(Bloomberg) -- President Donald Trump proposed ending federal flood insurance for new homes in areas most at risk of flooding, a change that could curtail new construction in vast parts of Florida, Louisiana and along the Eastern Seaboard.
Trump’s plan would radically overhaul the program created in 1968 to help protect homeowners who live along coasts or near rivers. The idea, sent by the White House to Congress, created an unlikely set of responses: Home builders warned it could stifle the economy while climate activists, who have battled Trump, called the idea smart.
Related: The self-defeating cycle of floods and federal aid
|Letter to Congress
On Wednesday Mick Mulvaney, the director of White House Office of Management and Budget, sent a letter to Congress calling for changes to the taxpayer-subsidized National Flood Insurance Program, which is $25 billion in debt thanks to ever-worsening storms. Mulvaney’s proposals included preventing homes built in flood plains after 2020 from obtaining insurance under the program. Those homes could instead seek private coverage, which is often prohibitively expensive — if it’s available at all.
Home builders oppose idea
The National Association of Home Builders said it strongly opposed the idea, arguing it would "harm local communities and impair economic growth."
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