With a stroke of the pen, President Obama has delayed a reckoning for the National Flood Insurance Program for at least another year.
The yearlong extension of the debt-ridden program comes after multiple three-month extensions and lapses of the program. A 2008 report by the U.S. Government Accountability Office (GAO) concluded that the NFIP owes the U.S. Treasury $17 billion, and is ill equipped to meet losses in the event of a future catastrophe.
A lasting funding solution to the program has foundered upon issues such as whether to include coverage for wind damage in the program and how to replenish the program’s coffers. Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), says the year-long extension gives legislators time to tackle the long-simmering issues confronting the NFIP.
"AIA commends the President and the Congress for putting in place a longer-term extension rather than the prior pattern of short-term extensions and lapses that have plagued the NFIP,” Pusey said in a statement. “With the program now in place for another year, there is now the opportunity to tackle the larger, more fundamental reforms with federal policymakers like NFIP subsidies and the mapping of flood plains."
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