WASHINGTON–The Bush Administration would oppose legislation establishing a federal catastrophe fund, a top administration official told the Senate Banking Committee today.
Edward Lazear, chairman of the Council of Economic Advisors, told the Senate panel that the administration "opposes legislation to create a new federal program to backstop catastrophe insurance," and that it also opposes expanding the current scope of the National Flood Insurance Program.
If enacted, Mr. Lazear said the administration believes a federal catastrophe backstop, dealing either with state funds or directly with insurers, would undermine the private market and could encourage the type of development that has increased the catastrophe risk problem.
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