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FEMA’s Flood Insurance Program Needs Bailout

From an unquestioning Reuters:

FEMA may seek flood insurance bailout after Sandy

Sarah N. Lynch | November 14, 2012

WASHINGTON (Reuters) – The Federal Emergency Management Agency will probably need to request a congressional bailout of its flood insurance operations, as claims from superstorm Sandy could be as much as four times greater than the program’s capacity, a top FEMA official said on Wednesday.

And just imagine if Sandy has been a full blown hurricane.

The National Flood Insurance Program, a FEMA subsidiary, has $2.9 billion in borrowing capacity but expects Sandy-related losses of $6 billion to $12 billion, Edward Connor, FEMA’s deputy associate administrator for federal insurance, told a meeting of the Federal Advisory Committee on Insurance.

"As we go into this, we are looking at Sandy and the numbers are staggering," Connor said.

The NFIP is essentially the country’s only flood insurer for residential properties. It received a bailout after Hurricane Katrina in 2005, leaving it with a debt load of just under $18 billion, an amount the government has said the program will probably never be able to repay.

Maybe the federal government shouldn’t be in the flood insurance business. Or the health insurance business.

A reform package signed into law this year is expected to improve the program’s finances eventually, although such changes are years away and have been criticized as insufficient by elements of the insurance industry.

For now, extending the program’s borrowing capacity beyond the current $20.7 billion cap would require authorization from Congress, something Connor said he expected the Homeland Security Department would request soon…

Why bother to have caps? They are always lifted.

Meanwhile, we have more joyous tidings, via the Associated Press:

Christie Warns NJ Residents of Post-Storm Tax Hikes

By ANGELA DELLI SANTI | Wednesday, Nov 14, 2012

Gov. Chris Christie is warning New Jerseyans living in storm-wrecked towns that they’re likely to see higher local property taxes to help pay for rebuilding…

New Jersey residents already pay the highest property taxes in the country, averaging $7,758 per household.

But just look at all the services they get for this money. The premium schools. The excellent roads and utilities and emergency relief programs.

Christie… said an exemption to the state’s 2 percent tax cap law is emergencies like Sandy, which destroyed coastal towns, knocked out rail service and left 2.7 million households in the dark…

Once again, what is the point of having a cap if it is just going to be raised?

This article was posted by Steve on Thursday, November 15th, 2012. Comments are currently closed.

One Response to “FEMA’s Flood Insurance Program Needs Bailout”

  1. Right of the People says:

    Why don’t we just abandon New Jersey and have them move to Bite Me Joe’s home state of Delaware?

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