As flood insurance program lapses, ripple effects are felt

In the midst of typical political chatter and partisan impasse on Capitol Hill over spending bills, one critical debate has gone largely unnoticed: flood insurance.

Congress failed to extend the National Flood Insurance Program before leaving for recess last month, resulting in the program’s expiration on March 28.

The NFIP extension is embedded in H.R. 4851, the Continuing Extension Act of 2010, which has been stalled in the Senate all week.

Since March 29, the program has been in what FEMA calls a “hiatus period,” meaning that no flood insurance policies can be issued or renewed until after Congress passes an NFIP reauthorization. In addition, existing policyholders cannot increase their coverage.

This is a big deal. For starters, thousands of homeowners are picking up the pieces after devastating floodwaters ripped through the Northeast. In addition, real estate closings across the nation have been delayed because if a property is in a floodplain, the purchaser is required to obtain flood coverage under federally backed mortgage requirements. This adds more uncertainty to the real estate market in flood-prone areas, which is of particular alarm as realtors and mortgage brokers work to secure the Homebuyer Tax Credits for their clients before the program ends this spring.

With over $18 billion in debt, the NFIP is a program that needs meaningful reform. But instead, Congress has entered into a cycle of passing short-term extensions for the NFIP, which has already led to two lapses in the program’s coverage this year. Besides the present lapse, there was a gap in coverage for two days when the NFIP expired Feb. 28 and was not reauthorized until March 2.

Floods are the most common natural disasters to occur in the United States. The NFIP provides over 5.5 million Americans with needed flood insurance coverage and there are NFIP policies in place in every state. Property damage caused by a flood is not covered under standard personal and commercial property policies. Flood insurance must be bought as a separate policy through the NFIP, which is the primary source for flood insurance in the country.

This year’s heavy spring storms serve as yet another reminder that all Americans, not just those in coastal states, need the protection provided by the flood program. The average NFIP flood claim in 2008 was $42,000 per homeowner. The same year, the program paid for over $2.5 billion in flood damages.

The disjointed approach to NFIP underscores many of the major flaws in this vital program. We need a long-term solution, not quick fixes. We look forward to working with the House Financial Services Committee and subcommittee chairwoman Maxine Waters next week to seek substantive reform of the flood program for a more efficient, cost-effective and self-sustaining program to protect families, homeowners and business owners.

Des Plaines, Ill.

Illegal immigrants are big tax burden

From Yeh Ling-Ling, executive director, Alliance for a Sustainable USA

I used to prepare amnesty and other immigration applications and wish to respond to your article on (illegal) immigrants holding signs showing they love to pay taxes (“Immigrants display revenue-generating prowess in run-up to Tax Day,” April 14).

Over 15 million American workers, including legal immigrants, are unemployed. If amnesty and U.S. citizenship are granted for 12 million or more illegal migrants, millions of legalized people will likely apply for their extended families to immigrate to the U.S. These tens of millions of newcomers will also need jobs, healthcare, education, welfare and many other costly social services. Due to their mostly low incomes, most of these newcomers will not be likely to pay enough taxes to cover even the cost of educating their children, which could be as high as $14,000 per child per year.

After the misnamed Immigration Reform and Control Act adopted in 1986 amnestied 3 million illegal migrants, our illegal population has more than quadrupled, even though the law had provisions to secure our borders! Therefore, there should not be any doubt that any “comprehensive immigration reform” that includes amnesty will increase illegal immigration as well; millions of newly naturalized people will be mobilized by open-border activists to vigorously oppose all efforts to reduce illegal immigration in the future.

Furthermore, the federal government will have no will to ensure that amnestied people will learn English. Requiring that amnesty applicants pay back taxes will actually increase our burden because most of them will probably receive the Earned Income Tax Credit due to their low incomes.

Orinda, Calif.