Dr. Coburn Criticizes Senate for Subsidizing Coastal Homes in Flood Insurance Bill
Senate Funds Bill with Borrowed Money rather than Spending Cuts
U.S. Senator Tom Coburn, M.D. (R-OK) released the following statement today after the Senate rejected, by a margin of 70 to 26, his attempt to pay for a bloated Flood Insurance Bill with spending cuts rather than borrowed money. The bill was a $30 billion bailout of the National Flood Insurance Program (NFIP), which was created with the intent of helping homeowners recover from disasters that traditional insurance would not cover.
"Today, Senators had a chance to do the responsible thing and pay for this bill with common sense fiscal restraint. Unfortunately, politicians in both parties chose not to do the hard work of conducting oversight on a program that hasn't worked and isn't going to work. Countless audits and studies have shown that the NFIP has turned into a boondoggle that subsidizes wealthy homeowners who don't want to pay for the risks associated with living near the ocean or a flood plain. Yet, instead of fixing the problems with the program, politicians who are running for re-election chose to charge $30 billion to the next generation," Dr. Coburn said.
"The American people have lost confidence in Congress because we refuse to set common sense priorities and make hard choices. Finding ways to pay for this bill would not have been difficult. This government wastes at least $300 billion every year. It's not too much to ask politicians in Washington to tighten their belts, just like all American families do in tough economic times," Dr. Coburn said.
According to the Senate Banking Committee: "The NFIP has grown significantly over its history from 1 million policyholders and $50 billion of risk exposure to over 5.4 million policyholders with in excess of $1 trillion of risk exposure." Yet, it only brings in an estimated $2.6 billion in premiums each year.
Despite earlier claims of program soundness, the program has routinely operated in the red. According to the nonpartisan Congressional Research Service, operating losses occurred annually between 1972 and 1980 and in the years 1983, 1984, 1989, 1990, 1992, 1993, 1995, 1996, 2004, and 2005.
Furthermore, since 1981, the program has been forced to borrow from Treasury (taxpayers) on at least a dozen separate occasions. In effect, taxpayers have become the reinsurer for NFIP.