Gene Taylor

Mr. TAYLOR

Mr. TAYLOR. I thank the gentleman. I rise in opposition to the rule. We have at the moment about 10 percent unemployment in the United States of America. Some of the oldest laws of our Republic are the cabotage laws, which reserve coastwide commerce for American-made, American-owned, American-crewed vessels. They also required that all repairs to those vessels take place in the United States of America, except for emergency repairs, and certainly prohibited the rebuilding of any vessel overseas. In recent years, I have supplied to the United States Coast Guard photographs of a ship that was clearly rebuilt in the People's Republic of China. Just yesterday, I supplied to the Rules Committee those same photographs, a vessel that any amateur could look at and clearly see this isn't an emergency repair. It is the rebuilding of an American- flagged Jones Act vessel in the People's Communist Republic of China. Having brought this to the attention of the Commandant, he said that the law reads, and I want people to hear this, A vessel is deemed to have been rebuilt in the United States only if the entire rebuilding, including the construction of any major component of the hull or superstructure, is done in the United States. That seems pretty clear to me. Apparently it was not clear to the Marine Inspection Office of the Coast Guard. So I asked the Commandant of the Coast Guard for a clarification. ``Why don't you come up with something, Mr. Commandant, that your folks will understand?'' He came up with a very simple amendment that said 10 percent of the weight of the vessel, if you are changing out 10 percent of the weight of the vessel, that is clearly a rebuild. It has to be done stateside. I regret that an amendment drafted by the United States Coast Guard was rejected by the Rules Committee. I am told it was a concern about some foreign treaties, and I would remind Members this is language that goes back to 1956, prior to GATT. So I am going to rise in opposition to this rule.

Mr. TAYLOR. I would have thought with a Democratic majority that we would have been about trying to repeal things like NAFTA, things like most-favored-nation status for China, and those things that limit American job opportunities here within our own country. I am deeply disappointed in the ruling of the Rules Committee. Obviously, we need to get this bill to the floor, but we ought to be taking steps every chance we get to bring jobs home to America. The Rules Committee decided otherwise in a vote last night. I thank the gentleman very much for the opportunity.

Mr. TAYLOR

Mr. TAYLOR. Let me begin by thanking our chairman and ranking member for the phenomenal job they've done. Let me begin by telling the gentleman from Virginia that I agree with much of what he said. I would also remind the gentleman from Virginia that, like him, I voted to send those young men and women to Iraq and Afghanistan. With that vote came my commitment to equip them, to pay them, to take care of their families should something bad happen to them, to provide them with the very best equipment. The one thing that every American can agree on is we have the world's best Army. We have the world's best Navy. We have the world's best Marine Corps. We have the world's best Air Force. This bill keeps it that way. I regret that the other body, by a vote of 87-7, put some language in there that should never be in this bill. But the bottom line is, come November, sometime between Thanksgiving and Christmas, I'm going to be visiting at least 7,000 Mississippians, to the best of my ability trying to see every one of them that I voted to send there. And when I look them in the eye, I want them to know that I voted in support of them over the reservations of one small part of this bill. The bill does a lot of good things for our Navy. It pays for seven new ships: a DDG-51 class destroyer, the best Destroyer in the world, one that we're going to build for at least another decade; two Littoral Combat Ships; two T-AKE dry cargo ships; a Joint High Speed Vessel; and a Virginia class submarine. It includes language to see to it that our next generation of carrier, with the all-important electromagnetic launch system, will have the proper oversight so that it is delivered on time and on budget. It includes language to see that the Littoral Combat system that, to date, has been poorly handled will be done better in the future with a 10-ship buy, followed by a 5-ship buy, at the best price for whoever is willing to make that ship. It funds the F-18E/F program, the world's best fighter, except for the F-22, and, quite frankly, a lot more affordable fighter than the F- 22. Lastly, it includes $6 billion for the most important weapon in our inventory at the moment, and that is the next generation of mine resistant vehicles. Look at the casualty list from Afghanistan. Almost every casualty is a result of an improvised explosive device on a vehicle that is not mine resistant. The magnificent vehicles that we have built that work so well in Iraq and have saved so many lives in Iraq were, unfortunately, too big and too bulky for the terrain in Afghanistan. That's why we have to come up with a second-generation vehicle. This bill funds 5,000 of those vehicles that when they are delivered, from day one, will start saving lives and bring our friends and our family members back home with their limbs. So, Mr. Speaker, again, like many of you, I have very, very, very deep concerns and, in fact, anger over some language that was included in this bill. But that is not enough to keep me from voting for funding the troops that serve our Nation so well, giving them the equipment they deserve.

Mr. TAYLOR

Mr. TAYLOR. Would the gentleman yield?

Mr. TAYLOR. I want to thank the gentleman. You ask a great question. The reason is, in the 6 years that he was Secretary of Defense, Don Rumsfeld decimated the defense acquisition community, fired tens of thousands of people who would have drawn those drafts and would have put it out for bid. We are trying to reconstitute that community right now.

Mr. TAYLOR. You are exactly right. Because of the lack of trained professionals, there really isn't anyone in the DOD anymore who can say what something should cost. You don't learn that overnight. Now, we are trying to restore that----

Mr. TAYLOR. And we are dealing with it. The other part is, on those major programs, starting with the big ones, whenever we buy something here going forward, we are demanding that when we buy something, we own the technical data package, that from now on we will own the specifications so that----

Mr. TAYLOR. If we think the contractor is not being fair with us, we can put it out for bid for someone else.

Mr. TAYLOR. Again, I would remind the gentleman; the gentleman makes the point that we have had a new administration for 6 months. Don Rumsfeld, the guy who said he knew the Iraqis had weapons of mass destruction and he knew they were going to use them, decimated the acquisition force. Unless you own the specs, you can't put it out for competition. We are in the process, in the Armed Services Committee, of getting the specifications of everything we buy from here on out--something Rumsfeld never did--so that we can have the kind of competition that the gentleman seeks. We are in the process of doing so, starting with the Littoral Combat Ship. If the gentleman has a question, I would be more than happy to answer it.

Mr. TAYLOR. Sure.

Mr. TAYLOR. Again, there will be times when someone who has invented something comes to Congress and says, I have something that is bigger, faster, smaller, faster--whatever the deal is. And if that person says, and by the way, I own the unique rights to this, do you want to buy it from me or not? That first time it makes sense for the Nation to buy it. It also makes sense for the Nation to say, from here on out, when we buy your product, we are buying the specifications with it so we can get it from somebody else in the future.

Mr. TAYLOR. Sure.

Mr. TAYLOR

Mr. TAYLOR. Mr. Chairman, last year you had extensive hearings on this subject. The bill that was proposed by the House increased the coverage amount since it was a shock to a lot of people who had to rebuild--$250,000 just doesn't buy the kind of house that it used to 10 years ago. We took the step to end the practice of concurrent causation, where if, according to testimony before the Mississippi Supreme Court, a house was 95 percent destroyed by the wind before the water got there, the insurance companies would bill the Federal Government for 100 percent of the cost of the damage, as testimony before the Mississippi Supreme Court. And then the other thing is the possibility of adding wind insurance to the National Flood Insurance Program so that there isn't any discrepancy. It doesn't matter if the wind destroyed your house or if the water destroyed your house, if you built it to code, if your community built to code and you paid your premiums, that you are going to get paid. I realize your committee has been very busy with the housing crisis. Everyone is aware of that. But the folks in the affected regions--which is now 52 percent of all Americans--are curious; at what point do you think there will be some talk of these changes to the flood insurance?

Mr. TAYLOR. Specifically, does the gentleman envision hearings this fall on the subject?

Mr. TAYLOR. I thank the gentleman. And to the previous speaker, as someone who lives in a house on stilts and represents a lot of people who live in houses on stilts, they're not all that bad. Thank you very much.

Mr. TAYLOR

Mr. TAYLOR. Madam Speaker, I ask unanimous consent to express my opposition to this bill and for permission to insert a statement in the Record.

Mr. TAYLOR. Madam Speaker, I rise in opposition to this bill. One of the provisions of this bill would create a cap and trade system throughout the United States in an effort to reduce the production of global warming gases. This system would limit the amount global warming gases emitted through regulation of ``allowances'' to each company. If a company released more gases than their ``allowances'' permitted the company would be taxed by the federal government. The system also would establish an ``allowance'' market that would permit companies to buy and sell ``allowances.'' The same speculators who manipulated oil futures last year, pushing gasoline prices over $4 per gallon will be trading in the cap and trade market, trying to figure out how to game the system at the expense of consumers and taxpayers. I do not believe a cap and trade system is the approach that is best to reduce global warming gases. As a matter of fact I think it is a simple ``Ponzi Scheme'' that will increase energy prices. According to the Congressional Budget Office it will create a complex financial system that allows risky investment in the energy market increasing the cost of living per household by $1600 per year. Additionally, I don't like the idea that a factory in one state is cleaner than it has to be so that another factory is dirtier than it should be. This could potentially leave Mississippi with the cancer causing agents and other states with the credit. Madam Speaker, I'll be brief. This is a bad deal for South Mississippi and my nation. I hope that we will defeat this bill.

Mr. TAYLOR

Mr. TAYLOR. I very much want to thank our outstanding chairman, Mr. Skelton for giving me this opportunity. I rise in support of H.R. 2647, the National Defense Authorization Act. As chairman of the Sea Power and Expeditionary Forces Subcommittee, I am pleased to report to the House that this bill strengthens our Navy and Marine Corps by providing the necessary equipment for the brave young sailors and marines to carry out the tasks that our Nation requests of them. In all, this bill authorizes $38 billion for Navy and Marine Corps procurement, $19.6 billion for Navy and Marine Corps research and development efforts, $3.2 billion for Navy and Marine Corps Overseas Contingency Operations, and $401.9 million for maintaining a robust United States merchant fleet. I believe that the balance between quality, capability, and affordability is met head on with the bill before the House tonight. The bill provides authorization for the correct number of ships, planes and ground vehicles with the right capability to meet the threat, but with the recognition that unless equipment can be procured affordably, we will never be able to build our fleet or our air wings. That's why, working in a bipartisan manner, the subcommittee recommended and the full committee adopted our recommendation to grant multiyear procurement authority for the construction of DDG 51 destroyer programs, the world's best destroyer, and multiyear procurement authority to realize significant cost savings in the procurement of F/A 18 Strike Fighters to repopulate our air wings on the decks of our carriers. In particular, the bill would authorize construction of eight new battle force vessels to include a Virginia Class submarine, three Littoral Combat Ships, one DDG 51 Burke Class Destroyer, two T-AKE Dry Cargo Ammunition Ships and one Joint High Speed Vessel. In addition to new construction, the bill would authorize procurement of long lead material construction for seven additional vessels in coming years, most importantly, two submarines per year starting next year. The bill would authorize the Secretary of the Navy to enter into multiyear contracts for the purchase of additional F/A 18 Superhornets and E/A 18 Growlers. The bill contains over $100 million in additional funding to buy long-lead equipment and materiel necessary to continue production of these aircraft. These are the finest aircraft in the world today, save our own Air Force F22 Raptor. Since it's unlikely that our Navy and Air Force will go to battle against themselves, that means the Superhornet is unmatched by any other strike fighter in the world. We must always remember that the Navy and the Marine Corps are our Nation's 9-1-1 force; they can arrive anywhere in the world quickly with full combat power. They do not need weeks or months to ship and stage equipment. This is why the expeditionary force desperately needs more of these strike fighters. The bill will provide that capability. This bill would also continue vital research and development efforts to ensure that our fleet maintains the technology and the superiority necessary to defeat all threats.

Mr. TAYLOR. Most notably, advanced missile and advanced submarine threats. The bill would fund the design and development of the next class of missile submarine, the next class of nuclear powered cruiser, and the next class of aircraft carriers. Finally, the bill authorizes the resources necessary to maintain a robust United States Merchant Marine and authorizes $60 billion for the Title XI program. Mr. Chairman, I would like to thank Captain Will Ebbs, Ms. Jeaness Simlar, Heath Pope, Doug Bush, and Jesse Tollson for their work in putting together this portion of the bill. I recommend it to the full House for its passage.

Mr. TAYLOR

Mr. TAYLOR. Mr. Chairman, I thank the gentleman. There is nothing I can say that can top the words of the gentleman from New Jersey, but I do want to use this opportunity to say what a magnificent job the AmeriCorps volunteers did down in southern Mississippi after Hurricane Katrina. They showed up almost as soon as the dust settled from the storm, and they are still there 3\1/2\ years later doing things for people who need some hope. I wanted to take this opportunity to heartily endorse this program.

Mr. TAYLOR

Mr. TAYLOR. I want to thank the gentlemen from Massachusetts and California for their very timely consideration of this. I want to thank all the members of the Mississippi House delegation for cosponsoring it. Gentlemen, there really isn't anything that remains to be said. I think you all did a phenomenal job of honoring Ed Freeman's life. The only thing I would ask is that his Medal of Honor citation be included in the Congressional Record. Thank you for the timely consideration. Medal of Honor Citation, Captain Ed W. Freeman, United States Army For conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty: Captain Ed W. Freeman, United States Army, distinguished himself by numerous acts of conspicuous gallantry and extraordinary intrepidity on 14 November 1965 while serving with Company A, 229th Assault Helicopter Battalion, 1st Cavalry Division (Airmobile). As a flight leader and second in command of a 16-helicopter lift unit, he supported a heavily engaged American infantry battalion at Landing Zone X-Ray in the Ia Drang Valley, Republic of Vietnam. The unit was almost out of ammunition after taking some of the heaviest casualties of the war, fighting off a relentless attack from a highly motivated, heavily armed enemy force. When the infantry commander closed the helicopter landing zone due to intense direct enemy fire, Captain Freeman risked his own life by flying his unarmed helicopter through a gauntlet of enemy fire time after time, delivering critically needed ammunition, water and medical supplies to the besieged battalion. His flights had a direct impact on the battle's outcome by providing the engaged units with timely supplies of ammunition critical to their survival, without which they would almost surely have gone down, with much greater loss of life. After medical evacuation helicopters refused to fly into the area due to intense enemy fire, Captain Freeman flew 14 separate rescue missions, providing life-saving evacuation of an estimated 30 seriously wounded soldiers--some of whom would not have survived had he not acted. All flights were made into a small emergency landing zone within 100 to 200 meters of the defensive perimeter where heavily committed units were perilously holding off the attacking elements. Captain Freeman's selfless acts of great valor, extraordinary perseverance and intrepidity were far above and beyond the call of duty or mission and set a superb example of leadership and courage for all of his peers. Captain Freeman's extraordinary heroism and devotion to duty are in keeping with the highest traditions of military service and reflect great credit upon himself, his unit and the United States Army.

Mr. TAYLOR

Mr. TAYLOR. I want to thank the chairman of our committee and our ranking member for working together to help Mr. Bartlett and I put together what we think is an excellent package on the Navy and Marine Corps programs. Mr. Speaker, we took the $14 billion that the President of the United States had asked for in shipbuilding to build seven ships, and because of the good work of Captain Ebbs on our subcommittee and Ms. Simler, we were able to stretch that out to 10 ships by setting other priorities. We didn't quite get the package that originally passed the House due to some concessions to the Senate, but we did give the Secretary of the Navy the leeway to return to building the DD-51 program, rather than the DD-1000, should he deem that be in the best interest of our Nation. I think it is. Additionally, we have $1.6 billion in funding for the National Sealift Fund. For the Maritime Administration we have about $878 million, which includes money for the Merchant Marine Academy, Military Sealift program, Assistance to Small Shipyards, and $30 million for the vital title XI program. We've also given the Maritime Administration, working with the Senate, the language to make adjustments at the Merchant Marine Academy, so that their very generous alumni can continue to contribute to that institution, and those funds help subsidize the cost of it. I want to point out that with the great help of my ranking member, Mr. Bartlett, we have taken a second huge step as a Nation to lessen our Nation's military vulnerabilities to having our fuel cut off. Last year, with his help, we determined that the next generation of cruisers would be nuclear-powered. This year, again with his assistance, we're going to see to it that the next generation of marine amphibious assault ships will have nuclear propulsion, which means that we don't have to call on Hugo Chavez or the Iranians to get our vessels from one place to another, and that is a huge step on the part of this Nation towards energy independence. Again, I want to thank the chairman and our ranking member. We have about $14 billion in for shipbuilding. We have another $14 billion in for planes and helicopters for the Navy and Marine Corps, $10 billion for weapons, ammunition, vehicles and equipment upgrades for the Navy and Marine Corps. Again, none of this could have been done without the tremendous assistance of my ranking member from Maryland (Mr. Bartlett).

Mr. TAYLOR

Mr. TAYLOR. I have an amendment at the desk.

Mr. TAYLOR. Mr. Chairman, in the immediate aftermath of Hurricane Katrina, the Congress of the United States showed incredible generosity to the people of south Mississippi. One of those acts of generosity was the transfer of approximately 100 acres of very valuable waterfront property along Highway 90 in Gulfport, Mississippi, that had, and is still owned by the Veterans Administration to the City of Gulfport. We are very grateful for that. It had been my desire that that remain a veterans hospital, but because of the decision by the CARES Commission, the initial plan was for the Nation to sell that property and plow the proceeds of that sale into other Veterans Administration facilities in south Mississippi for upgrades. In the aftermath of the storm, our very capable Senators drafted some legislation that allowed the city of Gulfport to receive this property free from our Nation. And again we are grateful for that. What I regret is that there were no safeguards to ensure that this transfer, that this property continues to serve a public purpose. And this piece of property has been a public asset for over 80 years. For 80 years veterans with psychological, traumatic mental illnesses have been treated there. And I think it would serve our Nation well to delay this process, go to conference and make sure that there are adequate safeguards so that the funds received from the lease of this property, any future use of this property, serves a public purpose. And so I have brought this to the attention of Mr. Filner. I brought this to the attention of Mr. Edwards. I would hope that, given, again, we respect the fact that Congress acted very quickly in the aftermath of Katrina to do something to help the people of south Mississippi in their efforts to act quickly. I regret that I don't think there were adequate safeguards to protect the public. This is an effort to slow this down just long enough to put those safeguards in there. I believe I have the support of Chairman Filner. I would hope I have the support of Chairman Edwards. I would hope Ranking Member Wamp would agree to this. I yield back the remainder of my time.

Mr. TAYLOR

Mr. TAYLOR. Madam Speaker, let me begin by thanking all the men and women who work for the House of Representatives. I know that they are anxious to get out of town and begin their 4th of July holiday. But when we come back in July, it will be what I have considered over the course of my life the beginning of hurricane season, and we still have some unfinished business from Hurricane Katrina that affected my district and could potentially affect over half of all Americans, and that is the reauthorization of the National Flood Insurance Program. If Congress does not act by September, this program that is of vital importance to people in the Midwest from flooding, the people on the Gulf Coast because of hurricanes, the people in New England because of storms, this program is important to everyone, it may not get reauthorized, and I think it would put a lot of Americans in jeopardy. Therefore, I think it is important that we not only reauthorize it, but fix some of the problems that we have discovered in the wake of Hurricane Katrina. I want to begin with some homes from my hometown. This is one that belonged to Mr. and Mrs. John Hadden in Bay Saint Louis, Mississippi. If you take a look at it, it started about 10 feet off the ground. It had hurricane shutters. It had a low profile roof. It was built to be a hurricane-proof house. It was insured for about $650,000. This is what it looked like the day before Hurricane Katrina. This is what the family came home to when they could get back to Bay Saint Louis. I mentioned that they had $650,000 worth of insurance with their insurance company, State Farm. Almost 2 years to the day of that, they still had not been paid by State Farm Insurance Company. Corky is a financial planner. He thought he had done everything he should do. What he didn't realize is that he was dealing with a company that instead of saying ``we are your good neighbor,'' went out of its way not to pay him. This is another home, a much more traditional, older home. In fact, it was one of the oldest homes in my hometown of Bay Saint Louis. It belonged to Jody and Betty Benvenuti. They had it insured for $586,000. Jody is in the insurance business. He understood the importance of it. He paid his premiums on time. He insured his home for what he thought it would cost to rebuild it. This is what it looked like when he evacuated, as he was ordered to by his Nation, the day before the storm. This is what he came home to. Within a couple of weeks, his good neighbor, the State Farm agent, informed him that he saw no evidence of wind damage, and therefore, he was going to get paid nothing on his homeowner's policy. Another home in South Mississippi, more of a typical South Mississippi home, belonged to Mr. and Mrs. Pat Street. $250,000 worth of insurance. Prior to the storm, prior to all of the inflation that has taken place since then, that probably would have been a very good amount to be insured for. It certainly should have covered the cost of replacing it should something bad have happened. Again, they were ordered to evacuate. So this is what their home looked like as they were leaving before the storm. That's what they came home to. Again, they were told by the insurance company we see no evidence of wind damage. Notice the tree is knocked over to different angles. So, therefore, we're not going to pay you the $250,000. We're going to pay you $9,000 on this policy. Madam Speaker, in South Mississippi, we asked the United States Navy to model what happened that day on August the 29th of 2005. What the Navy told us, I found, as a life-long resident of the gulf coast, to be pretty interesting. It's that we've always thought of maximum wind and maximum water occurring at the same time, but in the case of Hurricane Katrina, as you can see, category 2 and 3 force winds, which is up to 140 miles an hour, actually occurred several hours before the water showed up. When I asked the Navy to explain that to me, they said it's pretty simple. You can push air a lot faster than you can push water. The storm was moving ahead of the water. So, basically, what it translates to is that homes like I just showed you were subjected to anywhere from 2-to-4-hours' worth of hurricane- force winds before the water ever showed up. As a matter of fact, it's not just that area that we're talking about, but as to the entire State of Mississippi, the insurance companies actually paid claims on wind damage all the way from down here on the Mississippi gulf coast all the way up to Memphis, Tennessee. They paid claims in every county in the State of Mississippi. What was particularly interesting and what should be particularly interesting to the 53 percent of all Americans who live in coastal America is that the claims they chose not to pay were right down here where the winds were the strongest. They somehow would tell people that no, no, no. Your damage was not the result of wind. It was the result of water. This is in fairness to them. These are the areas in South Mississippi that were affected by both wind and water. This is where the flood went. For those of you familiar with that area, this is I-1 to I-10. It was designed to be a hurricane-proof road, and by and large, the designers did a very good job. They came close to doing that, but there were some areas north of I-10 that flooded. Our Nation has a plan to help people protect themselves in the event of a hurricane. Most prudent people whom I know, based on the fact that we have had other hurricanes in my lifetime--Hurricane Betsy and Hurricane Camille--don't know whether it's going to be the wind. They don't know whether it's going to be the water. So a prudent homeowner buys a homeowner's policy. It's supposed to protect you in case of wind damage. If you buy a flood policy, it's supposed to protect you in case of flood. So the way the claims process should have worked is our Nation should have hired the insurance industry to go out and adjust a claim. If the wind did it, it should have, therefore, been covered under the homeowner's policy. The company would then pay out of its pocket those people who suffered wind damage. If the water did it, then folks who would be covered by the National Flood Insurance Program would have the Nation that would back that program. The Nation would pay the insurance industry to sell the policy. The Nation would pay the insurance industry to go out and adjust the claim. That way, we wouldn't have to have a lot of Federal employees who would be doing all of these things. Up until Hurricane Katrina, the program worked pretty well. With Hurricane Katrina, though, we saw a very different set of circumstances because what should have happened didn't happen. That insurance company that we were counting on to go out and adjust the claim and to make a fair, proper adjustment of the claim, in many instances, looked after its own best interest against the interest of the homeowner and, by the way, against the interest of the American taxpayer. Now, why is that? The law calls on the insurance companies to do a proper adjustment of the claim, and we give them total discretion as to who is going to adjust that claim. Think about it. I can't think of anyone else in America who can send a bill to the United States of America for $250,000 for the cost of that claim, another $100,000 for the cost of the contents, and no one second-guesses it, and no one looks over his shoulder and sees if it's a proper claim. In this instance, it was the case. So some insurers interpreted the law to allow them to blame everything on the water. What does that mean? It means that, for starters, a typical homeowner's policy says that, if your--the homeowner's--house gets hit by a meteor tonight or if your house catches on fire tonight or if a trucker loses control of his vehicle and, unfortunately, plows into your living room and your house is uninhabitable, a typical homeowner's policy will not only pay to get your house fixed; it will pay to put you up for up to 24 months until your house can be repaired. But when the insurance company walks onto your property and says, ``We see no evidence of wind damage. We're not going to pay your homeowner's policy,'' then they escape those things. They don't fix your house, and they don't pay the cost of putting you up. Again, the law calls on them to call for the proper adjustment of a claim, but what had happened in the case of Katrina and what I fear could happen to you if you live in coastal America is that the policy is that the companies do what they did in South Mississippi, which is, within days of the storm, they send their adjusters notices that say, when you see wind and water both occur, blame it all on the water. What that means is, as I've told you, that there were 4 hours of hurricane-force winds at homes like the Benvenutis' and the Haddens' and at others. They had substantial damage because of the wind, but the insurance company took the policy that if there was one 2-by-4 left standing after 4 hours of hurricane-force winds and then a wave came along and knocked down that last 2-by-4 that they had escaped all liability for what the wind did and that the taxpayer would pay all of the cost of getting this fixed, that they would escape all liability of rebuilding that home, all liability of putting that family up until their house could be repaired. The taxpayer was going to foot the bill. Well, flood insurance doesn't cover cost of living expenses. So, right off the bat, that cost was borne by the taxpayer. How do they get away with this? Well, buried in a typical 25-page contract, that was the norm for State Farm Insurance Company. On Page 10 of a 25-page contract, buried in there despite a contract with America that calls for a fair adjustment of the claim, they told folks we do not insure any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events: We do not insure for such loss regardless of: A, cause of excluded event, B, other causes of the law, C, whether other causes acted concurrently or in any sequence with the excluded event to produce the loss or, D, whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces or occurs as a result of any combination of these. If you are confused, don't feel alone. A Federal judge, Judge Lou Guirola in South Mississippi, ended up suing his insurance company because they told him he couldn't read his policy. The former president of the United States Senate, Trent Lott, also an attorney, was told ``We're sorry, Senator. You can't read your policy,'' which leads to the question: If a U.S. Senator and a Federal judge can't read their policies, what chance do you have? What chance does a high school football coach, a corrugated box salesman or a housewife have if those guys are told ``you can't read your policy''? That goes back to the conflict between the law that says you can do a fair adjustment of the claim and a company that says, if both things happen, we're not going to pay. I'm quoting from the National Flood Insurance Program regulations, section 44 CFR. ``The primary relationship between the `write your own company'' that's your insurer--``and the Federal Government will be of a fiduciary nature; i.e., to ensure that any taxpayer funds are accounted for and are appropriately expended. ``The entire responsibility for providing a proper adjustment for both combined wind and water claims and flood-alone claims is the responsibility of the `write your own.' '' In effect, our Nation said we're trusting you, State Farm. We're trusting you, Nationwide. We're trusting you, Allstate, to do a fair adjustment. If the water did it, Nation pays. If the wind did it, you pay. So how did the insurance industry respond to being given this huge leeway? Within days of the storm, within about 13 days to be exact, State Farm was writing their adjusters and was saying, where wind acts concurrently with flooding to cause damage to insured property, coverage for the loss exists only under flood coverage. What does that translate to? The homeowner gets screwed out of his policy, and you, the taxpayers, get stuck with the bill. This is an internal e-mail from an engineering firm, one of the ones that was hired by State Farm to go out and adjust these claims. It had been fired by State Farm for actually doing what the law said to do, which was to say this much wind damage, this much water damage, but now they have reached an agreement with State Farm, saying, ``Okay. We'll go back and revise those things.'' Meaning, we'll scratch out all efforts to say that the wind did it, because we're going to now say the water did it, and the taxpayer pays. So this is from Randy Down to Bob Kochan. This is an internal memo that we've been given access to: ``I have serious concerns about the ethics of this whole matter. I really question the ethics of someone who wants to fire us simply because our conclusions don't match his or hers. In my opinion, we need to find a more rational and ethical client other than State Farm to be dealing with. They have already contradicted themselves regarding the reports, wanting percentages stated, and his counterpart calling a few days later and telling us to resubmit two reports that had shown percentages and saying that SF,'' State Farm, ``absolutely does not want them shown because they would then have to settle for the portion that was reportedly caused by wind.'' In the House of Representatives, we have passed language to try to correct this. The people who have objected to this have been, by and large, from the insurance industry. The insurance industry, in their claims, will tell you that they had settled 95 percent of the Katrina claims within the first year. What they will not tell you is that there were hundreds of thousands of wind-only claims in Louisiana, Mississippi, Alabama, Florida, Tennessee, and Georgia where there was no flooding. So in any place they couldn't blame flooding, in any place they could not put the bill on the government, they had no choice but to pay. So, yes, they did pay thousands of claims. Disputes over wind and flood damage were confirmed to the portions of the coastal counties and parishes that experienced both flooding and the most severe wind damage. Bob Hardwick of the Insurance Information Institute testified in Congress: ``A claim was completely excluded, for example, because it was not covered under the policy to begin with, which wouldn't be in these statistics to begin with. We consider a claim when there is some damage that is compensable under the insurance policy. In other words, these statistics don't consider all of the claims filed, only those that the insurer decided to pay.'' To put it simply, the claims of the three folks that I showed you when I first walked in would have been considered by the insurance company to have been settled because they were told ``no.'' Maybe in State Farm's mind that case was closed. It certainly was not in the case of those three families, and it was not just three families. I could bring thousands of similar photos before you with thousands of similar sad stories. So those families were screwed out of their policies, but the point I want to make to you, to the taxpayers of America, is that you got stuck with bills. The Nation got stuck with bills that the insurance companies should have paid. I think there was fraud. The insurance companies tell you there was no fraud, but the Government Accountability Office, the GAO, finds ``an inherent conflict of interest exists when the same insurance company is responsible for determining the extent of the flood damage that the National Flood Insurance must pay and the extent of the wind damage that is the responsibility of the company, itself. FEMA, a parent organization of National Flood Insurance, cannot determine the accuracy of flood insurance payments because it does not require companies to explain how they divided wind and flood. ``Property owners with separate wind and flood policies cannot buy insurance and know in advance what hurricane damage will have been covered.'' The Inspector General of the Department of Homeland Security went on to say because FEMA oversight on wind-water claims is minimal, the inspector general subpoenaed records from 15 insurance companies to investigate their proceedings. Adjusters working for the insurance companies, or for the companies, have a conflict of interest when handling flood claims. Concurrent causation. Remember, that's what we talk about, page 10 of a 25-page document. Language in the insurance policies creates the potential to bill flood insurance for damage that is caused by both wind and flooding. Let me make it perfectly simple. You are a claims adjuster, you're 25 years old, you have a mortgage. You have kids in school, Christmas is coming up, and you have the opportunity to walk on that property and do a fair adjustment which says my company has to pay some, the Nation has to pay some, or you have the opportunity, in fact you have been instructed by your boss to say when there is wind and water, stick it to the government. What do you think they did? And as we saw from that internal company memo, the ones who did it right were threatened with being fired. Not only does the insurer not pay for the house to be rebuilt, they don't pay the living expenses for the property owner who would be entitled to them if the claim was approved. So who pays? You pay. In the case of south Mississippi, let me start by saying we are eternally grateful to the American people for the kindness and generosity that they have shown us because at one point there were 42,000 families just in south Mississippi living off the generosity of the people of America. They were living in what has now been called a FEMA trailer, a 28-foot travel trailer that our Nation was generous enough to buy and put on their property, hook up to water and sewer, but not without a cost. In fact, the cost of those 42,000 trailers turns out to be, that we paid on the average $15,000 per trailer to buy them, and $16,000, which I know is an outrageous cost, to put them on that property. That was a no-bid deal to one of the President's buddy's, Bechtel, Incorporated. But the fact of the matter is it did happen and it will happen again next time. And the combined cost of this for those 42,000 families, our Nation, you and I, pitched in $31,000. The cost of that just in Mississippi alone was $1.3 billion that the Nation paid that in most instances an insurance company should have paid. But because they said there was no wind damage, we are not paying on your homeowner's policy, so somebody got stuck with the bill. Our Nation did. You would like to think that maybe they did that because funds were tight or maybe it threatened the survivability of those companies. That certainly wasn't the case. In 2005, even after paying the Hurricane Katrina claims that they did, the insurance industry made $48.8 billion in profits. In 2006, we were fortunate to have fewer hurricanes, they made $67 billion in profits. Last year, $65 billion in profit. We have before us a situation where it is the perfect storm of everything that can go wrong for the consumer. Number one, you would think why isn't Congress doing something about this. For starters, you can open the Federal Code from the first page to the last code and you won't find one word of regulation of the insurance industry. It gets worse. The insurance industry, the same folks that are supposed to be our good neighbor, we're supposed to be in their good hands, they're supposed to be on our side, it turns out that they are exempt from the antitrust laws that regulate every other business in America. It is perfectly legal for State Farm to call Allstate to call Nationwide and say, You know what, let's raise everybody's rates. So be it your health insurance, your automobile insurance, or your homeowner's insurance. It is also legal for them, as I am pretty well convinced they did after the storm, to call each other up and say: You know what, if you don't pay claims, State Farm, and I don't pay claims, Allstate, and Nationwide doesn't pay claims, there won't be anybody saying they are getting screwed, because they're all getting screwed; but it's just the way it is. If any other business in America did that, they would go to jail. But the insurance industry is exempt from the antitrust laws. Congress has not addressed that, but I want you to be aware of it. They were given this exemption based on a Supreme Court ruling in 1944 that says, wait a second, you're doing interstate commerce, you have to be regulated by interstate commerce. Instead, Congress came back in 1945 and passed something called the McCarran-Ferguson Act which in effect is granting an immunity from the antitrust laws to the insurance industry. I had hoped we would address that. We didn't. But Congress did do something. First, I would like to tell you I'm sure some of you are thinking, that is just a Mississippi problem. Why are you boring us? I will tell you it is definitely a Mississippi problem. State Farm won't sell property insurance policies in Mississippi. Farm Bureau will not renew wind coverage. Allstate, no new wind coverage sold in south Mississippi. Nationwide, no wind coverage sold in south Mississippi. But it is not just our problem, it is America's problem. Massachusetts is a long way from south Mississippi. Since 2003, ten insurance companies have dropped homeowner coverage in Cape Cod, affecting 44,000 homeowners. In New York, Allstate stopped writing new homeowners' policies for single-family homes in New York City, Long Island, and Winchester County. Allstate held 26 percent of the market share for homeowners in these counties in 2006. In Maryland, the second largest homeowner insurance in the State, Allstate, Allstate will stop writing new policies in many coastal areas. North Carolina, the North Carolina State Insurance Plan, the beach plan, saw liability increase by over 260 percent, so that is a State- run system picking up for the fact that the private sector has pulled out. In Virginia in 2006, State Farm stopped writing insurance business. Travelers Insurance stopped selling and renewing residential insurance in Virginia Beach. South Carolina insurance companies have dropped the last 16,000 homeowners' policies since 2006. In Florida, State Farm has announced it will stop writing residential renters and commercial properties on March 1, 2008. Texas, Allstate won't write new homeowners' policies in 14 coastal counties. Louisiana, the State insurance plan that jumped in to take the place of the private sector is now the third largest homeowner's insurance. In Alabama, State Farm won't write policies to cover the beach towns. The point is that although the coastal counties of America constitute only 17 percent of the total land mass, it represents 53 percent of all Americans. That is why this is a problem that affects every one of us, at least half of us. Every one of us who lives in a coastal State, half of all Americans. Unless we change the law, Congress will allow this system to continue and taxpayers to continue to foot the bill when the next hurricane strikes. So what's the solution? The solution is what the House of Representatives has already passed that the Senate has not passed that we will go to conference in the next month on, and that I would hope as a result of this that the American people would encourage their Senators to help us find a risk-based, actuarially sound national pool to allow property owners to purchase coverage for both wind and water, a revocation of the insurance industry's antitrust exemption that allows them to fix prices. The multi-peril bill that passed this House with the help of Speaker Pelosi and Chairman Frank, Chairwoman Waters, and a lot of other folks, including a number of my Republican colleagues, would allow property owners to buy both wind and flood coverage through the National Flood Insurance Program. It would increase the coverage, and I am one of the many people who lost my home that night, and I for one was shocked at the incredible cost of replacing my house. And, quite frankly, the $250,000 that the National Flood Insurance covers, I would have told you 5 years ago was a lot of money. Based on my experience of building a 1,400 square foot house, I realize now it really doesn't cover enough. So we have increased the coverage up to $500,000 per structure, $150,000 for contents. For non-residential, it's a million for the structure and $750,000 for contents. Property owners would be able to buy insurance and know in advance that hurricane damage will be covered without disputes. That you don't have to hire an engineer to say whether the wind did it or the water did it, you don't have to hire a lawyer, and you don't have to wait 2 years to get justice. If you leave your home, if you evacuate the way your Nation told you to get out of there, and you come home to a substantially damaged home, or if you come home to nothing, which is what thousands of my friends and neighbors did, you know that if you paid your policy, if you built your house the way you should have, that you are going to get paid. The premiums for this new coverage would be risk-based and actuarially sound. Under the new rules of the House, under the Democratic majority, we can't start any new program that doesn't pay for itself. That's the way it should be. So the premiums would be more than enough to cover the liabilities and so there would be, unlike the present situation where $1.3 billion went to pay for FEMA trailers by folks who got screwed by the insurance companies, where billions of dollars went for homeowners' grants in Louisiana and Mississippi to pay people who didn't get paid by the insurance companies, in these instances those people who had the policy who paid the premiums who built the houses the way they should, they're going to be covered and you, the taxpayer, will not have to subsidize this by one dime. Wind storm insurance would be available where the local governments adopt and enforce the international building code or equivalent. The Federal multi-peril program will spread the risk geographically. If you think about it, Mississippi has a fairly small coastline so it is fairly safe to say that if a storm hits, the entire coastline is going to get hit. That is not spreading the risk. On the other hand, if 53 percent of all Americans live on the coast, the chance that every coastal community is going to get hit by a storm that year is minuscule. In fact, it would probably be called Armageddon, and we hope that doesn't happen. Taxpayers would benefit where more damages are covered by the insurance industry instead of the inefficient governmental disaster assistance programs. Insurance companies could return to coastal communities to sell fire, theft, and liability coverage and excess coverage above the $500,000 that this policy would cover. A multi-peril bill was introduced in the House in February. It had 33 cosponsors, 27 Democrats, 6 Republicans. Ms. Waters, the chairman of the subcommittee, included the text in the National Flood Insurance Program. It passed this House by a vote of 263-146. It did not get a lot of help in the United States Senate. It will go to conference this summer. If you live in coastal America, I would give you a couple of words of advice. Number one, if you have a homeowner's policy, break it out. See if it has the words ``concurrent causation'' in that policy because if it does, that becomes the same excuse that the insurance companies used to screw thousands of south Mississippians out of their money. Demand a clarification from your insurance agent as to what that means for you. Does that mean you are going to find an excuse not to pay me? Or does that mean that you're going to come through like a good neighbor, like I'm going to be in your good hands, like you're supposed to be on my side. The second thing I would ask you to do, if you belong to the home builders or the realtors or the bankers, encourage those organizations to back this program because, again, for 53 percent of all Americans, they are in peril at the thought of not being able to cover their home for wind damage. But I will take this a step further. It has come to my attention recently that there has been as much tornado damage around the country for the past 20 years as hurricane damage. Tornadoes happen to be very fierce in a smaller area, but the cumulative effect of all those tornadoes has caused as much damage dollar-wise as the hurricanes have. In fairness, we ought to cover that, too. In fairness, those people who are waking up in Indiana and Ohio and Iowa from the devastation of those floods and from the devastation of those tornadoes, they need to know that they are protected, too. I would hope that as this bill goes to conference that our Nation would step forward and assume the responsibility and provide every American the opportunity to purchase multi-peril insurance. Hopefully we can start out with hurricanes because we know the present system isn't working there. But I think every American ought to know that if they build their house right and pay their premiums and something terrible happens to them, that their Nation is going to be there for them. And yes, they have paid into a fund that will help cover that cost when it happens. We will have that opportunity next month, and I would hope that every American, no matter where you live in America, would see the value of this and would ask their Senators to agree to this, and that we can do something that's good, not just good for my State, not just good for Alabama and Louisiana, not just good for Maine and Massachusetts and North Carolina, but good for every American. The insurance industry let us down. The insurance industry makes huge money. The insurance industry is exempt from the antitrust laws. The insurance industry has the most favorable tax treatment of any industry in America; and the truth of the matter is, instead of having all of those benefits and turning around when the people were down and saying yes, we are going to help you, they screwed the people of south Mississippi. What I don't want is them to do that to you. This is not going to be an easy fight. This is truly a case of the citizens against the lobbyists. In 2004, the insurance industry donated $36 million in political contributions. In 2006, $31 million. Most of that money went to Republicans, but in fairness, now that the Democrats are in the majority, they're probably writing checks to Democrats, too. They're doing this because they want to hang on to their greedy practices. They want to hang on to their anti-trust exemption. They want to hang on to the fact that they can collude. They want to hang on to the fact that they can turn around and have the lowest taxes in America and that they have zero Federal regulation, that there is nothing that the Federal law can do to stop them from these practices. But you know what? We have right on our side. We have the best interest of the homeowner, whether he's in Kansas, Massachusetts, Mississippi, California, when we think that there's better ways to offer an all-fairness insurance, backed by our Nation, that's going to be there when we need it. So Madam Speaker, with that in mind, I'm going to yield back the remainder of my time. And for the very, very patient staff of the House of Representatives, I kept you here as late as I did, but I appreciate this opportunity to speak to the people.