WASHINGTON – President Bush promoted a terrorism insurance bill as a job-creation measure Wednesday and argued that it should shield businesses from lawsuits stemming from attacks.
Bush supported the GOP version of the bill as an employment boon in an address to a national carpenters' union. At a time when Congress is getting down to serious negotiating on the legislation, Bush's tactic could split two traditionally Democratic-aligned groups -- labor and the trial attorneys who make their living filing lawsuits.
The president stepped directly into the central dispute between the Democrat-controlled Senate and the GOP-controlled House: whether to insulate businesses from paying punitive damages.
The Senate passed a terrorism insurance bill Tuesday that does not protect companies from punitive damages. The House passed legislation last November that limits lawsuits and bans punitive damages.
"They've got to make sure this bill doesn't open up all kind of lawsuits," Bush said. "What we're interested in is job creation, not lawsuit creation. We've got plenty of lawsuits all around America as it is."
Bush's audience, the United Brotherhood of Carpenters and Joiners, applauded. The group is a strong backer of the Democratic Party.
Bush sought to put a human face on the issue for the carpenters, who rely on a strong building sector for jobs.
He cited the example of a commercial lending company that he said has turned down more than $1 billion in construction projects because they were not insured against a terrorist attack.
Meanwhile, a company in the Washington-Baltimore area cannot get funding for a $50 million apartment complex -- a project that would create 250 jobs, Bush said.
"If the concern is more jobs, and people aren't lending money because there is no insurance against acts of terror, Congress needs to deal with it," Bush said.
Both the House and Senate bills would provide government backing for insurance companies forced to cover astronomical claims following terrorist attacks like those on Sept. 11. Following the attacks, many insurers limited or dropped coverage for casualty and property losses to terrorism because insurance companies faced record payouts of $30 billion to $50 billion.
The House has passed legislation under which the government would help insurers continue to offer terror insurance by agreeing to pick up, for at least one year, 90 percent of losses in any major attack.
Under the Senate bill, the insurance industry would have to pay $10 billion of insurance costs for terror attacks for two years. Beyond that level, the government would cover 90 percent with the insurance industry paying the remaining 10 percent.
There would be a $100 billion cap; the Treasury secretary would have to go to Congress if costs exceeded that.