NU Online News Service, May 8, 2:18 p.m. EDT
WASHINGTON–President Obama's budget document, released yesterday, calls for cuts in federal subsidy for the Terrorism Risk Insurance Act, beginning in the next budget year.
The industry, however, is expected to fight tooth and nail to keep the current program intact.
In a statement, Cliston Brown, a spokesman for the Property Casualty Insurers Association of America, said the reason PCI lobbied for "this vital program" is that "we felt it was necessary to restoring the marketplace after the tragic events of Sept. 11, 2001."
Mr. Brown said TRIA "remains vital, and we do not know if this proposal changes its efficacy, but we are going to study it carefully."
He explained, "As happens with many programs, the administration has signaled that it may consider some changes, and it is always good to have advance notice of these considerations so that our members can appropriately assess the potential impact."
The budget document suggests that cuts be made in the program, as extended by Congress for seven years in late 2007, beginning in the fiscal year that starts Oct. 1, 2010, "after the economy is expected to stabilize."
It projects savings from the original legislation extending the program of $263 million over the 2010-2014 period and $644 million over the period of 2010-2019.
It is part of a revised budget blueprint designed to yield $17 billion in spending cuts for fiscal year 2010. The cuts for the current year are an attempt to reduce some of the $1.17 trillion budget deficit projected for the fiscal year that begins Oct. 1.
The 2010 budget projects spending of $3.5 trillion.
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