ICYMI: In NYT Op-Ed, Senators Whitehouse and Sheehy Warn Natural Disasters Could Trigger Next Economic Crisis

"We must avoid this torpedo to the hull of the economy," wrote the Senators

Washington, DC - In case you missed it, Senator Sheldon Whitehouse (D-RI), Ranking Member of the Senate Environment and Public Works Committee (EPW), and Senator Tim Sheehy (R-MT) published a joint op-ed today in The New York Times sounding the alarm about how increasingly devastating natural disasters are disrupting homeowners' insurance and threatening a housing market collapse. The looming, widespread decline in property values threatens to crash the entire economy.

"Freddie Mac's former chief economist has warned that rising sea levels and flooding could hit insurance and mortgage markets with an economic shock akin to the 2008 financial crisis. That coastal risk now has an evil twin in the growing threat of Western wildfires, such as those we saw last year in Los Angeles. A major economic hit is coming at us, caused by these disasters," wrote the Senators.

"We must avoid this torpedo to the hull of the economy, and that's why we're sounding the alarm now. Action can and must be taken to overhaul America's disaster preparedness. Our disaster response and disaster preparedness need to adopt a 'left of bang' mind-set, getting ahead of the problem before it explodes. Responding after a disaster happens is not enough," continued the Senators.

Read the full op-ed HERE.

A Torpedo to the Hull of the Economy

By Senators Sheldon Whitehouse (D-RI) and Tim Sheehy (R-MT)

America is facing a looming economic crisis that few people are talking about, and most citizens are not even aware of: a housing market collapse driven by increasingly devastating natural disasters.

Freddie Mac's former chief economist has warned that rising sea levels and flooding could hit insurance and mortgage markets with an economic shock akin to the 2008 financial crisis. That coastal risk now has an evil twin in the growing threat of Western wildfires, such as those we saw last year in Los Angeles. A major economic hit is coming at us, caused by these disasters.

As we look for areas to find common ground between the political parties in Washington, one place we can start is taking action to protect communities from the growing threat of wildfires, floods and severe weather, to save lives and protect our economy.

Wildfire season is now year-round; in 2025, approximately 72,000 fires burned 5,000,000 acres across America. Coastal flooding worsens as sea levels rise, and warming waters power stronger storms. While there is persistent debate over what's causing these extreme weather events to happen more frequently, what's clear is that we must be ready to prevent an avoidable, well-predicted economic crisis.

The growing threat of natural disasters puts Americans' ability to get homeowners' insurance in serious jeopardy, leaving families exposed to devastating losses. But it doesn't end there. Increased insurance premiums, reduced coverage and the withdrawal of insurance companies from regional markets depress housing values. Uninsurable properties are usually unmortgageable, and mortgages that have lost value can leave lenders holding bad paper, threatening bank insolvencies.

We must avoid this torpedo to the hull of the economy, and that's why we're sounding the alarm now. Action can and must be taken to overhaul America's disaster preparedness. Our disaster response and disaster preparedness need to adopt a "left of bang" mind-set, getting ahead of the problem before it explodes. Responding after a disaster happens is not enough.

For wildfire-exposed states, creating a new U.S. Wildland Fire Service is one step that will ensure we can prevent disasters by responding quickly, aggressively and effectively to wildfires while they are small. For too long, a plethora of overlapping government agencies and private sector partners working within a splintered infrastructure have led to delayed response and devastating results.

Currently, there is no clear accountability, or a national standard, for wildfire suppression. Deaths due to fire have dropped by 40 percent since 1980 thanks to standards governing fire department response, but no similar standard exists for fighting wildfires. A centralized U.S. Wildland Fire Service will streamline outdated bureaucracy, ensure a robust response to these disasters, and better protect assets and people - thereby lowering insurance prices and saving lives.

For coastal states, passage of the bipartisan Reinvesting in Shoreline Economies and Ecosystems Act would create a dedicated revenue stream to fund coastal resiliency projects and lessen the impacts of storm surges and rising sea levels. Coastal cities and towns face enormous infrastructure needs to protect structures from flood damage. One estimate puts the total cost of building necessary sea walls at more than $400 billion by 2040. Channeling money from offshore energy development to states to help them defray these huge costs makes sense.

We must also seriously re-evaluate how homeownership remains viable in disaster-prone areas, and what policies will best protect citizens in those regions. The current Federal Emergency Management Agency buyout program for flood-damaged homes should be expanded to cover homes damaged by wildfires. The program must also be dramatically streamlined. Some studies show the current average time to complete the buyout process is over five years, which leaves homeowners in limbo and discourages them from moving out of at-risk zones.

Building codes should be updated in storm- and wildfire-exposed states. In Texas, relatively weak building codes leave structures vulnerable, even to low-end storms. When homeowners invest in fortifying their homes against storms or wildfires, they should see their insurance premiums come down to encourage others to do the same, but that doesn't always happen, because the assessed value of newly protected homes increases. Fannie Mae and Freddie Mac must get serious about ensuring that they are only accepting mortgages on properties insured by financially stable insurance companies, lest an unreasonable risk of defaults be transferred to taxpayers.

Sailors and pilots know storm warnings should be heeded. The warnings are many. They come from serious sources, often sources that have fiduciary obligations to predict carefully and well. The danger of a financial collapse cascading through insurance, mortgage and housing markets is deadly real.

We owe the American people better disaster readiness and response than they are currently getting. It's an imperative that will save lives and precious assets. It will also protect the economy.