Terrorism Risk Insurance Program Reauthorization Act of 2007

Mr. Chairman, this is a continuation of a program that the Congress adopted in one of the previous Congresses to provide insurance in case of a terrorist attack. We had, obviously, the terrible murderous attack on America in 2001.

Substantial damage was done. Obviously, the overwhelming cost of that was in the human lives caused by these murderers, but we also had property damage. And I believe that it is unrealistic to think, and in fact inappropriate to urge, that the private insurance market, which functions very well in this country and serves us well, that that ought to be used in response to terrorism. We bring a bill forward that would provide both for life and property insurance from the Federal Government worked out in various ways.

There are two arguments for continuing this on an ongoing basis. Everybody agrees that it needs to be extended for a while. Some have said phase it out, let the private market ultimately take it over. I believe there are two reasons why that is not a good idea.

First, virtually no entities that are in the private insurance market believe that the private market could handle this well. Not only do the insurers believe that, but the customers of the insurance believe it. And primarily, by the way, the customers here are commercial real estate developers. People who are going to build large commercial buildings with tens, hundreds of millions of dollars in construction costs cannot build without a bank loan, and the banks will not lend and would not be allowed to lend by the regulators without fully insuring against all risks, including the risks of the terrorism that we wish were not around but clearly still is.

We do not believe, based on extensive conversations with virtually everyone in the marketplace, that this will work. In fact, I submit for printing in the Record a letter from the head of Goldman Sachs in 2005, that very important financial institution, clearly an entity that knows a great deal about the market. And in 2005, only 2 years ago, after we had TRIA for a while and the question was coming up about whether or not to continue it, he wrote to the gentleman from Louisiana (Mr. Baker), then Chair of the Capital Market Subcommittee, that:

``Current data suggests that reinsurance, and consequently insurance, participation in the terrorism insurance market will decline if the Federal backstop is left to expire.

``Some have suggested that private markets for terrorism can successfully utilize risk transfer mechanisms such as catastrophe bonds.

``There is no evidence to suggest that the rating agencies or capital markets investors will be able to quantify the risk.''

And what he says is that he does not believe the market can do this.

The Goldman Sachs Group, Inc.,

New York, NY, July 26, 2005.

Hon. Richard Baker,

Chairman, Subcommittee on Capital Markets, Insurance and

Government Sponsored Enterprises, House of

Representatives, Cannon House Office Building,

Washington, DC.

Dear Mr. Chairman: On behalf of The Goldman Sachs Group,

lnc., a leading global investment banking, securities and

investment management firm, I am writing to express my

support for maintaining a federal terrorism insurance

backstop.

The federal terrorism insurance program, enacted by the

Terrorism Risk Insurance Act of 2002 (TRIA), has helped

provide the underpinning to a robust economic recovery

despite the ongoing threat of terrorism. Notwithstanding

Treasury's conclusion that TRIA has achieved its original

purpose, we are not aware of any meaningful evidence showing

that private terrorism risk insurance or reinsurance markets

have developed ample capacity to rationally price and insure

against terrorism on a scale that would adequately protect

our nation's economy. In fact, current data suggests that

reinsurance, and consequently insurance, participation in the

terrorism insurance market likely will decline significantly

if the federal terrorism insurance backstop is left to

expire.

Some have suggested that private markets for terrorism risk

can successfully utilize risk transfer mechanisms such as

catastrophe bonds (CAT bonds) that transfer risk from

insurers to capital markets. Such securitization vehicles,

however, represent a minor percentage of the overall

insurance market and have been used mainly for natural

disasters, such as earthquakes and hurricanes. There is no

evidence to suggest that the rating agencies or capital

markets investors will be able to more effectively quantify

the risk of terrorism than insurers or reinsurers. As such,

CAT bonds and other risk transfer mechanisms are unlikely to

offer, at this time, the broad capacity necessary to insure

America's businesses, workers and property owners against the

risk of terrorism.

With less than five months remaining in the current

program, American businesses soon will be forced to compete

for portions of a severely constrained private insurance

market and risk the possibility of being left with inadequate

levels of terrorism insurance. In short, we simply cannot

afford to let the private sector be economically exposed.

I appreciate your attention to this very important matter.

Sincerely,

Henry M. Paulson, Jr.,

Chairman and Chief Executive Officer.

The CEO of Goldman Sachs who signed this is a very distinguished expert, Henry M. Paulson, Jr. He is no longer the chief of Goldman Sachs; he is now the Secretary of the Treasury and has somewhat different views, but this is a letter that he sent in late July 2005.

So we don't think the market can handle it. But I want to argue that even if you thought the market could handle it, we shouldn't ask it to for this reason: If you insure against risk, you ultimately pass the costs along to the people who are at risk. Insurance allows you to spread that risk out among those who are at risk. But the more you are at risk, the more you pay in insurance.

If we were to adopt a purely market solution, that would mean that those parts of the country which were calculated to be likelier targets of terrorism would pay more. That is the insurance principle. If you are more likely to be the victim of terrorism, then you should pay more.

I do not think we should allow vicious fanatics who hate this country and seek to inflict severe physical damage on us to decide where it should be more expensive to do business in our country and where it should not. But if you use the private insurance mechanism, that is what you get.

There is another problem with the private insurance mechanism, not a problem, a good facet, that doesn't apply here. What you can do with private insurance is to say to these entities: You know what, if you lower your risk, we will lower your insurance costs. But people who have large office buildings cannot significantly lower their risk of being attacked by terrorists. If they could, we wouldn't want them to be. We wouldn't want people in

America in the business sector to be told, well, why don't you try to appease the terrorists so they don't blow you up. So it ought to be a public program.

Now, we have had significant debate in the committee. We had in the subcommittee and committee two full markups, an unusual degree of attention. A number of amendments were adopted from both parties. It is a different and, I believe, better bill now than it was when it was introduced. There are still some philosophical differences.

There is one issue, though, that came up after the committee consideration, and to our surprise the Congressional Budget Office said that this is going to cost a certain amount of money. I will get the estimate. I think they said $10 billion over a period of 10 years. That is a very odd thing to say. A terrorist attack will cost hundreds of billions if it happens; it will cost nothing if it doesn't. They apparently used some calculation of probability, which I think is in itself kind of dubious. Nobody, I think, can realistically talk about the probability of a terrorist attack, to give us the number that it will cost $3.5 billion over 5 years and $8.4 billion over 10 years.

One thing we know for sure is that these estimates are wrong. It will either cost a lot more, or nothing. CBO did its job, I don't think very well. Maybe that is because of the constraints they operate under. I don't make a personal criticism of them. But we have this PAYGO rule.

I will say that my own preference as an individual Member would have been to grant an emergency waiver, because if a terrorist attack is an emergency, then we shouldn't have that in there. I do not represent the thinking of the majority as of now on this or the Democratic leadership. That is an open question to evolve. So we did the next best thing, which is to adopt a set of procedures to deal with what will happen if the Federal Government has to make a payout under this.

I will say that I think that was a good effort, given the time frame. And I think it is important, given the potential expiration or the expiration date, that we should move forward, and maybe it will encourage our colleagues across the Capitol to act.

I do not believe that what we have in here will be the final answer. We have one possibility: Maybe a consensus will develop on a waiver. I can't say that I have confidence in that, but I certainly will advocate for it. If we can't get a waiver, we will within the framework of the PAYGO requirement, $3 billion over 5 years, try to work something out. And I know that is what the Democratic leadership has assured the Members from New York in particular, that they will do their best within the context of PAYGO to work this out. And I believe we can improve on where we are. We will reduce the risk that there won't be payment to the minimum amount possible, and then maybe we share that risk.

So I do not believe that what we have in this bill will be the final version. I think it is important to move this process along. I think this is as good an effort to do it as we could now. We will have to be consulting with the various parties in interest, including the cities, including the insurers, including the insured and others, and we will move forward on that. So I do believe it is very important to move forward now.

The only reason to vote against this bill at this point is not because of disagreement on some of the specifics. They will evolve as we go forward, particularly in the PAYGO response. But if you believe this is something that should be left to the market, and I do not believe that the market can or should be asked to handle terrorism. Adam Smith is one of the great intellectual contributors to thought in this world, but I don't think he knew much about terrorism, luckily for him. I do not think that the free market was adopted or is adaptable to murderous attacks of the sort we had on September 11.

So I believe this is the best we can do at this point. It is a very good bill, I believe, not perfect, with regard to the PAYGO fix, but that is something that I believe will evolve. I have every confidence that we will be able to do it better as we go forward, and I hope the bill passes.

I reserve the balance of my time.

Mr. Chairman, I yield myself first 30 seconds to note that I was impressed when the gentleman said he was going to vote against this bill because of this new amendment. But he voted against the bill the last time, so apparently my friend from Alabama intends to vote against this bill twice, because he voted against it in committee. So no one should think that the effort to deal with PAYGO is the reason he's voting against it.

Secondly, no one is asking anybody to accept any blank checks, and that is a misrepresentation of the legislative process. Changes will be made, I hope, in an open way. There will be an open conference, in total contrast to the way in which his party operated. I guarantee Members, as chairman of this committee, that we will have a conference committee, it will be a legitimate conference committee, and everything will be done openly, and votes will be taken. So no one is asking anybody to do anything in secret.

And again, the gentleman, having already voted against the bill, there are only so many bases you can claim on which you vote against the bill. He says he's not going to vote for the bill. We never thought he would. He voted against it the last time.

Mr. Chairman, I yield 5\1/2\ minutes to the gentleman from New York (Mr. Ackerman).

Absolutely.

Let me just say, first of all, having grown up in New Jersey, I'm used to complaints from New Yorkers. But in this particular case I believe they are entirely legitimate and justified, and I can assure the gentleman that we will work together in an open way to resolve it.

Mr. Chairman, I yield 2 minutes now to a senior member of our committee, the Chair of the Subcommittee on Financial Institutions and Consumer Credit, someone who has worked a great deal on this, the gentlewoman from New York (Mrs. Maloney).

Mr. Chairman, I now yield 2 minutes to another member of the committee, whose district in Jersey City is as close to the site of the terrorism attack of 2001 as any, other than the district in which it happened.

Mr. Chairman, I will give myself 15 seconds to say I was waiting for the gentleman to tell me he voted against the war in Iraq. He talked about all these things he voted against. Added together and doubled, they don't add up to the war in Iraq, the continuing indefinite drain. Hundreds of billions of dollars have already gone, and they are committed to spending hundreds of billions more to make us worse off.

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from North Dakota (Mr. Pomeroy).

I yield 15 seconds to the gentleman from New York to make a response.

I yield 3\3/4\ minutes to the gentleman from

Pennsylvania, the chairman of the subcommittee who guided this bill through a very thoughtful bipartisan markup.

(Mr. KANJORSKI asked and was given permission to revise and extend his remarks.)

I yield 2 minutes to the gentlewoman from Florida (Ms. Wasserman Schultz).

I agree with the gentlewoman on both points. First, there is nothing in this language, and I should say that this issue of preventing unfair denials of life insurance, she was the one who brought it up. She brought it up in the prior Congress. And now that we are in the majority, we are able to accommodate it.

I appreciate the fact that the gentlewoman worked with us as we worked with the life insurance companies. I believe we have an acceptable set of principles. She is right that this language does need a little bit more, I think, refinement on conflict. I think there's a conceptual agreement. I agree with her as to the need for definition.

As a preemption, that is very simple. I am a strong believer we should not be preempting unless we say so explicitly. There has been an excess of subtle preemption. By itself, this bill does not do that. Insurance has been primarily a State issue. This is a Federal statement, but it is not at all meant to be preemptive.

Before I yield to the gentleman from Vermont (Mr. Welch), I would just point out that when we voted on this in committee before we had the PAYGO glitch, the vote on the Republican side was 19 opposed, 14 in favor, so it was hardly a one-sided partisan bill. It partly reflects the work that the gentleman from Pennsylvania (Mr. Kanjorski) did in accommodating a lot of the concerns.

Mr. Chairman, I yield 2 minutes to the gentleman from Vermont.

Yes.

Get to the question.

If the gentleman would yield, he has pointed to a very important issue. We did try to make some accommodation with the small insurers, but I don't think we have finally done that. But I would say, you know, the notion that a bill that comes to the floor is not graven in stone shouldn't come as a surprise to people. We have a Senate. We have a genuine conference. It will be an open conference.

I should say I understand why some of my colleagues on the Republican side were somewhat puzzled at the notion that we might go to conference and, in an open way in conference, further amend the bill. They didn't believe in that. They didn't have any. So for them, that was all done in secret.

We will have an open conference to address these. And this is one of the issues. I do believe that it is legitimate. We will be meeting with, and the staffs will be meeting with, the smaller private insurers. To the extent possible consistent with the purpose of the bill, we will seek to improve on the accommodation.

Mr. Chairman, I yield the balance of my time to the gentleman from Rhode Island (Mr. Langevin).

Mr. Chairman, I offer an amendment.

Mr. Chairman, I recognize myself for 1 minute.

Mr. Chairman, this is an agreed-upon set of amendments. As I said, it was a bipartisan process, to some extent, in drafting. This makes technical revisions and requires Treasury to promulgate rules to clarify the nuclear, biological, chemical and radiation certification process. It provides that there be indexing, which is, I think, in accordance, there are some copayments, et cetera, and these will be indexed. It applies the reset mechanism to the deductible for nuclear, biological, chemical and radiological, and it makes technical and conforming changes. I believe, as I said, this represents a consensus.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I thank the ranking member. We were able to work out a number of these things. I would just want to return to a couple of broader points. I want to make two points. One, I don't think the market will work and neither does any participant in the market either as an insurer, or any significant number, or as the insured. But even if it could, it does not seem to me that it should. If you did this purely in the private market, you would give to the vicious attackers of America the power to decide that it would be more

expensive to do business in some parts of our country than others. You could have another video from the despicable Osama Bin Laden in which he could threaten that he would take action against this area or that area, these facilities or those facilities, and their insurance premiums would go up.

Yes, the private market should govern all those things which it deals with, with fire and with other forms of casualty and even with natural disasters. But to put in the hands of America's enemies this economic power is a grave error. Should the taxpayers pay for it? Yes, because it is a matter of national defense. It is a matter of homeland security. We are not talking about insuring people against the risk if they built a commercial building of liability to injury, of fire, of theft, of improper or inadequate construction. We are saying that, no, if you are in business in America, you should not have to insure against an attack on this country based on hatred of us.

So that is why I believe that we should do this as a public policy matter.

Mr. Chairman, at this point, I yield 2 minutes to the gentleman from North Carolina, a member of the committee who is one of our most thoughtful Members to discuss the general principle of the bill.

I join the gentleman in opposition, and I want to address this charge that we heard from one of the Members that this is a typical liberal Democratic big-spending program.

I will include for the Record a strong endorsement of H.R. 2761 from the Coalition to Insure Against Terrorism. It is composed of such traditional liberal groups as the American Bankers Association, the National Apartment Association, the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Retail Federation, the National Restaurant Association and the National Association of Industrial and Office Property. Virtually every business involved in this, the Financial Services Roundtable, led by that radical, our former colleague, Mr. Bartlett of Texas, every business group from the insuring and insured part says this is not for the market.

I would add also a letter from the National League of Cities strongly urging on behalf of the cities of America passage of this bill as it was reported out of committee.

Finally, from the American Insurance Association, a strong argument. In particular, it thanks us for including nuclear, biological, chemical and radiological.

Those who said the market can do it, it says two separate government studies have concluded what insurers already knew, that outside of State mandates, there is virtually no private insurance market capacity for NBCR. ``For this and other reasons,'' they like the whole bill, ``the American Insurance Association and its more than 350 property casualty insurance companies strongly endorse H.R. 2761 as it was reported out of the committee.'' They have got some concern about the reset, and we will talk about that and we agree with them. But here is this strong endorsement.

Yes, it is true that this is something that some liberal Democrats support. And here is the signer on behalf of the American Insurance Association, Governor Marc Racicot, I believe a former chairman of the Republican National Committee. I want to congratulate my Democratic colleagues. To have insinuated a liberal Democrat into the chairmanship of the Republican National Committee is a degree of flexibility I didn't know we have.

So this notion that this is some liberal invention and that the market can do it is repudiated by everyone who knows anything about the market. I hope the amendment is defeated and the bill is passed.

Vote ``Yes'' on H.R. 2761

The undersigned members of the Coalition to Insure Against

Terrorism (CIAT), a broad based coalition of business

insurance policyholders representing a significant segment of

the nation's GDP, strongly urge you to vote ``yes'' on H.R.

2761 Terrorism Risk Insurance Revision and Extension Act of

2007 (TRIREA).

American Bankers Association; American Bankers Insurance

Association; American Council of Engineering Companies;

American Gas Association; American Hotel and Lodging

Association; American Land Title Association; American Public

Gas Association; American Public Power Association; American

Resort Development Association; American Society of

Association Executives; Associated Builders and Contractors;

Associated General Contractors of America; Association of

American Railroads; Association of Art Museum Directors;

Babson Capital Management LLC; The Bond Market Association;

Building Owners and Managers Association International;

Boston Properties; and CCIM Institute.

Campbell Soup Company; Century 21 Department Stores;

Chemical Producers and Distributors Association; Citigroup

Inc.; Commercial Mortgage Securities Association; Cornerstone

Real Estate Advisers, Inc.; CSX Corporation; Edison Electric

Institute; Electric Power Supply Association; The Financial

Services Roundtable; The Food Marketing Institute; General

Aviation Manufacturers Association; Helicopter Association

International; Hilton Hotels Corporation; Host Hotels and

Resorts; Independent Electrical Contractors; Institute of

Real Estate Management; Intercontinental Hotels; and

International Council of Shopping Centers.

International Franchise Association; International Safety

Equipment Association; The Long Island Import Export

Association; Marriott International; Mortgage Bankers

Association; National Apartment Association; National

Association of Home Builders; National Association of

Industrial and Office Properties; National Association of

Manufacturers; National Association of REALTORS';

National Association of Real Estate Investment Trusts;

National Association of Waterfront Employers; National

Association of Wholesaler-Distributors; National Basketball

Association; National Collegiate Athletic Association;

National Council of Chain Restaurants; National Football

League; National Hockey League; and National Multi Housing

Council.

National Petrochemical & Refiners Association; National

Restaurant Association; National Retail Federation; National

Roofing Contractors Association; National Rural Electric

Cooperative Association; The New England Council; Partnership

for New York City; Office of the Commissioner of Baseball;

Public Utilities Risk Management Association; The Real Estate

Board of New York; The Real Estate Roundtable; Society of

American Florists; Starwood Hotels and Resorts; Taxicab,

Limousine & Paratransit Association; Travel Business

Roundtable; Trizec Properties, Inc.; UJA-Federation of New

York; Union Pacific Corporation; and U.S. Chamber of

Commerce.

I would say yes, the taxpayers do pay. It is a matter of national defense. Where people are building and incurring risks, they should pay for it themselves. I accept that point. We are talking about how we respond to Osama bin Laden or other murderers who would attack this country.

I think it is appropriate that the country as a whole respond, and not allow the terrorists to pick and choose which Americans will have to suffer disproportionately.

Mr. Speaker, I rise in opposition to the motion to recommit.

First of all, of course it says ``promptly.'' Members make a choice. The purpose of this is terrorism risk insurance expires the end of this year. We are on a reasonable timetable but not one that has a lot of water in it.

Yesterday, on an important bill that goes before the Committee on Financial Services, they said ``promptly.'' So the notion is that they can make the Committee on Financial Services a revolving door and then complain when we can't get the work done when we will have to do it two and three times.

Secondly, Members on the other side, and I don't know where the gentleman from California was on this, but in Committee, before the PAYGO problem arose, while we got substantial Republican support, 14, 19 Republicans, including the ranking member, voted ``no.'' So the Republicans had taken an opposing position in the majority. The administration is in the majority against it.

And what are they telling us? That a bill that the Republicans on the whole are against doesn't do enough for the people who want the bill. This is people intervening on behalf of people who don't want their intervention.

It is true that there is some ambiguity that I hope will be resolved; but the American Insurance Association, and that is the group that, despite the Republican's argument that this can be done by the market, says no, the market can't handle it. And, in a letter signed by a former chairman of the Republican National Committee, Governor Marc Racicot, president of the AIA, they say please go ahead with the bill. And they say: We have concerns about this fix. We hope we can go forward and work on it as opposed to delaying it further.

We got a letter today from the Chamber of Commerce and the National Association of Manufacturers, the Bankers, the League of Cities, being aware of the problem and of the first cut at fixing it, that say please go forward.

Now, if the people who were expecting to be the participants in this program said, wait a minute, this can't go forward, they would be, I think, entitled to be listened to. When people who have on the whole been opposed to the whole program and who voted against it before this arose now appear to say, oh, my goodness, this poor program, you are not doing enough justice, when they want to kill it, I don't think have a lot of credibility.

So, yes, this does need some work. There are a variety of suggestions that have been made. We do have a Senate to go forward and we have a conference process.

And I will say to the Republicans, I understand their skepticism about a conference process, because when they were in the power, they didn't have any. They did a lot of backroom, okay, we will do this.

We will have a conference. I am chairman of this committee. I can promise, and I have talked to the leadership, we will have an open conference and there will be debates and discussions.

I am explaining it because the Republicans, some of them, the newer ones don't know what one is. It will be the

House and the Senate, and we will talk about it. And so we will address this particular issue.

And, again, all of those who are in favor of this program as it was drafted, all of them want us to go forward as we continue to make this final fix. Most of those who are saying, oh, no, you can't go forward, it is not perfect, didn't like it in any case.

I yield to the gentleman from California.

I thank the gentleman, but I take back my time. He will vote in favor of the legislation after it is sent back to committee, after it is wide open again to an amendment process, after members of the committee on his side of the aisle will offer a whole lot of new amendments. And so weeks could go by before we are able to get floor time again and do it. There are a lot of things on the floor, and they are complaining that we didn't pass other things.

So the gentleman will vote for it in the sweet by-and-by if we send it back. There is an alternative: We go through the regular process. The Senate votes on this, aware of the CBO. We go to an open conference. We debate it, and we bring that to the floor.

I will yield again to the gentleman.

I know turf is more important to some Members than anything else.

It is rather odd to proclaim yourself an institutionalist while violating the rules.

The fact is that I understand turf makes some people jittery. And I will certainly advocate that the Rules Committee be included in the conference report.

Again, the Republicans have forgotten how conferences work. Conferences can have more than one committee, so the Rules Committee can get representation on the conference.

Again, everybody who is for this bill in the House and the private sector, people on the whole and the cities, the representatives of the public affected, want us to go forward and say, in good faith work, this out.

People who have been on the whole opposed to it, not entirely but on the whole opposed to it, have found this hook to try and hold it up. I don't think they are trying to hold it up to make it better when a majority of them wanted to kill it in the first place.

Mr. Speaker, I yield myself such time as I may consume.

Members of the body, first let me address the practicalities of where we are. I am going to talk about the policies in a few minutes after others have had an opportunity to speak, but let's just talk about where we are.

The chairman has talked about the Senate this, the House this. But the truth is that the present legislation expires December 31. That is in 19 days. Businesses across the country are trying to arrange their insurance coverages for next year, and they have no certainty as to whether or how much there will be a Federal safety net in place. Nineteen days.

Even if Congress were to act today, there is hardly time enough for insurance companies to develop new policy forms, to obtain approval from 50 State regulators, to get them in the marketplace for review by the brokers, and to finish negotiating coverage with their policyholders. There is just not time.

Now, it can be the Senate problem. The House passed a bill earlier this year. That is all true, but that doesn't change the facts. Nineteen days. Nineteen days. Each additional day that we fail to get a bill on the President's desk means less ability in the marketplace to adjust and to respond to the new mandates in this program, or the Senate program, particularly the mandates on domestic terrorism. Policies are going to have to be rewritten. And both the House and the Senate bill does that, so it doesn't really matter which bill ultimately passes.

Mr. Speaker, I share Chairman Frank's frustration with the Senate. He described this ping pong, back and forth. A House-Senate conference would have been nice to work out our differences, although in a minute I will say why I personally believe the Senate bill is more in keeping with our original intention. The chairman of the full committee and I were two of the authors of the original legislation. And it says in that legislation it was intended as a very temporary Federal backstop until the private market could fill in, and I will talk about that and why I support the Senate bill later.

But as a practical matter, whether I supported the Senate or the House bill, there is only one bill that is going to pass. I think the chairman knows that, I know that, Members of this body know that. That's the Senate bill.

The administration has indicated they are going to veto anything but the Senate bill. If we pass this bill, they will veto it. The Senate has agreed unanimously to their bill. They came together unanimously. I regret we weren't able to do that. But it was, at that time, a 15-year permanent bill. So we didn't come together. But we have got to put this behind us and adopt legislation that has a realistic possibility of becoming law, and to do it right now. We need to do that on the alternate minimum tax. It is staring us in the face.

I don't think the American people, the taxpayers, I don't think the accounting industry care whether or not the Senate did this to the House or the

House did this to the Senate. On terrorist insurance, I don't think the insurance companies, the developers, the policyholders, I am not sure they care about all the internal fights between this body and that body. They are caught in the middle, and you do have a bill available. It's a Senate bill that will go to the President to be signed and take away this uncertainty.

The Senate has made it clear that they are not going to pass the legislation that the chairman is offering. It is not me; that is the Senate. The White House has issued a Statement of Administrative Policy indicating that if presented with the bill we are going to vote on today, the President will veto it. That's with less. The Senate is not going to take it up, so it won't ever get to the President. So that is just theoretical because the Senate said they are not going to pass it. And we have got 3 weeks left before the program expires.

Now, some of our Members think that the private market, that the TRIA 5 years after 9/11, a 3-year bill and a 2-year extension, that TRIA has served its purpose. And in a few minutes I am going to talk about the Treasury and that they believe that it has fulfilled its purpose and from now on it just retards the private market.

But we can vote this bill down, we can bring up the Senate bill, and we can put a bipartisan TRIA extension on the President's desk. We can do it this week. The time for further deliberation or argument has passed. Time has run out on us.

With all due respect to the chairman of the House Financial Services Committee, I recommend we vote down this legislation, we bring up the Senate legislation, we do it in a motion to recommit, we do it in a unanimous consent, we do it in a suspension. We move it, we pass it over to the Senate, and we end the uncertainty.

If it is such a vital program that many Members think it is, why don't we need it in place? Why would we wait until a week or two or even after it expires to reauthorize it?

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Hensarling).

Mr. Speaker, I yield to myself such time as I may consume.

Mr. Speaker, the Terrorism Risk Insurance Act, TRIA, provides a free Federal backstop to private insurers to protect them against acts of terrorism in the United States so they can have insurance. It was enacted, as all of us recall, right after 9/11 for 3 years as a very temporary measure. It was intended to give the insurance industry developers a 3-year period of transition to a private market, allow them to stabilize, to price terrorism insurance, and the third goal was to rebuild capacity.

Now, in 2005, Republicans agreed. We came together bipartisanly and extended it for 2 years. However, that same year, the Treasury did a study on TRIA, and here's what they said. They said, by 2005, 2 years ago, the program had achieved all its purposes. The insurance market had stabilized. They were pricing terrorism insurance, and they were rebuilding capacity.

I will submit for the Record the Treasury Department study that they found had achieved all its goals. Now, let me read from the Treasury study of 2 years ago: ``The availability and affordability of terrorism risk insurance has improved since the terrorist attacks of September 11. Despite increases in risk retentions under TRIA, insurers have allocated additional capacity to terrorism risk, prices have declined, and take-up (purchase) rates have increased.'' But we extended it.

And then we passed the legislation that the chairman has talked about today, and it went over to the Senate. And the Senate, unanimously, passed a TRIA bill. One hundred Republicans and Democrats came together and passed that legislation, and the President said he would sign it.

Now, there are things about this bill that some of my colleagues on this side support. The gentlelady from Florida has a provision that I think would be beneficial. But it deals with group life. I'm sure she's going to talk about that provision in a minute.

But let me say this. The Senate has said they're not going to include group life. So why put a provision in about group life when the Senate has already said they're not going to include group life?

I yield to the gentleman from Massachusetts.

Well, as I said a few minutes ago to the chairman, with all respect to the chairman, we have 19 days. We've talked about the importance, particularly on that side of the aisle, and many Members on our side, the importance, if we are going to have a bill, let's have a bill. If the program is important, let's have the program. Let's not let it expire.

If terrorist risk insurance will shut down New York, if in the absence of this bill you can't build a hotdog stand in New York, why would we let a bill expire that will, quote, shut down the economy of New York? We have an alternative. The alternative is to pass a bill that passed unanimously in the Senate.

Executive Summary

The Terrorism Risk Insurance Extension Act of 2005 requires

the President's Working Group on Financial Markets (PWG) to

perform an analysis regarding the long-term availability and

affordability of insurance for terrorism risk, including

group life coverage; and coverage for chemical, nuclear,

biological, and radiological events; and to submit a report

of its findings to Congress by September 30, 2006.

In conducting this analysis, the PWG was assisted by staff

of the member agencies who reviewed academic and industry

studies on terrorism risk insurance, and sought additional

information and consultation through a Request for Comment

published in the Federal Register. Staff also met with

insurance regulators, policyholder groups, insurers,

reinsurers, modelers, and other governmental agencies to

gather further information.

The key findings of the PWG's analysis are set forth below.

The findings are presented under three main areas: the

general availability and affordability of terrorism risk

insurance; coverage for group life insurance; and coverage

for chemical, nuclear, biological, and radiological events.

Further detail on each finding is provided in the body of the

report.

Key Findings

Long-Term Overall Availability and Affordability of Terrorism

Risk Insurance

The availability and affordability of terrorism risk

insurance have improved since the terrorist attacks of

September 11, 2001. Despite increases in risk retentions

under TRIA, insurers have allocated additional capacity to

terrorism risk, prices have declined, and take-up (purchase)

rates have increased. The take-up rate--or the percentage of

companies buying terrorism coverage--has reportedly increased

from 27 percent in 2003 to 58 percent in 2005, while the cost

of coverage has generally fallen to roughly 3 to 5 percent of

total property insurance costs. These improvements have

transpired in a marketplace that has had access to a Federal

backstop that has gradually contracted through the life of

the temporary TRIA Program. Insurers' retention of risk has

steadily increased under the TRIA Program: deductibles have

increased from 7 percent of direct earned premium in 2003 to

17.5 percent in 2006, and other changes made to TRIA in 2005

have also increased insurer retentions. The general trend

observed in the market has been that as insurer retentions

have increased under TRIA and policyholder surpluses have

risen, prices for terrorism risk have fallen and take-up

rates have increased.

The improvement in the terrorism risk insurance market is

due to several important factors, including better risk

measurement and management, improved modeling of terrorism

risk, greater reinsurance capacity, and a recovery in the

financial health of property and casualty insurers. State

regulation does not appear to have had a significant impact

on capacity, and a significant number of policyholders are

still not purchasing terrorism coverage. How these factors

continue to evolve will importantly affect further

developments in the long-term availability and price of

terrorism risk insurance.

Insurers have made great strides in measuring and managing

their risk accumulations. The amount of capital an individual

insurance company is willing to allocate to a particular risk

in a given location depends on its understanding of its

maximum loss under different scenarios. Since September 11,

insurers have made greater use of sophisticated models that

allow them to identify and manage concentrations of risk in

order to avoid accumulating too much risk in any given

location. This improvement in risk accumulation management

has allowed insurers to better diversify and control their

terrorism risk exposures, which has enhanced their ability to

underwrite terrorism risk.

A significant effort has been made by the insurance

industry in modeling the potential frequency and severity of

terrorist attacks, which helps insurers to assess their

potential loss exposures. An understanding of the potential

frequency and severity of terrorist attacks is important for

insurers to properly evaluate their risk exposures.

Improvements in probability modeling of terrorist attacks

have likely had a positive impact on insurers' willingness to

provide coverage for terrorism risk following the re-

evaluation of terrorism risk that took place after September

11. However, unlike other catastrophic exposures (e.g.,

natural disasters) where there are more refined methods of

modeling frequency, modeling terrorism risk frequency relies

largely on analysis of terrorist behavior. Given the

uncertainty of terrorism in general and, in particular, the

uncertainty associated with these modeling efforts, insurers

appear to have limited confidence in these models for

evaluating their risk exposures.

The quantity of terrorism risk reinsurance capacity has

increased since the period following September 11.

Reinsurance for terrorism risk all but vanished after

September 11 as reinsurers withdrew from the market. The

market has since improved and reinsurers have gradually

allocated more capital to terrorism risk. The key

determinants in the capital allocation decisions of

reinsurers include pricing, which is influenced largely by

demand, loss experience, underwriting performance, and

probability of loss for a given risk at a given location.

These determinants also factor into the willingness of other

capital providers (e.g., through catastrophe bonds or other

mechanisms) to allocate capital to terrorism risk. The

presence of subsidized Federal reinsurance through TRIA

appears to negatively affect the emergence of private

reinsurance capacity because it dilutes demand for private

sector reinsurance.

The financial health and capacity of insurers has recovered

since September 11. There

has been improvement in the financial health of the insurance

industry, which plays a role in how much capacity an insurer

is willing to expose to terrorism risk. Since September 11,

policyholder surpluses in the property and casualty industry

have risen, as the industry has remained profitable (even

with the 2005 hurricane season losses) and has benefited from

increased rates of return on assets. As a result, insurers

have more available capital to allocate, and they apparently

have chosen to allocate additional capacity to terrorism risk

as demonstrated by the increased provision of terrorism risk

insurance coverage over the past few years.

States require that some types of terrorism risk insurance

be provided and otherwise regulate aspects of the terrorism

risk insurance market. However, it is unclear whether these

requirements have reduced capacity significantly. State laws

and regulations govern various aspects of the insurance

marketplace (e.g., mandating certain types of coverage,

approving forms and rates, and monitoring financial

solvency), and the provision of terrorism risk insurance

falls within this general structure. In terms of pricing,

although states regulate commercial insurance rates to

various degrees (to a larger extent with workers'

compensation insurance), commercial terrorism risk insurance

for large property risks may be exempt from state price

regulation or not subject to state price regulation (or other

state mandates) when purchased from non-admitted surplus

lines insurers. In addition, some insurers do not even charge

for the terrorism coverage that is included in their

policies. In lines of insurance with the greatest amount of

price regulation and coverage mandates (such as workers'

compensation insurance), insurers have generally remained in

the market, even as their TRIA retentions have increased,

despite not having the flexibility to fully price for

terrorism risk. Therefore, while state regulations have the

potential to significantly interfere with the operation of

the insurance markets, it does not appear that such

restrictions have had a significant impact in the market for

terrorism risk insurance in the post-TRIA environment.

While take-up rates have increased as prices have fallen, a

significant number of policyholders are still not purchasing

coverage. The willingness of consumers to pay for terrorism

risk insurance is a determinant of how much capital insurers

will allocate. It is unclear why approximately 40 percent of

all policyholders do not purchase coverage, although the

Treasury's 2005 study and others have found that the primary

reasons were price and assessment of their individual risk to

terrorist attack. Individual perceptions of low risk are

likely related to the lack of a successful terrorist attack

within the U.S. since 2001, and perhaps to some degree an

expectation that Federal aid might be available if a

significant attack occurs.

Further improvements in insurers' ability to model and

manage terrorism risk will likely contribute to the long-term

development of the terrorism risk insurance market. However,

the high level of uncertainty currently associated with

predicting the frequency of terrorist attacks, along with

what appears to be a general unwillingness of some insurance

policyholders to purchase insurance coverage, makes any

prediction of the potential degree of long-term development

of the terrorism risk insurance market somewhat difficult.

The post-September 11 terrorism insurance market has

developed in the presence of a Federal backstop (albeit a

progressively less generous one over time), which creates

inherent difficulties in evaluating the long-term development

of the terrorism risk insurance market.

Group Life Insurance

Coverage for terrorism risk insurance in group life

insurance policies has remained generally available and

prices have declined, even though group life insurance is not

part of TRIA. Given these market signals, there is no reason

to expect negative developments in the group life insurance

market. Group life insurance is generally sold to employers

as part of employee benefit packages along with other

benefits, such as medical, dental, vision, and disability. In

some cases group life insurers partner with other providers

of employee benefit services. The group life insurance market

is highly competitive and insurers appear to be unwilling in

the face of such competition to raise prices (states do not

regulate group life insurance rates), or to decline to

provide terrorism coverage. Even though group life insurance

has not had access to the Federal backstop under TRIA,

private market forces (high competitiveness and extreme price

sensitivity) have ensured the continued availability and

affordability of group life insurance to employers and their

participating employees.

As in the market for property and casualty reinsurance,

there have also been improvements in the availability of

catastrophic life reinsurance, and there is the potential for

continued market development. Just as with the property and

casualty reinsurance, catastrophic life reinsurance all but

disappeared after September 11, even though by most industry

metrics, September 11 was not a catastrophe in terms of

either individual or group life insurance losses. Still, the

lack or limited availability of catastrophic life reinsurance

following September 11 had no disruptive effect on the

availability and affordability of group life insurance to

consumers largely due to competitive market forces. Since

then, some catastrophic life reinsurance has again become

available in the marketplace, albeit at higher cost when

compared to pre-September 11 pricing. Today, group life

insurers are deciding whether to purchase reinsurance, or to

forgo and retain most of the risk--a decision that has not

had any impact on the availability and cost of group life

insurance to consumers.

Similar to the situation with property and casualty

insurers, group life insurers have developed an increased

ability to measure and manage their accumulation of terrorism

exposure through the use of modeling, and there appears to be

potential for additional improvements. While group life

insurers face aggregation exposure (the risk of multiple

losses from a terrorist-related mass casualty event due to

concentrations of insured lives), they are capable of

managing this risk to some degree by managing risk

accumulations. Property and casualty insurers have made great

strides in modeling techniques, but it is unclear to what

extent group life insurers have made use of these tools. The

highly competitive environment in the group life market, the

general wider dispersion of overall life insurance risks (for

companies that sell both group and individual life), and some

institutional arrangements regarding how policies are sold,

may all influence how group life insurers view their need and

ability to manage accumulation risk.

Chemical, Nuclear, Biological and Radiological (``CNBR'')

Coverage

Historically, insurance coverage for losses associated with

chemical, nuclear, biological, and radiological risks has

generally not been widely available unless it was mandated.

Insurers generally did not provide CNBR coverage even before

September 11, and for the most part they do not provide such

terrorism coverage even with a Federal backstop in place.

Given the general reluctance of insurance companies to

provide coverage for these types of risks, there may be

little potential for future market development. The factors

determining the availability and affordability of CNBR

coverage in the marketplace have more to do with the nature,

scale, and uncertainty of the damage and losses from CNBR

events--however caused--and less to do with terrorism

specifically. What coverage exists today is mostly tied to

state mandates, most prominently workers' compensation

insurance, as well as some aspects of fire insurance through

the Standard Fire Policy. In addition, a Federal mandate

requires some nuclear coverage for reactor operators and some

specialty coverage exists. There is virtually no CNBR

reinsurance available, and the modeling issues both for

exposure and probability become even more complicated for

Mr. Speaker, we have 19 days till this program expires. Now, if, as you have said, this is such an essential program, we need to pass a bill today. The industry needed 6 months. They've only got 19 days. Policies have to be written. We can continue to talk about not letting the Senate run over the House. We can continue to say we're going to stand up for our version of the bill, but ask yourself this question: How could 100 Senators, both Republicans and Democrats, come up with a unanimous bill, which many of us in this bill support, and the President said he will take it up and sign it, why are we here today delaying the extension of what many of you have argued on the floor today is a very important bill?

I'm going to say it again. Even if Congress were to act today, there's not enough time for insurance companies to develop new policy forms. There's not enough time for 50 State regulators to approve those forms. There's not time to get the finished product to the marketplace. There's not time to negotiate with policyholders.

So this idea that we don't have to pass it today, no, we don't have to pass it today. No, we don't have to pass it tomorrow. We should have passed it 6 months ago. We did. The Senate passed a different version, and we are arguing at the end of this session, 19 days before this program expires, as to differences between the Senate and the House version.

And quite frankly, as I have said, the Senate version, which is the version the Treasury Department urged on the House, the version the President has said he will sign, the insurance industry's happy with. It extends the TRIA program. Why are we here delaying? As I said, we're delaying this. We're putting this program at jeopardy. We're postponing a decision on AMT. The IRS is not going to have time to react to that, and here we are as if we have all the time in the world.

The American people are not interested in differences between the House and the Senate bill. I believe the American people, you know, if a bill can pass unanimously out of the Senate, which it did, and the President take it up, why does this House continue to debate long after the time to act and pass legislation? It should have happened 6 months ago. It can happen today. It should happen today.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield to myself such time as I may consume.

It's all come down to this. We can continue to debate the Senate, we can continue to try to change this bill, or we can pass a bill, send it to the President, which extends this vitally important program as so many speakers on the majority side have said. Let's be honest with ourselves. We know that this bill should have passed 6 months ago. We know it probably should have passed 9 months ago. We know that it will not pass in time for new coverage to be written January 1. We know that.

So here we are, arguing differences with the Senate, but I think the first thing we ought to acknowledge is the Senate unanimously passed this bill. Now, the chairman says that two people got together, agreed on everything and the other 98 waved good-bye. Well, let me say this. We, the majority of this body, almost all the Members on your side, if not all, and a good number of the Members on our side have said we need to extend this program and we needed to do it 6 months ago. It's time for us to pass the Senate language, send this bill to the President. You know, there comes a time when if what the Senate did is wave this bill good-bye, it's time for us to wave this bill good-bye.

We have engaged in a debate. The Senate has been unfair to us. Quite frankly, policyholders don't care whether the Senate's unfair to the

House. They don't care whether the House didn't get its way and the Senate did. The bill the Senate passed, I'm not supporting it because it's not only the only thing available today, although it is. Let me again read to you what the statement of the administration is.

The administration continues to believe that any TRIA reauthorization should satisfy these three key elements: The program should be temporary and short-term, there should be no expansion of the program, and private sector retention should be increased. That was the original policies and the original bill we passed. However, the administration will not oppose the version of H.R. 2761 passed by the Senate on November 16, but the administration strongly opposes any amendments to the Senate-passed version of the bill away from the administration's key elements.

And the only thing underlined in this statement to us is, accordingly, if H.R. 2761 passes, that's the bill before us, if it's presented to the President to be considered, his senior advisers will recommend him veto the bill. A very important program.

It's already too late for insurance companies and policyholders to adopt the provisions as of January 1. State regulators don't have time to print the forms. It's time for us to pass the bill. It's time for us to say, Okay, we didn't settle all our differences with the Senate, and we can do that. And, quite frankly, I am very happy that it is the Senate bill we'll be passing, because the Senate bill is very, very close to what we Republicans some year ago proposed. And we've gone through a year.

Provisions, the House has not gotten its way on certain provisions. It's time to act. It's past time to act, and we're going to have that opportunity today. We're going to have the opportunity to extend what you say is a vital program, what some of us say, well, actually we're not getting what we want because we believe that this program continues to be a free Federal backstop for private insurers and developers, and that's okay.

We want development, just like you do. We don't believe, as the Treasury does, many of us, that the program has served its purpose and it is actually impeding the private market, but we don't have to get there. We have compromised our beliefs and are willing to vote for a 7- year extension. The Senate unanimously came together and compromised their various differences and voted unanimously for a version the President has said he will sign.

The only thing that remains is on this side, the House side, that some in the majority have not gotten their way on certain provisions. And listen, I'm all for advocating a House position, but we've done that, and in the interests of the American people, in the interests of getting legislation, in the interests of closure, let's vote for the Senate version.

Mr. Speaker, pursuant to House Resolution 862, I call up the bill (H.R. 4299) to extend the Terrorism Insurance Program of the Department of the Treasury, and for other purposes, and ask for its immediate consideration.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and insert extraneous material on the pending legislation.

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.

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

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.

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.

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.

I yield now 6 minutes to the gentleman from New York (Mr. Ackerman).

Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Maloney), a representative from the city who is Chair of the Financial Institution Subcommittee and has been very active on this issue.

Mr. Speaker, will the gentleman yield?

The gentleman said why put the provision in if the Senate said it's not going to talk about group life? Because I don't think that we should have a de facto amendment to the House rules that puts the Senate in charge of what we can discuss.

Mr. Speaker, I yield myself 30 seconds.

The gentleman has raised a red herring. There is no chance of it expiring, and the fact that he would talk about a nonexistent threat of expiration seems to me to be an indication that there's nothing substantive to talk about.

In the end, we would retain the vehicle to pass this bill. But we will not give up talking about issues prematurely, and that's why we will not allow the Senate's unanimous consent agreement, very hastily done, to shut off debate here. But there is no chance of this expiring and the gentleman from Alabama knows that.

I yield now 3 minutes to the gentleman from Georgia (Mr. Scott), a member of the committee.

Mr. Speaker, I would just say the gentleman from Alabama appears to have the Senate's preference for conflict avoidance confused with genuine consensus.

There weren't 100 votes for that. They didn't have a roll call vote. They're barely able to act, and so a couple of Members worked out a deal and the rest of them waved it good-bye. But the notion that that comes with some great significance clearly misunderstands what's happening, and it certainly shouldn't keep us from legislating.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from New Jersey (Mr. Sires).

How much time remains?

Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from Florida (Ms. Wasserman Schultz).

Mr. Speaker, I rise in strong opposition to this modified closed rule that shuts down debate in the House to every Member of this body, except the chairman of the Financial Services Committee, who has already had ample time and opportunity to modify this legislation, and to one token Republican amendment.

Two nights ago, in the Democrat Rules Committee, which over the last year has truly solidified its reputation as the graveyard of good ideas in the House of Representatives, we had a wide-ranging discussion from Members on both sides of the aisle about their

proposals to improve this legislation. We adjourned this meeting without reporting out a rule so that alternatives to subverting the Rules Committee jurisdiction, while sticking to the Democrat pay-for rule, could be studied. Unfortunately, when the opportunity came for the majority to make good on its campaign promises to run the most honest, ethical and transparent House in history by providing an open and transparent legislative process, Members of this House were, once again, silenced by the heavy-handed Democrat leadership.

While I am no longer surprised by the Democrat leadership's decision to allow politics to prevail over good government, I'm still disappointed, because as the sponsor of legislation to extend the TRIA program in the 108th Congress, I fundamentally believe that it has helped the private sector to stabilize our Nation's economy by providing a functioning marketplace for policyholders to acquire terrorism insurance and for insurers to provide it to them.

In fact, many of the positive aspects of this bill mimic policy proposals included in my legislation, and in legislation introduced last Congress by my good friend from Louisiana, Richard Baker. Like these Republican bills, today's legislation would extend the current program, providing both policyholders and insurers with the certainty needed for long-term projects and our domestic economic health to move forward.

And, like prior Republican legislation, today's bill would eliminate the false distinction between foreign and domestic acts of terror. As we have learned from the London bombings and from the recent foiled terrorist plots in Germany and in New Jersey, no country is insulated from home-grown terrorism, which can be just as destructive and as costly as terrorists from abroad.

Other aspects of this legislation, such as the inclusion of nuclear, biological, chemical, or radiological coverage, mimic past Republican proposals without including market-based modifications that our proposals also contained in order to make this coverage both taxpayer friendly and cost efficient.

Unfortunately, there's one proposal in today's legislation that is unprecedented and that I simply cannot support. Written in the Rules Committee, without any consideration or debate in the Financial Services Committee, and then self-executed by the rule so that it receives no up-or-down vote, this rule contains language that skirts recent Democrat promises to abide by their own self-imposed PAYGO rules by shifting the responsibility of funding TRIA onto future Congresses.

By including this mandate on future Congresses, which the Supreme Court has roundly rejected as unconstitutional, the market stabilization benefits of TRIA completely evaporate.

Rather than helping to provide insurers and policyholders with the certainty that they need to manage their exposure to the financial costs of terrorism, this bill simply kicks the responsibility down the road and by and large says ``we will let somebody else worry about that.''

Rather than clearly signaling to the private sector what the Federal Government will spend in the event of another attack on the United States and what their own costs and responsibilities would be, this hastily drafted language, shoved in in the middle of the night, reintroduces political risk into this financial transaction by leaving these hard decisions up to the whims of a future Congress.

Mr. Speaker, I think this Congress should do better and they can do better than this. Instead of closed rules and artful dodges of the PAYGO rule, I think that Members and their constituents deserve the openness promised by Democrat leadership. Instead of procedural trickery and inserting language of a mysterious origin into this rule without any minority input or open debate, I think that Members and their constituents deserve transparency, which was promised by the Democrat leadership. And, most of all, instead of leaving the hard decisions and potential costs of this program to future Congresses, I believe that Members and their constituents deserve a bill that deals honestly with one of the most serious problems facing the American economy.

Unfortunately, this bill provides none of these things and is a far less responsible approach to dealing with the real-world economic problems posed by terrorism to our country, more than past Republican proposals. In fact, about the best thing that can be said about this bill and the process under which it is being considered today is the fact that perhaps it will spur the Senate to provide the American people with a more serious proposal in dealing with TRIA so that all of the flaws of this legislation can be worked out in conference.

I oppose this rule and encourage all of my colleagues on both sides of the aisle to do the same.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, at this time I am going to yield to the gentleman from California, who will help us to understand a little bit more clearly about the uncooked and, I believe, sloppy work that was presented to the Rules Committee such that many, many, many Members on a bipartisan basis questioned the decision that was made, and it will help us to reflect upon an opportunity about how it could be done better.

I yield 5 minutes to the ranking member of the Rules Committee, the gentleman from San Dimas, California, the Honorable David Dreier.

(Mr. DREIER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I would like to congratulate the gentleman for his fine remarks. As a matter of fact, I agree with him, that I do not believe that it is proper or correct to have a mandatory bill which requires mandatory spending, but discretionary funding that's available. And that is exactly what this new Democrat majority is doing. They are saying we would be absolutely required, mandatory, to spend the money, but discretionary as to whether we're really serious about providing that or not. And I believe that that is a serious question that comes under question today about the serious nature of the policy of this.

I don't attack the underlying legislation at all. The legislation does not bother me. I've supported this for years. That's what will be the underpinning of making our country stronger and better and preparing us for what may be in our future. But you can't require something and then not provide the money, especially under PAYGO rules that you had initiated yourself.

So this is simply a debate that the new Democrat majority is having within itself about whether they're really serious about their opportunity to bring to the table serious policy issues that face this great Nation.

Mr. Speaker, at this time, I would like to yield 5 minutes to the gentleman from Georgia, Dr. Price.

(Mr. PRICE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I appreciate the gentleman, once again, another speaker from our friends on the Democrat side, talking with us about how they are going to fix it. We appreciate that.

That is what we are asking for today. The best I can tell you is that the Republican Party is in favor of fixing it. We believe the best way to do it is on the floor of the House right now, because right now we could fix it where all the Members will understand what the ramifications are. The ramifications are either that we are going to say that terrorist attacks don't apply under PAYGO rules or that terrorist attacks would be in fine print, that now perhaps the Democrat majority wants to put in that all this spending applies but perhaps not under certain circumstances. I think we could craft a deal here.

But now what the gentleman is asking us to do is ``just trust me.'' Well, the first thing I would like to do is get a copy of the letter. It would be appropriate for me to ask for that. I know the gentleman, Mr. Ackerman, does not oppose my getting a copy of that letter. But what we are now being told is, ``now trust us that it will be brought back in a forum where there is debate, but it is either an up or down vote.'' We can't change that decision, nor can any other Member of this body change that. We have heard enough people talk today about how what is happening is wrong, should not happen, is bad policy. We ought to fix it today here on the floor if we are going to move forward and not say, ``trust me, trust me, wait for fine print or disagreement later.''

I appreciate the gentleman, Mr. Ackerman. I thought it was not only very nice what he did but well spoken, and I appreciate the gentleman very much.

Mr. Speaker, I yield 5 minutes to my friend, the gentleman from New York (Mr. King).

Mr. Speaker, you know, I do appreciate my good friend, the gentleman from Massachusetts, coming in and arguing, but his side has already given in on this point. They have already conceded that they don't like the way the bill is, the self-executing rule. There is already agreement on his side, ``Whoa, this is wrong. We don't agree with this. We will agree to fix it.''

So, I love the gentleman from Massachusetts, he and I are very good friends, but they have already conceded that point. They have already said, ``We think there could be a better way to do it. We agree to fix it.'' So what did we say on this side? ``Thank you very much, Mr. Ackerman. We appreciate this. That is what we have been asking for. We are pleased that we got it.''

I wish we had the agreement here today. I wish we knew what that deal was going to be before you brought the bill to the floor. That's why we held off in the Rules Committee for an extra day waiting for a better answer. Didn't get it, get to the floor.

I would say to my good friends on this side, if you want us to be a better minority, you are going to have to be a better majority. We took seriously what Speaker Pelosi said, ``honest, open, ethical Congress.'' We are still waiting for that through the Rules Committee. When she said, ``PAYGO is going to apply to everything,'' it implied that Republicans didn't do that. Then we took that at the surface of the words, not looking for fine print, not looking for how they are going to try and get out of it. So we are trying to make sure that we simply know what we are supposed to count on.

They have come to the floor today, and they have said, ``We are going to work on it.'' I am pleased we are going to do that. I am simply saying that it should have been done before it got here. That is sloppy.

Mr. Speaker, at this time, I have no additional speakers on the rule. I yield to the gentleman from New York to run down his time, then I will make my closing statement.

Mr. Speaker, I will be asking Members to oppose the previous question so that I may amend the

rule to allow for the consideration of H. Res. 479, a resolution that I have not heard talked about today but the concepts are in that that I will call the ``Earmark Accountability Rule.''

At the beginning of this Congress, a number of promises were made to the American people about the Democrats' supposedly new and improved earmark rules.

As the Congress has worn on, however, I have noticed that while the Democrats' rule changes definitely sound good, they have not really lived up to their promise and have not really accomplished much, since the majority has repeatedly turned their head the other way when it comes to their actual enforcement.

I acknowledge that the majority has given into the minority demands for enforcement of their own rules a handful of times when it comes to appropriations conference reports. Unfortunately, we continue to see non-disclosed earmarks in all sorts of bills, also.

This rules change would simply allow the House to debate openly and honestly the validity and accuracy of earmarks contained in all bills, not just appropriations bills. If we defeat the previous question, we can address that problem today and restore this Congress' nonexistent credibility when it comes to enforcement of its rules, like we have seen once again today.

Mr. Speaker, I ask unanimous consent to have the text of the amendment and extraneous material appear in the Record just prior to the vote on the previous question.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I rise in opposition to this rule, despite my long-term support for TRIA, because passing a bill that has already been pronounced dead on arrival in the Senate foolishly puts the reauthorization of this important program in jeopardy as its expiration date at the end of the year draws ever closer because

the Democrat House leadership has decided to continue to play political games on this issue.

By engaging in this game of what I call ``legislative chicken'' with the Senate, the House is setting itself up for potentially allowing this important program to expire, an outcome that I believe is bad for continued growth of the American economy and is an outcome that I strongly oppose.

But even if the Senate were somehow to miraculously pass this legislation, the Statement of Administration Policy regarding this legislation that was released by the Office of Management and Budget on Tuesday makes it clear that President Bush will veto this bill in its current form and that any extension of the TRIA program must be temporary and short term, include no program expansion and must increase private sector retentions.

At this time, I will submit a copy of the Statement of Administrative Policy for substantially similar legislation explaining the futility of today's legislative exercise in the Congressional Record.

Executive Office of the President, Office of Management

and Budget,

Washington, DC, December 11, 2007.

Statement of Administration Policy

H.R. 2761--Terrorism Risk Insurance Program Reauthorization Act of 2007

The Administration believes that the Terrorism Risk

Insurance Act (TRIA) should be phased out in favor of a

private market for terrorism insurance. The most efficient,

lowest-cost, and most innovative methods of providing

terrorism risk insurance will come from the private sector.

Therefore, the Administration has set forth three key

elements for an acceptable extension of TRIA: (1) the Program

should be temporary and short-term; (2) there should be no

expansion of the Program; and (3) private sector retentions

should be increased.

The Administration continues to believe that any TRIA

reauthorization should satisfy these three key elements.

However, the Administration will not oppose the version of

H.R. 2761 passed by the Senate on November 16, 2007. The

Administration strongly opposes any amendments that move the

Senate-passed version of the bill away from the

Administration's key elements. Accordingly, if H.R. 2761 were

presented to the President in the form to be considered by

the House, his senior advisors would recommend that he veto

the bill.

Mr. Speaker, the Senate version of this legislation is not perfect. However, I do believe that on behalf of terrorism insurance policyholders, American workers and businesses, the health of our insurance marketplace and the continued growth of the American economy, it is important for the House to stop playing games with TRIA and to pass a bill that can advance through the Senate and be signed into law by President Bush.

Mr. Speaker, I encourage all of my colleagues to reject this exercise in legislative futility so that the Rules Committee can instead bring to the floor a rule that would provide for consideration of the Senate compromise bill that the House has already received.

It's time to stop playing games on this important issue and for the majority to finally grow up and lead to protect the American economy from the threat of terrorism.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, we urge the legislation to be passed, also. And that's why we're encouraging for the House to agree to the Senate version so we can get this done before the expiration at the end of the year.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I have great respect and admiration for the chairman of the committee, and I think that virtually everything the chairman said I agree with. I think the question is of timing. The fact of the matter is that the majority has chosen to not have a conference. They have chosen to negotiate among themselves, and they have chosen to wait until the last minute. With great respect to the gentleman, these are lots of arguments I could have been making or our chairman could have made just several years ago for a number of years.

I yield to the gentleman from Massachusetts.

Reclaiming my time, we are not negotiating with the Senate, we are negotiating with ourselves, and I believe that what we need to do is get it done.

Now, there are reasons why the gentleman has chosen to do what he has done. I really can't disagree with him. I really don't. From an institutional perspective, for making the bill better, I think every one of these are great arguments. I think my point would be similar to what we are trying to make on our side: Let's get our work done so the rest of the world and the rest of the marketplace can get their work done. It's pretty late. We are now moving on to the middle of December and this expires at the end of December. There are lots of paperwork issues, there are lots of legal issues, there are lots of contract issues. There are lots of things that need to be done, and it takes some period of time. We are doing the same thing with the AMT. We are trying to say, why don't we not rock the boat because what you are going to do is put in jeopardy the ability this next year for the IRS to even get their work done. So the wake-up call, the head snap is, today it's darn near the middle of December. I could have completely bought off on everything the chairman said, every single word, every single philosophy, everything he said if this were November 15. It is not. It is 1 month later. It is time that we get our work done so that the marketplace can get their work done so that investors can know that they are taken care of, so that we can have certainty in the marketplace and so that we know what we are going to pass. And that is the only disagreement.

Retrieving my time, I would say to the gentleman that we believe we should not continue doing what the gentleman is doing. We should do what the agreement should be and get it done, because we believe that there are overriding considerations, Mr. Speaker, in the marketplace, with people who need an answer today to be able to get their work done. And waiting until the end, whatever that means, does not help the marketplace.

We are not the start-all and end-all of the world by being the United States Congress. There is a marketplace out there. There are people who need things done. New York City is a fine example of where the business community and those that own property need TRIA. Let's get the thing done. I would have agreed completely with what the gentleman said 1 month ago. It is now time. We are asking, please, let's get this thing done. Let's come to an agreement.

I reserve the balance of my time.

Mr. Speaker, will the gentleman yield?

The question that I would have for the gentleman is, whom are you negotiating with in the Senate? You talked about these negotiations. Whom is the negotiation with?

I thank the gentleman. So we are going to keep playing ping pong?

Mr. Speaker, I appreciate both the gentlemen from the Financial Services Committee offering their explanation about this process. I would once again remind my friends in this great body that there is a lot of work that needs to be done after this bill leaves both of these bodies, including a signature of the President of the United States. What we do does matter and is important. But it is time we get our work done to allow the people who really do matter, and that is the people who are in the marketplace to be able to buy the insurance, to make it available and to get it ready days from now. It is time to put aside our differences. It is time to enter the real negotiation, and that is either to have a real conference where we know where people are to get it done, or to find a way to cut a deal. And, instead, to come back to this body and to once again change the rechange of the change I think is a bad deal.

So we're going to vote ``no.'' We would like to get the deal done, but not to continue to deal.

You see, Mr. Speaker, in the world where I come from, it is results that matter, not just reworking the work to rework the work, just like what this body has gotten used to this year with 10 out of 11 spending bills not being done. I would remind the majority, you got a lot of work to do there, too, so that we can have the confidence of the American people that we can not only run the railroad on time, but we can make wise decisions.

I reserve the balance of my time.

I thank the gentleman, and responding to the gentleman, I have no additional speakers.

I thank the gentleman.

Mr. Speaker, the conversation that has taken place today is one that was important. The Republican Party does support and thinks what the gentleman is doing is of a worthy nature. The gentleman, Mr. Frank, has, for a number of years, not only spoken about this issue but has worked hard for its resolution. We know that if we continue to work together on issues like this, we can get things done. But getting things done is also important, and we think that a bill should have been done, an agreement should have been reached before now and negotiations should have ended because it is now time to give to the President, it is now time to give to the marketplace.

But I also recognize that this is the 44th closed rule of this session, that somebody is not really interested in what we think. That's why we have 44 closed rules this year. So we come to the floor, once again, the Republican Party, saying, you can have it your way, we know you have the votes, 44th closed rule this year. But let's get our work done. Let's not have the American people waiting on the House of Representatives.

I know the Speaker of the House wants to do things in the way that she sees fit. But let's get our work done. The American people are waiting. They are waiting not just on AMT. They are not just waiting on this bill that we have today. They are waiting on, like the rest of the government, the other 10 out of the 11 spending bills. And I do think that the American people don't confuse a lot of work that is being done with progress. Progress is the end result where you get something done and then say, We're proud of our effort. All I have heard all today, notwithstanding the prior arguments, and these arguments, that everybody is trying to take credit for everything. We are far short of the runway. We are far short of the runway because what we do here must be done right, but must be finished and done so that the American people and the economy can move forward.

I know this is a closed rule. If it had been an open rule, and that is okay, we understand. If it had been an open rule, we would have said, let's get this thing done. Let's close it. I offered an amendment in the Rules Committee the other day that said, let's take the Senate language, let's decide we will just accept what they have done so that we can get it done in proper timing. On a party-line vote that was defeated. So there is a reason why the Speaker wants to continue this dialogue. There's a reason why the Speaker wants to wait and to hold this out. I don't understand it. But the Republican Party once again today is saying, we think we ought to get our work done. We think we should do what we said we were going to do, and we should then let the American public see what we have done and not hide things in secret.

Let's get this done, let's get TRIA done, let's get our AMT done, let's get the 10 out of 11 spending bills done, and let's show the American people we can do the work which we were sent here to do. That is the position of the Republican Party.

Mr. Speaker, we yield back the balance of our time.

Mr. Speaker, on that I demand the yeas and nays.