Specter Backs $140B Asbestos Bill

Washington, DC, January 20--Senate Judiciary Committee Chairman Arlen Specter said on Wednesday he was proposing a $140 billion fund to compensate asbestos victims and cap the liability of companies paying them damages. This is the maximum some business interests have said they would pay into such a fund, but about $9 billion less than labor representatives say is necessary to pay asbestos claims. If the fund runs dry, people sickened by asbestos could return to court, Specter said. The prospect of such a return to court is anathema to many business interests who want the fund to provide certainty and finality to asbestos payouts. Specter, a Pennsylvania Republican, said he would introduce legislation to create the fund next week. He is trying to fix a massive problem that has defied solution for years, involving sick and dying people and hundreds of thousands of damage claims in the U.S. courts and sending companies into bankruptcy. Similar proposals stalled last year as Senate Republican Leader Bill Frist and then-Democratic Leader Tom Daschle were unable to satisfy competing demands of the affected groups. Daschle and Frist did however agree to a $140 billion fund. Specter, who restarted the asbestos talks among interested groups after the November elections, had not endorsed that amount until Wednesday. He told a business meeting of his committee he thought $140 billion was "within the parameters of what is realistic to ask the manufacturers and the insurers to pay. "We have preserved a safety valve for the claimants, that in the event that the funds are insufficient, the claimants can go back to their constitutional right to a jury trial," Specter said. But he gave no details of how this would work. A spokeswoman for the American Insurers Association, said the group would have to see the fine print on the "safety valve" and other parts of the legislation before commenting. The group is concerned companies should not have to pay damages twice -- first to the fund and then later in court. "If it's a $140 billion fund that is very tight, so that all the claims are being paid out of the fund, that's quite different from a $140 billion fund where there is a lot of leakage and the tort system is still operating business as usual," said AIA spokeswoman Julie Rochman. The proposed trust would have $40 billion in "startup" money, Specter said, referring to funding needed in the first few years, when the crush of claims is expected to be greatest. Hundreds of thousands of claims are in courts now, and dozens of firms have gone bankrupt after being swamped by claims. But it would also have another $20 billion in borrowing authority to raise more startup money if needed, Specter said. He did not mention any Democrats who would join him in sponsoring the bill. A spokeswoman for Vermont Sen. Patrick Leahy, the committee's ranking Democrat, said he would not comment but was in talks with Specter and others on the issue. Asbestos, a fire-retardant fibrous mineral, was once widely used for insulation and construction purposes. Scientists say inhaled fibers are linked to cancer and other diseases. Many of these diseases take a long time to develop, and some exposed workers have sued out of fear that they will fall ill later.

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