The Federal National Flood Insurance Program Has Grown to Epic Proportions – Unworkable

The Federal Flood Insurance Program, referred to as the National Flood Insurance Program (NFIP) is a total disaster, pun intended of course, you know me. How bad has it gotten? Well, they are redrawing flood maps to help get more premiums to pay for their costs, costs which are out of line simply because FEMA is so wasteful, politically correct, and inefficient, even if it is one of the more efficient agencies of our Federal Government. Yes, let’s talk about all this shall we?

The GAO (Government Accounting Office) put out an interesting report on September 18, 2013 titled; “National Flood Insurance Program: Continued Attention Needed to Address Challenges,” GAO-13-858T, which was quite telling, it stated in the introduction amongst other things that the National Flood Insurance Program (NFIP) has been on the “high risk list” since 2006, and it owes well over $24 Billion to the US Treasury, not including the devastating Boulder Colorado flood in the Summer of 2013. The report then stated;

“NFIP’s financial condition highlights structural weaknesses in how the program has been funded–primarily its rate structure. The annual amount that NFIP collects in both full-risk and subsidized premiums is generally not enough to cover its operating costs, claim payments, and principal and interest payments for the debt owed to Treasury, especially in years of catastrophic flooding, such as 2005.”

In 2005 they are speaking of Katrina, Rita and several Hurricane storm surge hits and the flooding from the Lake Ponchartrain levee breaches. Also included in the current deficit and bankrupt fund is money allotted for political reasons during the Obama re-election campaign in October/November of 2012, Super Storm Sally, I mean Sandy-Pants, where the US taxpayer took it in the shorts and big government paid out anyone with a sniffle or wet shoes.

Another interesting testimony was given by FEMA Director to the US Senate sub-committee, you can also read about this statement; “Written testimony of FEMA Administrator Craig Fugate for a Senate Committee on Banking, Housing, and Urban Affairs, Subcommittee on Economic Policy hearing titled “Implementation of the Biggert-Waters Flood Insurance Reform Act of 2012: One Year After Enactment” which appeared in the online archives on September 18, 2013.

Why is all this happening? Because the government thought that it could solve all its problems by selling insurance where private markets didn’t dare due to risk.

The government in its infinite wisdom and bureaucracy thought it could manage the program better and more profitable. Since that has never to my knowledge happened in government whether we are talking about Amtrak, US Postal Service, or ObamaCare, one has to ask why anyone is surprised this isn’t working. Worse now, the bankrupt FEMA, and NFIP wants to soak those who are not at risk with higher forced premiums to pay for their shortfalls. Ouch.

Yes, ouch, like the US middle class consumer home owner can take anymore. Now they have the DHS, yes, the Department of Homeland Security calling it a national security issue, convenient, meaning they’ll have the power to enforce their authority onto anyone and in this case perhaps everyone they choose. Please consider all this and think on it.