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Bush Signs Terrorism Insurance Act, Sees Jobs Boost
Reuters ^ | Tuesday, November 26, 2002 | Randall Mikkelsen

Posted on 11/26/2002 10:58:55 AM PST by Willie Green

For education and discussion only. Not for commercial use.

WASHINGTON (Reuters) - President Bush on Tuesday signed legislation aimed at removing a roadblock to major construction projects by ensuring companies can obtain terrorism insurance.

The legislation will boost the economy by allowing billions of dollars worth of construction projects to proceed that had been stalled by a lack of insurance, Bush said. But independent economists said the initial impact is likely to be minor.

"Today we're taking action to strengthen America's economy, to build confidence with America's investors and to create jobs for America's workers," Bush said at a White House signing ceremony. He was flanked by six construction workers in blue jeans and work boots.

During the autumn congressional election campaign, Bush made a major issue of the legislation, casting it as a needed stimulus to a soft economy that would create thousands of new jobs, and blaming Senate Democrats for holding it up.

The measure, known as the Terrorism Risk Insurance Act, provides up to $100 billion in U.S. government backing for insurance companies in the aftermath of another attack like that of Sept. 11, 2001, and requires that companies offer terrorism coverage in their policies.

Bush said on Tuesday that more than $15 billion in real estate transactions were delayed by an inability to obtain terrorism insurance following the 2001 attacks on the World Trade Center in New York and the Pentagon.

The attacks led to an estimated $40 billion to $50 billion in insurance claims, and insurers have said they could be ruined by another similar attack.

"By helping to ensure that terrorism insurance is affordable and available, the Terrorism Risk Insurance Act will permit many construction projects to move forward and to help this economy grow," Bush said.

"Billions of dollars in investments will be more secure. The nation's hard-hats will get back to work, being able to put food on the table for their families," he said.

But Wells Fargo chief economist Sung Won Sohn said the main cause of a slowdown in commercial construction has been a soft economy, meaning the terrorism insurance bill is likely to provide little help.

"We have a glut in office space ... from a macroeconomic point of view, it wouldn't be a good time to build anything," he said.

Furthermore, he said, in a $10 trillion U.S. economy, the impact of $15 billion in delayed construction projects is small.

Economist Mark Vitner of Wachovia Securities said the law's impact would become more significant as the economy picked up and construction rebounded. The demand for office and industrial space has shown signs of reviving, he said.

"I don't think it's a huge immediate impact (from the bill), but what this bill does more than anything else, it helps remove some of the uncertainty surrounding commercial real estate development," he said. "Without those issues being addressed we can't even move forward."

Consumer organizations have criticized the law, saying it exposes taxpayers to potentially billions of dollars of claims and removes incentives for insurers to protect against future attacks. The insurance rating agency Fitch Ratings has voiced similar concerns.

Sohn said the prospect of a government terrorism insurance program probably discouraged the private sector from developing its own programs and may have served to prolong the backlog in projects awaiting terrorism insurance.


TOPICS: Business/Economy; Crime/Corruption; Culture/Society; Government
KEYWORDS: globalism; recession; taxpayerrape; thebusheconomy
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The title of this article should read: "Bush Helps Insurance Industry Sodomize The Treasury"

With the collapse of the high-tech telecom/dotbomb bubble, and the economy in general in the dumpster, there is a glut of empty office space on the market. There is absolutely NO pent-up demand for new construction of 110 story office buildings.

Who does this out-of-touch Presidential Bozo think he's kidding?

Related thread: Bush Plans New Agency to Dole Out Billions in Aid

1 posted on 11/26/2002 10:58:55 AM PST by Willie Green
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To: Willie Green
As they say in Texas, all hat and no cattle. The appearance is created that this is holding back construction when the real reason is the glut of office space that is already built.
2 posted on 11/26/2002 11:11:44 AM PST by meenie
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To: Willie Green
"read: "Bush Helps Insurance Industry Sodomize The Treasury""

Is there nothing more vile than those greedy, corporate insurance bastards?!! Oh!!..and those homophobes that won't let a gay man take children camping. The swine!! And christians..Yikes!!!

Sure is fun being part of the herd.

3 posted on 11/26/2002 11:41:13 AM PST by laotzu
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To: laotzu
sorry lao, this legislation was not needed at this time. the concept as well as the "why" is bogus. if construction is slow it's because there is NO demand. there's plenty of empty office space, hotel rooms, and yes even in NYC multimillion dollar condos are going a beggin. we've got to take a breather for awhile and allow for industry adjustments.
4 posted on 11/26/2002 12:13:40 PM PST by contessa machiaveli
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Comment #5 Removed by Moderator

To: contessa machiaveli
" if construction is slow it's because there is NO demand"

This is not about construction or the need for office space.

This is about guaranteeing insurance companies they will not have liabilities forced upon them from risks they did not accept, or collect premiums for.

To arbitrarily, & forcibly transfer risks on them; and prohibit all underwriting and compensation, would financially destroy them in short order.

As despicable as insurance companies are painted (and sometimes earned), we would not be able to do without them.

6 posted on 11/26/2002 12:30:25 PM PST by laotzu
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To: laotzu
This is about guaranteeing insurance companies they will not have liabilities forced upon them from risks they did not accept, or collect premiums for.

There's no need for such subsidies.
Insurance companies are in the business of evaluating and underwriting such risks.

7 posted on 11/26/2002 12:59:23 PM PST by Willie Green
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To: laotzu
This is not about construction or the need for office space.

That's not what the president has been saying.

8 posted on 11/26/2002 1:04:10 PM PST by Moonman62
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To: Willie Green
Bush said on Tuesday that more than $15 billion in real estate transactions were delayed by an inability to obtain terrorism insurance following the 2001 attacks on the World Trade Center in New York and the Pentagon.

Does anyone know of any actual project that's been held up?

9 posted on 11/26/2002 1:05:21 PM PST by Moonman62
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To: Willie Green
"Today we're taking action to strengthen America's economy, to build confidence with America's investors and to create jobs for America's workers," Bush said at a White House signing ceremony.

If he really wanted to help investors and create jobs, he'd stop the runaway federal pork train, and get the government out of the way. Adding another $270 billion potential liabilty to us taxpayers isn't helping.

10 posted on 11/26/2002 1:10:12 PM PST by Moonman62
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To: Moonman62
Of course not.
This whole sham is so ludicrous, it's even insufficient to say that their motives are "transparent"
It's more an arrogant display of "Look what we can get away with" basking in the spotlight.
11 posted on 11/26/2002 1:12:36 PM PST by Willie Green
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To: jbind
New Republican Motto: "We're not very good for the economy, but we're not as bad as the Democrats."
12 posted on 11/26/2002 1:14:00 PM PST by Moonman62
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To: Willie Green
$100 billion in U.S. government backing for insurance companies........

Quid Pro Quo?

I suppose insurance premiums will be plunging now right?


13 posted on 11/26/2002 1:18:37 PM PST by WhiteGuy
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To: Willie Green
I just had another thought....

Doesn't this "plan" seem like one of Tony Soprano's cause and effect scams?

Frightening
14 posted on 11/26/2002 1:22:59 PM PST by WhiteGuy
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To: WhiteGuy
Frightening

Even Hollyweird scriptwriters can't top the corruption that occurs in real life.

15 posted on 11/26/2002 1:28:03 PM PST by Willie Green
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To: Willie Green
I own a ONE STORY office/warehouse building in a premiere business park and my "updated" insurance policy excludes "terrorism" AND THE PREMIUM DOUBLED.

You probably ought to research the problem from a business perspective, before posting.

16 posted on 11/26/2002 6:25:55 PM PST by demsux
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To: Moonman62
Does anyone know of any actual project that's been held up?

Yes

17 posted on 11/26/2002 6:28:07 PM PST by demsux
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To: demsux
I own a ONE STORY office/warehouse building in a premiere business park

Whooooaa... I'm sure that just gotta be on the Top Ten Target List for the Evil Doers. </sarcasm>

18 posted on 11/26/2002 6:47:22 PM PST by Willie Green
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To: demsux
What project is that?
19 posted on 11/26/2002 7:16:08 PM PST by Moonman62
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To: Moonman62
World Trade Center
20 posted on 11/26/2002 7:59:59 PM PST by demsux
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