Specter Pushes for Vote on S. 852, While Budget Office Says Bill’s Asbestos Trust Fund Is Inadequate

Claimants Would Deplete Trust Proposed Fund in First Decade

WASHINGTON, DC — September 9, 2005 — Sen. Arlen Specter, co–author of the asbestos bill, S. 852, said that he expects the legislation to be considered by the Senate during the first week in October. The Senate went back into session on September 7, and is due to recess on October 10.

S. 852 would create a trust fund to compensate asbestos victims, but they would lose their rights to a jury trial. Cases already scheduled for trial would not be heard, and unpaid settlements would be thrown out.

Under S. 852, claimants would be forced to go through a bureaucratic trust procedure to qualify for damages. They would be subject to unfair, outdated medical criteria to determine if they had asbestosis, asbestos lung cancer, mesothelioma, or other asbestos diseases. For example, lung cancer victims would have to show that they had asbestosis or lung scarring to prove that their lung cancer was related to asbestos, although there is no modern medical basis for this requirement. S. 852 also forces claimants to satisfy arbitrary asbestos exposure standards, ignoring the fact that individuals differ in their susceptibility to asbestos and disease.

Trust Fund Could Run Out of Money Before All Claims Are Resolved

The amount of the trust fund is $140 billion, which would be financed by asbestos–affiliated companies and insurers. Labor leaders have said that this amount is inadequate to compensate all asbestos victims, and that the fund will run out of money. Many Democratic leaders agree, although Sen. Dianne Feinstein (D—CA), Sen. Patrick Leahy (D—VT), and Sen. Herbert Kohl (D–WI) now support the bill.

Late last month, the Congressional Budget Office released its estimate of trust fund costs (Congressional Budget Office Cost Estimate, August 25, 2005). The Budget Office concluded that expenses would exceed revenues in the first 10 years of the trust fund's existence, and that it would need to borrow money. The interest cost of borrowing "would add significantly to the long–term costs faced by the fund" and increases the possibility that the trust may become insolvent.

Although the maximum revenue that the trust may collect is $140 billion, the actual amount "could be considerably less," the report added. The projections that have been made in the past of the number of asbestos claims likely to be filed were much too low, suggesting that there is a "significant risk of underestimating the number of future asbestos claims," the report concluded. This is especially true when one considers that the period from initial asbestos exposure to the onset of asbestos disease can be decades.

Will the Asbestos Bill Reach the Senate Floor?

Sen. John Cornyn (R–TX) says that the Budget Office report greatly decreases the likelihood that S. 852 will pass this year. Some Senators in both parties share this view, despite Sen. Specter's hope that S. 852 will be voted on in October. The Senate confirmation hearings further reduce the chances that S. 852 will be heard.