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Terrorism Risk Insurance Revision and Extension Act of 2007

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Location: Washington, DC


TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT OF 2007 -- (House of Representatives - December 12, 2007)

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Mr. FRANK of Massachusetts. I yield myself such time as I may consume.

Mr. Speaker, the House passed a version of the terrorism risk insurance program by a large vote, 300-something to 100-something, earlier this year. It happened after a very open process at the subcommittee and committee level. We had a very good set of meetings. There were concerns raised. I think there was general agreement that terrorism insurance had to go forward, but there were some very legitimate debates about how to do it. Not all of them, obviously, have been resolved.

[Time: 15:00]

We had, unusual for our committee and I think maybe for other committees, a full markup in subcommittee followed by a full markup in committee. The bill that emerged was much closer to a consensus product, although obviously not unanimous. There were amendments offered by both sides. There were bipartisan compromises worked out. We came to the floor. It wasn't as open a process as I would have hoped, but it still represented, we thought, a fairly good piece of legislation, and, of course, it got well over 70 percent of the House Members voting for it. Then it went to the Senate and nothing happened for a very long time, and I regret that. We had hoped that we could continue this process and in fact have a conference. The Senate did not act.

Finally, the Senate acted and sent us a bill which was an extension of the current program, better in my view than the current program, not as comprehensive as the bill we passed. And we were told by the Senate, as we have been from time to time this year: This is all we can do. Take it or leave it. That seemed to me to be a problem and, now, not so much for substance as for institutional concerns. Members have asked, well, in the end we may just have to accept what the Senate sent us. That is possible, and we have preserved the option to do that.

Let me be very clear, Mr. Speaker. We are here dealing with a new bill that we introduced. The Senate bill still sits at the desk. It will be available if the Senate continues to refuse to act in any kind of a bicameral manner. But I am not ready to give up yet, Mr. Speaker, on some important issues, the most important of which is the institutional one. It is simply not in the spirit of the United States Constitution for one of the Houses to say, this is it, take it or leave it, especially when you contrast the way in which the two Houses acted. We had subcommittee and committee markup and debate on the floor. The Senate had one of their not very open processes. The bill emerged from some quiet conversations among the senior members of both parties and went to the floor, no amendments, no votes, here it is. As I said, I regret that. We may not be able to prevent it from happening in this instance. I do think it is important for us to send the message that we do not want to see this sort of procedure repeated.

So what we did was to in effect have a virtual conference. We looked at the Senate bill, we looked at our bill, and we came up with what I think might well have resulted had there been a conference. The bill we passed had a 15-year extension. The reason for a long extension is that we are talking here about building projects. We are talking about the need for terrorism risk insurance if we are to get large commercial buildings, or residential, but especially commercial buildings built in our big cities. You can't get those buildings obviously without bank loans and you can't get the bank loans without insurance. That is why the Chamber of Commerce scores this as an important bill, why the real estate industry, the cities, a whole range of business and urban interests tell us this is important. And you need to have some assurance of a timeframe in which to build. We thought 15 years. The Senate said 7 years. We didn't here come with a split-the-difference. We have accepted

[Page: H15357]

the Senate's 7 years. We were told at the last minute that there was a PAYGO problem in a calculation by the Congressional Budget Office that I still do not understand, but we have no option but to abide by it. We came up with a PAYGO solution which was not a very good one. The Senate came up with, and I give them credit here, a much better PAYGO solution. They had more time to work on it, but they did it well. We have accepted the Senate PAYGO solution. So we accept that term of years, we accept that PAYGO solution.

We had also broadened this from simply being in case a building was destroyed to include group life insurance and protection against what sadly we cannot rule out, nuclear, biological, chemical, or radiological attacks. The Senate rejected both of those. We split the difference. We accepted their rejection of nuclear, biological, chemical and radiological attacks. We did feel that group life insurance should be in. I should say that including the group life provision is something that was called to our attention on a bipartisan basis from Members from Florida which says that you should not have your life insurance cancelled if you go to Israel. That is basically what we are talking about, or maybe some other areas where the insurance companies think there is a problem when there isn't one. And we checked, and the number of payoffs they have had to make of people who died going to Israel or other countries on their list is negligible, zero, from what we could tell. So we included a provision in our bill that was overwhelmingly supported by both sides, to say that there were rules; not that you couldn't deny someone life insurance if they were going to a hazardous area, but that you had to have a rational process by which you defined that.

We put group life back in. Members will remember that after the 2001 mass murders of so many innocent Americans by vicious thugs, we adopted a very expensive program to compensate people. A better way to do that would be to have this group life insurance as part of the terrorism risk insurance.

And at the request of smaller insurance companies, we lowered the trigger from $100 million to $50 million per incident, because small insurance companies said to us: We would like to be able to insure some of these buildings. Our colleagues from some of the smaller States brought this to our attention. But if it is $100 million that you have to absorb before this kicks in, we can't do it; we can do it at $50 million.

So we accept the Senate version on 7 years versus our 15. We accept their version of PAYGO. We accept their rejection of nuclear, biological, chemical, and radiological weapons. We do ask that group life insurance be kept in with the travel provision I mentioned, and that the trigger go from $100 million to $50 million.

Finally, there is the reset provision, which says that if you have once been attacked and you have to deal with it, should that same area be attacked again, the clock starts again. That is, you would not be in a position where, having been attacked once by these vicious murderers, you would be unable to get full insurance if they did it a second time.

Those are the differences. As I said, we have no guarantee that the Senate will do this or pay even serious attention. We have retained a vehicle in case they don't. But I don't want, and I said this earlier, we are not debating preemptive strikes here. We are debating preemptive surrender. I don't want to have a situation where the United States Senate passes legislation, sends it to us and says, You may not even think about changing things.

We are prepared to compromise. But I think inclusion of group life and that travel protection is important. We think that the smaller insurance companies had a legitimate concern. We think the reset provision is legitimate.

We are asking the Senate again to consider them. We can't compel that. But I think it would be a mistake for us to set the precedent that, when they confront us with these ultimata, that we simply cave in.

Let me repeat, because I got it right now. I was quoting before the lyric from ``MacArthur Park.'' What the Senate tells us is, Look, we were able to do this, but we can't do it again. You just have to accept it as it is. And the theme song apparently is, if people will remember; I will say it because I sing something awful.

``Someone left the cake out in the rain.

I don't think that I can take it

'Cause it took so long to bake it

And I'll never have the recipe again.''

If someone in the Senate tells us, we left the bill out in the rain, or at least they are telling us that if we were to try to get them to change it, it would be leaving the bill out in the rain, and they couldn't remake it because they don't have the recipe.

Mr. Speaker, I think it's time to send the Senate back to their recipe books and ask them to keep track. I understand in the end we may not be able to change things, but I do not want this House simply at this point to say, Okay, you gave us an ultimatum, we accept it.

I would hope, and we are going to be here obviously next week, that the small life insurance companies, people interested in the ability to travel to Israel and others would then at least go to Senators and say, Can't we at least even have a vote on this? Can't you even consider this?

And that is why I ask that today we send this bill back over. We retain a vehicle if the Senate remains impervious, but I think it's worth a try.

I reserve the balance of my time.

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Mr. FRANK of Massachusetts. Mr. Speaker, first of all, there is no chance of waiting until after it expires. I don't know why the gentleman would have said that. He knows there is zero chance of that.

Now, I agree it has waited too long. But I would have been more impressed with the urgency if I had had people joining us in trying to get the Senate to act. We passed the bill months ago. We would have liked to have seen an act. But I didn't hear all this passion trying to force the Senate to act, and it was partly the minority in the Senate that was blocking it, that is, block the ability to have a conference.

[Time: 15:15]

Here is the point. I think telling the life insurance companies that they should not be restricting people's ability to travel unfairly is important. We think group life is important. We think that not allowing your community to be disadvantaged if it has been attacked once is important. And we may not be able to accomplish them this year, but we think it is important not simply to cave in and say those aren't even worth fighting for.

We are going to send a message, I hope, by voting for those principles because we pass the bill this year, and we may have to accept a minimal position, but we will be back here in a month or two and we hope to renew some of these things.

So I just reject the notion that the Senate can achieve this by waiting and waiting and waiting and then saying, Oh, well, there isn't enough time. There is not enough time because they held it up. No one can seriously argue that having seen this delay of many months, and again I didn't hear all this passion trying to make the Senate act for all of those months, nobody can argue that another day or two is going to make a difference. And that's what we're talking about.

So I reiterate, there is no chance of this expiring. Everybody knows that. We have preserved our ability at any point simply to accept this bill. The question is do we give up now or do we send them the message that the ability to travel to Israel, the concern for the small insurance companies being able to insure commercial properties and the concern for group life and not just property, that those are important issues.

We can take that vote today and send that message. And if we have to, we will accommodate reality. But we will have sent that message, and it gives us a basis upon which to act next year.

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