R.J. Lehmann on the National Flood Insurance Program
Reason – ICLE Editor-in-Chief R.J. Lehmann was quoted by Reason magazine about a congressional proposal to forgive the National Flood Insurance Program’s more than $20 billion in debt to the U.S. Treasury. The full story is available here.
Typically bailouts of the NFIP have come when the program was about to hit the limits of its borrowing authority, says Ray Lehmann, a senior fellow at the International Center for Law and Economics. That’s not the case today, given that the NFIP still has about $10 billion in borrowing authority.
“This is just straight out deciding bygones will be bygones. We’re going to pretend there was never any debt to begin with,” Lehmann tells Reason. “It’s a shame that this is happening because there remain enormous structural problems with the program.”
…Come October, FEMA is supposed to roll out its Risk Rating 2.0 plan, which would raise premiums on some properties where the risk of flooding has increased. The rate at which these premiums can increase is nevertheless capped at 18 percent per year for most properties. Lehmann says this would mean it could take years until some properties are charged actuarially fair rates.
“The Democratic leadership is not shy about discussing the impacts of climate change and the things we need to do to adapt to climate change,” says Lehmann. “If you can’t even get [flood insurance reform] done, it’s hard to imagine how you’re going to get the Green New Deal done.”