By Peter Schroeder - 04/10/14 10:36 AM EDT
A bipartisan group of senators has struck a deal to extend a government insurance program for terrorist attacks.
Under the proposal, the Terrorism Risk Insurance Act (TRIA) would be extended for another seven years, but private companies would shoulder a larger share of the costs if a terrorist attack occurred, according to an aide familiar with the deal. The program is set to expire at the end of the year.
Schumer is co-sponsoring the extension alongside Sens. Dean Heller (R-Nev.), Mark Kirk (R-Ill.) and Mike Johanns (R-Neb.).
The proposal, and its bipartisan backing, could lead to a conflict with conservatives who have criticized the program as one that puts government dollars at risk, and who have been reluctant to seek an extension.
A Senate Banking Committee spokesman said the bill was a "positive step," adding that both Chairman Tim Johnson (D-S.D.) and ranking member Sen. Mike Crapo (R-Idaho) want to advance it in the coming weeks.
TRIA was first put in place in the aftermath of the Sept. 11 attacks in 2001, and has twice been extended by Congress.
In a September hearing on the program, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said the program was originally intended to help insurance companies recover from the attacks, but it has only grown in scope with each extension. He said he had an open but skeptical mind on another extension.
At the same time, he noted that several of his GOP colleagues, such as Rep. Michael Grimm (R-N.Y.), have been adamant about the need for another extension. Grimm has sponsored a five-year extension of the program, and a 10-year extension has been offered by Rep. Michael Capuano (D-Mass.).
Rep. Maxine Waters (D-Calif.), the top Democrat on Financial Services, praised the senators for coming to an agreement, while chastising Hensarling for not bringing up an extension yet.
"In the Financial Services Committee, there are two pieces of legislation that would achieve these goals by cleanly extending TRIA over the long-term. Both have bipartisan support and both could pass the Committee today," she said in a statement. "It seems some may understand that TRIA must remain in place to ensure a speedy recovery after an attack, to avoid market disruptions, and to protect schools, jobs and businesses."
Ensuring the program continues has been a top priority for a host of major businesses and industry groups, which have formed a coalition solely devoted to pushing an extension. Major banks, sports leagues and hotel chains have joined the group pushing for an extension of that backstop.
According to the aide, the Senate proposal would include two changes that would be phased into the program over five years.
Currently, the government covers 85 percent of losses in a terrorist attack up to $100 billion, with insurance companies covering the other 15 percent. The government support kicks in once insurance companies have exhausted their deductibles.
The Senate proposal would drop government support to 80 percent of losses, requiring insurance companies to pick up 20 percent of the costs.
The new plan would also require the government to recoup costs from the industry in the event of costlier attacks. Currently, the government is required to recoup its costs if the losses suffered by insurance companies do not exceed $27.5 billion (the Treasury Secretary has the power to recoup costs above that, but it is not mandatory).
Under the new bill, that threshold would climb to $37.5 billion.
This post updated at 2:00 pm and 2:53 pm.