NU Online News Service, June 10, 5:45 p.m. — Washington
Bush administration officials are pressing Republican leaders to support terrorism insurance legislation, but they stopped short today of endorsing the bill introduced Friday by Democratic leaders.
“The absence of federal legislation is having a palpable and severe effect on our economy and is costing America’s workers their jobs,” top Bush administration officials say in a letter sent today to Senate Minority Leader Trent Lott, R-Miss.
The letter was signed by Treasury Secretary Paul O’Neill, Office of Management and Budget Director Mitchell E. Daniels, National Economic Council Director Lawrence B. Lindsey and Council of Economic Advisors Director R. Glenn Hubbard.
Without terrorism insurance legislation, the letter says, the economic impact of another terrorist attack would be much larger than the Sept. 11, 2001, attack, leading to major bankruptcies, layoffs and loan defaults.
However, the letter says the legislation must not allow for excessive litigation against American companies.
Two provisions are essential in any legislation to avoid this problem, the letter says:
- All cases arising out of terrorist attacks should be resolved in a federal court in a consolidated action.
- The victims of terrorism should not have to pay punitive damages.
“We would recommend that the President not sign any legislation that leaves the American economy and victims of terrorist acts subject to predatory lawsuits and punitive damages,” the letter says.
S. 2600, the bill that was introduced Friday by Democratic leaders, addresses only one of these issues. Under S. 2600, all claims for property damage, personal injury or death filed against American companies would be handled by a federal court. All state-based causes of action would be preempted.
However, S. 2600 does not address the issue of punitive damages against American companies.