By Matthew Bechard

Senator Richard "Dick" Durbin (D-IL) has spent the past 23 years in public service on Capitol Hill. From 1983 to 1997, Durbin served in the House and was elected to the Senate in 1996 to succeed his mentor and friend Sen. Paul Simon. Durbin has served as Democratic Whip, the party's second-highest post, since December 2004. A former attorney, he has earned a reputation as one of the Senate's best debaters.

Durbin serves on the Senate Appropriations, Judiciary and Rules and Administration committees. His subcommittee assignments include serving as the ranking member on the Legislative Branch Subcommittee and Subcommittee on Immigration, Border Security and Citizenship.

Durbin recently spoke with Portfolio about a number of issues including extension of the Terrorism Risk Insurance Act, preserving retirement security, bolstering the national economy, and the valuable role played by REITs and real estate.

On Terrorism Insurance

In his role on the Senate Judiciary Subcommittee on Terrorism, Technology and Homeland Security, Durbin actively monitors issues relating to the nation's security. A key element to maintaining the nation's economic viability in the event of another terrorist attack was the two-year extension in late 2005 of the Terrorism Risk Insurance Act (TRIA). Durbin says the extension, the Terrorism Risk Insurance Extension Act of 2005 (TRIEA), was essential to maintain a functioning property insurance system.

TRIEA continues to require insurers to make terrorism coverage available to commercial policyholders on the same terms and conditions as other offered lines of coverage. In return, the act provides reinsurance above certain levels to the insurers who make available coverage against acts of foreign terrorism.

"TRIA and now TREIA have been constructed to minimize any potential taxpayer liability while permitting the full functioning of an insurance market that is absolutely necessary for property investment," Durbin says.

One of the complaints against extending TRIA was a reluctance to see the government involved in providing a federal insurance backstop and the impact it would have on the private market. However, Durbin says the federal government's involvement is not a hindrance, but rather a necessity.

"While I recognize that some have argued that government intervention into the property insurance market might lead to the crowding out of private insurance, in the case of terrorism there is just no way to properly price private property insurance policies in a way that supports continued property development," Durbin says.

On Retirement Security

An issue facing a growing number of Americans as they approach retirement age is the safety of their retirement plans. With the stability of corporate pension plans in question and an aging population, preserving the financial security of retirees is an increasingly important challenge for Congress.

"The continuing escalation of health care costs, the erosion of defined benefit plans, the stagnation of wages, and the low savings rate of Americans all pose serious threats for our retirement security in the years ahead," Durbin says.

At the forefront of the retirement issue is what to do with Social Security. Does it need to be completely overhauled or can the system still function long-term with a few minor alterations? While he did not provide specifics about plans for improvement, Durbin listed Social Security among the many initiatives he says Congress needs to tackle to preserve and protect the retirement savings of American workers.

"Congress needs to shore up Social Security, better target tax incentives for retirement savings to middle and lower income families, and encourage Americans to plan ahead and save for their retirement," he says. "Congress must also pass meaningful pension reform as soon as possible."

On the Economy

When it comes to the state of the nation's economy, Durbin says that while the recent economic growth has been encouraging, this has nonetheless been one of the weakest economic recoveries in the nation's history.

"Almost all national income gains have been concentrated at the very top of the income scale, as wages for median income families have stagnated," Durbin says. "Productivity gains have been impressive but so far the benefits have almost all gone to corporate profits rather than to higher wages for employees."

Durbin stresses that if the nation is to sustain long-term economic growth, it needs to see better dispersal of national income gains throughout the economy. In addition, he says there must be a return to more responsible fiscal policies that reduce the long-term deficits this nation faces.

"Over the last few years, large increases in spending and reductions in revenue have led to enormous budget deficits, which have been financed through borrowings from abroad," Durbin says. "While this borrowing has enabled interest rates to remain low, the question is whether these fiscal imbalances can continue to be sustained."

Congress just increased the debt level to almost $9 trillion, nearly half of which has been incurred in just the last five years, Durbin says.

"It is estimated that by 2011, the federal government will be paying out more than $180 billion annually to foreign lenders," he says. "To exacerbate the problem, we also are running huge trade deficits. This simply cannot continue."

On Real Estate and REITs

Durbin says one area of the economy that has been a strength has been the real estate sector.

"A strong, vibrant, and stable real estate industry is an essential element to our national economy," Durbin says. "The returns provided to investors, the jobs created in the construction industry, and the profits generated to lenders all contribute to the nation's overall health. Just as the real estate depression 15 years ago undermined our nation's economic health, the more recent record of a strong real estate industry has contributed to the nation's economy. The industry is a source of good, high paying jobs that any community should gladly welcome."

In particular, Durbin points to the benefits investors have seen from publicly traded REITs.

"The REIT sector has demonstrated strong gains," Durbin says. "Through sound management decisions, the REIT sector has harnessed the benefits of a low interest rate environment, and identified the markets recovering most strongly from the economic downturn."

Durbin's home state of Illinois is headquarters to some of the largest U.S. real estate investment trusts, including Equity Office Properties (NYSE: EOP), Equity Residential (NYSE: EQR), First Industrial Realty Trust, Inc. (NYSE: FR), General Growth Properties, Inc. (NYSE: GGP) and Trizec Properties, Inc. (NYSE: TRZ). Durbin says that a major reason so many REITs, as well as other businesses, set up shop in Illinois is that its largest metropolitan area, Chicago, "is such a vibrant, healthy city with a talented workforce, competent city government, and many creative entrepreneurs that have assembled strong real estate companies."

Chicago has a long history of aggressive, large-scale real estate development, beginning with the founding and rapid growth of the city during the 19th century, and the rebuilding of the city after the great fire in 1871, Durbin says.

"Today, the Chicago skyline, with its residential and office towers, is a testament to the strength of Chicago real estate," Durbin says. "The strong real estate redevelopment activities that are going on around the metropolitan area are a source of pride that have created economic multiplier effects that generate optimism in many local communities."