Partisan politics again hinder terrorism insurance renewal

It is the second time this year that bipartisan support for the program has fallen apart in the House, with Democrats accusing Republicans of manipulating the issue to aid Rep. Pete Sessions (R-Texas), who is in a tight reelection race with Democratic Rep. Martin Frost.

It also significantly dims the prospects for passing any extension of the program this Congress.

TRIA was passed to revive the terrorism insurance market after the attacks of Sept. 11, 2001. Both the real-estate industry and insurance companies argue that without the program insurers would not readily offer terrorism-risk policies.

With the current program expiring at the end of next year, the push is on to have Congress pass a two-year extension.

On Sept. 29, the House Financial Services Committee approved a TRIA extension sponsored by Sessions. The committee expanded the bill to include a Democratic provision on group life insurance, drawing Democrats to the bill.

Buoyed by broad support, backers of the extension tried to schedule a House floor vote on the measure or get it considered as an amendment to a bill overhauling the country’s intelligence services.

Yet both those efforts met opposition from House leadership, which opted instead to schedule a vote on a six-month extension. That proposal threw supporters of the program into disarray.

Rep. Barney Frank (Mass.), ranking Democrat on the Financial Services Committee, and four other Democrats penned a letter to colleagues urging them to “oppose the inadequate partisan six-month extension of the Terrorism Risk Insurance Act.

“Rather than take up [the two-year extension], the Republican leadership plans to take up … an entirely inadequate 6-month extension,” the Democrats wrote.

Frank told The Hill that he called the shorter proposal partisan because it would only serve to give Sessions “some bragging points” in his reelection race.

“You need more than six months. They’re not really for it, but they’re going to pretend they are,” Frank said.

Industry likewise balked at the proposal. “The feeling was that if you got six months, that would be all you got,” said a real-estate-industry source.

Rep. Richard Baker (R-La.), chairman of the Financial Services subcommittee with jurisdiction over insurance, had said that he would back only one extension of the program.

Critics of TRIA charge that it provides unnecessary taxpayer support to the insurance industry.

As support for the six-month extension dissipated, the proposal was removed from the House schedule, dooming prospects of passing an extension in the House this year.

House aides and lobbyists said that House Majority Leader Tom DeLay (R-Texas) has been the principle opponent of the program in the House leadership. He strongly opposed the program when it was first proposed in 2002.

“The pivotal person on this is DeLay. His view on this is the industry came, needed a temporary fix and here we are again,” an insurance lobbyist said, referring to the industry’s push for an extension of the program.

Earlier this year, Republicans and Democrats on the Financial Services Committee had been working together to craft a bill to extend the TRIA program when Republicans suddenly introduced their own bill, sponsored by Sessions. The move surprised Democrats and many industry lobbyists, prompting Democrats to charge that they had awarded the issue to Sessions — who is not a member of the committee but does handle financial-services issues for the House Rules Committee — to give him ownership of a high-profile issue.

House politics aside, a TRIA extension has also been held up in the Senate, where Banking Committee Chairman Richard Shelby (R-Ala.) has said he wants to hold hearing on the issue next year and consider the results of a Treasury Department study set to be released next spring.