Industry wary of Specter's asbestos reform bill

Manufacturers and insurers are worried about key aspects of draft legislation on asbestos litigation reform that Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) has floated. Industry officials insist that the proposed trust fund must be the exclusive remedy for asbestos claims and strongly object to any provision that would see some asbestos claims revert to the tort system under any circumstances.

The current draft of Specter's bill gives fund administrators 180 days to set up the fund before claimants can return to the tort system. But organized labor and trial lawyers will fight legislation that would not allow for a fallback system if the trust fund runs out of money. However, at a committee hearing on the issue yesterday, AFL-CIO Director of Safety and Health Peg Seminario said reverting to the tort system should be a "last resort."

American Insurance Association general counsel Craig Berrington also expressed concern that Specter's draft bill would not make the trust fund the exclusive remedy. But AFL-CIO Legislative Director Bill Samuel said a fallback plan is necessary; otherwise there is "no recourse" if some of those asked to pay into the trust fund "disappear."

Though emphasizing the need for a trust fund, industry is also concerned about the absence of a price tag for the program. National Association of Manufacturers President and CEO John Engler said at the hearing that the amount in the trust fund must not exceed the $140 billion that Senate leaders agreed upon last year.

Other concerns raised at the hearing include disagreements over medical screening programs, which are favored by labor and unpopular with business, and whether employers should receive worker's compensation in addition to payouts from the trust fund.

The Senate has wrestled with asbestos reform for years and was as close as ever to reaching a deal at the end of the 108th Congress, although large chasms still existed between stakeholders. This year, with stronger GOP majorities in both chambers, President Bush is getting more involved in the debate right. Last week, as part of his tort-reform plans, he pledged to work with Congress to reform asbestos litigation, saying that lawsuits "have led to the bankruptcy of dozens of companies and cost tens of thousands of jobs." Bush said he wants Congress to "get the job done," adding that he wants to sign legislation this year.

Samuel said Bush's getting involved is a good sign but should not encourage industry to believe that it can force its plans through the Senate. "I don't think there is a way to get 60 votes" without general consensus among the major groups, he said.

Despite the high financial stakes and the economic consequences of the current system, asbestos reform is a dicey issue because it pits some of the parties' core constituencies and sources of funding against one another.

Industry calls for immediate and complete reform and is counting on new Republican majorities to get it done. Meantime, organized labor and the trial lawyers count on Democrats to stop any proposal that falls short of their reform goals.

Specter has vowed to address the issue quickly in 2005. "It's now or never," he said yesterday, adding that it would be more difficult to get floor time later in the year.

Doug Larkin, director of communications of the victims-rights group Asbestos Disease Awareness Organization, voiced concern over what he described as an ambitious schedule for the bill and said he would have liked to hear more from asbestos victims. Of the eight panelists at yesterday's hearing, two spoke personally about the effects of asbestos related illness.

Despite the remaining differences, both Specter and ranking Democrat Sen. Patrick Leahy (Vt.) praised the progress that has been made on asbestos reform over the past two years. Specter held meetings with all stakeholders Monday and has scheduled another meeting for next Wednesday.