I thank the gentlelady for yielding me some time. Mr. Chairman, I rise in opposition to this program and to this bill, and I would once again remind my colleagues that this program is a very, very bad deal for my constituents in the great…
I thank the gentlelady for yielding me some time.
Mr. Chairman, I rise in opposition to this program and to this bill, and I would once again remind my colleagues that this program is a very, very bad deal for my constituents in the great State of Michigan, the Great Lake State. In fact, it's a bad deal for most all the States that are in the Great Lake States.
As an example, my constituents in Michigan are paying very high flood insurance premiums, yet we rarely receive any claims, and I will give you examples. Since we've instituted this flood program in the Nation since 1978, in Michigan we've received $44 million in claims; however, we've paid in over $200 million during that time in premiums. This year alone, in Michigan, our citizens are going to pay $19 million in claims, which means that in just 2 years of paying premiums, we will have covered all of our losses for the last 32 years. In fact, the GAO report on this program that was published in April found that one in four property owners are paying subsidized rates for their flood insurance that do not reflect the full risk of their flooding.
That same report found that repetitive losses represent only 1 percent of policies but over 25 percent of all of the claims. In short, we keep paying over and over and over again claims for some Americans to live in flood-prone areas, and it is no wonder that this program is $19 billion in debt.
Unfortunately, the Rules Committee didn't make one of my amendments in order that would have addressed this problem of repetitive losses, and this is a case in so many properties. They just keep rebuilding and refiling their claims over and over and over again, and I just don't think that's fair to the rest of the Nation. If you insist on rebuilding, then you should assume the risk.
Mr. Chairman, quite frankly, my home State of Michigan feels like the ATM machine for this flood debt program. I think this program is very, very unfair. One thing I would say, in Michigan, we actually look down at the water. We don't look up at the water. And we are very sympathetic, Mr. Chairman, very sympathetic to areas of other parts of the country that are prone to floods, that are prone to hurricanes, et cetera. We appreciate the challenges that they face, but I don't think it's fair that citizens in a State like Michigan have to pay for those kinds of things.
I think we need to have a national catastrophic fund that establishes more fairly the burden on this rather than looking for States like Michigan. I'm not opposed to redigitizing the maps and using the state- of-the-art technology that's happening. I think that's very important. We want to know the proper elevations. You can use it for planning. Local municipalities need it, et cetera. But in Michigan, I can tell you tens of thousands of properties that are now being included in this floodplain that have never been included previously, that have no history of flooding. In the last couple of years, the Great Lakes have had historic lows.
I'm going to be voting against this. I urge my colleagues to vote against this bill, Mr. Chairman.
Mr. Chairman, I have an amendment at the desk made in order under the rule.
Mr. Chairman, my amendment calls for a GAO study to study the ways that the private insurance market can contribute to insuring against flood damage; to further study the impact on the National Flood Insurance Program if communities decide actually not to participate in this program; and to study the feasibility of recognizing the National Flood Insurance Program and ensuring that there's no cross-subsidization between the regions.
The United States, Mr. Chairman, is actually the only industrialized nation that uses our form of government to administer flood insurance. In every other industrialized nation this is done by a private insurance company. Even in Canada or the U.K., they use the private industry to do so. And I believe that the role of the U.S. Government in terms of flood insurance certainly is the creation and maintenance of accurate flood maps, and to have those that live in flood-prone areas, though, pay their own freight by purchasing private flood insurance.
Since Congress established the NFIP, we have engaged in subsidizing our fellow Americans who do live in flood-prone areas, essentially creating a moral hazard. And as a result, more than half of the U.S. population now lives in coastal watershed counties or flood plain areas.
My constituents in Michigan, that's the reason I offered this amendment, Mr. Chairman, are paying very, very high flood insurance premiums; and yet we rarely receive claims. I mentioned this during general debate, but I'll mention it again: since 1978, Michigan residents have actually received about $44 million in claims from the flood insurance program. However, this year alone our premiums in the State are going to be almost $20 million, which means that in 2 years of premiums we have covered all of our losses since 1978, in other words, paid over $200 million in premiums, yet we've sent more than $150 million to other States since '78. And I would guess that all of the Great Lakes States, all of the States that are in the Great Lakes basin would have similar experiences.
So my constituents and the residents of my State, I think, are unfairly carrying a very high burden, given their relatively low risk. I think it's a very vivid demonstration when you see that the average premium for flood insurance in Michigan is $764 and yet in Louisiana it's $647.
I think, Mr. Chairman, again, we need to have a national catastrophic fund. We are very sensitive and very sympathetic to folks that live in States that flood, that are flood-prone, that have hurricanes, et cetera. But I don't think it is fair for property owners in areas that don't have this high risk to keep paying so much money for other areas. I think we should try to share the burden among the entire States.
I would also ask that the GAO would look at regionalization of the National Flood Insurance Program as a means to correct this balance. Currently, FEMA has 10 separate regions, and I believe that if you did this amongst those regions, perhaps that would be a good way to reorganize the flood insurance program. And so each region would then, ideally, have actuarially sound premiums that are reflective of the risk of that region. And I think, under that plan, States like Michigan again would not be forced to subsidize other parts of the Nation that have substantially higher risk than we do.
And in lieu of that, the last part of the study for the GAO would look at the impacts of communities to actually opt out of this program.
Mr. Chairman, several years ago I actually wrote a letter to our Governor asking her to consider having Michigan, our entire State, opt out of this program because we are so unfairly disadvantaged. And although that has not happened yet, I'm going to continue to press that because I do think if we self-insured and got out of this program, it would be much, much, much better for the State of Michigan to do so.
So, again, my amendment asks the GAO to look at I think several commonsense ways to fix a very severely flawed program. And I would ask that my colleagues consider my amendment and support its adoption as well.
I reserve the balance of my time.
I would certainly just say that I am very appreciative of the gentlewoman's acceptance of my amendment. I do think it will help the Nation lead us forward
on a path to fairness and equity in this issue of flood insurance.
Mr. Chairman, I yield back the balance of my time.