Letter To The Editor

It's not every day you get told off by an ex-FEMA director as well as a retired admiral and former deputy secretary of homeland security. But that's exactly what happened to me last week when I received a letter from James Lee Witt (pictured above) and James M. Loy, who now co-chair ProtectingAmerica.Org. The pair took issue with my recent recap of how well I had predicted the top stories of 2007, at least in terms of my take on the advance of their cause–to establish a national catastrophe fund. Read on for their critique and my response.

Dear Mr. Friedman:

You recently reviewed your predictions for 2007 [click here to read what I said] and declared that you were right in predicting that there would be lots of talk but little action in Congress on establishing a national catastrophe fund.

Its one thing to be wrong about a prediction; it happens every day. But you couldnt be more wrong about what did, in fact, happen in Congress on creating a national CAT fund.

The fact is, the House of Representatives, by a bipartisan vote and a more than 100-vote margin, passed HR 3355, the Homeowners Defense Act of 2007.

The Speaker of the House and the Chairman of the House Financial Services Committee declared the creation of a CAT fund, a national priority. The bill was introduced, hearings were held and passage was secured, all in a matter of a few months.

Thats more than talk. Thats definitive action and historic progress on a bill that will help better prepare and protect consumers and help rejuvenate the homeowners market for the 60 percent of America that is exposed to massive hurricanes and major earthquakes.

In addition to the recent definitive action in the House, the front-runners among the Democratic and Republican candidates for President have endorsed the concept and the bill itself.

They recognize that the status quo is unacceptable and that consumers deserve a better way.

The 2008 forecast: definitive action in the US Senate is inevitable.

Contrary to your 2007 prediction, progress was made in Congress and America is half-way to better protection from catastrophes. Action will certainly come in the U.S. Senate; we hope it comes before the next catastrophe strikes.

Sincerely,

James Lee Witt
Admiral James M. Loy (USCG Ret.)
Co-Chairs, ProtectingAmerica.Org

Sam Responds:

First of all, I obviously overstated my case by saying there was “little action” on this cause in Congress. There obviously was a lot of “activity.” Whether it will amount to anything in terms of definitive “action”–as in enacting the concept into law–is just as doubtful this year as it was last. Even if the Senate does get on board with the bill passed by the House–no sure thing–the veto pen of President George W. Bush will loom just as large.

I don't need a crystal ball to tell me that there is no way this bill will become law in this Congress, with this White House, this year.

That might very well change after Election Day, with a new President in power. If a Democrat is elected, the chances for passage at some point are much higher. Still, unless there is another major catastrophe (no big stretch to imagine), the new President will likely focus on Iraq, the economy, health care reform and other, more politically pressing issues first.

However, if a Republican is elected, the odds go way down. Your best bet would be if Rudy Giuliani is elected (that does seem a bit of stretch right now), but even he might not push the disaster fund concept wholeheartedly once in office, no matter how desperately he is pandering to Floridians today to get their primary vote.

In any case, thanks for the feedback, and good luck to both of you! Just because I didn't think the concept would go anywhere last year–or this year, for that matter–doesn't mean I don't think it might not be a good idea down the road. The way catastrophe-recovery is funded right now is an insane roller coaster ride that a national cat fund might stabilize.

What do you folks out there think?