Senators Sheldon Whitehouse and Tim Sheehy have issued a warning about the potential for natural disasters to trigger an economic crisis in the United States. In a joint op-ed published in The New York Times, they described how worsening wildfires, floods, and storms are disrupting homeowners’ insurance markets and could threaten a collapse of the housing market.
The senators cited concerns from Freddie Mac’s former chief economist, who has warned that rising sea levels and flooding could impact insurance and mortgage markets with consequences similar to those seen during the 2008 financial crisis. They noted that this coastal risk is now matched by the growing threat of wildfires in Western states.
“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 Senators Whitehouse and Sheehy.
They stressed the need for proactive measures: “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.”
The senators highlighted recent statistics showing that wildfire season is now year-round, with approximately 72,000 fires burning five million acres across America in 2025. They also pointed out how increased insurance premiums, reduced coverage, or withdrawal from certain regional markets can depress housing values. Properties without insurance are often unmortgageable, creating risks for lenders.
As part of their recommendations, Whitehouse and Sheehy proposed creating a new U.S. Wildland Fire Service to provide clear accountability for wildfire suppression efforts at a national level. They noted that while deaths due to fire have decreased thanks to established standards for local fire departments since 1980, no similar national standard exists for wildfires.
They also advocated for passage of bipartisan legislation called the Reinvesting in Shoreline Economies and Ecosystems Act to fund coastal resiliency projects using revenue from offshore energy development—an approach they say would help address infrastructure needs as sea levels rise.
Other proposals included expanding federal buyout programs beyond flood-damaged homes to include properties affected by wildfires; updating building codes in storm- or wildfire-prone areas; encouraging lower insurance premiums when homeowners fortify their properties; and ensuring Fannie Mae and Freddie Mac only accept mortgages on properties insured by stable companies.
“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,” wrote Whitehouse and Sheehy.
“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,” concluded both senators.
