Waters Statement on the 2017 Hurricane Season and the Future of the National Flood Insurance Program
Today, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, issued a statement regarding the devastation caused by hurricanes this season, and the news that Congress will need to raise the National Flood Insurance Program’s (NFIP) borrowing authority to pay all of its claims from Hurricanes Harvey and Irma.
“As the 2017 hurricane season continues, we must put these storms and their impact on our fellow Americans into perspective. Irma made history with winds at some of the highest levels ever recorded and the longest consecutive streak as a Category 5 hurricane, and while the storm hit a week ago, there are still hundreds of thousands in Florida without power or dealing with the effects of flooding. But Irma is the second catastrophic storm to hit the U.S. in just a matter of weeks. Houston, Beaumont, and other cities are still struggling to clean up in the wake of Hurricane Harvey. And with Hurricane Maria now threatening the U.S. Virgin Islands and Puerto Rico, the nation must brace for another storm and another long recovery. As a nation, we must get serious about the reality that climate change will likely make these storms more frequent, stronger and more devastating than ever before. And we must make sure that the National Flood Insurance Program (NFIP) remains available and affordable to all Americans.
The National Flood Insurance Program has been self-supporting for most of its nearly 50-year history. However, in order to ensure that the NFIP can pay all of its claims following catastrophic losses, FEMA has the authority to borrow funds from the U.S. Treasury. Prior to Hurricane Katrina in 2005, the NFIP had generally been able to cover its costs, borrowing relatively small amounts from the U.S. Treasury to pay claims, and then repaying the loans with interest. However, due to extraordinary losses incurred following hurricanes Katrina, Rita and Wilma in 2005, the NFIP had to borrow $19 billion that – for the first time – it could not repay. Excluding the debt from the 2005 storms, the NFIP was self-funded again from 2006 until October 2012. Following Superstorm Sandy in 2012, Congress authorized FEMA to borrow up to an additional $7 billion, bringing its total authority to $30.425 billion. Prior to Hurricane Harvey, NFIP’s debt stood at $24.6 billion, leaving $5.825 billion left without further Congressional action. These funds are expected to be exhausted following Hurricane Harvey, requiring Congress to increase the borrowing authority in order for the NFIP to pay all of its claims following Hurricanes Harvey and Irma.