Insurance Remains Issue On Gulf Coast

JACKSON, MS - Republican Gov. Haley Barbour and President Bush are getting blasted by some heavy hitters in Congress over the delay in post-Katrina housing. Rep. Maxine Waters, D-Calif., is concerned about the lack of affordable housing for victims of the storm that hit Aug. 29, 2005, and that there still is no discernable housing strategy in case of a new storm. Mississippi's 2nd District Congressman Bennie Thompson, D-Bolton, said Wednesday the state has made "poor use" of federal emergency funds and Congress should have more control over how disaster aid is spent.

The representatives can cause grief because both chair powerful panels. Waters chairs the Financial Services Subcommittee on Housing and Community Opportunity, which oversees funding the state could critically need. Thompson chairs the powerful House Homeland Security Committee that oversees FEMA.

Thompson is blasting Barbour's plan to use $600 million in federal housing grants to rebuild the Port of Gulfport. "In the wake of a housing crisis, the state has decided to do things totally unrelated to housing," Thompson said at a joint hearing of House Homeland Security and Financial Services subcommittees. He said Congress should "put some constraints" on future disaster aid "because of the demonstrated poor use of the funds." While both Waters and Thompson have legitimate complaints about the delay in providing housing for hurricane victims, and the need for affordable housing on the Gulf Coast, their targets and suggested tactics are misplaced.

As former Mississippi Insurance Commissioner George Dale noted in The Clarion-Ledger's Sunday Perspective section, the lack of affordable insurance is the culprit for the lagging pace of Coast recovery. Reducing rates, Dale said, "can occur in two ways: federal or state taxpayer subsidy to reduce rates or let the free enterprise system work and hope enough time elapses since the last storm to bring back a competitive market."

Since the latter delay is the object of criticism, Dale suggests looking at what happened after 9-11: "The federal government quickly passed the Terrorism Risk Insurance Act or the government established a fund as a backdrop that would allow the insurance industry to begin offering coverage again. The same can be done for insurance companies which are willing to write coverage for those who live in coastal areas."

Barbour authorized funding improvements at the Port of Gulfport so that Coast residents could have jobs as part of the recovery, of which housing is an aspect. Rather than criticizing strategies to rebuild the Coast, federal lawmakers would do better to take action to spur more recovery in all areas, such as Dale suggests.