The deadly Paris terrorist attacks on the offices of the newspaper Charlie Hebdo served as a grim reminder that terrorism has not abated, prompting the Senate to vote Thursday to renew the Terrorism Risk Insurance Program after efforts to extend it were blocked at the end of last year.
The Senate voted to reauthorize the Terrorism Risk Insurance Act (TRIA) through 2020 on a 93-4 vote after the House passed the bill Wednesday on a 416-5 vote. The bill now goes to President Obama for signature.
"As we saw in the news just this morning, no one is immune from the terrorist threat in the 21st century – and government’s responsibility is to take proactive steps to protect our citizens against all those who seek to inflict harm and destroy what we build," New York City Mayor de Blasio said in a statement on Wednesday.
Following the tragic September 11, 2001 terrorist attacks, TRIA was signed into law in 2002 to create a federal "backstop" for insurance claims related to acts of terrorism. TRIA helps businesses recover in the wake of a catastrophic terror attack.
"This is a bill which, I have said a number of times, was absolutely essential after September 11th, when terrorism risk insurance could not be obtained. It even became more obvious as time went on how essential it was, how we desperately need it, and we have to preserve it," said Rep. Peter King (R-NY).
"Also, not one federal dollar has been expended on it, but yet, billions of dollars in revenues, construction projects, jobs and expansion of the economy has resulted because of it," King added.
However, the program expired on December 31, 2014, after objections by Sen. Tom Coburn, now retired, held up legislation.
"There may not be any TRIA until January, the next Congress. I’m OK with that," Coburn said last month. "Quite frankly, I don’t care whether TRIA happens or not. Because I believe that markets will fill in that void."
House Republicans added a provision changing part of the 2010 Dodd-Frank financial law concerning the impact of new derivatives rules on so-called end users. Sen. Elizabeth Warren (D-Mass.) introduced an amendment to remove the provision, but the amendment failed by a vote of 31-66.
"If we fail to challenge this cynical strategy now, it will only encourage Republicans to pull our financial regulations apart piece by piece," Warren said.
The bill also contains an amendment proposed by Sen. David Vitter (R-La.) that would reserve a seat on the Federal Reserve Board for someone with community banking experience. The amendment passed.
The bill states that the purpose of the amendment is to, “Reaffirm the importance of community banking and community banking regulatory experience on the Federal Reserve Board of Governors, to ensure that the Federal Reserve Board of Governors has a member who has previous experience in community banking or community banking supervision.”
Renewal of the program has drawn overwhelming support from a number of business sectors including commercial developers, owners of sports and entertainment companies, construction, hospitality and realtors.
Immediately after the Senate passed TRIA, the National Association of Realtors issued a statement praising the House and Senate for quickly reauthorizing the program.
"TRIA provides a crucial framework for economic recovery in the wake of a catastrophic terrorist attack and allows the US to maintain a stable terrorism insurance market so employers can invest in properties, create jobs and insure against losses due to a terrorist attack,” said Chris Polychron, president of the National Association of Realtors. “Without TRIA, many property owners with existing commercial mortgage balances that require terrorism insurance would be in technical default of their mortgage terms.”
The program provides a backstop in which the government steps in to cover the bulk of losses after the first $200 million in damages from a terrorist attack, up from $100 million previously. The government has never paid out under the law.
“This reform bill doubles the taxpayer protection trigger, decreases federal share of losses, and encourages greater private sector participation in the terrorism risk insurance market,” said Rep. Randy Neugebauer (R-Texas), chairman of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit and a sponsor of the TRIA bill.