The House is moving its own version of a bill sought after by businesses that would renew a government backstop for terrorism insurance.
In a party-line vote, the House Financial Services Committee approved a bill that would extend for five-year the Terrorism Risk Insurance Act.
{mosads}That measure, likely to be taken up before the August recess, would extend for the fourth time a program created in the aftermath of the Sept. 11 terrorist attacks, when the insurance industry was upended by the massive amount of claims.
The program allows the government to step in and shoulder the costs of insurance payouts stemming from a large terrorist attacks, and later recoup those costs from the industry after the fact.
While it appears both parties are willing to strike a deal to extend the program again, conservatives have been wary of continually extending a program that was originally billed as temporary relief to an ailing industry following an historic attack.
But even Chairman Jeb Hensarling (R-Texas), a staunch proponent of free market ideas, said Thursday that he believed the market cannot sustain terrorism insurance without a government safety net.
“After carefully studying the issue, I have concluded that today there remains a need for a Federal backstop against heinous acts of terrorism that cannot be reasonably modeled, reasonably mitigated, and whose catastrophic size truly impacts our economy,” he said.
At a markup to consider the bill Thursday, several Democrats criticized the changes made by Rep. Randy Neugebauer (R-Texas), the subcommittee chairman taking the lead on the issue.
Rep. Carolyn Maloney (D-N.Y.) said his measure was a “significant improvement” from earlier drafts considered by Republicans, but still wanted to see the existing program simply reauthorized with no changes.
“If it’s not broke, don’t fix it,” said Rep. Gregory Meeks (D-N.Y.).
Neugebauer’s bill, as well as the Senate version, makes several tweaks that would increase the conditions in which the backstop would trigger, and require the private insurance industry to shoulder a larger share of the overall costs. Under the bill, damage not caused by a nuclear, chemical, biological, or radiological attack would face a higher threshold for government action of $500 million. Those aforementioned attacks would receive government support at the original $100 million threshold, and the provision would take effect beginning in 2019.
The version pending in the Senate does not include that bifurcation provision, and would extend the program for seven years. The Senate Banking Committee unanimously approved the measure earlier this month, and it awaits full Senate consideration.
Members of both parties said they are willing to work out a deal to extend the legislation, but even if talks falter, it appears TRIA is not going anywhere anytime soon. Hensarling said at Thursday’s markup that if no compromise emerges, he is prepared to take up a six-month “clean” reauthorization to allow talks to continue in the new Congress.