U.S. Sen. Pat Toomey (R-PA) is urging Congress to seek long-term reauthorization of the National Flood Insurance Program (NFIP) to benefit taxpayers and homeowners.
Officials said Toomey encouraged the action during a recent Senate Banking Committee hearing and commended the Federal Emergency Management Agency (FEMA) for recognizing the NFIP must be financially stable to be a sustainable program.
“Congress has repeatedly reauthorized the program on a short-term basis—21 times to be exact—that’s no way to run a railroad,” said Toomey, Senate Banking Committee ranking member. “So, I’m ready to work with my colleagues on a long-term NFIP reauthorization that reforms this program.”
Since 2000, NFIP has borrowed from the Treasury for 11 out of 22 years, maintaining half the time the program requires additional federal taxpayer funds to subsidize policyholders.
“Today, NFIP’s current debt to the Treasury stands at $20.5 billion,” he said. “The interest payments alone are between $300 and $400 million a year. And the $20.5 billion in debt excludes the $16 billion that was arbitrarily forgiven in 2017. This broken subsidization program systemically under prices flood insurance. And it is the policies of Congress—not FEMA—that are the root causes of NFIP challenges. FEMA has worked to improve NFIP by implementing a new price rating for flood insurance premiums—known as Risk Rating 2.0—that better aligns policyholders’ premiums with their actual flood risk.”
According to Toomey, a long-term reauthorization must continue to move NFIP in a positive direction to protect taxpayers. While NFIP cannot be repaired instantly, Congress should use reauthorization as an opportunity to move it in the right direction.