Candice Miller for Congress, Michigan

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We Need to Eliminate the National Flood Insurance Program

by Candice Miller on May 17, 2012

U.S. Rep. Candice Miller says Michigan citizens are “getting fleeced” by the National Flood Insurance Program. She is proposing the program not be reauthorized, but replaced and privatized.

The U.S. House of Representatives has delayed a vote on a bill that would extend the National Flood Insurance Program for another 30 days.

Some 20,000 communities across the U.S. participate in the NFIP by adopting floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes federally-backed flood insurance available to homeowners, renters, and business owners in these communities, according to the Federal Emergency Management Association.

The NFIP is scheduled to expire at the end of May unless both houses of Congress reauthorize it. U.S. Rep. Candice Miller (District 10) made the following remarks Wednesday on the floor of the House in opposition to continued reauthorization of NFIP:

What in the world is the federal government doing in the national flood insurance business? I give the sponsors of this legislation credit for the fact that they are trying to reform what I think is an unnecessary federal government boondoggle, but rather than reforming this I think we need to eliminate the National Flood Insurance Program. As an example, so many of us were very strongly opposed to, Obamacare, the government takeover of healthcare, because we didn’t believe the federal government should be running health care for our entire nation. But apparently we have no problem with the federal government running a national flood insurance program?

This program was created in 1968, and we started writing policies in 1972. Today, this program is almost $18 billion in debt. And FEMA says that this debt will never be paid off. Never. So not only is the federal government improperly running a flood insurance program; it is operating a very bad flood insurance program.

The National Flood Insurance Program is not actuarially sound; it charges some in the highest-risk areas subsidized rates and charges others in areas of no risk astronomical rates to pay for those subsidies. Take my home state of Michigan for example where our residents have been forced into this program, charged thousands of dollars each and every year even we have almost no risk of flooding. In Michigan, we actually look down at the water not up at the water. We pay multiple times more in premiums than we have ever received back in benefits. In short, the people of the great state of Michigan are getting fleeced by this program.

Obviously we are a compassionate nation and if we have a case of a national disaster then we need to make sure that we step-up and give relief to our fellow Americans. But what we are doing today is simply not fair. What we should have is a national catastrophic fund in which everyone pays into not just some who are being forced to subsidize others – that is not fair. I hope that my colleagues will join me in rejecting the reauthorization of the National Flood Insurance Program so that we can get to work on way to allow the private marketplace to move in and replace it.

In the last several years, Congress has extended NFIP more than a dozen times, but continues to debate the program’s growing debt.

The House has passed reform legislation, including a five-year re-authorization of the program, but the Senate has not taken action at this point in time.

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