Business

Schumer, Hensarling can’t find deal on terrorism insurance

by Kevin Cirilli - 11/19/14 5:27 PM ET

Sen. Charles Schumer (D-N.Y.) and House Financial Services Committee Chairman Jeb Hensarling (R-Texas) met Tuesday night to try and hammer out a deal on extending Congress’s terrorism insurance program.

The two lawmakers were unable to reach an agreement, according to three sources familiar with the meeting.

{mosads}”Hensarling said if we can’t agree he will do a short-term bill which is a nonstarter and not supported by industry,” said one source about the meeting. “Hensarling was pushing the same proposals that he can’t get passed in the House.”

Congress must extend the Terrorism Risk Insurance Act (TRIA), which provides a financial backstop for insurers in the event of a large-scale terror attack in the lame duck. Congress created TRIA as a temporary program following the Sept. 11, 2001. It has since been reauthorized and backed by lawmakers in both parties.

Hensarling and other Tea Partiers, though, argue that the program puts taxpayers at risk for having to pay for terrorist attacks that cause hundreds of millions of dollars of damage.

House GOP leaders have backed Hensarling, indicating they would support a short-term, six-to-nine month reauthorization to give him time to push for reforms.

Schumer’s office declined comment. Hensarling’s office did not respond to requests for comment.

The business community, including the U.S. Chamber of Commerce, supports the program and is pushing for a long-term reauthorization in the House. In July, the Senate voted to reauthorize the terrorism insurance program for seven years in a 93-4 vote.

The Senate’s nearly unanimous vote has TRIA supporters believing that Schumer and the upper chamber would have the upper hand in negotiations.

Supporters of a short-term reauthorization though note that Hensarling has the backing of House GOP leaders and that Republicans are set to take over Congress in January.

One of the reforms Hensarling is pushing would raise the threshold for the government to step in after a massive terrorist attack. Currently the trigger is $100 million, which Hensarling wants to raise to $500 million.

An industry source familiar with the meeting said Hensarling would likely be willing to move the threshold to $400 million.

Hensarling’s panel in June approved a five-year reauthorization that changed the trigger. But that bill, which was introduced by Rep. Randy Neugebauer (R-Texas) was never voted on by the full House amid opposition from business groups.

Neugebauer’s office didn’t respond to a request for comment.

House Speaker John Boehner (R-Ohio) said in a statement earlier this month that “a short-term extension may be necessary” in order to include reforms to the program.

“I support Chairman Hensarling’s goal of enacting a long-term TRIA extension with reforms that protect taxpayers,” Boehner said.

House Majority Leader Kevin McCarthy (R-Calif.) said in a statement that he supports Hensarling’s efforts to reform the program “even if a short-term extension is needed.”

The business community has formed the Coalition to Insure Against Terrorism, which has been active on the hill this week meeting with lawmakers urging them for a longer-term reauthorization of TRIA. They say a short-term deal would create economic uncertainty for businesses.

Tags Chuck Schumer Jeb Hensarling Terrorism insurance