Published: Friday, June 29, 2012, 2:59 PM Updated: Friday, June 29, 2012, 3:47 PM
WASHINGTON -- Shedding, at least for one day, its ultra-partisan and do-nothing, dead-locked image, Congress approved a far reaching bill Friday that funds transportation projects, distributes BP oil spill fines to the Gulf states, reauthorizes the federal flood insurance program and blocks a doubling of subsidized college loan interest rates.
It passed the House 373-52 and the Senate 74-19. All members of the Louisiana delegation voted for the measure, which now goes to the president, who is expected to sign it into law.
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For Louisiana, the biggest provision is the Restore Act, legislation worth potentially billions of dollars to the state. A top priority for Louisiana lawmakers and supported by the Obama administration, it allocates 80 percent of Clean Water Act fines from the 2010 BP spill to Louisiana and the four other Gulf states.
The fines are estimated to total between $5 billion and $20 billion, with the final amount dependent on how much negligence the responsible parties are willing to admit to, or, if negotiations fail, the degree of negligence determined by a federal judge.
The Restore Act directs that the fines returned to the Gulf Coast states be used for ecological and economic recovery efforts. It sets up a Gulf Coast Ecosystem Restoration Council to develop and finance a comprehensive plan for ecological recovery.
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That was the good news. The bad news was that the bill will dig a deep hole in Louisiana's budget.
At the insistence of House GOP leaders, the bill will reclaim $650 million in Medicaid funding for Louisiana. During negotiations, the GOP leaders said the money was part of a larger sum paid the state in error and should be recouped.
The decision creates a $1.1 billion shortfall in the state's fiscal 2013 Medicaid budget, forcing cuts in care for the poor and uninsured, according to the Jindal administration.
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The new flood insurance rules in the bill will force some homeowners and commercial property owners to pay higher premiums, up to 20 percent a year for the next five years. Rate increases currently are limited to 10 percent annually. The higher increases will be for second homes, vacation residences, properties with repetitive flood claims and commercial properties.
But it also will extend the program for five years, ending a process in which Congress regularly approved short term extensions. In four instances over recent years, the program briefly lapsed, forcing the postponement of house sale closings in communities where flood insurance is mandatory.
A provision that would have required homeowners living near federally financed levees to buy flood insurance was stripped from the bill in the final moments. Opponents said it's unfair to make people, who contributed to building the levees to pay for coverage are supposed to protect them. But others said Katrina proved, levees don't always work the way they are supposed to, especially with the design flaws discovered after the 2005 hurricane.
The flood insurance measure was added to the omnibus transportation bill because the changes in the flood program are expected to produce savings that lawmakers are using to offset some of the spending in the massive measure.
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