President Bush signed the long-awaited terrorism insurance bill Tuesday, saying the new law will get the economy back on its feet should another attack take place.
Bush has argued for more than a year that companies’ inability to obtain insurance for large construction projects was costing the economy thousands of jobs.
“With this new law, builders and investors can begin construction in real estate projects that have been stalled for too long, and get our hard hats back to work,” Bush said during the bill-signing ceremony. “We’re defending America by making America more secure.”
Under the law, the federal government would cover 90 percent of financial losses after insurance companies pay a deductible that’s a percentage of the premiums they collect each year. In 2003 the deductible will be 7 percent of premiums, in 2004 it will be 10 percent and in 2005 it will increase to 15 percent. The government wouldn’t pay anything for claims less than $5 million.
The law limits federal spending on claims to $90 billion in 2003, $87.5 billion in 2004 and $85 billion in 2005 – the last year of the program.
In order to get the bill approved, Republicans in the lame-duck session of Congress had to give up their fight for limited punitive damages in civil lawsuits related to terror attacks.
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