Compensation NationIt's time to formally compensate the victims of overzealous counterterrorism policies.

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Whatever differences may exist between terrorism's two kinds of victims, the racialized gulf separating them is unjustified. Indeed, counterterrorism's potential victims are especially compromised because no private insurance market exists for them akin to the terrorism insurance market that businesses use. Compensation must be part of the accountability conversation. It should also be on the legislative agenda, although it will likely take presidential initiative to get there.

Redress for counterterrorism's collateral damage will have powerful positive consequences on U.S. security policy. In his Cairo speech, President Obama recognized the urgent need to foster political support and diminish anti-Americanism in the Muslim world. He aims, clearly, to diminish the support for al-Qaida that the prior administration sometimes inflamed. The idea of compensation for the collateral damage of national security policies is hardly new. Nor is the idea that such compensation yields security gains. As Vice President Biden explained in 2007, discussing the ponderous and halfhearted efforts to pay back Afghans harmed by U.S. airstrikes, compensation goes a long way toward tamping down local resentments and builds support for U.S. efforts. And small gestures can have vast repercussions in this arena. The appointment of Egyptian-born Dahlia Mogahed to a White House advisory council reaped fulsome praise in the Arab press.

A small gesture is all that is needed. The 1988 legislation apologizing and authorizing reparations for the World War II internment of Japanese-Americans granted only $20,000 a person in damages but made a compelling moral statement. Compared with the $48.5 billion intelligence budget in 2008 (only part of what's spent on national security), this is a drop in the bucket.

Compensation brings complicated line-drawing problems. Who is "innocent" enough to warrant reparations? The U.S. government has largely rejected the use of criminal proceedings for terrorism suspects, making it especially hard to sift the innocent from the more culpable. Worse, it continues, implausibly, to deny all wrongdoing. So there is no official tally of erroneous actions. Opponents of compensation will pounce on this to complain that even a minimal risk of funds flowing to a person linked to terrorism is unacceptable.

But it is plausible for a law to vest broad compensatory discretion in the executive. Then, the president could begin with the easy cases, immediately reaping the publicity rewards. Two high-profile victims of "extraordinary rendition," for example, are Khaled El-Masri and Maher Arar. Neither is plausibly linked to any act of terrorism. Indeed, Canada has already compensated Arar for its role in his painful ordeal.

Compensation for counterterrorism's victims would also flush out bias against Muslims and Arabs that may be distorting government's thinking. Say it was possible to introduce a compensation law. Say, like the 1988 legislation responding to the Japanese internment, it neither confirmed nor denied government error. What possible reason would there be to oppose it? The financial impacts would be minimal, the gains to public diplomacy significant.

Bigotry against Muslims and Arabs remains a coin of the land and a reason to fight compensation. Compensation, by flushing out those motivated by nasty bias, would be a purgative to the body politic.

It would be foolish to think that legislators now stand eager to pass this proposal. Rather, it will be up to President Obama to show leadership, just as he did in Cairo. Taking the leap on compensation would wrong-foot those who have criticized his failures on government accountability. And he would build worthwhile allies in both domestic and foreign Muslim communities, where crucial parts of his national security policy will be tested. The president can also lead by example without congressional aid. He can begin by settling now-pending damages cases to show the right course and direct his Justice Department to reopen cases dismissed on procedural grounds.

In doing so, he would simply be heeding the wise advice of that other Illinois senator-turned-president. Lincoln once advised: "It is the duty of Government to render prompt justice against itself in favor of its citizens as it is to administer the same between private individuals." In the diverse post-9/11 world, it's past time to extend that privilege to the citizens and noncitizens who became the jetsam of our flawed and overbroad counterterrorism policies.

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