Judiciary panel to revisit asbestos

An upcoming Senate Judiciary Committee hearing on asbestos-injury-liability reform will give Chairman Arlen Specter (R-Pa.) a chance to counter a critical report about his bill and rejuvenate his effort to move the legislation forward.

The hearing, scheduled for next Thursday, could be viewed as a response to a recent report by the economics-consulting firm Bates White, which concluded that Specter’s proposed trust fund to pay asbestos claims will go bankrupt.

The Specter legislation would establish a $140 billion industry-financed fund that would replace the tort system as the source of compensation for people injured by asbestos exposure. Asbestos has been linked to cancer and other ailments. Powerful lobbying interests are aligned on both sides.

The panel reported the bill, which is co-sponsored by Judiciary Committee ranking member Patrick Leahy (D-Vt.), in May. Even though it passed, committee members who voted for the bill said they would not support floor passage in its current form. Specter has identified the asbestos bill as one of his top legislative priorities.

Specter’s decision to call a hearing on a bill his committee has already marked is a break with the Senate’s usual practice. He could be seeking to repair any damage the Bates White report may have inflicted on his legislation’s future.

If the trust fund were to run dry, the legislation would allow claimants to file lawsuits. Politically, however, it could prove difficult for Congress to allow a trust fund to disappear. The federal government could be left to foot the bill itself or squeeze additional money from the private sector.

Specter’s hearing will include analysts who will no doubt impugn the Bates White study, which the conservative American Legislative Exchange Council commissioned. Other independent reports have drawn more optimistic conclusions about the fiscal soundness of the fund.

Charles Bates of Bates White will appear at next week’s hearing to defend his findings. The company already responded to more than 20 questions from Specter’s office. Bates White partner Charles Mullin said the committee sought explanations about the methods and assumptions used to arrive at the conclusion that the trust fund could be as much as $160 billion short when the claims stack up over the coming decades.

The Congressional Budget Office (CBO) has estimated that the shortfall would be only up to $10 billion. The CBO acknowledged in its August estimate that uncertainties about the number of people who could file claims could have an effect on the total cost. CBO primarily based its projection of the number of claims on how many people were suing for asbestos injuries.

However, a nonpartisan group called STATs, which is affiliated with George Mason University, is releasing an analysis today that backs up the Bates White finding that more people will seek payouts than CBO estimated.

“Obviously, there will be more claimants when the process is streamlined, and victims are guaranteed compensation if they meet the medical criteria,” according to the STATS report, which was written by mathematician Rebecca Goldin.

Goldin said that proponents of the Specter bill would have a hard time criticizing the Bates White study as being skewed in favor of its conservative financiers.

“It didn’t look biased to me,” she said. “It looked extremely professional.” Goldin observed that “the CBO study was pretty sloppy.” She added that she personally favors the creation of an asbestos trust fund.

“In general, these predictions are pretty difficult,” Goldin cautioned, noting that there are a number of unknown variables.

AFL-CIO Director of Safety and Health Peg Seminario agreed but also maintained that the Bates White study was deliberately skewed against providing compensation to people with asbestos-related injuries.

The study, she contended, overstates the number of people who would qualify for payouts and could chasten lawmakers concerned about the cost of the trust fund. The AFL-CIO opposes the Specter bill, primarily on the basis that it does not provide enough money and is too conservative in its estimate of who would be eligible for compensations. A union representative will testify at the hearing.

Specter originally scheduled the hearing for Monday. Sources said he moved it back amid complaints that committee members and others would sparsely attend a hearing on a Monday — a day Senate committees rarely convene.