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With TRIA slated to expire at the end of this year, businesses across the country are already receiving notices that their terrorism coverage will expire after Dec. 31, even if the policy otherwise extends into 2015. As a CEO, I know that lenders, investors and the business community want to avoid uncertainty.
Lenders will be reluctant to make loans without terrorism risk coverage on the assets being financed. Without TRIA, business expansion would slow down, costing tens of thousands of jobs. Companies would have a harder time raising capital in the debt markets, hurting an already sluggish economic recovery. The result: fewer pay raises and more layoff notices.
The biggest losers would be small businesses that already have difficulty getting loans and that stand to lose everything from a terrorist attack. A major company in the hospitality industry can recover from damages to one hotel, but the gift shop in the hotel lobby may be forced out of business forever. This isn’t just a big-city problem. As a study by the Heritage Foundation reported, there have been — fortunately foiled — terrorist plots in Wyoming and other rural areas.
As President Barack Obama recently observed, “For the foreseeable future, the most direct threat to America, at home and abroad, remains terrorism.” Terrorism is not predictable. But the costs and consequences of leaving American businesses and workers without terrorism risk insurance are predictable — and avoidable. For the sake of our national security and our economic security, Congress must work quickly to renew TRIA.
W. Edward Walter is president and CEO of Host Hotels & Resorts, Inc., which owns or has interests in more than 140 hotels in 15 countries, 24 states and the District of Columbia.