July 27, 2018
"to elevate the condition of men--to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life." --Abraham Lincoln
Chairman's Note: Make the Rich Insure Their Own Beach Homes
The National Flood Insurance Program is in desperate need of reform. It creates a government monopoly to insure some of the most expensive real estate in the world. These are homes and home-owners that the private sector should be falling all over itself to insure.
Yet somehow the federal government’s answer to private insurance is loses money. A lot of money. The NFIP is currently $20 billion in debt, even after receiving a $16 billion bailout just a few months ago.
How did this happen?
The answer is that like most inexplicably durable federal programs, NFIP quietly serves the interests of the well-to-do at the expense of working- and middle-class families.
Proponents of the program would have us believe that NFIP is essential to protecting innocent victims who just happen to live in low-lying communities and can’t afford flood insurance.
But this argument is absurd. First of all, if home-owners can’t afford to insure their homes, then in reality they can’t afford their homes.
Second, many of the areas Washington calls “flood plains” are really just “property near water.” Residences there are expensive for lots of reasons, but any realtor can tell you the biggest one is “location, location, location.”
These homes are expensive because lots of people want to live there, among them wealthy people who bid up the price.
There are, of course, worthy and sympathetic beneficiaries of NFIP, as there are for every government program. But in the aggregate, the NFIP simply redistributes money from non-wealthy people to wealthy people, and to believe otherwise is to indulge in what might be called actuarial science-denial.
Sens. Dean Heller (R-NV) and Jon Tester (D-MT) have a bill that would allow private insurers to compete with NFIP. I support their bill, and can cite Utah’s successful embrace of private flood insurance as strong evidence in its favor.
And Sens. Mike Crapo (R-ID) and Sherrod Brown (D-OH) have a bill that would improve flood mapping and insist on “community preparation” for flooding as a condition of eligibility for NFIP coverage.
This is not too much for the American people to ask – either of their affluent, flood-prone neighbors, or of their sworn representatives in Congress.
This week I offered an amendment that would cap eligibility for NFIP insurance at homes worth $2.5 million. Anything under that, home owners can still enjoy their cut-rate premiums. But taxpayers should not pay any amount of coverage for the top 1% that can afford a $2.5 million-dollar beach home.
With the stock market near all-time highs, with a corporate tax cut driving up profits, it’s an eminently reasonable time to ask multi-millionaires to insure their beach houses without the welfare assistance of hardworking taxpayers who make a fraction of their income.
Unfortunately this amendment did not get a vote and a straight four-month reauthorization of the program, without any reforms, is set to pass Monday.
But this is not a fight we can just give up. I will continue to fight to end taxpayer bailouts for millionaire beach homes this November. And I hope you and your representatives in Washington will join me.
Issue in Focus: The War on Almond Milk
A few years ago a small start-up company in California called JUST, Inc., formerly known as Hampton Creek, started selling a vegan brand of mayonnaise called “Just Mayo” in stores nationwide.
This start-up company was the picture of an American success story: a small business that developed a popular and innovative product, in this case an affordable eggless alternative to mayonnaise.
But “Just Mayo” was too successful for the likes of the egg industry. So much so that top executives from the industry conspired with a federal entity called the American Egg Board and USDA employees to coerce and threaten retailers into not carrying the “Just Mayo” brand.
And how did they do this? They accused JUST, Inc. of illegally using the term “mayonnaise” since their product did not contain any eggs.
What was their true crime? Their success. As the American Egg Board’s CEO had put it in an email to colleagues, Just Mayo posed a “crisis and major threat to the future of the egg product business.”
This is just one example of cronyist abuse of “standards of identity” established by the FDA.
The FDA established these labeling requirements to regulate what a food product must contain to be marketed under a certain name. While they were set in place with the intent of protecting consumer safety as part of the Federal Food, Drug, and Cosmetic Act of 1938, these antiquated rules have failed to keep pace with modern innovations.
Instead, they have been used as a tool by the well-established food industries to suppress competition and limit new players from entering the market.
And the market for meat, dairy, and egg alternatives – such as plant-based products – has only grown in recent years. In fact, between 2015 and 2016 the total profit for sales in plant-based foods rose by 8 percent. Consumers are clear that they want these options available to them.
But the current labeling requirements on the books are poised to restrict many of these innovative products.
For example, milk is defined by the FDA as “lacteal secretion… obtained by the complete milking of one or more healthy cows.” By this definition, almond milk, soy milk, and coconut milk – among others – technically violate the legal standard.
And the list goes on… “almond butter,” “goat cheese,” and “gluten-free bread,” for example, could also be accused of being illegally labeled.
Not only are these labeling requirements outdated, but they are also unnecessary. There are already separate requirements for manufacturers to list all of a product’s ingredients on the nutrition facts panel – confirming the fact that consumers are not “deceived” by these labels.
The truth is that these labeling requirements play right into the hands of the large, cronyist food industries that want to place new, innovative products at a disadvantage. Because after becoming established and reaching success themselves, they aim to pull up the ladder behind them – preventing any of the small competitors from having a chance in a level playing field. Rather than playing fair and square, they stifle competition and rig the rules of the game in their favor.
That’s why I have introduced legislation that would protect “standard of identity” requirements from this kind of abuse.
This bill would prohibit “standards of identity” from being enforced against products simply because of their use of a common compound name – specifically where a word or phrase identifies an alternative plant or animal source.
Because the cronies should not have a stranglehold on food terms, or a monopoly on the market. It is only right that we let companies like JUST, Inc. – and the other small start-ups and innovators across the country – have a fair shot at the competition.
