The libertarian, pro-business people at the Competitive Enterprise Institute rarely see eye-to-eye with the environmentalists at the Sierra Club. At its annual dinner two years ago, for instance, the CEI marked the centennial of the birth of Rachel Carson — whose book “Silent Spring” indicted the pesticide industry and helped create the modern environmental movement — by handing out T-shirts declaring, “Rachel was wrong.”
Despite their different worldviews, though, the two groups are united in opposing legislation that would create a national fund, paid for by participating states and backed by federal loans, to help cover losses from hurricanes and other natural catastrophes.
The groups are leading a coalition called SmarterSafer.org. It’s focused on defeating legislation by two Florida Democrats, Bill Nelson of Orlando in the Senate and Ron Klein of Boca Raton in the House that would establish the national fund to backstop states that subsidize insurance losses of homeowners in high-risk areas. A similar measure passed the House in 2007 but stalled due to opposition from President George W. Bush. Klein and Nelson are more hopeful now because President Obama cosponsored the Senate version of the bill in 2007.
The issue is of obvious interest in Florida and the rest of the Southeast, which was abandoned by some private insurers after Hurricane Katrina in 2005. But Eli Lehrer, a senior fellow at the CEI, says the bill is an “attack on the free market” and amounts to a government subsidy for homeowners, often wealthy, who chose to live in high-risk areas. “If someone who’s rich and stupid wants to build a mansion on a sand dune,” Lehrer says, “I’m in favor of letting them do that, so long as the only thing they are entitled to is a rescue boat and a bill for that rescue boat.”
The Sierra Club’s rationale for opposition is totally different: It says the fund would promote unwise policy. Ed Hopkins, director of the club’s environmental quality program, says the bills would “provide a perverse incentive for coastal development that could put people in harm’s way.”
For his part, Klein says critics of a national fund are missing the realities in some areas where private insurance is nearly impossible to secure and taxpayers are already regularly stuck with paying for disaster relief funds. “This is a better way to do it,” Klein says.