Today, the Senate voted to reauthorize the Terrorism Risk Insurance Program, which serves as a bailout guarantee for big businesses.
Here's David Dayen on this bipartisan-approved corporate welfare program:
The Terrorism Risk Insurance Act provides a government backstop to insurance companies in the event of a terrorist attack. Tria arrived in the wake of the September 11 attacks, when it arose as a way for the government to protect the insurance companies from taking huge losses that would put them out of business after a terrorist attack.
The rationale behind Tria is simple. Previously, there was no contract by which companies could protect themselves from terrorism costs. That was a disaster when the insured loss for 9-11 approached $40bn, with most of it paid by insurance companies and the firms who insure them, known as reinsurers.
The appeal is clear – to insurers, who have been raking in cash. Over 60% of all businesses have purchased government-subsidized terrorism insurance since 2002. The program has cost the government $1m a year – almost nothing – but has made an estimated $40bn in revenue for insurance companies, who have never paid a claim, or given a dime to the government for their reinsurance protection.
(Read the full article for a more in-depth explanation).
The bill just voted on reauthorizes the program for six more years and raises the threshold for the government to begin paying out terrorism insurance claims from $100 million to $200 million.
Republicans, in TRIA reauthorization negotiations last year, decided that they wanted to sweeten the corporate welfare pot some more by rolling back part of Dodd-Frank, particularly by exempting non-financial companies from having to follow the same derivative regulations as banks. The White House has expressed its disapproval of this addition to the bill but has not issued a veto threat because of it:
Broadening Dodd-Frank’s statutory exemptions is a complicated issue with serious implications for the health and stability of the Nation’s financial markets. The main purpose of S. 2244 is to reauthorize the Terrorism Risk Insurance Program; this bill should not be used as a vehicle to add entirely unrelated financial regulatory provisions.
During the Senate vote on TRIA reauthorization, Elizabeth Warren decided to offer an amendment to strip this unrelated Dodd-Frank rollback provision from the bill.
The Senate proceeded to vote her amendment down 66 to 31.
All of the Republicans in attendance voted against it, and 13 members of the Democratic caucus joined them.
Who were the 13?
Michael Bennet (D-CO)
Tom Carper (D-DE)
Bob Casey (D-PA)
Joe Donnelly (D-IN)
Martin Heinrich (D-NM)
Heidi Heitkamp (D-ND)
Angus King (I-ME)
Amy Klobuchar (D-MN)
Joe Manchin (D-WV)
Claire McCaskill (D-MO)
Gary Peters (D-MI)
Debbie Stabenow (D-MI)
Jon Tester (D-MT)
Keep your eye on them because they will likely be the Democratic turncoats who help the GOP get to 60 on their various deregulatory bills over the next two years.
After killing Warren's amendment, the Senate voted on the full TRIA reauthorization bill. It passed easily 93 to 4.
The four NO votes were Maria Cantwell (D-WA), Marco Rubio (R-FL), Bernie Sanders (I-VT), and Elizabeth Warren (D-MA).