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State Flood Managers: Forgive NFIP’s $25 Billion Debt

Congress should admit that the $25 billion debt of the National Flood Insurance Program will never be repaid, and forgive it. That’s the assessment of the Association of State Floodplain Managers, who say the $400 million in annual interest payments would be better spent on flood mitigation efforts...
July 11, 2017

Debt

Congress should admit that the $25 billion debt of the National Flood Insurance Program (NFIP) will never be repaid, and forgive it. That’s the assessment of the Association of State Floodplain Managers (ASFPM), who say the $400 million in annual interest payments would be better spent on flood mitigation efforts.

“This program cannot possibly pay this back; I don’t care how high you raise the rates,” Larry Larson, director emeritus and senior policy adviser of ASFPM, told Bloomberg BNA. “It’s the federal government paying itself. It’s kind of stupid.”


Larson’s comments come shortly after the American Academy of Actuaries told Senate staff that the NFIP's debt was primarily caused by big disasters like Hurricane Katrina and Superstorm Sandy. The issue of funding with regard to such events is a public policy question, not an actuarial one, Rade Musulin, the academy’s vice president of casualty, recently told Bloomberg BNA ahead of a congressional briefing held by his group.

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