WASHINGTON--Rep. Barney Frank, D-Mass., said yesterday he is at work on a solution to budget issues that caused the House leadership to delay this week's floor action on legislation extending federal supports for terrorism insurance.

Under consideration is a provision requiring a separate vote by Congress to authorize payment of claims. That is seen as dealing with cost issues raised by a Congressional Budget Office letter last week saying the program could cost the government $10.4 billion over 10 years even if there is no attack (or $8.4 billion when direct spending costs are offset by an estimated $2 billion rise in government revenues.)

Under House rules instituted by Democrats when they took over this year, any program that causes an increase in federal spending must be offset by either new revenues or cuts in existing programs.

The House Democratic leadership is considering the separate vote idea as it works to get the Terrorism Risk Insurance Act Extension Bill on the House floor next week.

In comments to congressional correspondents confirmed by Steve Adamske, his press aide, Rep. Frank said yesterday he is "trying to work out" the financial issues that caused the delay.

The letter by the CBO on Sept. 6 scored the bill as costing the government $3.5 billion over 5 years and $8.4 billion over 10 years under the Democrat's rules requiring that legislation authorizing expenditure of funds include a means for offsetting the expenditures.

"We hope to have it on the floor as soon as possible," Mr. Adamskie confirmed.

In comments on the House floor Friday, Majority Leader Steny Hoyer, D-Md., said the Democratic House leadership would put the bill on the floor the week of Sept. 17, after working through the pay-as-you-go requirement.

"Clearly, there is no payout if aterror attack doesn't happen," Rep. Hoyer said. "There is a contingency that would have to happen. We're trying to address that," Mr. Hoyer said.

"It's clearly of crucial importance to get the budget issue solved and get the bill moving, because the program expires Dec. 31 and the clock is ticking," said Cliston Brown, Property Casualty Insurers Association of America (PCI) federal public affairs director.

"We're watching very closely to see what final form the chairman's proposed changes will ultimately take, and we will be carefully assessing what impact those changes will have on the program," Mr. Brown said.

In a letter sent to the Democratic and Republican House leadership last week, Marc Racicot, president of the American Insurance Association, urged quick action.

"With the current program set to expire at the end of this year, and millions of commercial insurance policies in the process of renewal beyond that date, it is critical that Congress act to continue a program that is a vital part of our nation's economic security in a post-September 11 environment, and that has helped to provide much needed market stability for U.S. businesses," Mr. Racicot said.

The bill was originally scheduled for debate today on the anniversary of the 9/11 attacks that caused the insurance industry to pay claims estimated at more than $37 billion.

But members of the House were told late Thursday that action would be delayed, although the delay was attributed to House members leaving to attend today's funeral in Ohio for Rep. Paul Gillmor, R-Ohio, who died suddenly last Wednesday.

But the real reason was the CBO report, his spokesman confirmed, as did Mr. Frank in comments to Congress Daily.

Rep. Frank said he believes he will beable to "work around" the so-called "pay/go" problems and told Congress Daily, the CBO estimate was "Sanskrit."

He explained that he is considering attaching language to the bill that will say no funds would be spent until after an attack.

If an attack occurred, Congress would then have to vote again to release the money. "It would be...'nothing will be spent if this happens.' Then there will have to be another vote to release the funds, which I'm sure would come," Mr. Frank said.

He added he would have preferred to have secured a waiver of budget rules, but Democratic House leadership has not granted one this year in the face of anticipated GOP criticism. His comments were confirmed by his spokesman.

Mr. Frank said he was"bewildered" by the CBO estimate because, he argued, if an attack occurred, it probably would cost more than $10 billion, possibly as much as $200 billion.

"I don't know how they get a $10 billion terrorist attack ... It's letting the process take over the substance," he said.

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