Tax on foreign insurers could pay for 9/11 health bill

WASHINGTON – Permanently renewing legislation to benefit Ground Zero first responders could be financed by closing a tax loophole, Democratic Sen. Kirsten Gillibrand of New York said Tuesday.

That loophole allows foreign insurance companies to issue reinsurance in the United States without paying the same taxes as their U.S. competitors.

Gillibrand announced the financing measure at a rally with more than 100 New York City police officers, firefighters and construction workers visiting Washington to lobby Congress to vote on legislation that would permanently renew the James Zadroga 9/11 Health and Compensation Act.

But the relevant committees, all controlled by Republicans, haven’t signed off the proposal, according to a House Judiciary Committee aide who said negotiations between Gillibrand and other lawmakers are ongoing.

House Judiciary Committee Chairman Bob Goodlatte of Virginia has a competing bill that would renew the September 11 Victim Compensation Fund for only five years. The fund is one of the two programs included in the James Zadroga bill. It pays for economic and other losses suffered by first responders and others who helped with recovery efforts at Ground Zero.

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The World Trade Center Health Program is the other program. It provides medical monitoring and treatment for first responders, cleanup workers and volunteers who worked at Ground Zero, the Pentagon and Shanksville, Pa., where people were killed in the Sept. 11, 2001 terrorist attacks.

Gillibrand said she’s “very hopeful’’ she can persuade Goodlatte to back a permanent reauthorization.

“I cannot accommodate his interest in a five-year bill,’’ she said. “It would be destructive to these first responders. It would be insufficient for the people who need compensation today. Maybe he wrote a five-year bill because that’s all he could pay for.”

Firefighters who attended Tuesday's rally agreed a permanent renewal is needed.

Anthony Carbone of Beekman retired from the New York City Fire Department after he was diagnosed with prostate cancer and failed a pulmonary function test about four years ago. Carbone, 55, said he worked on wreckage at the World Trade Center "for many months.''

"These diagnoses are going to continue to come every day,'' Carbone said. "This is a marathon. It’s not a sprint. Until those people are gone and they pass, that’s when the legislation should die.’’

Lt. Dennis Stanford, 62, of Cortland Manor works at Engine 44 on the Upper East Side. He has not developed any 9/11-related illnesses, but said he knows it's possible in the future.

"It’s something I hope I never need but for the people who have it, and the people who are going to get it, I'm here for them,'' he said.

Goodlatte would pay for his bill by using $3.8 billion in a Justice Department victims’ compensation fund. Money in the fund came from a forfeiture agreement with BNP Paribas SA of France, one of the world’s largest banks, for violating U.S. sanctions against the Sudan, Iran and Cuba.

Goodlatte would use $2.77 billion to renew the September 11 Victim Compensation Fund and the remaining $1 billion to compensate people wounded in terrorist attacks abroad and family members of victims killed in such attacks.

Finding a way to finance a permanent renewal of the Zadroga bill that’s acceptable to Republicans controlling Congress has long been an impediment to getting a vote.

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The bill has 248 cosponsors in the House – 30 more than the 218 needed for passage. It has 65 cosponsors in the Senate, five more than neeed to overcome a filibuster.

Gillibrand was optimistic Tuesday that the proposal to close the reinsurance tax loophole will break the logjam.

“It’s a bipartisan pay-for that we think is appropriate for this bill,’’ she said.

The loophole closure proposal is included in plans by House Speaker Paul Ryan, R-Wis., and Senate Finance Committee Chairman Orrin Hatch, R-Utah, to overhaul the nation’s international tax system, Gillibrand said.

Closing the loophole would produce $9.5 billion in estimated revenue. That’s within the $8 billion-$11 billion estimated range the nonpartisan Congressional Budget Office gave last week for the cost of permanently renewing the Zadroga bill for the first 10 years.

CBO said its estimate covered a wide range of possible costs because of “considerable uncertainty about the number of people that will seek compensation’’ from the Victim Compensation Fund.

That includes people who are expected to develop 9/11 related cancers in the coming years and also can prove their eligibility. CBO estimated 35,000 people who lived or worked in the area around Ground Zero will develop cancer in the next 10 years and between 2,500 and 10,000 of them will apply for and receive compensation from the Victims Compensation Fund.

CBO estimates the average compensation for a victim who develops a 9/11-related cancer will be $385,000 and the average award to those with other illnesses will be $194,000, the same amounts that have recently been awarded.

Several military veterans’ organizations – the Iraq and Afghanistan Veterans of America, the American Legion, Vietnam Veterans of America and The United States Army Warrant Officers Association – joined Tuesday’s rally to show their support.

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Contact Brian Tumulty at btumulty@gannett.com Twitter: @NYinDC