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Gulf Coast Senators Could Block Flood Legislation

As the Senate continues debate on the dimming Federal Aviation Administration reauthorization bill, four Gulf Coast Senators are getting ready for the next battle on flood insurance, which is set to come to the floor sometime this week.

Louisiana Sens. Mary Landrieu (D) and David Vitter (R), as well as Mississippi Republicans Thad Cochran and Roger Wicker are gearing up for a fight to revamp the National Flood Insurance Program.

They are fighting for several changes in the program in the wake of the devastation caused in their states by Hurricane Katrina in 2005.

The key change they are seeking is inclusion of optional coverage for wind damage in the federal flood program. Tens of thousands of homeowners were out of luck after Katrina because their private insurance policies said damage was from water, not wind, meaning they were not reimbursed for a majority of the damage to their homes, sparking a veritable flood of lawsuits.

In the wake of the storm, Gulf Coast lawmakers want homeowners to be able to purchase a single policy that covers both water and wind damage.

Vitter has gone so far as to place a hold on the legislation, meaning that Senate Majority Leader Harry Reid (D-Nev.) would have to garner 60 votes in order to circumvent a filibuster. Vitter would like to see some other changes in the bill as well, including raising coverage limits and slowing the period over which premiums increase.

The proposals supported by the four Senators, particularly adding wind coverage, have not only met with fierce resistance from the insurance industry, but also sidestep a compromise sought by Sens. Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.), chairman and ranking member of the Banking, Housing and Urban Affairs Committee, which crafted the bill.

The four Senators sent an April 16 letter to Dodd and Shelby suggesting that they would withhold their support for the insurance bill unless some of their concerns were addressed, but stopped short of stepping on toes.

The Mississippi and Louisianan Senators requested that the committee leaders take a look at their various proposals, including adding wind coverage, rate adjustments and mandatory coverage areas.

An insurance lobbyist said the wind coverage plan is increasingly likely to be offered as an amendment to the bill and might even pass.

Insurance companies oppose adding wind coverage, arguing that it would put insurance companies at a disadvantage in having to compete with the federal government, which usually offers coverage below competitive prices.

“We are vehemently opposed to wind coverage,” said the insurance lobbyist. “There has been intense lobbying against that.”

As for whether the bill would pass with wind coverage in it, the expert speculated: “A few weeks ago, I would said ‘no.’ Now I’m not so sure.”

Wind coverage language made it into the House flood insurance bill sponsored by Rep. Gene Taylor (D-Miss.), who lost his house in Katrina. Taylor has been lobbying his Senate counterparts to include wind coverage in the Senate version.

A Republican aide said that no formal amendments have been drafted, but Dodd has been supportive in addressing some of the concerns that the Gulf Coast Senators have raised.

The aide added that Wicker plans to offer an amendment that would seek wind coverage in the federal program.

Another senior Republican aide acknowledged the dim prospect that a Wicker amendment on wind coverage would succeed. If wind coverage fails in the Senate, the aide left out hope that it would be considered in conference with the House.

“It’s not going to pass, but it’s huge for the state of Mississippi as a Gulf Coast issue. It’s something that we need to do; it’s something that we have to do,” said the aide.

The Republican aide noted that Reid could bring the bill to the floor and totally bypass the concerns raised by the Senators, but forecasted that that move as unlikely.

In reality, Reid is walking a fine line on this issue as he looks to the fall elections. Landrieu is the most vulnerable Senate Democrat this cycle, and Reid may be inclined to help her in any way he can.

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