Senate moves to fix insurance

The late William F. Buckley Jr. once noted that it's more fun to criticize than praise. That's probably why readers see so many editorials and pundits criticizing politicians and very few taking note when our representatives do something noteworthy in a good way.

But it's important to recognize that what comes out of Washington is not always a new attempt to get into our wallets or restrict our freedom. It was encouraging to see that played out last week in the Senate as that body was debating changes to the National Flood Insurance Program.

In a 73-19 vote, senators headed off a move by Louisiana and Mississippi lawmakers to add wind insurance to the federally backed insurance program. The Gulf state senators pushed the change because many private insurance companies denied wind damage claims after the series of hurricanes that pummeled the region in 2005. Insurance companies argued homes and businesses were damaged by floodwaters rather than wind, thus pushing the claims off onto taxpayers. As if taxpayers in non-coastal states aren't paying enough for flooding in areas thousands of miles away.

Wednesday's vote came as the Senate considers changes to the insurance program that expires in September. Lawmakers are trying to get the cash-strapped program back on its feet financially, but, like so many government programs, that's not likely to happen. One look at the wind-damage proposal from Sen. Roger Wicker shows why.

Wicker's idea was to add optional multi-peril insurance to the flood insurance program. See how that works? It's a flood insurance program, but lawmakers are trying to expand its scope to cover other risks. Voilá!

A government program grows beyond its original scope. And though it might be tempting to blame this expansion of government on Democrats, both parties do it; Wicker is a Republican.

Although the Senate took a step forward toward restricting government growth in shooting down Wicker's amendment, it's taking two backward with other provisions in the bill.

Insurance premiums are supposed to generate enough revenue to cover claims, but the National Flood Insurance Program has had to pay out many large claims in recent years, forcing the program to borrow from the federal Treasury to the tune of about $17 billion. The Senate bill would forgive that debt.

According to an Associated Press report, another part of the proposal would force a larger number of at-risk homeowners to buy into the program. Although that would increase premium revenue, because the new additions are in the high-risk category, the program likely will have to pay out more than it takes in from those new policy holders. Insurance works by spreading the risk, not attracting policyholders likely to make claims.

However, lawmakers are trying to restore some measure of fiscal responsibility to the program by boosting deductibles and allowing higher annual rate increases. In addition, the bill would drop subsidies to some vacation homeowners. Still, the program is basically broken and tinkering at the edges won't do much to solve its problems.

What progress the Senate could make might well be in vain, however. The House passed its version of the bill in September, and it included the wind damage provision. After the Senate approves its bill the two chambers will have to get together in conference committee to hammer out differences. Because government's tendency is to increase its reach, the wind damage addition will likely be part of the bill that lands on the president's desk. Bob Dylan was right; the answer really is blowing in the wind.