An eerie silence has descended over the White House and the Treasury Department as the administration prepares to release a report that will play a key role in the fate of the Terrorism Risk Insurance Act, which expires Dec. 31.
The report by law must be in the hands of Congress by June 30.
The White House and Treasury are giving no hint as to what the report will say and when it will be released, although there is strong speculation it will be presented to Congress very soon.
Rep. Paul Kanjorski, D-Pa., a ranking member of the House Financial Services Committee, last week castigated the White House for lack of attention to the bill and the House Republican leadership for inaction.
Kanjorski warned that the industry might have to accept a series of 6-month extensions in order to win the two-year transition seen as the time period needed to develop a private market for terrorism risk coverage.
Kanjorski said leadership for extension from the administration is just “totally absent.” Among the administration deficiencies, he said, is the large number of vacant spots the administration has failed to fill among appointed posts at Treasury.
Kanjorski said there is nobody at the appointed level at Treasury to take the bill and marshal it through Congress. He said he hasn’t heard from President Bush on the bill at all and told his audience, “You may talk to the President more often than I do on TRIA.”
He cited the fact that TRIA extension is not a pressing issue with the administration, such as the budget or war in Iraq. “We are not going to get a TRIA extension by public demand; we’re going to get it by forceful advocacy.” Kanjorski said. “That’s because of the delay of DeLay,” he said, as a way of reminding his audience that House Majority Leader Tom DeLay, R-Texas, has strongly questioned having the government insure private property.
Insurance industry officials have been battling for a year to have the current three-year-plus program extended for two years while a more permanent solution with lesser federal involvement is crafted.
These people say that if the report recommends a straightforward two-year extension as represented by the legislation introduced several months ago in the Senate by Sen. Robert Bennett, R-Utah, and Sen. Chris Dodd, D-Conn., it will set off immediate action in the House, probably leading to hearings by mid-July in the House Financial Services Committee, as well as the introduction of legislation there by the time Congress leaves for its August recess.
An equally positive result will occur if the report recommends a one-year extension while providing “contours” as to what the administration will accept as a long-term solution. “Anything that is nebulous is beneficial, setting off immediate action, at least in the House,” one lobbyist said. “Any combination of the above options is acceptable.”
But there is trepidation that the report will make no recommendations as to what is acceptable to the administration, “which means there will be no extension,” the lobbyist said.
The silence has created deep anxiety in the property/casualty insurance and the real estate industries. Additionally, underwriters of group life insurance bemoan the fact that reinsurance for their product dried up after the Sept. 11, 2001, attack and is still not available, leaving them totally on the hook if another disastrous terrorist attack occurs.
In his comments, Kanjorski specifically mentioned that group life should be covered.
Rep. Paul Kanjorski, D-Pa., a ranking member of the House Financial Services Committee, last week castigated the White House for lack of attention to the bill extending TRIA and said leadership from the administration on the issue was “totally absent”