House Republican leaders are closing in on a plan to reauthorize a terrorism risk insurance program that would represent a compromise with an already-passed Senate version, but are proceeding quietly amid worries about a potential conservative backlash.
Initially enacted after the Sept. 11, 2001, terror attacks, the program is set to expire at the end of 2014. The deal under discussion would raise the threshold at which the federal cost-sharing program for insurance would kick in to $250 million in damages from a terrorist strike, according to House GOP leadership and other sources.
“Something’s got to give,” a House GOP leadership aide said of the realization by leaders that the standoff with the Senate must end, amid building pressure for action from a wide range of businesses throughout the real estate, transportation, construction, and manufacturing sectors.
A Senate bill passed 93-4 in July would maintain the existing $100 million threshold and bring only minor changes, while reauthorizing the program for seven years. The federal backstop has never been needed, so far.
But House conservatives, led by Financial Services Committee Chairman Jeb Hensarling of Texas, oppose the Senate approach, and say bigger changes are needed to protect taxpayers. They want to raise the “trigger” for the federal aid to $500 million in damages and make other alterations, as reflected in a bill passed by Hensarling’s committee to extend the program for five years.
“But if Hensarling tries to bring that bill to the House floor for a vote, he knows it won’t pass,” the House GOP leadership aide said.
Hensarling aides did not respond to requests for comment Tuesday. But Hensarling has hinted at a realization that the bill passed by his committee faces problems.
That’s because a combination of Democrats and House Republicans, mostly from the New York City region and other urban areas whose districts contain more potential terrorist targets, would be enough to block that measure, say aides and lawmakers. The opponents could include Rep. Peter King, R-N.Y., who supports full reauthorization. King could not be reached through a spokesman.
“We have a diverse Republican caucus in the House. We have some members who believe the reforms go too far and we have a host of conservatives who feel the reforms don’t go far enough,” Hensarling said in a statement in July.
He also said at the time that he expected the process of finding a long-term plan to take several months. There has since been talk of a potential six-month extension of the current program, kicking a final reauthorization to a new Congress.
But it’s not clear that could pass the Senate. And outside groups from the insurance, business, construction, and manufacturing sectors are getting antsy. It was these groups that combined after 9/11 to push for initial enactment of the Terrorism Risk Insurance Program in 2002 to help provide continued coverage in high-risk areas for such things as commercial buildings and stadiums.
With Democratic buy-in, there appears to be little doubt such a compromise could pass the House.
Still, a remaining complication is a lack of appetite for any move that might appear to publicly roll over Hensarling and other conservatives””especially prior to upcoming internal House GOP leadership elections, to be held in November.
A brewing battle over another issue””opposition by Hensarling and other conservatives to renewing the Export-Import Bank’s charter without major changes””only further adds to the political sensitivity.
One hope is that a compromise of setting $250 million as the threshold for the terrorism insurance renewal can be sold in the next weeks to conservatives, in a way designed to avoid handing them an embarrassing defeat. Even if it is not the exact approach they want, it is less than what the Senate has passed, and could be pitched to them as a victory in that regard.
But for some outside groups waiting for congressional action, such internal political maneuvering misses the point.
“Failure to reauthorize TRIA would have serious consequences for US economic stability and security,” said Marty DePoy, a spokesman for the Coalition to Insure Against Terrorism, on Tuesday. The group’s membership roster includes a wide range, from the American Bankers Insurance Association, to the Institute of Real Estate Management, to the Association of Art Museum Directors and Hilton Worldwide.
“Each time TRIA nears its expiration, business owners struggle with the uncertainty and fear that they may no longer be able to obtain the coverage they need,” he added. “With limited legislative days before the election, CIAT members urge the House to move quickly to pass a reauthorization proposal so leaders in the House and Senate can agree on a final bill for the president’s signature.”