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Subsidy proposal degrades taxpayers and environment

November 14, 2007

The Hill

David Jenkins

It’s time to join the growing number of voices expressing caution about the perils of legislation aimed at adding wind coverage to the government-run National Flood Insurance Program (NFIP).

Adding wind insurance to the NFIP essentially lulls property owners into a false sense of security and promotes building — and rebuilding — in coastal areas routinely slammed by tropical storms and hurricanes. Given the effect of climate change, larger and more destructive storms will be a routine phenomenon — which is why it’s ridiculous for the federal government to subsidize coastal mansions and vacation homes at the expense of taxpayers. To constantly build and rebuild on fragile oceanfront ecosystems rife with wildlife and native species is simply irresponsible.

Now, Congress seems poised to establish an even bigger federal bailout program for all natural disasters. On Nov. 8, the House passed a bill that will have the federal government provide state insurance and reinsurance programs with financial backing of up to $200 billion a year for natural disasters. This aid would be on top of federal disaster assistance that already is available in the U.S. in the event of a wide range of natural disasters.

In a rush to follow suit, Sens. Hillary Rodham Clinton (D-N.Y.) and Bill Nelson (D-Fla.) this week introduced similar legislation in the Senate. The bill would help states pool and diversify catastrophe risk insurance and reinsurance for hurricanes, floods, fires and other natural disasters — and require the federal government to provide low-cost federal loans to states that can’t cover their bills.

Where will the money come from for these proposed programs? One place: the American taxpayer.

While some lawmakers think adding wind protection to the NFIP and providing federally backed reinsurance and loans is merely a welcome mat to new economic development in lands of sun and sand, it instead casts a gray pall on the sparkling blue horizon. With the environmental loss posed by continued development in environmentally sensitive lands, the potential burden placed on the American taxpayer, and under priced insurance incentives dangled in front of those who develop in hurricane-prone areas and other vulnerable properties, these legislative proposals are truly a lose-lose gambit.

If they sail through Congress and become law, the American taxpayer could theoretically be pushed to the brink. It’s time for Americans to rethink where and how people build their homes and businesses. And having the federal government help to insure homes and businesses in high-risk areas isn’t the right answer.

Albuquerque, N.M.

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