Former Defense Secretary Robert Gates says Congress should reauthorize its terrorism insurance program in the lame-duck session.
Gates said it would be a “huge mistake” for lawmakers not to renew the Terrorism Risk Insurance program, which was enacted after the Sept. 11, 2001, terrorist attacks to provide a federal backstop for the cost of insurance payouts after large-scale attacks.
Insurance industry officials are scrambling during the recess to make sure Congress reauthorizes the program, which is set to expire at the end of the year. The program was originally seen as a temporary program but has been renewed in the past.
Gates joins the Chamber of Commerce and The Real Estate Roundtable, as well as the NFL and the NBA in pushing for the renewal. Those groups are calling for a long-term reauthorization, like the seven-year bill that the Senate passed in July.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) is pushing to reform the program. Hensarling and other Tea Partiers are weary of the government meddling in the insurance market in a program that was supposed to be temporary.
In June, Hensarling’s panel approved Rep. Randy NeugebauerRandy NeugebauerWarren’s regulatory beast is under fire – and rightfully so Dem senators to Trump: Don't tell consumer bureau chief 'you're fired' Overnight Finance: Carson, Warren battle at hearing | Rumored consumer bureau pick meets Trump | Trump takes credit for Amazon hirings | A big loss for Soros MORE's (R-Texas) reauthorization bill, but it never got a floor vote. Business groups opposed that bill, which would increase the threshold for which the government is responsible for fronting costs from a $100 million trigger to $500 million.
At a meeting last week with industry officials, Neugebauer's staff attempted to rally support for the bill.
But one insurance industry source said the message wasn't successful.
“They wanted us to get on board with this bill or else risk getting a short-term reauthorization,” the source said. “That meeting was pretty much a step backwards.”
Further complicating the reauthorization process are Hensarling's rumored leadership ambitions. It's unclear how next week's midterm elections will impact the Tea Party's threshold in Congress.
Sources familiar with the industry's concerns fear that Hensarling could look to use the bill’s reauthorization as a political wedge issue between establishment Republicans and Tea Party members.
It was a similar tactic he took when politicking the reauthorization of the Export-Import Bank, another government entity Tea Partiers view as wasteful spending. Hensarling got Congress to agree to a short-term reauthorization that extended the bank's charter through June.
The insurance industry is concerned TRIA could face a similar fate, an industry source said.