Asbestos bill heads to Senate floor

Outlook unclear for reform measure creating $140 billion trust fund

February 06, 2006|By GWYNETH K. SHAW | GWYNETH K. SHAW,SUN REPORTER

WASHINGTON -- Legislation that would create a federal trust fund to compensate victims of asbestos exposure will come to the Senate floor this week after months of delay, although the bill's prospects remain uncertain.

The legislation would move asbestos cases out of the court system and create a $140 billion fund to compensate people sickened by asbestos. A new federal office would oversee payments ranging from $25,000 to $1.1 million.

Asbestos manufacturers and insurance companies would pay into the fund, in exchange for relief from any further liability. The measure also would limit attorneys' fees, in most cases, at 5 percent of an award.

FOR THE RECORD - An article yesterday about federal legislation to create a trust fund to aid victims of asbestos exposure incorrectly reported that asbestos has been banned in the United States.

Critics say that the fund is far less than what's needed and that the bill could leave many sick people with nothing while releasing companies that used asbestos from future claims.

The Senate Judiciary Committee cleared the bill last summer, but stubborn concerns about the legislation - and a crowded Senate schedule - kept it from being debated on the floor. Last week, with consideration looming, Sen. Arlen Specter, the Pennsylvania Republican who chairs the panel, and Vermont Sen. Patrick J. Leahy, the top Democrat on the committee, visited senators' offices, trying to secure votes.

Specter said last week that he is prepared to fight a number of procedural efforts to stall or kill the bill.

"It is a work in process to meet the objections," he said.

Even if the bill passes the Senate, it's unclear whether it will be debated in the House, where there are several alternative proposals.

Asbestos was prized for decades for its flame-retardant capability, but the fibrous substance also can cause irreversible damage to the lungs and is now banned. A study released last year by the RAND Institute for Civil Justice said that more than 730,000 Americans filed asbestos-related claims between the early 1970s and late 2002, with awards totaling more than $70 billion. Those claims forced more than 70 companies into bankruptcy by mid-2004.

Supporters of the legislation say that federal intervention is the only way to stop the tide of bankruptcies, free up a clogged court system and speed financial help to the sick. They note that the Supreme Court has called on Congress to take action.

Opponents argue that the bill is essentially a bailout for these companies and will create a system that's unfair to victims. They say $140 billion is insufficient to cover the damages, and they worry that taxpayers could ultimately pick up the tab.

Last week, a group of advocates for asbestos victims sent a letter to Senate leaders decrying the bill. Among those who signed it was Jim Fite, who worked in Bethlehem Steel's Baltimore shipyard and is a leader in the White Lung Association, a victims' group.

The letter outlined the group's concerns, including fears that people exposed to asbestos recently, or not in the course of their jobs - in the aftermath of the Sept. 11 terrorist attacks, for example, or after Hurricane Katrina - would be locked out by the complicated criteria laid out in the bill.

"We do not want this proposed government policy forced upon us," it stated. "We believe the program will fail to treat victims fairly, while benefiting the very companies that caused the problem."

The National Association of Manufacturers, an industry group, also says that the bill is imperfect - even as its lobbyists hit Capitol Hill last week to push for the legislation. Hank Cox, a spokesman for the group, said the organization's intent is to encourage a compromise that all sides can live with.

"Our stated goal is just to keep the process going, and get a bill out there," he said. "We don't have a consensus on exactly what the bill should provide, except that everyone agrees that a legislative solution is long overdue."

Despite concerns about the legislation, President Bush called for the Senate to pass it during an appearance in Minnesota last week, saying that the bill would help add "balance in the legal system."

"It's time to send a clear message to investors and markets and employees that we've got to have a legal system in regards to asbestos that's fair to those who have actually been harmed and reasonable for those who need to pay," Bush said.

The legislation, if it becomes law, would have a major impact in Maryland, where all asbestos cases have been consolidated in Baltimore Circuit Court for more than a decade. The state has a two-tiered system aimed at helping the sickest first, with an "inactive" docket for people who claim to have been exposed to asbestos but have not become sick.

About 90 percent of asbestos cases in the state are settled without a trial. But a federal law would wipe out Maryland's system, and remove all cases nationwide from the courts.

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