The U.S. Senate failed to pass legislation extending the Terrorism Risk Insurance Act, meaning it will be 2015 before there is any chance of it coming up again.
The TRIA passed the House on a bipartisan vote but stalled in the Senate under outgoing Senate Majority Leader Harry Reid, D-Nev., in the last days of this session of the lame duck 114th Congress.
David Stevens, president and CEO of the Mortgage Bankers Association, said it’s critical the legislation passes in 2015, before the new Congress begins.
“MBA is extremely disappointed that the Senate failed to reauthorize TRIA before adjourning last night. Passing this critical piece of legislation would have been a key safeguard for numerous industries, including the commercial/multifamily real estate finance sector. Failing to reauthorize this program will have widespread market implications with regard to risk exposure, and could significantly interrupt the flow of business capital to the market,” Stevens said. "We will continue to support the availability and affordability of terrorism risk insurance, a critical component of a strong and vibrant commercial and multifamily real estate market. We urge the 114th Congress to make this an immediate legislative priority in 2015.”
The head of the National Association of Realtors, Chris Polychron, expressed similarly heated sentiments.
“The U.S. Senate’s alarming failure to renew the federal terrorism risk insurance program before adjournment will stall commercial real estate development around the country. The Senate missed an opportunity to approve a six-year reauthorization of the Terrorism Risk Insurance Act, which passed the U.S. House of Representatives with overwhelming bipartisan support,” Polychron said. “TRIA provides a crucial framework for economic recovery in the wake of a catastrophic terrorist attack and allows the U.S. to maintain a stable terrorism insurance market so employers can invest in properties and create jobs without assuming the risk and liabilities of a terrorist attack. Terrorism risk insurance is also a requirement of many existing commercial mortgage balances, so those whose coverage will lapse at the expiration of TRIA will be in technical default of their mortgage terms.
“Without action, terrorism insurance will become scarce and expensive, causing construction projects to stall, commercial property values to drop and the ongoing economic recovery to slow. Realtors will work closely with Congress in the new year to swiftly reenact TRIA and provide much needed certainty to the market,” he said.
Rep. Maxine Waters, D-Calif., blamed House Financial Services Committee Chairman Jeb Hensarling, R-Texas, even though he supported the TRIA.
"I'm saddened and disappointed that the U.S. Senate was unable to renew the critical Terrorism Risk Insurance Act. The death of TRIA is the direct result of Chairman Hensarling's 11th hour brinksmanship in the House of Representatives. Democrats repeatedly pointed out the difficulty of passing the Chairman’s legislation in the Senate, which contained provisions unrelated to the important terrorism insurance backstop,” Waters said. “The result will be a stagnation in job creation, investment and economic growth for the countless businesses and venues that rely on TRIA.
“Even though the Senate and House both voted to renew TRIA by strong bipartisan votes, it is disturbing that the ideology of one Republican in the House and another in the Senate has derailed the continuation of this important program. I hope that the incoming Republican leadership prioritizes TRIA as its first order of business,” Waters said.
The House Financial Services Committee blog posted the following statement after the Senate’s failure to act under Reid’s leadership.
This morning, Washington Democrats are feverishly trying to spin Harry Reid’s decision to prevent the Senate from taking a vote on the bipartisan House-passed bill to reauthorize the Terrorism Risk Insurance Act.
From their seats on their flights home for the holidays, Democrats are trying their hardest to blame TRIA’s demise on the inclusion of a technical clarification of the Dodd-Frank law that, as a standalone measure, passed the House almost unanimously. That might be true if facts did not get in the way. Rep. Maxine Waters—the highest ranking Democratic Member on the Financial Services Committee—called this Dodd-Frank language “a truly technical fix” that “would clarify the intent of Dodd-Frank.”
The truth is that the Senate’s failure to bring the TRIA reauthorization to the floor has nothing to do with the Dodd-Frank clarification. If that were the case, the bill would not have attracted the support of 417 members of the House, including every Democrat who voted. And as Politico notes, “Senate Democrats were begrudgingly willing to clear the TRIA package for the president’s signature.”
The Senate’s failure on TRIA had nothing to do with Dodd-Frank; it has nothing to do with Sen. Coburn’s objection. It has everything to do with Harry Reid.
He simply refused to bring the bill up in the Senate. He decided that the bill would either pass by unanimous consent or, apparently, not pass at all.