This week, FEMA announced that it sustained a $4 billion loss last year—making 2016 one of the most expensive years in the program’s history.
In order to help make up for NFIP losses last year, FEMA has borrowed $1.6 billion from the Treasury Department. According to FEMA, the additional funds from Treasury will help “cover payments to insureds and payments due on the program’s debt in spring 2017. The debt now totals $24.6 billion.”
Jeb Hensarling (R-Texas), House Financial Services Chairman, was quick to respond to FEMA’s announcement, calling for “fundamental reform” of the NFIP. “The NFIP is poorly designed, costly and in desperate need of fundamental reform,” he said. “A market monopoly and an annual deficit from more than four decades of liberal subsidies have resulted in $23 billion in debt to taxpayers before today’s new borrowing—debt the flood insurance program openly admits its current structure can never afford to repay.”
As Chairman Hensarling’s comments make clear, we expect the U.S. House of Representatives to push for a major overhaul of the NFIP. With the program set to expire in September of this year, NFIP reauthorization will be a top priority at the annual Big “I” Legislative Conference, May 3-5.
Jen McPhillips is Big “I” vice president of federal government affairs.