Lawmakers make terror insurance outline for future

Sunday, October 28, 2001

WASHINGTON -- The Bush administration and key lawmakers have drawn up the outlines of a government aid package that would help the insurance industry withstand future terrorist attacks. They hope to introduce legislation next week.

Under the proposal, the industry would finance the first $10 billion in payments following a future attack, and the government would pay 70 percent to 90 percent of costs after that, an administration official said Saturday. The exact percentage remains to be decided.

The agreement came after a meeting Friday with Treasury Secretary Paul O'Neill and Sen. Paul Sarbanes, D-Md., the Banking Committee's chairman; Sen. Phil Gramm of Texas, the committee's senior Republican; and Chris Dodd, D-Conn., also a member of the committee, the official said.

The money would come from general revenues, said Treasury Department spokeswoman Michele Davis. Some lawmakers and consumer groups have questioned whether taxpayers should pay to keep the insurance industry healthy, but Davis defended the proposal.

"An attack on the United States is an attack on all taxpayers," she said.

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