Asbestos Study Group Issues Statement on the CBO A
Washington, DC, December 20, 2005--The Asbestos Study Group issued the following statement in response to the Congressional Budget Office's (CBO) latest analysis of S. 852 (The Fairness in Asbestos Injury Resolution Act of 2005):
"The CBO statement was once again a validation for the approach contained in the FAIR Act.
"The CBO's findings reinforce the widely held view that the FAIR Act provides the nation with a strong framework for solving a seemingly intractable national problem: the ongoing asbestos litigation crisis. At the same time, we are not surprised to learn that the CBO, the non-partisan and independent analytical arm of Congress, raises several serious concerns about the soundness and the significance of the privately funded Bates White study.
"Fundamentally, the CBO found that the paid-for Bates White study contained no new information that would cause the CBO to revise its cost estimate. And while the CBO recognizes that a long-term forecast does not lend itself to precise projections, the CBO estimates once again provide a range in total claimant compensation over 50 years from a low of $120 billion to a high of $150 billion. The overall value of the FAIR Act fund at $140 billion over 30 years is well within that range.
"In doing its analysis of Bates White, the CBO found expressly that the privately funded study overestimates the number of claims to be made against the asbestos trust fund from individuals suffering from lung cancer and other cancers, many of which would not have been caused by exposure to asbestos.
"According to the CBO, it "remains convinced that the number of such claims ... would be far fewer than suggested by Bates White.
"CBO raises a litany of other questions about the Bates White study, including:
- Whether Bates White overestimates the incidence of pleural abnormalities.
- Whether Bates White overestimates the number of individuals that could file a claim under S. 852.
- Whether Bates White overestimates the number of individuals that would file a claim under S. 852.
- Whether Bates White overestimates the population exposed to asbestos.
- Whether Bates White overestimates the number of claims because it fails to consider that the financial incentives that drive the current broken system, namely attorneys fees up to 40% of the amount awarded, would be replaced by a cap of 5% of the amount awarded by the fund.
"Finally, one issue the CBO does not explicitly address is the status quo. Today victims are forced to wait too long and too often receive only a paltry share of the compensation they deserve, if they ever receive anything at all.
"To be clear, the current asbestos litigation system completely and utterly fails victims who have become ill as a result of asbestos exposure. At the same time, it inflicts never-ending damage on defendant companies, US workers and our nation's economy. S. 852 continues to be the best hope for a solution to the nation's asbestos litigation crisis."
