Asbestos Bill Will Have Its Day
But Chances Of Passing Are Slim

After more than two years of wrangling, the Senate is set to vote next month on a major $140 billion bill to resolve the asbestos litigation crisis. But insiders say the bill's chances are iffy at best.

Senate Majority Leader Bill Frist, R-Tenn., has pledged that a vote on the Fairness in Asbestos Injury Resolution Act will be one of the first items of business when the Senate reconvenes in January.

"Of all of the items which could provide an economic stimulus to the U.S. economy, I think asbestos reform would be the most important," Sen. Arlen Specter, R-Pa., co-author of the bill, told the Chamber of Commerce last month. But he conceded, "It is going to be a battle."

Just A Bill On Capitol Hill
The bill narrowly passed the Senate Judiciary Committee back in May and has languished on the Senate calendar ever since.

"The fact that they've held it on the Senate floor until now tells you something," said a Senate aide to a Republican involved in the bill's crafting.

Of the four major stakeholders that would be affected by the bill - business, insurers, trial lawyers and big labor - only business is backing the current version. One union, United Auto Workers, has broken ranks to endorse it.

It has scant Democratic support and many conservative Republicans have also expressed serious qualms about it. Passage is going to require a lot of arm-twisting.

"To my knowledge there has been no progress on this bill. All of the outstanding issues will have to be addressed on the Senate floor. That's a huge task," said a consultant to one of the stakeholders.

Among the concerns are whether $140 billion is enough and if the cases will return to the courts if the fund runs out. A Congressional Budget Office study indicated the fund could fall $10 billion short.

"We have always said that the amount of money is insufficient, especially the upfront funding," said Peg Seminario, AFL-CIO safety director.

Business disputes that, arguing the fund may not even have to pay out the full $140 billion.

"Bear in mind, $70 billion has been paid to date and no one has been using this stuff for 30 years," said Darren McKinney, spokesman for the National Association of Manufacturers.

Will Deal Spur More Suits?
Insurers are concerned that creating a fund will only cause more people to file suits before the trust is up and running. Trial lawyers don't like it since it would limit fees in what has been a very lucrative field.

The legislation would create a trust fund administered by the Labor Department. It would make payments to individuals who could prove they were harmed by asbestos. In exchange, the companies would be shielded from further liability. Lawyer's fees would be capped at 5% of the fund.

Of the $140 billion, $46 billion would come from insurers, another $90 billion from defendant companies and the rest from existing trusts.

The fund is intended to stem a tidal wave of lawsuits that critics say are clogging courts and choking business. Corporations have paid out $70 billion in claims to date. About 70 businesses have been forced into bankruptcy.

Litigation has grown so frequent, according to studies by the Rand Corp. and others, that many cases involve people without cancer and suffering no ailments.

Bipartisan Support, Disdain
The bill is bipartisan. Sen. Pat Leahy, D-Vt., and Sen. Arlen Specter, R-Pa., are co-authors. But only one other Democrat is co-sponsoring it, Sen. Diane Feinstein, D-Calif. During a hearing last month she indicated she may be rethinking her support. Senate Minority Leader Harry Reid, D-Nev., has come out against it.

Some Republicans, such as Sen. John Cornyn, R-Texas, have also expressed doubts that the bill as written will actually end the litigation.

One rumor floated by opponents is that Frist is bringing it up only as a favor to Specter, who's spent over a year on it. Specter is chairman of the Judiciary Committee, which will hold the hearings on Supreme Court nominee Samuel Alito in January.

Neither Specter nor Frist's offices responded to IBD's requests for comment.