The Senate Thursday approved legislation to renew a federal program that is credited with reviving the market for insurance against terrorist attacks after its collapse in the aftermath of the 9/11 attacks.
The sweeping 93-4 vote sends the measure to President Barack Obama, who is expected to sign it into law despite reservations about an unrelated provision that chips away at new regulations on financial instruments called derivatives. The House passed the measure on Wednesday.
The measure was a leftover from last year that became snagged in the waning days of the last session of Congress and it's the first piece of legislation to pass the Senate since Republicans took control of the chamber on Tuesday. The program expired at the end of last year and its swift renewal is a top priority of business sectors such as construction, real estate, hospitality and major sports leagues, which fear skyrocketing insurance costs if the program is not renewed.
The program provides a backstop in which the government steps in to cover the bulk of losses after the first $200 million in damages from a terrorist attack, up from $100 million previously.
"As these levels are increased, the federal share is reduced," said Sen. Mike Crapo, R-Idaho.
The government's share of losses above $200 million would be gradually lowered from 85 percent to 80 percent.
The program was enacted in 2002 after the market for terrorism insurance collapsed in the wake of the 2001 terrorist attacks. It was originally designed to be a temporary program but the hoped-for revival of the private market for terrorism insurance has failed to flourish. The government has never paid out under the law.
Democrats opposed unrelated legislation that seeks to protect businesses that use financial instruments called derivatives to hedge risk from being subjected to costly margin requirements under Dodd-Frank regulations. Those businesses -- including farmers and ranchers, airlines and manufacturers -- are already protected under the terms of the law and follow-up regulations, but such "end users" of derivatives are concerned that they could get snared by future regulations.
An amendment by Elizabeth Warren, D-Mass., to strike the derivatives-related provision was voted down by a 66-31 vote. She said changes to the 2010 Dodd-Frank law that tightened financial regulations don't belong on must-do measure like the terrorism insurance bill.
"If we fail to challenge this cynical strategy now, it will only encourage Republicans to pull our financial regulations apart piece by piece," Warren said.