the worst catastrophe that this country has seen, I guess, certainly in recent history. We ought to be proud about that; and, most importantly, we should be proud of ourselves. We should be proud of our American brothers and sisters.