WASHINGTON – U.S. Congresswoman Candice Miller (MI-10) today called for swift action on the legislation (H.R.435) she introduced to eliminate the National Flood Insurance Program (NFIP), which currently has a deficit of over $19 billion and puts all taxpayers at great risk for future billions of dollars of debt.
“The National Flood Insurance Program is a typical Washington boondoggle with an endless bureaucracy overseeing out-of-control spending,” Miller said. “The federal government is a bad insurance company, and the example of the flood insurance program proves that fact. Michigan has been turned into an ATM machine – forced to pay for the flood risks that our state does not actually face. The NFIP has a current deficit of over $19 billion and very soon Congress will be asked to raise the debt limit imposed on this program because it continues to hemorrhage taxpayer money. The only real solution to this problem is to eliminate this program altogether.
“This program is so actuarially unsound that if it were to be presented to any state insurance commissioner it would be put out of business,” Miller said. “For far too long, rates in this program have been set due to political considerations and not actual risk. Some who live in high flood propensity areas have their rates subsidized by others who live in low risk areas, like Michigan, who are forced to pay higher rates that do not accurately reflect risk.
“The American people spoke in November, and their message was that this is not only the time to cut spending, but to eliminate programs that have no place in the federal government. It is far better to leave this job to the states and the private sector, and I urge swift action in both the House and Senate to end this failed program. I would support ending this program and then allow states to form compacts to help spread risk equitably and away from federal interference. The only way to reduce the massive federal budget deficit is to end programs that don’t work and waste taxpayer money. The NFIP would be an ideal place to start,” Miller concluded.
Miller’s bill (H.R.435) seeks to dismantle the NFIP by December 31, 2013, allowing states enough time to form regional insurance compacts to spread risk, and continue to allow the Federal Emergency Management Agency to assist their efforts by producing high quality flood maps to assist states and the private sector to insure against flood loss.
Started in 1968, the NFIP has been consistently in debt, currently topping at $19 billion, and Congress has had to continually raise its purchasing debt limit. In addition, one out of every four property owners in the program receives subsidized rates and others in less flood prone area are forced to pay significantly higher rates than they should based upon risk
Note:
From January through November 2010, Michigan residents paid over $20 million into the NFIP. Compare that to the $45 million total Michigan residents have received back from the NFIP since 1978. In less than one year, Michigan residents paid back almost half of the entire sum they have received from the past 33 years. (Source: Congressional Research Service)
To see more information regarding a state-by-state comparison: http://www.fema.gov/business/nfip/statistics/pcstat.shtm
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