You would think that renewing federal reinsurance protection for terrorism risks in the short term, and establishing a permanent backup facility of some sort for the long-run, would be a no-brainer, given the potential severity and lack of predictability of the exposure involved. But then again, there is so little brain power, guts or political will in Washington these days that it's no surprise Uncle Sam is once again considering leaving the insurance industry in the lurch on this horrific risk.

The entire week was taken up with studies, hearings, press conferences and public statements about whether or not the federal government needs to provide some sort of reinsurance backstop for terrorism risks beyond TRIAs expiration at the end of next year. Ive never heard so much debate about what appears to me to be an open-and-shut question. The country needs federal insurance protection in the “war” on terrorism, period!

The word on the street is that the report on terrorism coverage being prepared by the Presidents Working Group on Financial Marketsdue out Saturday, after Congress goes home to campaign, so no one will hear about it or pay much attentionwill somehow conclude that the private market can handle terrorism risks on its own.