By Craig Gallagher
To put this question into proper perspective, you need to understand why FEMA is involved in flood insurance in the first place. Floods cause more damage each year in the United States than any other kind of natural disaster — so much more, in fact, that most private insurance companies stopped offering flood insurance decades ago. In 1968, the federal government stepped in, creating the National Flood Insurance Program. The program is run today by the Federal Emergency Management Agency.
The flood insurance program (NFIP) was originally intended to be self-sustaining — funded through policyholder premiums, not taxpayer dollars — and for much of its history, it was. But the catastrophic hurricanes Katrina in 2005 and Sandy in 2012 caused so much damage that the program could not pay for it all. After Hurricane Katrina, Congress increased FEMA’s borrowing authority from $2 billion to more
to more than 20billion. It was raised again, to $30 billion after Hurricane Sandy. The program’s debt to the U.S. Treasury is now roughly $24 billion dollars.
With each additional natural disaster, more money flows out of FEMA coffers. And if the magnitude of the disaster exceeds the FEMA yearly budget, as it certainly appears it will with recent flooding in Louisiana, FEMA must borrow additional funds from the department of the Treasury once again which they are mandated to repay.
The hole just keeps getting deeper.
Stay tuned for how this is repaid.
Craig Gallagher, President of GFH CONSTRUCTION, is a recognized industry leader in true turn key house lifting with over 25 years of FEMA construction experience. Contact GFH Construction today at WWW.GFHCONSTRUCTION.COM or call 732 703 7580.