Rebuild, Rehire and Reinvest
Before adjourning for the Thanksgiving holiday, the Senate passed two more bills that are very important to homeowners and businesses trying to rebuild, rehire and reinvest in the aftermath of Hurricane Katrina. One measure funds the federal flood insurance program. The other is a tax incentive bill designed specifically to help Katrina’s victims get back to work.
Tax Incentives for Jobs: Since Katrina, Congress has passed two major tax incentive measures. One is aimed at getting cash into the pockets of individual Katrina victims. The other – passed just last week – is aimed at businesses and getting Katrina victims back on a steady pay check.
The bill we passed contains more than a dozen Katrina-related tax incentives impacting Mississippi’s disaster counties. These incentives include new deductions for businesses to invest in equipment, facilities and employees. The bill also includes provisions providing so-called “New Markets” tax credits which encourage companies to invest in our state and create jobs. The measure also provides motivations to ensure a more robust housing supply throughout the stricken area.
Federal Flood Insurance Security: The federal flood insurance program is administered by the insurance industry, but it is backed by the federal government in much the same way the Federal Deposit Insurance Corporation (FDIC) backs your bank. Federally-recognized flood plains denote whose homes face the potential for flooding and to what degree. Depending on risk, homeowners are either required to have flood insurance, or it’s optional.
Well, as with so many things, Hurricane Katrina strained the national flood insurance program like never before, to the extent that the program was about to run out of money. In my view it would be unacceptable for the federal government to fail to pay the insurance companies, which in turn must pay the claims owed people in South Mississippi.
To that end we passed legislation providing the federal flood insurance program $18 billion in new borrowing authority. This gives insurers administering the program enough funds to pay claims stemming from both hurricanes Katrina and Rita through early 2006.
We were able to act quickly because I insisted we pass a clean bill – unhampered by the always-controversial provisions to expand flood plains. That’s another issue for separate legislation on another day. Right now, it is more important to get the hurricane claims paid.
Private Insurance Issue Pending: I must note that this is a separate issue from that of flood insurance, affecting people outside federally-recognized flood plains.
As we know, thousands of home owners who were told by insurance professionals that they were outside a flood plain and in no danger of seeing flood waters, saw their homes saturated by Katrina’s unprecedented tidal surge.
The Mississippi Congressional delegation is working on several plans that could help pay this type of claims. These claims blur the line between wind damage which private insurers cover, and water damage which private insurers do not cover, but instead defer to the federal flood insurance program.
My view is that insurers should recognize more claims as wind damage, and pay them. I’m not at all satisfied nor comfortable with what the insurance industry is doing or, in this case, is not doing to address the claims of those stuck with a mortgage and a slab. Whether by Congressional action, through the insurance industry’s own volition, or through the courts, these homeowners will be brought relief. I’ll keep you posted.
Helping individuals and businesses rebuild, rehire and reinvest must remain a priority of the Administration and the Congress. We have taken some great strides forward, but there’s still a long way to go. One thing is for sure: Mississippians will get the help they need and deserve. (11/22/05)
Senator Lott welcomes any questions or comments about this column.
Write to: U.S. Senator Trent Lott, 487 Russell Senate Office Building, Washington, D.C. 20510 (Attn: Press Office) or Email: email@example.com