Asbestos bill faces opposition at Senate hearing, witnesses question adequacy of funding

By Jennifer Lanning Drey

Eugene, Ore., June 7 - The Fairness in Asbestos Injury Resolution (FAIR) Act of 2006 faced opposition in a Senate hearing Wednesday from witnesses who warned the trust fund that would be established by the legislation is likely to burden both taxpayers and the federal government.

"It is implausible to take the FAIR Act at face value," said Douglas Holtz-Eakin, director of the Council on Foreign Relations, in testimony during the hearing.

The legislation (S.3274) calls for the establishment of a privately financed $144 billion trust fund that would be administered by the Department of Labor to compensate victims of asbestos exposure while shielding asbestos manufacturers from future lawsuits.

Holtz-Eakin and other opponents said the $144 billion trust fund would not cover the amount of claims that would be filed against it.

The burden could be shifted to taxpayers when the fund runs out, opponents said.

In addition, the number of claims that would be brought forth soon after the trust fund's establishment would necessitate federal borrowing since the fund's full revenues are expected to take approximately 30 years to be collected, Holtz-Eakin testified. Holtz-Eakin was speaking on his own behalf, not for the Council on Foreign Relations.

Eric Green, a court-appointed futures representative, also expressed concern that, if established, the fund would not have the resources to pay claims in a timely manner, and he defended the current system in place for companies facing large-scale asbestos claims.

But other witnesses and senators, including Sen. Arlen Specter, R-Pa., who introduced the legislation, defended the fund's ability to provide adequate compensation.

Supporters also testified that the legislation would eliminate asbestos litigation from the courts and provide relief for companies facing bankruptcy due to asbestos litigation claims.

Since the early 1980s, 77 companies have filed for bankruptcy protection due to asbestos litigation.

Act lifts 'constant threat'

"The companies contributing to the trust fund will have certainty about their financial obligations," said John Engler, president of the National Association of Manufacturers in testimony Wednesday.

"The FAIR Act lifts the constant threat that asbestos litigation poses to their operations and sometimes, even their survival," he said.

Jim Grogan, general president of the International Heat and Frost Insulators, and Flora Green, national spokesperson for the Seniors Coalition, also provided testimonies before the Senate defending the legislation's ability to provide fair compensation.

The proponents pressured Senators to work quickly to move the legislation to the House.

"Too much time has gone by without a solution to this pressing national problem. For the sake of victims, and especially for senior victims, it is critical that this bill be passed this year," said Green, in hearing testimony.

Frist wants signatures to schedule

Senate majority leader Bill Frist is responsible for scheduling the bill for vote.

Frist has said before he will schedule it, Specter must get 60 senators to signify their commitment to support a motion to waive a pending Budget Act point of order and to end any filibuster of the bill, according to Frist's press secretary, Carolyn Weyforth.

Frist said if Specter gets the votes, he will schedule the bill at the earliest possible opportunity, according to a news release.

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