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Shelby opposed disaster relief because of the flood insurance bailout

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Tuesday, U.S. Sen. Richard Shelby, R-Ala., voted against ending debate on HR 2266, the “Additional Supplemental Appropriations for Disaster Relief Requirements Act of 2017.”

Sen. Shelby opposed the $36.5 billion disaster aid package because it includes $16 billion for National Flood Insurance Program debt forgiveness.

“While I support emergency relief funding, I have consistently opposed bailouts and have openly voiced my concerns with the state of the National Flood Insurance Program,” Shelby said in a statement.

“Congress needs to have a broader conversation about flood insurance reform,” Shelby said. “I could not support this bill in its current form. Emergency relief funding is critically important, but it should not include a bailout funded by the American taxpayer. I will continue to advocate and push for the reforms necessary to ensure that the National Flood Insurance Program becomes sustainable.”

Conservative Republicans attempted to filibuster the bill – which has already passed the House; but Senate Majority Leader Mitch McConnell, R-Ky., and most of the GOP Caucus voted with the Democrats, so the motion to cloture passed 79 to 16. Both Alabama Sens. Shelby and Luther Strange voted against ending debate. Texas Sens. John Cornyn and Ted Cruz joined Louisiana Sens. John N. Kennedy and Bill Cassidy and Florida Sens. Marco Rubio and Bill Nelson, whose states were hard hit by hurricanes, voted in favor of the disaster package.

H.R. 2266 passed the Senate by a vote of 82 to 17.

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Hurricanes hit Florida and Texas really hard, and fires have done tremendous damage in California and other western states. Puerto Rico was hit especially hard. A month after the hurricane, over 80 percent of the island still does not have power restored. Most of the residents have friends and family in the United States mainland, and some in Washington believe that if conditions don’t improve soon, that there could be a mass exodus from the island.

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“The truth is, Hurricane Maria was an extraordinary storm with extraordinary damage, and it will be a long way back, but I am here to report we are making progress,” Vice President Mike Pence said recently.

Both President Donald Trump and Pence have been to Puerto Rico to survey damage and talk with the teams that are providing disaster assistance.

The deal includes $18.7 billion for the Federal Emergency Management Agency to respond to the disasters and $1.2 billion in nutrition assistance for the people of Puerto Rico. The bill also includes almost $5 billion in a credit line to the territorial government for their operating expenses and payroll.

In private insurance, the company collects more in premiums than they pay out in claims based on the best estimates from their actuaries. The premiums are invested, reserves are maintained based on the likelihood that a catastrophic event occurs. The government does not run the National Flood Insurance Program like that. Premiums go to the government, and the government pays out claims with little regard for profit since the Treasury is treated like an unlimited reserve.

Shelby has been a longtime supporter of reforming the NFIP.

Shelby has served Alabama in the U.S. Senate since he was first elected in 1986. Prior to that, Shelby represented Tuscaloosa in the U.S. House of Representatives, and before that in the Alabama Senate.

The bill now goes to the president’s desk for his signature.

(Original reporting by the Washington Post contributed to this report.)

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