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Terrorism Risk Insurance Act: A conservative’s perspective

What would Thomas Jefferson have done? 

As a conservative, I believe in smaller, less intrusive government. That federal spending is out of control and needs to be reigned in. That too often when people see a problem, they reflexively suggest another law, government program, or more federal spending. That the government too often interferes with and obstructs the dynamism of the market place.
With that said, I strongly favor reauthorization of a robust, forward-looking Terrorism Risk Insurance Act. Here??s why:
Terrorism is an act of war. The federal government??s first and most important constitutional responsibility is to defend the nation. If the federal government could every minute of every day do that job perfectly, terrorist attacks, including those that happened on 9/11, would never happen. But in the real world, no matter how capable or alert we are, there is always at least the risk that a terrorist attack will go undetected and therefore will not be prevented. What can the federal government do in that case? It can promote and facilitate private terrorism insurance so that if the unspeakable happens again, at least we can minimize the longterm economic harm that would be done.
The federal government should be stopping terrorist attacks whenever it is humanly possible. Thus, we need a strong and robust military and an active intelligence program to stop terrorism before it happens. But the federal government must also seek to reduce the catastrophic economic impact that acts of terrorism could have.
After the attacks on 9/11, the economy went into a tailspin. As a result, Congress passed the Terrorism Risk Insurance Act to promote and facilitate private companies providing terrorism insurance. Office buildings, shopping centers, schools, hospitals ?? anything that might plausibly be a target of terrorism ?? cannot be built without terrorism insurance because financing cannot be obtained. In 49 states, such insurance is required by law. Terrorist are, in large part, motivated by the large economic shock waives that follow a terrorist attack. If we can reduce those economic shock waves, we undermine part of their underlying motivation.
There is historical precedence for this. Our nation??s founders understood that the federal government??s job is to protect the nation from those who would wage war on our people. When Thomas Jefferson was president, pirates, the terrorists of the early Nineteenth Century, attacked American merchant ships in the Mediterranean Sea and in the Atlantic Ocean close to Europe and Africa. The pirates offered to stop the attacks in exchange for large annual payments. Some nations opted to pay the ransom so that its merchant ships could sail in peace.
Jefferson declined. Instead, he sent the U.S. Navy and the U.S. Marines to stop the pirates. That conflict, the Barbary War, lasted more than four years, and was fought on and around the northern coast of Africa near present-dayTripoli, Libya. American forces defeated the Barbary pirates and the attacks on American shipping stopped. Interestingly, the Marine Hymn recognizes this important victory in the first verse, ??From the Halls of Montezuma, to the shores of Tripoli, we fight our countries battles ??
The founders understood that national security was more than just protecting the homeland. The Barbary Pirates were not attacking America??s homeland. They were attacking ships owned by American businessmen on the open seas far from our shores. Yet, President Jefferson, one of our most famous founders and the author of the Declaration of Independence, used the power of the federal government to protect America against the business risks of terrorism.
Jefferson understood that if terrorists can attack our economy, they can wreck havoc on our nation without landing armies on our shores. So Jefferson took steps to insure that America wasn??t harmed economically by the heinous acts of terrorists.
More than 200 years ago, Jefferson got it right. Congress should follow Jefferson??s example. Reauthorizing the TRIA is different than other federal insurance boondoggles. It is inherently tied to national security ?? national economic security. The marketplace cannot possibly know how to accurately value the risks associated with terrorism. And it must have the certainty that only insurance in place over the long term provides. Thus, it is appropriate for the government to take steps not to provide the insurance, but to help facilitate it. Jefferson??s example is instructive.
TRIA will expire at the end of December. Congress needs to act now. Either they pass a good bill, as House Financial Services Chairman Jeb Hensarling, R-Texas, is trying to pull together or they must extend the existing program over the long term. As a conservative, I??m very secure when I can turn to the Founders for guidance and employ their wisdom. Let??s hope Congress does the same.
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