The Additional Supplemental Appropriations for Disaster Relief Requirements Act that you will be voting on today has a provision that will cost taxpayers dearly.
Section 308 casually cancels $16 billion of the debt the National Flood Insurance Program (NFIP) owes the Treasury.
This provision should be removed and replaced with an increase in the program’s borrowing authority to pay claims resulting from recent flooding events. Absent this change, Taxpayers for Common Sense urges you to oppose the legislation.
We are not opposed to providing targeted and timely disaster relief to our fellow Americans. And we are encouraged that the bill includes provisions that will make it easier to track disaster relief spending. In addition, we support paying legitimate flood insurance claims — individuals who paid their policy premiums deserve payouts.
But instead of reforming this troubled program to put it on sounder footing, the legislation attempts to sweep the problems under the rug by simply allowing the debt to be ignored.
The NFIP authorization received a short-term extension until December 8, 2017. Erasing the estimated additional debt from Hurricanes Harvey, Irma, and Maria also eliminates much of the pressure to reform this program, which was already nearly $25 billion in debt to taxpayers before the storms hit.
Lawmakers should include the Flood Insurance Market Parity Act, which gives high-risk homeowners a choice between private and NFIP policies.
Similar legislation passed the House last Congress 419-0 and was unanimously adopted by the House Financial Services Committee earlier this year. In addition, FEMA should be required to map the floodplain in a more accurate and technologically advanced manner and bolster funding for mitigation.
Lawmakers should allow rates to gradually increase to reflect true risk and eliminate subsidies, providing means-tested premium assistance to those in need.
The Congressional Budget Office estimated the NFIP operates with an expected $1.4 billion annual shortfall. Much of this is due to 85 percent of the properties in high storm surge risk areas enjoying a subsidy of some sort. This is not sustainable and kicking the can down the road with debt elimination, and without reform, is not a solution.
Again, Taxpayers for Common Sense urges Congress to increase the NFIP’s borrowing authority rather than cancelling $16 billion of the program’s debt outright.
Absent this change, we urge you to oppose the Additional Supplemental Appropriations for Disaster Relief Requirements Act.
Vice President, Taxpayers for Common Sense