The impact of the National Flood Insurance Program on taxpayers and its long-range outlook was questioned by Richard Shelby, R-Tuscaloosa, chairman Senate Banking Committee at a hearing last Thursday. Shelby said at the session’s end, “there’s got to be a fundamental change.”
The purpose of the hearings in Washington, the third in a series, sets the stage for administrators to ask to borrow another $5.6 billion from the Treasury to keep paying claims stemming from hurricanes Katrina, Rita and Wilma. Estimates predict the losses will add up to $23 billion, more than 11 times the program’s annual revenue.
Although the money is supposed to be repaid, last week Shelby told the Mobile, Ala. Register that the government may have to “eat the loss.”
The program covers 4.8 million properties nationally, and 42,000 in Alabama.
In a news release earlier last week, Shelby ranked flood insurance reform as one of the banking committee’s leading priorities. He does not have a specific timeline for preparing legislation, spokesman Andrew Gray said Thursday, but “hopes to move it this year.”
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