R Street responds to bill forgiving flood program’s debt
It long has been obvious to anyone paying attention that the NFIP’s so-called ‘debt’ to the federal Treasury amounts to an accounting fiction. The money has all already been spent, the bulk of it more than a decade ago. The program doesn’t generate sufficient revenues even to pay ongoing claims, much less to repay a debt that is several orders of magnitude larger than its annual premiums.
While it is inevitable that the program’s debt eventually must be forgiven, Congress should not act to do so until it has taken further steps to right the NFIP’s financial ship. The House already has moved in the right direction by passing legislation from Reps. Dennis Ross, R-Fla., and Patrick Murphy, D-Fla., clarifying how private insurance companies can participate in the market for flood coverage. We urge the U.S. Senate to move quickly to take up the companion legislation introduced in that chamber by Sens. Jon Tester, D-Mont., and Dean Heller, R-Nev. We also ask that the Federal Emergency Management Agency begin sharing its underwriting data with the private sector in anticipation of a growing private role in managing flood risk.
Moreover, as Congress looks forward to reauthorization of the National Flood Insurance Program in 2017, we recommend reinstating provisions included in the last authorization bill – co-authored by Rep. Waters – that would trigger rate increases when updated Flood Insurance Rate Maps show a property lies in a zone of elevated risk. Recent floods in South Carolina, Louisiana, Florida and elsewhere have hit many property owners who were unprepared for the flood risks they actually face, underscoring the need for updated, state-of-the-art mapping tools to reflect risks that a growing number of property owners continue to face.