The last thing the US economy needs is something else dragging it down — but we’ll all take a big hit unless Congress acts soon on terrorism insurance.
If we blow this, new development throughout the country could come to a screeching halt. This means if the Jets were ever to get their own stadium, construction could stop if Congress fails to act.
The Terrorism Risk Insurance Act of 2002, aka TRIA, expires in less than 16 months. Debate is already heating up on Capitol Hill over whether to extend it — even though it’s crucial for large construction projects.
Pre-9/11, US insurance companies routinely covered losses from terrorist attacks. But the attacks that day forced insurers to rethink the risks — and pretty much stop offering terrorism insurance. This left many commercial developments stalled or canceled, as developers and lenders refused to move forward without this insurance.
Let’s be clear: Terrorism insurance is not just about protecting New York skyscrapers. It also protects America’s sports stadiums, energy and transportation infrastructure and resorts.
TRIA doesn’t expire until Dec. 31, 2014, but with Congress badly gridlocked, we need to start moving now to get the job done. Otherwise, large projects could come to a halt. Kiss New York’s plans for “The Wheel” and Hudson Yards project goodbye.
Goodbye, too, to the jobs that go with such major construction.
TRIA also provides a key backstop to worker’s compensation insurers across the country. Without it, many of these insurers could be left in financial ruin in the wake of a major terrorist strike.
To keep our city and country moving forward, and to protect our valuable assets, we’ve introduced the Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013, to extend TRIA, in its current form, through 2019.
Some call this a taxpayer bailout. They’re wrong. TRIA creates a federal cost-sharing program that ensures that substantial private capital is used to cover losses before any government help is released. With $100 million in industry-wide copayments, TRIA is the most taxpayer-friendly approach to dealing with the costs associated with a terrorist attack.
Others say that, 12 years after 9/11, TRIA is no longer necessary, that the private insurance market is willing and able to once again bear the risk. Wrong again: The problems that caused the industry to retreat from offering terrorism insurance pre-TRIA still exist.
With widespread support from everyone from Disney World to the NFL to the insurance industry, the biggest obstacle to a TRIA extension is bound to be Congress. But we can’t afford to drag out this debate — projects can be delayed and even canceled merely on the fear that we won’t renew TRIA.
The sooner TRIA is extended, the sooner Americans can be assured that Congress isn’t keeping them from their new hockey arena or shopping mall.
Today, the House Financial Services Committee starts debate on TRIA. We’ll be urging our colleagues to listen carefully to the merits of extending TRIA and to pass a five-year extension of this critical program without delay.
Reps. Michael Grimm (R-Staten Island/Brooklyn) and Carolyn Maloney (D-Manhattan/Queens) are members of the House Committee on Financial Services.