As the federal flood insurance program drowns in billions of dollars worth of debt, Congress‘ top watchdog is proposing a novel solution: Have the private property owners — not taxpayers — foot the insurance bill.Listen to the cute chick explain it.
The National Flood Insurance Program “has accrued $24 billion in debt, highlighting structural weaknesses in the program and increasing concerns about its burden on taxpayers,” the Government Accountability Office said in a report released this week.If the government weren't willing to insure flooding knowing it would be losing money, insurance companies would be willing to write policies that wouldn't. Yes, they'd be more expensive than current policies, but they would reflect the true costs of building in flood zones.
As a result, some analysts reached by the congressional watchdog agency called for greater involvement from the private sector and eliminating government subsidies “so individual property owners — not taxpayers — would pay for their risk of flood loss.”
But Congress has been unable to act, drafting legislation that would put reforms on hold but doing little to stop the growing debt, now saddling the flood insurance program with a $24 billion deficit. In the meantime, leading lawmakers blame the Federal Emergency Management Agency for not providing accurate information on the effects of the cost increases.
“What Congress is trying to do right now is to undo some of the reforms, to actually delay the reforms that were adopted in July of 2012, which will actually accelerate insolvency of the program,” said Steve Ellis, vice president of Taxpayers for Common Sense.