He wrote that the Administration, "would accept an extension only if it includes a significant increase to $500 million of the event size that triggers coverage, increases the dollar deductibles and percentage co-payments, and eliminates from the program certain lines of insurance, such as Commercial Auto, General Liability, and other smaller lines, that are far less subject to aggregation risks and should be left to the private market."

At the hearing, however, he said the $500 million figure was open to discussion in response to questions from several members of the panel who noted that smaller attacks, such as those that occurred in London recently, would not meet the Administration's proposed threshold.

"We can debate," the $500 million figure, he said in response to a question from Rep. Arthur Davis, D-Ala. "This is a best judgment." Additionally, Sec. Snow said that the $500 million proposal was for an aggregate annualized figure, meaning that if several small attacks occurred within one year, their damages would be counted as a total for the purposes of triggering government payments under TRIA.

Rep. Richard Baker, R-La., who expressed overall support for Treasury's proposals, also expressed some concern regarding the $500 million threshold.

Reaching such a threshold, he said, would involve a far larger event in his district in Louisiana than would have to occur in New York City. Despite that concern, however, he suggested that the TRIA program was designed in haste and has shown the need for some revisions.

"We created this remedy out of whole cloth," he said. "What's happening now is the suit is sagging in some place and we need to make some alterations."

Rep. Paul Kanjorski, D-Penn, indicated that the Administration could also face significant opposition if it attempts to include civil litigation reform provisions in TRIA extension legislation.

In his opening statement, Mr. Kanjorski expressed concern regarding the Administration's call for "reasonable" legal reforms. "I am very concerned that such a posture could once again stall legislative efforts, as it delayed consideration of the original law," he said.

Later in the hearing, he cautioned Sec. Snow that if the administration seeks to make the TRIA legislation an engine for tort reform, "that's dead on arrival."

Overall, the secretary said that the changes were being proposed because the TRIA program had largely taken the place of the terrorism reinsurance market and was, in effect, preventing the market from adapting and creating new products to cover post Sept. 11 terrorism risks.

"Nobody is talking about ending that backstop," he said. "What we're talking about is revamping. The issue is can we make some improvements to the program to give the private sector more of a role to play."