A coalition of business and environmental groups is calling on President Obama to use his upcoming State of the Union address to urge Congress to reform the nation’s debt-ridden flood insurance program.
The U.S. House of Representatives has passed a bill that makes a number of reforms that promise to put the National Flood Insurance Program (NFIP) on better financial footing, and the U.S. Senate Banking Committee approved a similar bill in September.
“We believe the House and Senate bills can be easily reconciled, with a final bill sent to your desk for signature this year,” said SmarterSafer.org in a statement to President Obama. “To ensure this occurs, we request that you urge the Senate to quickly consider the Banking Committee bill and to come to quick agreement with the House on final reform legislation.”
The group said it believes a final bill would have strong bipartisan support.
The NFIP is $18 billion in debt to federal taxpayers and that amount is likely to increase as a result of flooding in 2011. The program covers 5.6 million households across the country and has $1.25 trillion in exposure.
SmarterSafer.org opposes subsidizing insurance premiums for properties in flood-prone areas for fiscal and environmental reasons. Its members include the National Association of Mutual Insurers, Liberty Mutual, Swiss Re, Chubb, Reinsurance Association of America, Americans for Tax Reform, Heartland Institute, the Environmental Defense Fund, Sierra Club, Republicans for Environmental Protection, American Rivers, Ceres and others.
SmarterSafer.org said it believes the NFIP needs to be reformed to ensure that it can continue to protect communities and the environment and prevent further taxpayer bailouts.
“Without significant reform, NFIP will not be sustainable; American taxpayers will continue to be asked to bail out the program time and time again; and the federal government will continue to subsidize development in hazardous and environmentally sensitive areas,” the group said in a statement.
The House and Senate NFIP reform bills would reauthorize NFIP for five years; phase out premium subsidies; allow NFIP to purchase reinsurance to help NFIP pay future claims; require that flood maps are updated and accurate; and strengthen mitigation programs to help decrease flood risks.
The NFIP was temporarily extended four times in 2011, with the latest extension set to expire on May 31, 2012.