Lung Cancer Fact

U.S. Senate: Asbestos Fund Top Priority for 2006

Source: Bloomberg.com

WASHINGTON -- A proposed $140 billion fund to pay current and future lung cancer claims for victims of asbestos exposure will be the U.S. Senate's top priority next year, Majority Leader Bill Frist said yesterday.

"The Senate will finally resolve the asbestos litigation crisis," Frist, of Tennessee, said in a Senate floor speech. "The day has come for us to fix it."

The Senate Judiciary Committee will conduct a hearing tomorrow to determine whether $140 billion is enough to cover all claims. A private study said the fund, to be financed by companies that made asbestos products and their insurers, would need $300 billion to pay current and future lung-cancer claims.

The proposed fund would end litigation that has forced 77 companies, such as USG Corp., the world's largest wallboard maker, into bankruptcy. The measure would pay victims of diseases such as cancer up to $1.1 million if they can prove the cause was asbestos.

In a letter to Frist and Senate Democratic leader Harry Reid, Senate Budget Committee Chairman Judd Gregg, a New Hampshire Republican, and Kent Conrad of North Dakota, the committee's ranking Democrat, questioned how much must be borrowed from the U.S. Treasury to start the compensation fund.

In response, Judiciary Committee Chairman Arlen Specter, a Pennsylvania Republican, and Patrick J. Leahy of Vermont, the panel's ranking Democrat, said the fund wouldn't impose any burden on taxpayers. The bill would ``explicitly absolve the federal government from any liability,'' they said in a letter to Frist and Reid.

Small and medium-sized businesses that face asbestos claims "are willing to take their lumps in the business world as they know them now," Reid, of Nevada, said. "They obect to being told they have to contribute huge amounts of money to this fund."

Senate Republicans are divided on the plan. Seven Republican members of the Judiciary Committee voiced serious reservations about the legislation after the panel approved the measure 13-5 on May 26.

Republicans have questioned whether the criteria for determining reimbursements for some victims are too generous. The skeptics, including Senators John Cornyn of Texas and Jon Kyl of Arizona, said they were concerned that too many cases would be allowed to return to the court system if the fund fails to pay claims on time.

Bloomberg.com