House easily approves bill to extend terrorism insurance

Brushing aside a White House veto threat, the House Wednesday overwhelmingly approved a 15-year-extension of the terrorism risk insurance program enacted in the aftermath of the 2001 terrorist attacks on the World Trade Center and Pentagon.

With 88 Republicans voting "yes," the legislation passed 312-110 after a spirited debate in which GOP opponents accused the bill's Democratic sponsors of trying to transform what was intended to be a temporary fix into another permanent big government spending program.

Noting that the original purpose of the bill was to buy time for private insurance companies to develop their own models for terrorism coverage, Rep. Jeb Hensarling, R-Texas, chairman of the Republican Study Committee, asked "how will we ever know now (whether this is possible) if we give away something for free?"

Republicans denounced as a farce the bill's provision to bring the legislation into compliance with pay/go rules by requiring that if a terrorist attack occurred, Congress would have to vote again on a fast-track basis to release funding from the program.

"That is like telling a homeowner he doesn't have to pay a premium on his house until it burns down," said Budget ranking member Paul Ryan, R-Wis.

Led by members from New York, Democrats contended the program's extension was vital because the insurance industry was not ready to assume the terrorism risk, and because a paucity of insurance would jeopardize the economies of areas considered likely to be attacked.

"You can't even build a hospital stand in Manhattan now without insurance," said Rep. Carolyn Maloney, D-N.Y.

"We are saying that if you are in business in America, you should not have to pay for attacks on America based on hatred," said Financial Services Chairman Barney Frank, D-Mass.

Democrats also hammered home the endorsement of the bill by former Republican National Chairman Marc Racicot, now chairman of the American Insurance Association.

Final approval came after the House defeated, 230-198, along party lines an amendment by Rep. Steve Pearce, R-N.M., to raise the 5 percent deductible in the bill by 1 percent annually instead of 0.5 percent. Pearce said the stepped-up increases would prompt insurance companies to take more responsibility.

Democratic opponents of the amendment said it would price insurance companies out of the market in high-risk places like New York City and prevent reconstruction on sites damaged by terrorist attacks. "Should we have left Ground Zero smoldering?" said Rep. Gary Ackerman, D-N.Y.

A Republican motion to recommit the bill also was defeated, 228-196, in another mostly party-line vote. But Frank's manager's amendment was adopted 426-1 after Republican leaders said it would make "improvements" in the overall legislation.

The estimated cost of the bill, over $10 billion in the first 10 years of the extension alone, helped draw the White House veto threat.