Rep. Maxine Waters (D-Calif.) asked House Speaker Mike Johnson (R-La.) and Democratic Leader Hakeem Jeffries (D-NY),  to forgive the National Flood Insurance Program’s (NFIP) debt in order to provide better support for those communities affected by Hurricanes Helene and Milton.

According to Waters, if not forgiven, the mounting NFIP will hinder its capacity to pay flood insurance claims as well as make coverage more expensive and less accessible for current and future policyholders.

“As of Oct. 7, 2024, the NFIP had a total of more than $14.1 billion in capacity, including over $4.2 billion in cash-on-hand resources and $9.9 billion in borrowing authority,” Waters explained in her letter. “Make no mistake that just one more storm could bankrupt the program and prevent future claims payments to devastated communities and responsible, taxpaying policyholders. … Just as Congress regularly provides disaster recovery grants for under-insured or uninsured households, we must not penalize current and future NFIP policyholders with skyrocketing debt that pushes up the cost of premiums.

“We know that future disasters with damages over $1 billion are inevitable and can hit at any moment,” she added. “That’s why now is the time for Congress to fully forgive the NFIP debt and help stabilize the program.”

Forgiving NFIP’s debt is also part of Water’s Housing Crisis Response Act, she stated. According to her letter, the NFIP has $20.5 billion in outstanding debt that FEMA is currently paying nearly $700 million in annual interest to the U.S. Treasury. Factoring in projected claims from Helene and Milton, she added, FEMA estimates these interest payments would go up to $1.3 billion by 2034.

“This debt not only hamstrings the NFIP’s capacity to pay claims, but it also makes NFIP coverage more expensive for current and future policyholders,” Waters said. “This debt represents claims from homeowners who responsibly retained flood insurance coverage in order to be able to rebuild after a storm. Just as Congress regularly provides disaster recovery grants for under-insured or uninsured households, we must not penalize current and future NFIP policyholders with skyrocketing debt that pushes up the cost of premiums.

“We know that future disasters with damages over $1 billion are inevitable and can hit at any moment,” she added. “That’s why now is the time for Congress to fully forgive the NFIP debt and help stabilize the program.”