The Wall Street Journal-20080126-Catastrophic-Fund Plan Moves to Fore in Florida
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Catastrophic-Fund Plan Moves to Fore in Florida
As Florida's Republican primary nears, an issue of acute local interest -- whether the federal government should help insure homeowners on the hurricane-battered coast -- has taken center stage.
Former New York Mayor Rudy Giuliani, who has slipped in polls after betting his prospects on a strong showing in Florida, is bidding for votes by touting the idea in campaign appearances and in a new ad. At Thursday's GOP debate in Boca Raton, he pressed Arizona Sen. John McCain and former Massachusetts Gov. Mitt Romney to back such insurance.
"This is something that is important to the people of Florida," Mr. Giuliani said. "Do you have a position on the national catastrophic fund? Yes? No?"
Mr. Romney said he favors the creation of a disaster-insurance pool, but that it should be funded by states in regions most vulnerable to natural disasters. Mr. McCain disagreed, saying a federal insurance pool would create a duplicative bureaucracy. He argued that the Federal Emergency Management Agency should be able to handle disasters and their aftermath.
After taking huge hurricane-related losses, some major insurance companies scaled back in Florida and other Gulf Coast states. Individual states have their own property-insurance pools but another series of megadisasters could overwhelm those funds and rock a single state's budget. The national catastrophe fund backed by Mr. Giuliani would allow private insurers and state pools to buy protection from the federal government, reducing the danger for any one state and limiting insurance companies' exposure to big disasters.
Hurricane relief is the latest local issue that has, at least temporarily, gained prominence in the presidential competition. In Iowa, nearly all the candidates embraced ethanol programs and support for corn subsidies. In Michigan, Gov. Romney used Sen. McCain's support for higher fuel standards as a wedge with auto-industry executives and employees. Nevada successfully used its status as an early caucus state to pressure candidates to denounce a plan to dump nuclear waste at Yucca Mountain.
One reason Florida pushed to move up its vote was to draw support for a national catastrophe fund, an idea strongly backed by Republican Gov. Charlie Crist and members of the state's congressional delegation. Democrats Hillary Clinton and Barack Obama have both said they support a federal catastrophe-insurance program.
Many consumer groups balk, arguing it is wrong for taxpayers nationwide to subsidize beachfront homeowners. The Consumer Federation of America, which represents groups such as AARP, favors improving FEMA and the National Flood Insurance Program instead.
The Florida Democratic Party praised Mr. Giuliani for his support, while pillorying Mr. McCain's "inexplicable" opposition. "You wouldn't not support it," said Mark Bubriski, communications director of the Florida Democrats. "It's like saying you don't like oranges."
