Washington, DC, February 10, 2006--The Senate bill to create a $140 billion fund to pay asbestos victims survived an attempt to gut it on Thursday, but the legislation immediately faced an objection that it violates budget rules.
The bill has sharply divided lawmakers and industry over how to resolve billions of dollars in litigation by people injured with lung-scarring diseases and cancer linked to asbestos.
The Senate voted 70-27 to block an amendment from more than a dozen Republicans that would have scrapped the victims' compensation fund and allowed injured people to continue to sue only if they met certain medical criteria. The amendment, sponsored by Texas Republican John Cornyn, was similar to a bill introduced in the House.
Asbestos fibers were widely used for their insulating and fire-retardant capabilities for years. Some 70 U.S. companies, including W.R. Grace and Co. (GRA.N: Quote, Profile, Research) and USG Corp. (USG.N: Quote, Profile, Research), have been pushed into bankruptcy proceedings by injury claims.
The fund would end victims' right to sue and pay claims out of a trust financed by companies and their insurers.
Immediately after the vote, Sen. John Ensign, a Nevada Republican, raised a parliamentary point of order against the trust fund bill for violating budget rules.
Such an objection requires a super-majority of 60 votes to defeat. A vote is not expected for several days.
Ensign was supported by Democrat Kent Conrad of North Dakota, who said he was worried the federal government would eventually have to bail out the proposed asbestos victims compensation fund.
Conrad cited a Senate Democratic analysis of the proposed compensation fund that he said showed it would run out of money. "The conclusion is that the shortfall over the period of the fund will be $150 billion," he said.
One of the bill's co-sponsors, Pennsylvania Republican Arlen Specter, retorted that if the fund ran out of money, the bill called for asbestos claims to go back to the courts. "The federal budget is not involved in this bill ... This is just a convenient maneuver to defeat the bill," he said.
