FEDERAL DISASTER RELIEF POLICY A DISASTER A DISASTER
July 10, 1997
President Clinton signed a bill in June 1997 authorizing $5 billion for the Federal Emergency Management Agency (FEMA) disaster relief program. However analysts say what is really needed is a fundamental change in the FEMA program that pays people to build in notoriously disaster-prone areas and is damaging to the environment:
- A March 1997 report in Idaho Statesman on the recent deluge by the Boise River, concluded that FEMA's National Flood Insurance Program (NFIP) has made development in risky areas economically attractive.
- Scott Faber, a conservationist with American Rivers, says that in the 1960s there wasn't much development in flood-prone areas because it was too risky for insurance companies to underwrite it.
- But, with NFIP's backing, not only is it less risky, it's economically attractive and now far more people live in flood plains.
FEMA is running a national campaign to get even more people to buy into the NFIP and expand its financial resources. But one agency analyst says its a Ponzi scheme that is running dry. The program charges a person only $300 a year for up to $250,000 in property damage coverage, whereas a private insurance company would charge $10,000.
FEMA Director James Lee Witt insists that the NFIP is a self-supporting program. Yet, according to budget analysts, the NFIP is in debt to the U.S. Treasury by almost one billion dollars. In addition, American taxpayers currently face more than $250 billion in exposure from NFIP policies.
James Bovard (Competitive Enterprise Institute), "More Flood Damage, Courtesy of FEMA?," Washington Times, July 10, 1997.
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