It’s back to the drawing board for House Republicans on legislation reauthorizing a federal backstop for terrorism risk insurance.
Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, disclosed last night that House Republicans failed to gain enough support to push through a bill that would effectively phase out a federal backstop for terrorism risk insurance after five years except for nuclear, biological, chemical and radiation (NBCR) risks.
In the wake of the head count, Waters called on members of both parties “to work together to achieve consensus on the renewal of the Terrorism Risk Insurance Act (TRIA).”
The fact that Republicans lack the votes to pass the slimmed-down bill through the House comes against the background of a scheduled Senate vote today on a bill that makes only modest changes to the current TRIA legislation.
“Tomorrow, the U.S. Senate is likely to pass bipartisan legislation to renew TRIA without delay,’ Waters says in her statement.
“Until the House does the same, the uncertainty and instability that for months has plagued our largest venues, businesses and employers will continue unabated,” she says.
With all 27 House FSC Democrats voting “no,” the FSC Republican leadership pushed the bill through the committee June 20, with 32 votes.
Rep. Peter King, R-N.Y., had made it clear for weeks that urban, moderate Republicans would ultimately not support the legislation.
In a comment to The New York Times Tuesday, King said he had support from up to 30 other Republicans to oppose the House bill as written, and he was apparently true to his word. King argues the House bill “is a solution in search of a problem. [The existing program] hasn’t cost us one penny. It’s brought in billions of dollars in tax revenues from the rebuilding of New York and it’s still needed.”
Reps. Jeb Hensarling and Randy Neugebauer, both R-Texas, are being urged to pursue a slimmed-down TRIA by the Heritage Action Foundation, a conservative lobbying group that contends TRIA was designed to be temporary when it was first enacted in 2002 in the wake of 9/11.
Moreover, a Heritage statement says, “Recent industry data indicates that there has been a great deal of progress towards making terrorism coverage both widely available and affordable.”
Citing data compiled by Heritage’s Diane Katz, a research fellow in regulatory policy, argues, “The insurance industry today is well-capitalized, and fully equipped with the resources necessary to provide terrorism risk coverage without government subsidies.”
The group further notes, “Although proponents of S. 2244 claim to make reforms, the program would remain largely intact.”
The House bill would extend the current program for five years; the Senate version, S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, would extend it for seven years. The Senate bill did increase industry co-shares by one-third under a five-year phase-in period.
In persuading Republicans on the House FSC to support the slimmed-down bill, Neugebauer, chairman of the House FSC’s Housing and Insurance Subcommittee, said he sees the bill “as an effort to recognize and keep pace with the market developments of the terrorism risk insurance marketplace over the past decade.”
He said the bill accomplishes three things: First, it strengthens vital taxpayer protections without altering the program’s fundamental functions. Second, the bill brings greater certainty and stability to the terrorism-risk market. “Lastly, the TRIA Reform Act lays the foundation for a more robust private market for terrorism risk,” Neugebauer said.
Hensarling was candid in saying he thought the slimmed-down House bill was still too generous to the industry and should be further curtailed, but didn’t have the political support to get such legislation through the committee.