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HEADLINE: The Nation;
ACTION IN CONGRESS;
Anti-Terrorism Deadlock Ends;
Bowing to Bush, the House OKs an insurance bill, andtighter seaport security clears Congress.

BYLINE: Richard Simon and Janet Hook, Times Staff Writers

DATELINE: WASHINGTON

BODY:
Goaded by President Bush, Congress on Thursday broke legislative deadlocks on two major anti-terrorism bills and finally agreed to set up an independent commission to investigate government failures surrounding last year's terrorist attacks.

In a key vote sought by Bush, the House late Thursday approved a long-delayed bill to provide federal backup insurance against damage caused by terrorism. Bush and other proponents have said the bill will provide the economy a needed boost by stimulating stalled construction projects.

The Senate is expected to pass the bill within a few days.

Also approved Thursday by the House and Senate is legislation to tighten security at seaports -- facilities considered especially weak links in the nation's homeland defense. The agreement on establishing the 10-member National Commission on Terrorist Attacks Upon the United States was reached just hours before the House prepared to adjourn for the year, with Bush getting much of what he wanted. The commission was included in an intelligence bill approved on a 366-3 vote that came after midnight. The Senate is expected to give its approval, perhaps as early as today.

Action on the terrorism insurance, port security and commission measures -- along with expected Senate approval early next week on legislation to create a Department of Homeland Security -- adds to Congress' already extensive response to the Sept. 11 attacks.

"Members of Congress have a nightmare: on the day after an attack, having to explain why they held up terrorism insurance or a Department of Homeland Security," said John J. Pitney Jr., a professor of government at Claremont McKenna College.

Bush helped spark this legislative flurry, demonstrating his willingness to use the clout he gained in last week's midterm elections to lean on Democrats and Republicans.

On the insurance bill, Bush personally lobbied key GOP House leaders -- including powerful House Majority Whip Tom DeLay (R-Texas) -- who wanted to put off the issue until next year when they have more power in Congress.

And although Senate GOP leaders initially had wanted to put off action on the bill to create a Homeland Security Department, they reversed course in the face of Bush's determination and are expected within days to deliver to the president a bill written largely to his specifications. The House approved the measure on Wednesday.

The deference to Bush portends a shift in legislative dynamics in the new Congress that convenes in January. At least for the first few months, Bush may have a honeymoon period, with Republicans more willing than ever to take marching orders from the White House and Democrats less willing to take him on.

As Congress fought to quickly finish a lame-duck session that began this week, GOP leaders suffered one unexpected setback Thursday when the House killed a long-awaited bill to overhaul the bankruptcy code. But early today the measure was revived on a 244-116 vote when an abortion-related provision loathed by conservatives was removed.

Another deadlock ended in the Senate, where the Democratic-led Judiciary Committee approved two of Bush's much-delayed conservative nominees to the federal bench.

White House spokesman Scott McClellan welcomed the spate of activity. "We are encouraged by the tremendous progress Congress is making during this lame-duck session, in a very short amount of time," he said.

The terrorism insurance bill the House approved would make the government the insurer of last resort for some of the damage caused by any terrorist attacks in the next three years.

"If Congress does not pass this bill and another major terrorism attack occurs, thousands of businesses could go bankrupt, people won't be able to get coverage for their losses, and the government will have to step in at a much higher price and without an efficient payment mechanism to salvage the crisis," said Rep. Michael G. Oxley (R-Ohio), chairman of the House Financial Services Committee.

The insurance industry expects to be able to pay the estimated $40 billion to $50 billion in claims stemming from last year's attacks. But industry officials have said they cannot insure against the incalculable liability from a future attack without government assistance.

The Golden Gate Bridge, for example, is paying twice as much in premiums (about $1 million a year) for a fourth of the property coverage -- and no longer has any coverage for a terrorist attack. As a result, if the bridge is damaged in a terrorist attack, the taxpayers would be liable for all of the repairs.

Bush portrayed the measure as a jobs bill, saying that the lack of terrorism insurance -- or high cost of it -- after last year's attacks has stalled construction projects and idled workers.

A number of Republicans had sought to put off a vote because they did not think the bill did enough to rein in what they regard as frivolous lawsuits and excessive attorney fees. They also were upset that the bill did not prohibit individuals injured in an attack from suing building owners for punitive damages.

Bush called DeLay on Wednesday night urging him to support the measure. "The president said we need to get this done," said a GOP leadership aide.

House Speaker J. Dennis Hastert (R-Ill.) also spoke to Bush on Wednesday and received an assurance that the White House would make legal reforms a major initiative next year.

Some disputed whether the measure is still needed.

Tom Miller, a scholar at the libertarian Cato Institute, contended that insurance markets have adjusted to the post-Sept 11 world.

"With taxpayers footing most of the bill for terrorism-related losses, insurance companies and insurance customers will have less of an incentive to upgrade security measures against terrorist attacks," he said. "Government does have a positive role to play in this, by improving national security to reduce the risk of terrorism and its costs."

Under the measure, insurance companies would pay a deductible before federal assistance becomes available. For losses above a company's deductible, the federal government would cover 90%, while the company would contribute 10%, although there would be some additional repayment under the three-year program.

But the industry would be required to repay any government expenditure for losses up to $10 billion in the first year, $12.5 billion the second and $15 billion the third year of the program. Losses would be capped at $100 billion.

The agreement on the independent commission was announced by the White House, which said that Bush would appoint the chairman, congressional Democrats would appoint the vice chairman and subpoenas could be issued with the agreement of the chairman and vice chairman or by a majority of the commission members.

Commission appointments would be evenly divided among Republicans and Democrats.

"Finally, we will get a clear, clean picture of what government agencies failed, how they failed and why," said Sen. Joseph I. Lieberman (D-Conn.) who with Sen. John McCain (R-Ariz.) worked out the agreement with White House staff members.

Under the earlier proposal, commission members appointed by one party could issue subpoenas, a power that the administration worried could lead to witch hunts.

The White House initially opposed creation of the panel, but Bush relented after emotional appeals by families of victims of the Sept. 11 attacks. Commission members would examine subjects ranging from intelligence failures to the flow of money to terrorist networks, diplomacy, immigration policies and aviation security. The commission will report to the president and Congress on its findings and recommendations after 18 months.

The port security bill sailed through the Senate on a 95-0 vote; it passed the House on a voice vote.

The bill would require assessments of the vulnerability of ports -- at home and abroad -- to terrorist attack, expand the Coast Guard's authority to stop and search ships and bolster maritime intelligence operations.

It also would require background checks of workers in security-sensitive jobs and implement new measures to better screen the 6 million cargo containers coming in annually to the nation's 361 ports, which stretch from Los Angeles and Long Beach to Portland, Maine.

A recent report by the Council on Foreign Relations warned that the U.S. remains "dangerously unprepared to prevent and respond" to another terrorist attack and singled out seaports as particularly vulnerable.

Experts warn that an attack on a seaport also could wreak economic havoc.

Supporters of the measure said its urgency also was demonstrated by a freighter crammed with Haitian refugees that eluded detection until it was just two miles off the Florida coast last month. "It could have been filled with 200 people who had bad intentions," said Sen. Bob Graham (D-Fla.).

The bill provides the promise of federal money to help secure ports, a good chunk of which would probably go to the Los Angeles-Long Beach port complex, the nation's busiest.

But critics say the measure falls short because it puts off until next year a decision on how the promised security improvements will be funded.

Under the measure, the Bush administration would have six months to submit a plan for funding port security improvements.

The bill does call for an increase in spending for the Coast Guard, from $5.8 billion in the fiscal year that ended Sept. 30 to about $6 billion this fiscal year.

Sen. Dianne Feinstein (D-Calif.) voted for the bill, but said Congress "squandered an opportunity to take aggressive action to erect a formidable barrier at our seaports," including approving tougher criminal penalties for shippers who provide false cargo information and requiring "high security" seals and electronic tags on containers coming into the U.S.

The measure gained momentum in the closing days of Congress only after one of its chief sponsors, Sen. Ernest F. Hollings (D-S.C.), grudgingly dropped an effort to impose a new fee on cargo and passengers that would have raised $700 million a year for security measures.

A security fee was added to airline tickets in the aviation security bill approved last year. But the port security fee faced stiff opposition from business groups and their GOP allies in Congress. Hollings said that he will continue to press for the fee next year.

*

Times staff writer James Gerstenzang contributed.

GRAPHIC: PHOTO: CLASS PORTRAIT: Members of the freshman class of the House get together for a photograph on Capitol Hill. They are attending orientation sessions, and will be sworn into office in January. PHOTOGRAPHER: Agence France-Presse

LOAD-DATE: November 15, 2002