The Building Tradesman Newspaper

Friday, January 06, 2006

Federal report raises fear that asbestos fund is inadequate for victims

By The Building Tradesman

By Mark Gruenberg
PAI Staff Writer

WASHINGTON (PAI) - A new federal study has given further ammunition to groups representing workers who are victims of asbestos-caused disease and to two key senators, who all say that the proposed asbestos trust fund for victims and their families is too small. The senators fear the taxpayers might have to bail it out.

The non-partisan Government Accountability Office (GAO) report paints a dismal financial history of other such trust funds for workers and warns lawmakers the same fate could occur with the asbestos trust fund.

Other funds that exceeded initial cost estimates include the federal black lung program, pushed by the Mine Workers, and one for former nuclear plant workers over-exposed to lethal radiation, advocated by the then-Oil, Chemical and Atomic Workers.

The mid-December GAO report comes as Senate Majority Leader William Frist (R-Tenn.) plans to bring the asbestos trust fund bill (S. 852) up after the Senate returns in January. The report is important because S. 852 limits the trust fund for the 200,000-plus asbestos victims and their families to $140 billion over a period of years. It sets extreme standards workers must meet to claim money for asbestos-caused disease.

And it lacks ways to add money to the fund once it runs out. It also bars victims and their families from going to court against asbestos manufacturers and their insurers, throws out past lawsuits and forces victims to start the process all over again. The firms and insurers pushed S. 852 and would pay the $140 billion, but no more.

The groups, who represent worker victims of mesothelioma, an asbestos-caused cancer, and asbestosis, and their widows and children, say the bill is pro-industry, the trust fund is too small, and that long-suffering victims would be thrown out of court should the trust fund run out of money. Victims, including construction workers, auto workers, steel workers, shipyard workers, suffer from diseases years after their work.

The revisions prompted victims groups and families to oppose S. 852. Early last year, the AFL-CIO walked away from the negotiations in disgust at the strong corporate influence when it was written. In December the two key senators, leaders of the Budget Committee, objected.

Frist "made a commitment to bring up the asbestos trust fund bill on the heels of receiving a letter from six asbestos victims' groups voicing our concerns with the funding and asking the Senate take more time to review pertinent issues," said Susan Vento, chair of the Committee to Protect Mesothelioma Victims. But "Frist made clear that regardless of whether or not serious problems with the bill are resolved, he will force it to the floor for a vote in January.
"We can understand why stakeholders are trying to hustle this legislation through - every week new problems arise. Budget issues, among many others, must be resolved before Congress even considers this piece of legislation," Vento added.

The GAO warns that the money in the trust fund may not be enough to compensate the victims and their families.

"Because these programs may expand significantly beyond the initial costs
anticipated when they were enacted, policymakers must carefully consider the cost and precedent-setting implications of establishing any new federal compensation program, particularly in light of the current federal deficit," GAO's report summary says.

GAO found that in the black lung program and two for workers handling the nuclear materials, "the actual number of claims filed significantly exceeded the estimates of the number of anticipated claims." It said the oldest program, for black lung, was supposed to cost $3 billion in its first, limited, time frame, from 1969-76. It has cost $41 billion for coal miners permanently disabled by the crippling lung disease.

Senate Budget Committee Chairman Judd Gregg (R-N.H.) and the panel's top Democrat, Kent Conrad (D-N.D.), raised many of the same objections in a latter to Frist. They said the cost of asbestos claims could be up to four times the money - the $140 billion - that the insurers and asbestos manufacturers pledged to the fund.

That lack of cash would force the taxpayers to bail out the manufacturers and insurers, in order to pay the victims and their survivors, Frist and Conrad said.

"There remain major unresolved questions about the budgetary impact of the bill," the senators warned. They include "the actual cost of the program," whether the trust fund will have enough money to pay asbestos claims, and "a lack of clarity" on how much companies will pay into the trust fund and how much the insurers will pay.