For years, NTU has actively worked to make the National Flood Insurance Program NFIP financially sound to ensure taxpayers aren’t on the hook to bailout the broken program, as some on the left have suggested. Unfortunately for taxpayers, the House voted yesterday and gave Democrats their biggest ask: a debt forgiveness of the National Flood Insurance Program (NFIP). Thats right, included in a $36.5 billion disaster relief package is essentially a $16 billion bailout of the programs $25 billion debt. By forgiving the programs debt, Congress is masking the true scale of the deep problems the program faces.
Of most concern to taxpayers is the lack of NFIP reforms that should have been included in this aid package. The deal includes no private flood insurance language (Ross-Castor), no new provisions on repetitive loss properties (Royce-Blumenauer), and will continue to allow new properties to purchase insurance through NFIP. With its artificially low rates, the NFIP will continue to discourage private companies from entering the market and allowing the government to control a monopoly in the flood insurance market. It is a costly mistake to bailout the program without these aforementioned bipartisan reforms that would have reduced the persistent deficits that plagues the program.
The status quo remains untenable for taxpayers as Congress’ action’s yesterday is the definition of fiscal irresponsibility. A bailout of a failed government program is something that should make all Conservatives cringe. NTU strongly urges the Senate to add substantial reforms to the proposed legislation or table it indefinitely.