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CBO Report Confirms Proposed Asbestos Fund is Under-funded, Untested, & Unfair

(Friday, August 26, 2005) - The Congressional Budget Office (CBO) analysis of S. 852, the proposed national asbestos trust fund, confirms the fundamental flaws with the proposal that victims, public health experts, independent claims analysts, and Senators on both sides of the aisle have been pointing out for months.

“This proposal would place all the burden on asbestos victims, denying thousands the help they need to cope with the devastating health and financial consequences of asbestos-related cancer,” said ATLA President Ken Suggs.

“It’s especially unfair that victims are asked to solely bear the risk of this untested and uncertain compensation mechanism while the asbestos manufacturers who poisoned them are instantly granted billions of dollars in liability relief the day the bill passes,” Suggs added.

CBO raised a number of financial red flags that should cause Senators to reconsider bringing this measure to the Senate floor – about solvency, federal borrowing and the ability of the fund to compensate innocent asbestos victims.

Major Problems Highlighted by the CBO Include:

• Over the first ten years the fund will fall nearly $8 billion short in revenues and would have to borrow money to pay qualified asbestos claims. CBO admits that overall, “resources may be insufficient to pay all claims,” and that all previous estimates of asbestos claims have been too low.
  
  
• Forced to borrow to stay afloat, the trust fund will spend money intended for victims on interest payments, money the CBO admits it did not calculate in its estimate of the fund’s cost.
  
  
• There will be significant delays for asbestos victims who are sick and dying. CBO says the fund, “would not be operational until at least a year following enactment of the legislation.” CBO did not consider additional delays caused by constitutional challenges or hurdles in the bill that victims would have to navigate.
  
  
• Even mesothelioma victims with pending claims could be forced to wait as long as 3 years because of requirements to protect asbestos companies and their insurers while victims are unable to seek help in court.
  
  
• Overall the picture is one of great uncertainty. In CBO’s own words:
  
  
  • “Operating the Asbestos Fund would be an entirely new governmental task, and CBO and other analysts have little basis for judging how the Administrator would implement the legislation;”
    
    
  • “The Asbestos Fund’s Operations Are Uncertain;”
    
    
  • “Past Estimates of the Number and Value of Asbestos Claims Have Been Inaccurate;” and
    
    
  • “The revenue collection stream that would be generated by the legislation is highly uncertain.”
    

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As the world's largest trial bar, ATLA promotes justice and fairness for injured persons, defends the constitutional right to trial by jury, and strengthens the civil justice system through education and disclosure of information critical to public health and safety. With 60,000 members worldwide, ATLA provides lawyers with the information and professional assistance they need to serve clients successfully and protect the democratic values of the civil justice system.