President Obama signed on Monday a six-year reauthorization of the Terrorism Risk Insurance Act (TRIA) that included a provision progressives opposed to change the 2010 Dodd-Frank Wall Street Reform Law.
It ended a terse Congressional negotiation process that saw the TRIA legislation caught in lawmakers' political wrangling.
A vast coalition of business, athletic and tourism industry groups lobbied heavily for the program, which allows for the federal government to pay businesses after catastrophic terrorist attacks exceeding $200 million in damage.
But the bill included an unrelated provision opposed by progressives, including Sen. Elizabeth WarrenElizabeth WarrenWarren, Daines introduce bill honoring 13 killed in Kabul attack Boston set to elect first female mayor Progressive groups call for Puerto Rico Fiscal Control Board to be abolished MORE (D-Mass.).
The measure scraps a number of Dodd-Frank financial regulations on several financial services industry sectors, dubbed "end users" in Washington speak. Republicans and centrist Democrats argued that these restrictions were only intended for big banks.
Prior to signing the legislation, White House officials and many Democrats criticized Republicans for including the "end users" provision in the bill, though Obama stopped short of issuing a veto threat.
It comes as House Republicans are set to vote on another piece of legislation this week that would tweak Dodd-Frank. The White House has already threatened to veto that legislation, which would delay Dodd-Frank's implementation of the legislation's so-called "Volcker Rule" until July 2019.
The Volcker Rule, named after former Fed Chairman Paul Volcker, requires that financial institutions only be able to hold a certain amount of financial trades known as "collaterized loan obligations" (CLOs), which many economists view as a riskier form of financial trading.
Despite the "end users" provision, TRIA garnered widespread bipartisan support, with the House passing the legislation earlier this month on a 416-5 vote, with only Tea Party hard-liners opposing.
The Senate passed TRIA last week on a 94-4 incomplete vote. Sen. Marco RubioMarco Antonio RubioOvernight Defense & National Security — Milley becomes lightning rod Joint Chiefs Chairman Milley becomes lightning rod on right GOP senators unveil bill designating Taliban as terrorist organization MORE (R-Fla.) opposed the legislation because he viewed the program as "corporate welfare."
Sen. Charles SchumerChuck SchumerCEOs urge Congress to raise debt limit or risk 'avoidable crisis' If .5 trillion 'infrastructure' bill fails, it's bye-bye for an increasingly unpopular Biden The Hill's Morning Report - Presented by National Industries for the Blind - Schumer: Dem unity will happen eventually; Newsom prevails MORE (D-N.Y.) and House Financial Services Committee Chairman Jeb Hensarling (R-Texas) negotiated a deal, with Hensarling pushing for the $200 million threshold — double the amount of the former $100 million threshold. Hensarling and other Tea Partiers had argued that TRIA puts taxpayers at risk of bailing out big businesses.
Warren and Sens. Bernie SandersBernie SandersWarren, Daines introduce bill honoring 13 killed in Kabul attack trillion tax hike the opposite of 'good investment' Progressive groups call for Puerto Rico Fiscal Control Board to be abolished MORE (I-Vt.) and Maria CantwellMaria Elaine CantwellDelta variant's spread hampers Labor Day air travel, industry recovery Wyden asks White House for details on jet fuel shortage amid wildfire season Air travel hits pandemic high MORE (D-Wash.) opposed the legislation because of the Wall Street provision.
Congress first created TRIA in 2002 after the Sept. 11, 2001, terror attacks, and it hasn't been used since its creation. However, most businesses rely on the program's existence to provide economic certainty when they are purchasing terror insurance on the private market.
For the insurance industry, the bill was a victory after an uncertain legislative process. Lawmakers failed to reauthorize the legislation before the last Congress ended, so the program expired on Dec. 31.
Nat Wienecke, senior vice president of federal government relations for the Property Casualty Insurers Association of America (PCI), praised Obama for signing the legislation.
"The overwhelming bipartisan votes in the House and Senate are a testament to the need for this critical program to preserve economic certainty today and provide for economic resiliency in the face of a catastrophic terrorist event," Wienecke said.