Flood Insurance – A Gutless Solution

Apparently, a compromise has been struck amongst Congressional members facing reelection this year.  There appears to be agreement on a method to roll back flood insurance premium increases previously ordered by Congress.  The National Flood Insurance Program now can get back in line with Medicare and Medicaid as officially sanctioned deficit building laws.

The NFIP is an important program which provides affordable insurance to those living in flood zones.  Currently the fund is almost $50 billion underfunded.  Prospects for the future do not look any more promising so experts expect the NFIP to remain under funded and the deficit to continue to grow.

In 2012, a law known as Biggert-Waters was passed stipulating increased premiums and that home owners would need to pay rates consistent with the risk.  Biggert-Waters projected very large increases to many homeowners.

As only Congress can do, especially in an election year, it is ready to pass a relief bill, which again only as Congress can do, is unfunded.

It is arguable whether Americans should be allowed to build in known flood areas.  This is not my point, however.  It is certainly commendable that Congress has found the concern to avoid forcing many people out of their homes and suffering large financial losses.  But this is not my point either.

My point is clear.  Why try again to sell Americans on a “free lunch”.  There are none.

If Congress wishes to repeal Biggert-Waters (and maybe it should), then it should simultaneously raise offsetting revenue.  That should be why Congress members get their large salaries (not to mention the other perks).

Hmmm.

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