Holtz-Eakin has doubts on asbestos-fund sunset

Former Congressional Budget Office Director Douglas Holtz-Eakin plans to deliver a potentially damaging blow to the prospects of a controversial bill on asbestos-litigation reform at a hearing scheduled for today.

Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) and other supporters have long cited the Congressional Budget Office (CBO) score of the bill as proof that it would not bust the federal budget, as its detractors claim. The legislation would create an industry-financed trust fund to make payouts to people ailing from asbestos exposure. The fund is supposed to “sunset” when it runs dry, which would send claimants back to the courts for financial redress.

But according to a draft copy of Holtz-Eakin’s testimony obtained by The Hill, the former CBO chief will tell the committee today that he never believed the trust fund would expire when it runs out of money.

An earlier version of the Specter bill was derailed in February, largely because of worry among conservatives that the bill creates a de facto entitlement program financed by new spending mandates.

Although the CBO is compelled to restrict its analyses to the text of the bill, Holtz-Eakin will testify that he always believed that lawmakers would act to extend the trust fund using taxpayer dollars when the industry money runs out.

In the draft testimony, Holtz-Eakin writes that the political pressure would be too strong not to deny sick people access to compensation.

Holtz-Eakin joined the Council on Foreign Relations after leaving the CBO last year.