The National Flood Insurance Program is costing the country’s taxpayers, and Sen. Rand Paul (R-KY) wants to do something about it.
Last week, during a debate surrounding the NFIP, Paul acknowledged the benevolent intentions of the program but highlighted how bad-faith actors exploit it at the expense of the ordinary citizen. Ever the fiscal conservative and guardian of the government’s reckless and wasteful spending, Paul encouraged reform of the NFIP.
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“Once again, we are asked to extend the Flood Program without any reforms to protect the taxpayers. Like many federal programs, this federal program is well-intentioned,” Paul said on the Senate floor last week. “But it may very well be the best real-life example of moral hazard. We’re told that the program is funded through insurance premiums. But the premiums are below the market rate, and so the program is eternally and consistently short of money.”
A federal program blowing through money without accountability is not the most shocking revelation. However, the NFIP is a program that can honor its intentions and aid the people who need it the most without it being a blank check for the government that has led to its depletion. There is zero accountability and minimal efforts to bring fiscal responsibility to NFIP, and it’s something that the senator from Kentucky wants to change. Paul highlighted the NFIP’s history to justify his proposal to reform it.
“A 2014 report by the Government Accountability Office found the Flood Program collected $17 billion less than the market would have required. For all practical purposes, the Flood Program is insolvent,” Paul said. “Just a few years ago, the Flood Program owed $30 billion to the taxpayer. Congress later canceled $16 billion of that debt, but the Flood Program has not made any progress in repaying the taxpayer. The total now stands that the Flood Program owes $20 billion to the taxpayer with no way of repaying that money.”
Such fiscal abuses are unsuitable for the taxpayer and the sustainability of NFIP. It’s an essential program for the survival of flooding victims throughout the country. This is all the more reason to implement massive changes. One of the first things that needs to change immediately about the NFIP is that it should no longer continue to be a taxpayer subsidy for the wealthy and affluent.
“My amendment would say you can’t use the insurance for your second home, only your primary residence, and if you have a half-a-million-dollar mansion on the beach, guess what, you get to buy your own insurance,” Paul said. “That’s my modification, and I would ask the senator to accept the Paul amendment that’s at the desk.”
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“What I’m trying to find here is there a compromise. Is there some level of rich person that maybe the taxpayer could say, enough’s enough? They ought to pay their own way,” Paul said. “Is there some level of rich person’s mansion that maybe the average ordinary taxpayer should not have to subsidize their insurance?”
Ordinary, middle-class, working-class people are not de facto flood insurance bank accounts for the elite. Paul is asking an important question. The American people deserve an answer, and the Senate must give it to them.