Rep Cmte Financial Services
Biggert-Waters Flood Insurance Reform Reviewed at Subcommittee Hearing
Washington, Nov 19 -
The Financial Services Housing and Insurance Subcommittee held a hearing today on the importance of implementing the Biggert-Waters Flood Insurance Reform Act in order to protect taxpayers from having to continue bailing out the debt-ridden National Flood Insurance Program (NFIP).
With a $24 billion debt, the NFIP is facing serious challenges and cannot continue to operate on its current fiscal trajectory. Since 2006, the Government Accountability Office has labeled the NFIP a “high-risk” to taxpayers. Because the flood insurance program does not charge rates sufficient to cover its obligations and projected losses, it can operate only with significant taxpayer support and has potentially large future liabilities.
The Biggert-Waters Flood Insurance Reform Act of 2012 was an important first step towards reforming the NFIP. The law mandates a series of reforms that the Congressional Budget Office estimates would generate a $2.7 billion increase in net income to the program over the next 10 years. The Biggert-Waters Act also seeks to encourage a greater role for the private sector in providing flood insurance coverage.
“After more than a decade in Congress, if I have learned anything, it is that the federal government does a terrible job of underwriting and pricing risk, and that has very real consequences for taxpayers who end up footing the bill for the government’s failures,” said Subcommittee Chairman Randy Neugebauer (R-TX). “Whether it is Fannie Mae, Freddie Mac, the Federal Housing Administration, Medicare, or soon to be Obamacare, the failure of the federal government to adequately price risk has piled hundreds of billions of dollars onto our $17 trillion national debt.”