Is it time to get rid of the federal flood insurance program? | WPRI ...

All 39 communities in Rhode Island participate in the federally funded National Flood Insurance Program, which Congress created in 1968 to deal with the lack of private insurance options available to homeowners in flood-prone areas.

The program has paid out tens of millions of dollars over the years, but in the wake of Sandy, some are asking about whether the program is a wise use of taxpayer money. They include economists Judith Kildow and Jason Scorse, who argue in a New York Times op-ed it?s time to end the program:

It?s no surprise that it can be very expensive to live near the ocean. But it may come as a surprise to American taxpayers that they are on the hook for at least $527 billion of vulnerable assets in the nation?s coastal flood plains. Those homes and businesses are insured by the federal government?s National Flood Insurance Program.

You read that right: $527 billion, which is just a portion of the program?s overall liability of $1.25 trillion, second only to Social Security in the liabilities on the government?s ledgers last year, according to government data. ?

Homeowners and businesses should be responsible for purchasing their own flood insurance on the private market, if they can find it. If they can?t, then the market is telling them that where they live is too dangerous. If they choose to live in harm?s way, they should bear the cost of that risk ? not the taxpayers.

And it?s not just the flood insurance program.

A lesser-known piece of legislation, the Stafford Act, authorizes the president to declare disaster areas and provide major federal funding for cleaning and rebuilding efforts. (For example, here is President Obama?s Stafford Act declaration for Rhode Island after Sandy.) ?Lately,? The Times reported on Nov. 18, ?scientists, budget-conscious lawmakers and advocacy groups across the political spectrum have argued that these subsidies waste money, put lives at risk and make no sense in an era of changing climate and rising seas.?

(photo: RIEMA)

Tags: flood insurance, flooding, National Flood Insurance Program

Source: http://blogs.wpri.com/2012/11/30/is-it-time-to-get-rid-of-the-federal-flood-insurance-program/

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