Congress eyes $16 billion in debt relief for National Flood Insurance Program, without strings attached
The debt relief will free up money to pay an avalanche of claims from NFIP policyholders in the wake of Hurricanes Harvey, Irma, Maria and Nate without ballooning interest payments owed by the program. The federally run program has eaten through its cash reserves and nearly exhausted its current authority to borrow more from the
None were included in the bill, which leaders in the
House Majority
"If
"It's definitely a win for us," said
Berni had raised concerns that Mulvaney's suggested changes would effectively end construction in large swaths of flood-prone south
The fight over changes to the National Flood Insurance Program is far from over, however. Congressional authorization for the government-run program expires in early December, meaning lawmakers in
A number of hardline budget hawks -- led by
Those changes would likely lead to significantly higher costs for residents of flood-prone areas -- including
Excluding so-called "multiple-loss properties" from the program -- buildings that have flooded more than once -- could also hit areas of
Hensarling and his allies have argued the changes are needed to put the NFIP on sounder financial footing.
A number of environmentalists, meanwhile, have complained that the NFIP effectively subsidizes new development in flood plains that destroy wetlands and leave areas more vulnerable to natural disasters.
But significant jumps in the cost of flood-insurance premiums -- or loss of access to coverage -- would likely hit homeowners hard in the pocketbook by pushing down home values.
"We need more people buying flood insurance, but some of the proposed changes (from the
Berni said she'd like to see further debt relief for the program when lawmakers act on it in December. The NFIP had remained in the black until 2005, when the staggering losses from Hurricane Katrina overwhelmed the NFIP's cash and left it roughly
Subsequent costly disasters -- including Hurricane Sandy, which caused extensive flooding in
Interest payments on the debt now exceed
Berni also noted that much of Katrina's destruction came as the result of federal levee failures. She argued that saddling NFIP policyholders with the costs of an engineering disaster was unfair and bad policy.
Mulvaney, the
If those projections prove accurate, the NFIP would be left with the same debt load once claims are settled and paid.
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