Merkley Asks CBO to Detail How Investing in Flood Adaptations Can Affect the Federal Budget

Merkley Asks CBO to Detail How Investing in Flood Adaptations Can Affect the Federal Budget

A Previous CBO Report Detailed How Spending for Adaptations can Reduce Flood Damage

WASHINGTON, D.C. - Today, U.S. Senator Jeff Merkley (D-OR), Ranking Member of the Senate Budget Committee, requested that the nonpartisan Congressional Budget Office (CBO) conduct a study of how federal spending for flood adaptations now is likely to affect the federal budget. Merkley specifically asked CBO to estimate the amount of potential future savings that could accrue to the federal government for every dollar it spends on flood adaptation and mitigation. A previous CBO report published in September 2024 detailed how spending for adaptations can reduce flood damage.

"Flooding is one of the costliest forms of natural disaster in the United States, causing tens of billions of dollars in damages annually. Experts project that climate change and ongoing coastal development will exacerbate flood risks, leading to significantly higher disaster recovery costs in the decades ahead," said Merkley.

"Federal spending for flood adaptations-such as building dams and levees for communities, and elevating or buying out high-risk properties-can reduce the amount of flood damage experienced in the future and mitigate the economic and human costs of natural disasters," Merkley continued.

The full letter is below or HERE.

Dear Director Swagel,

Flooding is one of the costliest forms of natural disaster in the United States, causing tens of billions of dollars in damages annually. Experts project that climate change and ongoing coastal development will exacerbate flood risks, leading to significantly higher disaster recovery costs in the decades ahead. Communities across Oregon are already experiencing the effects of a changing climate. Damaging floods occur every year in the Pacific Northwest, and atmospheric rivers are expected to be more frequent and more severe due to climate change. ^[1]

Federal spending for flood adaptations-such as building dams and levees for communities, and elevating or buying out high-risk properties-can reduce the amount of flood damage experienced in the future and mitigate the economic and human costs of natural disasters. In a previous report entitled Federal Spending for Flood Adaptations, the Congressional Budget Office (CBO) provided information on how spending for adaptations can reduce flood damage.^[2]

As Congress weighs investments in natural disaster adaptation, I request that CBO conduct a study of how federal spending for flood adaptations today is likely to affect the federal budget. Specifically, what are the future potential budgetary savings for every dollar the federal government spends on flood adaptation and mitigation? The analysis should consider future choices that lawmakers may make that would affect the budgetary impact of federal adaptation spending, such as the amount of future federal disaster relief, the kinds of flood adaptations funded, and any required matching contributions from state and local governments. In addition, the report should examine how federal flood adaptation spending affects the cost of insurance claims under the National Flood Insurance Program. CBO should consider that Congress is likely to provide supplemental disaster funding as it has in the past when considering the potential savings from avoided federal costs.

Sincerely,

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