Irene Sparks Debate Over National Flood Insurance

Republican Congresswoman Candice Miller on push to end federal program


NEIL CAVUTO, HOST OF "YOUR WORLD": The National Flood Insurance Program will expire in a month unless Congress keeps that money coming. It allows for victims to rebuild in the same flood-prone reason areas. And my next guest says that pretty much has to stop. Candice Miller is a Republican congresswoman from Michigan.

That's a big stipulation with this money that you don’t like, right, Congresswoman? You're on the phone with us right now. What's your big fear, that they will simply just rubber-stamp the same type of behavior?

REP. CANDICE MILLER, R-MICH.: Well, Neil that does happen over and over and over again.

But I guess I would just start with the basic premise. The question I ask is why in the world is the federal government in the flood insurance business? And, of course, we're watching these pictures of the flooding and our hearts go out to all of these individuals. But it's terrible when someone's home or their business floods.

But isn't it also bad if your home burns down or if you get in a mudslide or a wildfire or what have you? Why did we just pick flood insurance? If we really think the federal government should be in the insurance business, why not just take over everyone’s homeowner insurance?

Let's really get at it, if that is going to be the federal government's business. It's because of this, though, this particular program is $20 billion -- actually over $20 billion in debt right now because, no surprise, guess what, the federal government is not a very good insurance agent. So we need to get out of this business, I believe.

CAVUTO: The argument for it, Congresswoman – I'm not agreeing or disagreeing -- is that when private insurers either avoid an area or won't insure in an area for the very reasons you outline -- it might be a more flood-prone area, what have you, it's not wise -- then the government has no choice but to back that up.

You're saying people just shouldn’t be building in those areas, then, or what?

MILLER: No, I think they can go ahead and build in those areas, but I don't think that the -- I don't think people in my district need to pay for somebody that has rebuilt three and four times in an area that they’ve replaced their home.

I could give you example after example where you have a house that is worth $200,000. A guy has replaced it three times, so he’s into the government for over $800,000. That’s a pretty good deal.

This program actually started in '72 just because, you say, the private markets, of course, they always set their rates based on actual risk, and the people didn’t want to pay those high premiums. So then the politicians stepped in. And, as I say, we’re now $20 billion in debt.

But, yet, what happens here, Neil, is actually other states where there are premium holders, for instance, in Michigan, in my district, all of the great Lake States are, really, significantly disadvantaged because we don’t have hurricanes, and besides that, we don’t live below sea level. We actually look down at the water; we don’t look up at the water.

And Michigan pays more than six times in premium than we get back in claims, just as an example. So, I do believe that, look, we are Americans. When other Americans are hurt by a natural disaster, we have to step in. And I think, then, we should have, you know, FEMA, and some sort of natural disaster national catastrophic fund, where everybody pays, not just premium payers in other areas that are forced into the flood insurance program.

CAVUTO: All right.

MILLER: And I think this the federal government should be responsible for, of course, funding NOAA and the National Hurricane Center. And we need to tell people...

CAVUTO: Just don't go overboard. Don't go overboard.

Well-spoken. Congresswoman, thank you very much.

MILLER: Hey, thanks very much. Appreciate it.

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