"Newly Elected Republican Says Government Should Be Less Involved In Disaster Relief"
Newly-elected Rep. Trey Radel (R-FL), who ran his campaign on a pledge to cut spending and reduce the debt, said on Friday that he would vote to increase borrowing authority for the National Flood Insurance Program by $9.7 billion to help victims of Hurricane Sandy, but argued that disaster relief is best left to the private sector.
Appearing on CNN, Radel explained that government does have a role to play in the aftermath of natural disasters, but argued that people are too dependent on Washington for federal funding:
HOST: Will you in favor of the $61 billion Sandy aid bill today?
RADEL: Yes, I will. This is the national flood insurance program, it is something promised by the federal government and we need to release those funds to the people that are suffering in the northeast. … But ultimately, what we need to be doing, at the federal level, is weaning people off the federal government and allowing this not to just be left up to the states, but ultimately up to the private sector.
HOST: So you want to pass FEMA off to the private sector? You don’t think the government should be involved in federal relief at all?
RADEL: It should in some areas, but this is a case of insurance, just like in Florida, where you even have state-run programs that are out of control such as citizens where again, I’m sure you’ve covered many times, it ends up where middle class families end up paying for insurance for multimillionaires to have their homes on the beaches. It’s just not fair. We need to allow it to be in the private sector.
The private sector does play an important role in relief, but it cannot single-handedly finance or organize national disaster preparedness. For instance, while Walmart donated $25 million to help victims of Hurricane Katrina, the company’s aid made-up only a small fraction of the hundreds of billions of dollars the federal government spent in the aftermath of the tragedy. FEMA director Craig Fugate has embraced a “whole community approach to emergency management nationally,” integrating “all aspects of a community (volunteer, faith, and community-based organizations, the private sector, and the public, including survivors themselves).” But ultimately, only the federal government can coordinate and organize disaster response that spans across state lines and inflicts billions of dollars in damage.
Washington is even more directly involved in providing flood insurance to vulnerable populations. The federal government established the National Flood Insurance Program in 1968, after private insurers deemed the peril of floods “uninsurable,” noting that they couldn’t possibly “earn excess premiums to cover their cost of capital (they have to pre-fund losses), whereas the U.S. government can easily borrow money to cover catastrophic flood events after they occur.” It can also require homeowners in flood hazard areas to purchase insurance and avoid the problem of adverse selection (wherein only high-risk homeowners buy coverage) that private insurers face.
The program is far from perfect, but if it’s disbanded, Randel’s Florida constituents, some of whom undoubtedly live in flood-prone areas, would be left with no insurance at all.