Congressional Record (Bound Edition), Volume 150 (2004), Part 6 - DIVERSION OF FUNDS FOR MILITARY OPERATIONS IN IRAQ

[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[Senate]
[Pages 6986-7010]
[From the U.S. Government Publishing Office, www.gpo.gov]

DIVERSION OF FUNDS FOR MILITARY OPERATIONS IN IRAQ

Mr. LEAHY. Mr. President, I want to take a moment to respond to the
very serious allegations contained in Bob Woodward's book about the use
of counterterrorism funds to support preparations for the U.S. military
invasion of Iraq.
As a Senator and a taxpayer, I am very troubled by this information.
The Constitution gives Congress the sole power of the purse. The
Founding Fathers did this for good reason. It is a responsibility that
I take very seriously.
As a member of the Appropriations Committee for more than two
decades, I know there is a long, bipartisan tradition of
administrations--of both political parties--informing Congress when
money is going to be used for purposes different than what it was
intended for, especially if it is part of a major change of policy.
We do not yet know all of the facts, and we need to get the whole
story as soon as possible. But I will say that in the wake of September
11, the Congress moved very quickly in a bipartisan way to appropriate
billions of dollars to respond to the threat of international
terrorism.
In doing so, we gave the administration a great deal of flexibility,
but we also made clear that we expected the administration to keep the
Congress informed on the use of these funds. And administration
officials gave us their word that they would keep us informed.
We now learn, as a result of Bob Woodward's book, that millions of
dollars that we thought we were appropriating for Afghanistan, or to
respond to other terrorist threats, may have been used by the Defense
Department to begin preparations for the invasion of Iraq.
The problem is that there is not a shred of evidence linking Saddam
Hussein to the September 11 attacks. Even the President has
acknowledged this.

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In effect, it appears that the administration has treated the
Congress with much the same disdain as it treated our European allies.
Remember? They were the ``old Europe,'' who were out of touch, whose
support we did not need. Like the United Nations, they were
``irrelevant.''
So too the Congress: What do they know? They just appropriate money.
They do not need to know what it is being used for.
We also have learned, in even more detail, how this administration
rushed into war without making adequate post-war plans or building a
real international coalition. As a result, the reconstruction efforts
are a mess, our credibility is in tatters, and America's soldiers are
shouldering a grossly disproportionate share of the burden and the
casualties.
The proper use of taxpayers' money is not a Democratic or a
Republican issue. As representatives of the American people, it is
something that we should all be concerned about, and it may force us to
change the way we do business around here.
Mr. President, we also have before us an asbestos bill, the Asbestos
Injury Resolution Act of 2004. This partisan asbestos bill is not ready
for floor consideration. It is not ready for prime time, not by a long
shot. I do believe the Senate should pass legislation to establish a
national trust fund to fairly compensate asbestos victims. After all, I
held the first hearing ever held by the full Senate Judiciary Committee
in an effort to get a resolution to the problem facing victims of
asbestos poisoning. But, despite the title of this bill, it is far from
fair. It is very partisan. This partisan bill creates a trust fund that
provides unfair compensation for asbestos victims. This partisan bill
creates a trust fund with inadequate funding, no startup protections,
and major solvency problems. This partisan bill contains a warped
sunset provision that could trap victims in a failed trust fund for 7
years or more without having access to compensation.
Look at this chart. This fund says victims could be trapped in a
failed trust fund for 7 years or more and would have no compensation.
If the fund becomes insolvent, then the Hatch-Frist substitute provides
for a reversion to the tort system, but only after 7 years from when
the fund begins processing claims, and then only in Federal court, and
then only for some limited disease categories. So victims could be
trapped for 7 years or more with no compensation. That is not fair.
Some have claimed this bill provides for contingency funding to try
to address the many uncertainties of future projections for asbestos
victims, but the $10 billion for continued funding only kicks in after
year 2023 and only if the funds still exist at this time. Let me show
you on this chart. It is only after year 2023. We are in the year 2004.
There will be very few in the Senate who will still be around to try to
correct the mischief of this bill. You have contingency funding
available after 2023. That means a lot will not be available to pay the
pending 300,000 claims on day one. That is not a fair trust fund.
So I would say it is a mistake for the Republican leadership of the
Senate to insist on proceeding to a bill and have so many major
problems still unresolved. The bill is not ready for prime time. Let's
work at making it ready, not work at scoring partisan points. Let's do
something for the victims of asbestos.
Creating a fair national trust fund to compensate asbestos victims is
one of the most complex legislative situations I have seen in 29 years
in the Senate. The interrelated aspects necessary for a fair national
trust fund is like a child's Rubik's Cube. So it is all the more
necessary that a bill be a consensus piece of legislation for it to
become law. I am not looking for a Democratic or Republican piece of
legislation; I am looking for a bipartisan one that would work. That is
why I worked so hard in months of bipartisan negotiation, why I worked
so hard to encourage the interested stakeholders to reach agreement on
all the critical details. I have had so many meetings in my office and
in other Senators' offices with the major stakeholders across-the-
board, and this is where we are. We have Senator Hatch and the majority
leader introducing a partisan asbestos bill.
I hoped the bipartisan dialog over the past year would yield a fair
and efficient compensation system that we could in good conscience
offer to those suffering today from asbestos-related diseases and to
the victims yet to come. Our leader, the senior Senator from South
Dakota, Senator Daschle, was entrusted by all of us to speak for our
caucus and to try to negotiate an agreement. Time and again he made
that attempt. Time and again he was put off.
I stood there with him when he spoke to the leadership on the
Republican side saying, Can't we get together on a piece of
legislation? But unfortunately the Senate majority leadership decided
to walk away from those negotiations and resort to unilateralism by
introducing a partisan bill without Democratic support. That is a
shame. They ought to pull this bill and sit down with Senator Daschle,
knowing Senator Daschle will go to the table and negotiate a real bill,
because the introduction of this bill raises many questions, most
notably what the sponsors are trying to achieve, because it certainly
is not a fair compensation model for asbestos victims. By breaking off
bipartisan negotiations and pushing this bill to the floor, they have
turned their backs on those of us who have worked so long for a fair
solution.
I was encouraged to learn this week from a news wire report that a
colleague, the senior Senator from Pennsylvania, Senator Specter, who
played an important role in the negotiations, favored resumption of
negotiations. Senator Specter told the Associated Press:

I declined to join with Senator Frist and Senator Hatch in
their substitute bill because I think it is the better
practice to try to work through these problems. Senator
Specter, of course, has put in untold hours with retired
distinguished Judge Becker in trying to work through the
points of such a bill.

We have all learned a great deal about the harms caused by asbestos
exposure since that first hearing that convened in September of 2002.
Asbestos is the most lethal substance ever widely used in the
workplace. Between 1940, the year I was born, and 1980, more than 27.5
million workers in this country were exposed to asbestos on the job and
nearly 19 million of them had high levels of exposure over long periods
of time. Unbelievably, asbestos is still used today.
What we face is an asbestos-induced disease crisis. Hundreds of
thousands of workers and their families have suffered debilitating
disease and death due to asbestos exposure. The disease and the death
are among the most horrible ways of being sickened or to die. These are
the real victims of the nightmare and they must be the first and
foremost focus of our concern and effort. These are people who, simply
by showing up for work and doing their job as they are supposed to,
endured lives of extreme pain and suffering.
Not only do they continue to suffer, and their number will grow, but
the businesses involved in the litigation, along with their employees
and their retirees, are suffering from the economic uncertainty created
by the situation.
More than 60 companies have filed for bankruptcy because of their
asbestos-related liabilities. These 60 bankruptcies have a devastating
human economic effect. Asbestos victims deserving fair compensation do
not receive it and bankrupt companies do not create new jobs or invest
in our economy.
In working with Senators Daschle, Dodd, Frist, Hatch, and Specter, we
encouraged representatives from organized labor, the trial bar, and
industry help reach consensus on a national trust fund to compensate
asbestos victims. We wanted to give financial certainty also for the
defendants and their insurers.
Now a successful trust fund--by that, I mean one that would provide
fair and adequate compensation to all victims--would bring reasonable
financial certainty to defendant companies and their insurers. To be
successful, it has to have four essential components. It

[[Page 6988]]

has to have appropriate medical criteria, it has to have fair award
values, adequate funding, and an efficient, expedited system for
processing claims.
During the markup session of the Judiciary Committee on the first
FAIR Act, we unanimously adopted the Leahy-Hatch amendment on medical
criteria. This created 10 categories of disease. The medical criteria
represent bipartisan agreement the national trust fund should provide
monetary compensation to claimants who suffered impairment and it
should provide medical monitoring to those individuals with less
serious asbestos-related conditions. The bipartisan medical criteria
are in this new bill. I agree with them.
During the mediation process established by Senator Specter and Judge
Becker--I referred to him earlier as Judge Edward Becker, retired chief
judge for the United States Third Circuit Court of Appeals--the
interested stakeholders tried to craft a streamlined administrative
process. Senator Specter and Judge Becker worked very hard on this
process. They deserve the thanks of all Members. I believe their very
inclusive process was crucial to the establishment of a national trust
fund at the Department of Labor.
Even that agreement, the agreement between the interested
stakeholders, left many details unresolved. In fact, as this chart
shows, Judge Becker listed 22 outstanding issues. Many involved
administrative process. That list of 22 outstanding issues did not
include the 2 other major components of a fair trust fund: fair award
values and adequate funding to pay for it. These are the remaining
issues.
We cannot zip to the Senate floor and because we could not find
anything else to do, we bring it up. There are many issues, including
startup language, sunset time, timeframe, reversion to tort system, in
what forum, pending cases, settlements in pending cases, treatment of
existing trusts, worker's compensation, medical screening of high-risk
workers, transparencies, setoff rules, statute of limitation language,
exclusive default judgments, bankruptcies, FELA, exclusivity for
asbestos-related claims, and on and on.
I mention this because this is a highly complex area. Simply putting
something on the Senate calendar to say we put something on the Senate
calendar is a lot different than actually being legislators and trying
to pass something. What we want is a decent piece of legislation, not a
headline. The people who are suffering from asbestos-induced injuries
and illness are not helped by a headline. They are helped by real
legislation which requires real Senators doing--guess what--real work.
The changes made to a few award values by Majority Leader Frist moved
in the right direction. His partisan bill does not move far enough
toward providing fair compensation to all impaired victims of asbestos
exposure. In fact, seriously ill victims of exposure would receive
significantly less compensation on average under the current version of
this act than they would in the tort system. The so-called FAIR Act is
not yet fair.
The gravest injustice to the bill is to lung cancer victims. A victim
with at least 15 years of asbestos exposure could receive only $25,000
in compensation for his or her asbestos-related disease under the new
bill. Goodness gracious. I ask any Member of this committee, if
somebody's negligence caused them to have lung cancer, would they feel
satisfied with a $25,000 award? I don't have to poll the other 99
Senators. I know it would be a resounding no. Don't do it to the
victims of asbestos just because they do not serve in the Senate.
My chart underscores the fairness of the award value for asbestos-
related lung cancer victims compared to compensation available in the
tort system and under the proposal offered by Senator Kennedy and
myself during the committee markup.
The legislation we are considering today provides as little as
$25,000 in compensation for victims suffering asbestos-related lung
cancer. What a cruel joke on these lung cancer victims, especially
those who are going to die within the next 2 years. What a cruel joke
on their families who see this as the punishment because the
breadwinner in their family went to work every day in one of these
industries.
When there is smoking and asbestos combined, the likelihood of the
resulting disease is greater than the sum of the parts.
Dr. Laura Welch is a well-respected medical expert who helped us
craft medical criteria which was accepted by an overwhelming bipartisan
majority in the committee. She said:

Smoking and asbestos act in concert together to cause lung
cancer, each multiplying the risk conferred by the other.

There is a synergistic relationship between asbestos exposure and
smoking. Smokers who meet the bill's exposure requirements face a risk
of lung cancer that is up to five times greater than smokers not
exposed to asbestos. But they receive only $25,000 under this bill.
In other words, if you go to work at W.R. Grace or Halliburton or
some of the other companies that are getting a real, real big deal
under this bill, and they say, ``OK, guys and gals, you can take a 10-
minute cigarette break,'' if they are foolish enough to do it, that
combination of asbestos and smoking--at whatever company it might be; I
picked W.R. Grace and Halliburton only because they benefit so greatly
under the bill; others do, too--then their risk is much greater, and
then they may have their awards reduced or even eliminated to repay any
insurance carrier.
Now, that is a lot different than what happens now. Usually, under
these programs, you do not have to repay your insurance carrier, you do
not have to repay workman's compensation. Under the Radiation Exposure
Compensation Act, you do not have to do that. Under the Energy
Employees Occupational Illness Compensation Program Act, you do not
have to do that. Under the Ricky Ray Hemophiliac Relief Fund Act, you
do not have to do that.
But what bothers me is that when we made the medical criteria, we got
a bipartisan consensus on the medical criteria. We did it in a way to
guarantee that we were eliminating what were the most troublesome
claims. We were setting a roadmap on which business and everybody else
agreed. We all say we need to compensate the truly sick, but fair
compensation is not free.
The Judiciary Committee's bipartisan agreement on medical criteria
will be meaningless if the majority, in effect, rewrites the categories
by failing to fairly compensate many who fall within them. You cannot
come to the floor and say, look, you have Republicans and Democrats who
came together and worked out the medical criteria that they are all
very happy about--and we met with labor, and we met with businesses,
and we met with insurers, we met with the victims themselves, and we
worked out a fair medical criteria--and then come to the floor and say,
see, we worked it all out. However, we made one little change. And what
is the little change? The little change is to take away all the money
or much of the money that was going to pay these victims.
If the award values are unfair, the bill will be unfair. And if the
bill is unfair, it is unworthy of our support. In this case, with this
partisan bill, it is unfair. It is unworthy of the support of Senators.
Since the first hearing, the hearing I held, we have had one bedrock
principle: It has to be a balanced solution. Whatever solution we have,
it has to be balanced. I cannot support a bill that gives inadequate
compensation to victims. I will not adjust fair award values into some
discounted amount just to make the final tally come within a
predetermined and artificial limit. That is not fair, and I will not
vote for a bill that is not fair. Remember, we are taking away people's
most cherished right, the right of a jury trial. If we are going to do
that, we cannot do it in a bill that is not fair.
Now, my friends on the other side of the aisle have insisted for
months they will only support a bill that contains funding with a goal
of raising $109 billion over 24 years. But it is very clear from
projections of future claims that

[[Page 6989]]

this funding is inadequate to pay fair award values. You cannot have
good legislation, successful legislation, fair legislation if it is
based on a false promise. The promise we have to make is, if we are
going to take away the rights of a jury trial to these victims, then we
have to promise them fair compensation. This bill does not do that.
On the Judiciary Committee, we reported a bill that contained total
funding of $153 billion. But this new partisan bill, introduced less
than 2 weeks ago, contains mandatory funding of only $109 billion. All
of a sudden, we have lost--we have lost--over $40 billion from the
total funding approved by the Judiciary Committee under contingency
funding amendments by Senators Feinstein and Kohl.
Senator Feinstein--she can speak for herself; she is in the Chamber--
but she worked night and day on this issue to get a fair agreement. I
do not know the number of times she buttonholed me at the committee or
elsewhere, and every other Senator on both sides of the aisle, to reach
an agreement; and she got it. That has been taken out.
Look at this chart. Is this fair? We reported a bill, which many
questioned whether it had enough money, S. 1125, at $153 billion. Now
it comes back and it is $109 billion. The first bill, many complained,
did not have enough money; the current bill drops $44 billion out.
We also know there has to be adequate funding at the beginning of a
national trust fund. Why? There are more than 300,000 asbestos claims
in our current legal system, so you are going to have to have enough
money in there to handle the claims that are going to be there on day 1
of this fund. However, this new bill actually provides less upfront
funding than the bill reported by the Judiciary Committee.
It strikes what we passed in the committee, by bipartisan majorities,
a commonsense requirement that directs insurers--who, after all, have
billions of dollars sitting today in current asbestos reserves--to
contribute their funding within the first 3 years of the fund because
that is when most of the claims would come.
Another fundamental unfairness in this bill is it provides a
corporate bailout for certain companies with serious asbestos
liability.
Take a look at another chart. I ask if this is fair. The present
value of Halliburton's asbestos liability is $4.8 billion. Under this
bill, they would only pay $75 million a year to a national trust fund.
The reason I mention this is Halliburton told their shareholders
sometime ago they could handle this $4.8 billion, they could handle the
amount of money set aside for their liability. They knew they were
liable. They knew they would have to pay for it. They could set this
money aside. In fact, when they thought they had a settlement of that
amount, their stock actually went up.
But, lo and behold, by the time the Republican majority got the
amount Halliburton would owe--the $4.8 billion--by the time our friends
on the Republican side of the aisle got it, they only have to pay $1.2
billion. They saved $3.6 billion overnight. Not only that, they only
had to pay it over 24 years. They are going to make that on the
interest on their money. I am not even going to point out how much
money they are making in profits in Iraq at the moment. I will leave
that for another day. But they suddenly go from the $4.8 billion that
basically they knew they were going to have to pay, and as soon as this
Republican bill came up, it is down to $1.2 billion. No wonder
Halliburton likes some of my friends on the other side of the aisle.
Let's take W.R. Grace, another good friend of some of my friends on
the other side of the aisle. W.R. Grace was a company that was
responsible for poisoning an entire community. Some of these companies
only poison a few hundred or 200 or so of their employees when they
come to work. They only poison a few hundred by hiding what they are
doing. W.R. Grace goes big time, to quote one of the people they
support.
W.R. Grace was responsible for poisoning an entire community, the
whole community, whether you worked for them or not. They poisoned the
whole community from its asbestos mining facilities in Libby, MT. W.R.
Grace must love their Republican friends because while they had total
asbestos liabilities of about $3.1 billion, under this bill they
suddenly have to only make payments of $27 million over 24 years, which
is pocket change for them. Instead of paying the $3.1 billion they are
liable for today, they will pay only $424 million. No wonder they love
Republicans. I mean, this is a walkaway.
And the irony is, with a straight face there are those who call this
the FAIR Act. I am sure they probably call it the FAIR Act at the board
of directors of W.R. Grace. I am sure they call it the FAIR Act at the
board of Halliburton. But I can tell you, in the families where they
see the breadwinner with the oxygen tank suffering, coughing up blood,
suffering a horrible death, they don't call it the FAIR Act. They might
call it the Halliburton Relief Act. They might call it the W.R. Grace
Relief Act. They don't call it the FAIR Act.
As presently written, the FAIR Act would completely negate all
legally binding settlement agreements between asbestos defendants and
victims. It would take away their right to the courthouse. Even
settlements that have already been partially paid, even those
settlements--whether it is W.R. Grace or Halliburton, anybody else--
where they have agreed they are liable, where they have started to make
payments, all of a sudden comes the FAIR Act, and it is like Christmas
in April because they can void those agreements even though they have
been making payments.
In other words, if a victim agreed to take a settlement over a period
of time from a defendant in return for dismissing the case, and even
though that settlement agreement is an enforceable contract, the
defendant, whether it is Halliburton or W.R. Grace or anybody else,
gets the right to walk away.
Victims are actually punished under this legislation for agreeing to
settlement terms proposed by asbestos defendants. Is that fair?
Absolutely not.
In addition, the FAIR Act would retroactively extinguish all pending
asbestos cases regardless of the stage in the litigation. The asbestos
cases currently in trial or on the verge of trial would immediately be
brought to a halt. Cases with jury verdicts or judgments would end, and
all appeals would be suspended. Is that fair? No. It is not fair to the
victims. It might be fair to W.R. Grace or Halliburton; it is not fair
to the victims at home coughing out their lungs.
The partisan emphasis in this bill on behalf of the interests of the
industrial and insurance companies involved, to the detriment of the
victims, has predictably produced an imbalanced bill. This bill is a
reflection of the priorities that went into it. Remember, many of us
wanted to bring certitude to the companies, to bring fair compensation
to the victims. Instead, this is totally skewed.
For us to succeed in reaching the consensus solution we sought for so
long, a workable bill should fairly reflect and not discount the
significant benefits that a fair solution would confer on the companies
involved. A trust fund solution would offer these firms reasonable
financial security. Even a casual glance at the way the stock values of
these firms have closely tracked the Senate's work on this issue are
enough to make it crystal clear.
I think forcing this new asbestos bill through the Senate would prove
counterproductive, even fatal, to the legislative effort. The near
party-line vote within the committee on the earlier bill was more of a
setback than a step forward. Proceeding further without consensus would
make it worse.
Many of us have worked very hard. Senator Daschle has worked
extremely hard. Many of us have worked very hard for more than a year
toward the goal of a consensus asbestos bill. This new partisan bill is
especially saddening to me, and it is confounding. The obvious question
that all of us, including those who brought this new bill to the floor,
should be asking is, Does the partisan turn that the sponsors of

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this bill have taken help or hurt our efforts to produce and enact a
consensus bill? I think the answer is clear.
Instead of writing a bill that will make Halliburton and W.R. Grace
very happy with some in this partisan exercise, let's restart our work
to achieve the common ground needed to enact a good and fair law. That
is the best way to move it forward. Remember, we are not legislating as
an arm of Halliburton or W.R. Grace or a few others. We are legislating
for the good of this country. The 100 of us represent 280 million
Americans. We want to be fair. Let's represent them.
The PRESIDING OFFICER (Mr. Ensign). The Senator from California.
Mrs. FEINSTEIN. Mr. President, I thank the ranking member for his
comments, most of which--I think all of which I agree with.
Mr. HATCH. Will the Senator yield for a unanimous consent request?
Mrs. FEINSTEIN. Yes, of course.
Mr. HATCH. I ask unanimous consent that I be recognized immediately
following the distinguished Senator from California.
Mr. REID. Reserving the right to object, does the distinguished
chairman of the Judiciary Committee know approximately how long he
might speak when he does get the floor?
Mr. HATCH. I think it would be less than a half hour.
Mr. REID. We want to let other people come and speak. So it does not
matter how long he speaks, just so we have some general idea. I
withdraw the reservation of objection.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. FEINSTEIN. Mr. President, as a member of the Judiciary Committee
who voted for the bill in committee and worked out two amendments that
are substantial, I regretfully rise to urge my colleagues to vote no on
cloture on the motion to proceed to this bill. In the course of my
remarks, what I hope to do is indicate my reasons for opposing cloture
and make some positive suggestions as to how to close the gap on the
unresolved issues.
There are only two ways to get a bill on asbestos. I say this to
everybody out there who has a legitimate concern and need for a bill.
That is, one, unless the two leaders agree or, two, a bill that goes
back to the Judiciary Committee and is worked out as a product of that
committee's work.
Last July, nearly 9 months ago, the Judiciary Committee passed out a
comprehensive asbestos bill. We deliberated and had hearings over
several years.
The bill wasn't perfect, but it reflected a substantial step forward
in crafting a legislative compromise. A few issues were unresolved.
They were to be worked out by members in the intervening time. Since
July, labor representatives, defendant companies, insurers, and others
have engaged in multilateral negotiations, not only to settle these few
unresolved issues, but to renegotiate the entire bill.
The legislation proposed by Senator Hatch, the distinguished chairman
of our committee, and Senator Frist, the distinguished majority leader,
actually sets the debate backward by taking positions directly
contradictory to the will of the majority of the Judiciary Committee.
It is a substantially different bill that is on the Senate floor today
than was the bill that I voted for in committee.
I don't believe the bill is ready for the floor and I hope to
technically explain why. In fact, I have written the chairman of the
Judiciary Committee requesting that the bill be returned to committee
for future deliberations. We, the Senators serving on that committee,
did do our job, and we should be allowed to finish that job and work
through the issues necessary to forge a bill that can pass in this
body.
Let me explain my concerns. Specifically, the bill Senator Frist
proposes to bring to the Senate floor eliminates a crucial startup
amendment that guaranteed asbestos victims would continue to have their
legal rights until the Trust Fund is fully operational. This was a
major deletion. It will cost the Trust Fund an additional $5 billion.
Let me read to you from the CBO letter on that point, which is dated
today and sent to Senator Nickles. ``You''--meaning Senator Nickles--
``also requested that CBO explain the major differences between our
cost estimates for S. 1125''--that is the bill that came out of
committee--``and S. 2290''--that is the Hatch-Frist bill on the floor.
``On March 24, 2004, in a letter to Senator Hatch, CBO updated its
October 2, 2003, cost estimate for S. 1125, principally to reflect new
projections about the rate of future inflation, and it assumed a later
enactment date for the bill. That letter explains that we now estimate
enactment of S. 1125 at the end of fiscal year 2004 would result in
claims payments totaling $123 billion over the lifetime of the asbestos
fund (about 50 years).''
The bill that came out of committee was originally projected to cost
$108 billion. An amendment I made put in a contingency reserve of $45
billion in case more money was needed. What this CBO letter shows is
that money would, in fact, be needed. CBO's projections indicate that a
$10 billion contingency fund would not be enough to cover the cost.
That is major in scope.
The bill we are considering today would cost, according to CBO, $17
billion more than the Committee passed bill. Eleven billion of this
increase comes from higher awards values.
Five billion of that $17 billion increase is due to the elimination
of my startup amendment. Here is why it costs $5 billion. The startup
amendment guarantees that asbestos victims would continue to have their
legal rights until the Trust Fund is operational. In other words, they
could go to court until the Trust Fund was fully operational. CBO
estimates that the Fund would save $5 billion by allowing the private
settlement of these claims during this start-up period. That is the
implication of eliminating the Feinstein startup amendment made in the
Judiciary Committee.
Secondly, the Hatch-Frist bill, as I have said, reduces the asbestos
victims' trust fund's contingent reserve from $45 billion to $10
billion. The reason for the original $45 billion contingent reserve was
to ensure the solvency of the Trust Fund if the estimates are wrong. If
the reserve is not necessary, it is not used. But if it is necessary,
it is there. I have already shown you by this CBO letter that it would
likely be necessary. CBO predicts that the $108 billion bill we passed
last July would actually costs $123 billion because of revised
projections. Thus, at the get-go, CBO predicts the Trust would need an
additional $15 billion, which is already greater than the $10 billion
reserve in the new bill. So why pass a bill that, at its beginning, is
not going to have adequate funds?
Thirdly, this bill wipes out final asbestos settlements and trial
court judgments granting victims awards. This was one of the points
that was left hanging when we passed it out of committee, and the
members were supposed to get together and solve this. Well, the
members--at least this member--didn't get together. But I gather a
judge and one member did get together and, up to this point, there is
no solution. The bill before us simply says to everybody that has a
trial court judgment that that judgment is wiped out. That is wrong.
This bill also prevents individuals from returning to the tort system
for 7 years after the administrator starts processing the claims, even
if the trust fund goes bust in its first years of operation.
In contrast, the bill we passed out of committee said that if there
is not adequate money, individuals could revert to the tort system at
any time.
Now, I am not going to vote for cloture, but I recognize that 18.8
million U.S. workers were exposed to asbestos between 1940 and 1979.
The best way to look at asbestos is tiny spears, smaller than grains of
sand, that lodge in your lungs, guts, stomach, and, over a period of
time, in your organs. It is bad stuff and it ought to be prohibited.
This bill ought to prohibit it, for starters.
Our courts are overloaded with claims arising from these exposures.
Individuals have brought more than a half million asbestos suits over
the last 20 years against 8,400 companies. Approximately 71 companies
have filed

[[Page 6991]]

for bankruptcy due to asbestos lawsuits.
Moreover, the current system doesn't ensure compensation for the
sickest victims. Currently, nonmalignant cases get 65 percent of the
compensation awards, compared to 17 percent for mesothelioma, and 18
percent for other causes. That is wrong on its face.
As this tidal wave of asbestos cases goes forward, serious questions
remain whether existing victims will ever receive the compensation they
deserve. For example, because of the extraordinary influx of claims,
the Manville trust is only paying 5 cents on the dollar.
So I am one who believes we need a comprehensive solution to the
asbestos crisis so that victims who are truly sick get compensated in a
timely and fair manner.
I recognize negotiations over the asbestos bill have proceeded at a
pace that is satisfying no one, and to advance the debate, I would like
to ask the Senate to consider the following core proposals, and let me
mention what they are.
The fund must be fiscally prudent. Clearly, it has to have a
contingent fund of more than $15 billion. Whether that fund is $20
billion or $25 billion or $30 billion, I think we need to go back in
the Judiciary Committee and work the values versus the other provisions
in the bill. I showed how eliminating my startup amendment cost the
fund $5 billion. That is not my analysis. That is the CBO analysis.
Second, the risk of a delay in the start of a national asbestos trust
fund should not be borne by asbestos victims. What do I mean by that? I
pointed out the bill eliminates the startup I authored in committee
that permitted asbestos claimants to pursue asbestos claims in court
until the administrator of the trust fund certifies the fund is fully
operational.
The reason this amendment is so necessary is to protect the legal
rights of plaintiffs, and it should be restored. Without it, asbestos
victims could be left without any recourse if there is a delay in
starting up the fund. Under this bill, they cannot go to court. So if
the money is not there right upfront or the money is short upfront,
they are out in the cold.
The amendment I offered serves as a hammer to get defendant companies
and insurers to cooperate with the new trust administrator. And for the
third time, I point out, it saves $5 billion, according to the CBO.
I recognize the concern of some in the industry that asbestos
claimants who are not yet ill will use the interim period to press a
host of lawsuits against defendant companies. To address this, I would
like to propose modifying the Feinstein amendment to allow a 6-month
stay on asbestos claims upon enactment, except for those claimants
facing life-threatening, asbestos-related illness. Thus, the stay would
only apply to those who are not ill. I think that is a way out of the
problem. For those who are ill, there would be no stay.
Thirdly, I would like to suggest if claims exceed projections and the
trust runs out of money, plaintiffs should have immediate access to the
tort system in both State and Federal court. The current proposal on
the floor would prevent victims from filing claims for 7 years after
the trust starts processing them, even if the trust expires in the
first or second year of operation. We cannot leave victims in this kind
of legal purgatory.
So to address legitimate concerns by defendant companies about forum
shopping, I would also like to propose plaintiffs who return to court,
if the trust fund collapses, would only be able to file as a member of
a class or as an individual in State court jurisdictions where they
were exposed or where they currently reside. This would handle the
great bulk of forum shopping, if you think about it.
Fourth, I would like to suggest award values should have a sliding
scale in order to reflect the individual circumstances of victims. The
current asbestos bill applies a one-size-fits-all solution to asbestos
awards. An 83-year-old asbestos victim without dependents and a 37-
year-old single mother with three small children would both receive $1
million for mesothelioma under the bill, but if we look at the awards
given by asbestos trusts, such as the Western MacArthur trust,
individual circumstances are definitely taken into account.
For example, mesothelioma victims, under that trust, can receive
between $52,000 and $4 million, with an average value of $524,000 in
this particular Western MacArthur trust. This sliding scale brings
fairness to individual victims' awards. It works in this trust.
I have talked with the managers of the trust. They believe this half-
a-million-dollar average takes care of the younger victims and balances
that in a fair way against older victims.
Fifth, award values for the trust should be set in a way that
prioritizes compensation for the sickest victims whose illnesses can
clearly be traced to asbestos. This is the hobgoblin of this whole
thing. All of the companies I have spoken to are concerned the trust
will be abused, and it will be abused in this way: that smokers would
have access without the defined connection to asbestos. Specifically, I
think we should not allow the asbestos trust fund to be overwhelmed by
smoking claims. This is a deep and valid concern.
In the committee-passed bill--and I want to speak to it--awards in
category 7 of the medical values raise the largest specter of
uncertainty in terms of smoking claims. This category grants awards to
smokers with lung cancer with 15 years of weighted exposure to asbestos
but no obvious evidence of asbestos disease, such as pleural plaques or
asbestosis.
To prevent these claims from overwhelming the trust resources, I
propose title VII, smoking cases, revert to the tort system, both State
and Federal court, if the administrator determines at the year-end
review that the incidence rates of those smoking claims will exceed
projections by greater than 50 percent.
Why do I say that? The tort system historically has been able to
handle those cases. So it seems to me if there is a smoking case and it
shows neither the evidence of asbestos disease, such as pleural plaques
or asbestosis, let a court make that decision. This would deter smokers
from misusing the trust fund for illnesses caused by smoking rather
than asbestos.
This is the most difficult part of the bill. In all of the medical
values and all of the hearings and the medical testimony we heard back
and forth, it is clear there is a difficult line of definition here,
and that is why the trust fund, which is supposed to be a kind of no-
fault fund where a medical valuation can be made quickly and
scientifically, may not always be able to make that valuation.
So if the fund is going to be overburdened by smoking cases and the
administrator at the end of the year says, Look, we are not going to be
able to make next year, he can then file in that year-end review with
the Congress the request that those cases go to court.
We would give him that authority. I believe this is a solution to
that problem. I am not wed to it, but to my knowledge it is the only
one that anyone has come up with so far.
Six, a fair asbestos bill must exempt from the trust fund final
settlements as well as trial court verdicts that compensate victims.
The Hatch-Frist bill fails to do this. Specifically, the bill would
overturn any final settlement that ``requires future performance by any
party.'' Thus, if an individual received a $\1/2\ million award 5 years
ago to be paid in 10 annual installments, this bill would wipe out the
last 5 installments.
Of equal concern, the Hatch-Frist bill would wipe out lawsuits unless
they were ``no longer subject to any appeal or judicial review before
the day of enactment of the act.'' In other words, this bill would
erase any trial verdict favorable to plaintiffs still on appeal.
We should not undermine a litigant's reasonable expectation that he
or she can pursue a favorable trial court verdict to its conclusion.
I am also concerned the bill would overturn the final bankruptcy
settlements that have formed the $2.1 billion

[[Page 6992]]

Western Mac Arthur trust. Award recipients of Western Mac Arthur, 90
percent of whom are Californians, include 8,000 claimants who will be
paid hundreds of millions of dollars in a very few weeks. The Mac
Arthur trust has also set aside funds for 30,000 future claimants. All
of this money is taken by this bill and put in the national fund. So
this final bankruptcy trust is totally wiped out and 8,000 individuals
who are going to be paid in a matter of weeks lose their settlements.
It is just not right.
Unlike some other settlements, the Mac Arthur trust places priorities
on the sickest patients. A minimum of 80 percent of the awards paid out
under the trust goes to asbestos cancer victims. These awards will be
based on historical rates of asbestosis awards in California, which are
higher than the rest of the nation.
According to attorneys involved with the Mac Arthur trust, almost
every present claimant expecting payment under the Mac Arthur trust
will do worse under the Hatch bill than under the trust because of the
Hatch bill's requirement that collateral sources of compensation be
subtracted from any award.
Remember, this trust is not the only defendant for many of these
plaintiffs. Many of the claimants have cases against other defendants
and those are all wiped out as well.
Now, I have policy concerns about wiping out the settlements and the
fairness, but it is an open question as to whether such a transfer of
assets is constitutional. Let me speak about that for a moment. Legal
scholars such as Harvard law professor Elizabeth Warren have argued
that the bill's expropriation of money from settlement trusts would
violate the takings clause of the U.S. Constitution, which prohibits
the taking of ``private property . . . for public use, without just
compensation.''
Specifically, there are a number of individuals with a confirmed
court order allocating money to them who will have these awards taken
away without receiving comparable compensation from the national trust
fund. If I have ever heard of a takings case, that is it.
Additionally, the Mac Arthur trust, which is an independent legal
entity in its own right, may have a takings claim if its assets are
transferred to a national fund without receiving comparable assets in
return.
Renowned legal scholar Laurence Tribe takes an opposing view and
argues that the conversion of trust assets would be constitutionally
permissible. The ultimate outcome of this debate is unknown. But it is
clear that the trustees managing the Fuller-Austin and other asbestos
trusts have indicated they will file constitutional challenges against
the proposed legislation as soon as it is enacted unless changes are
made.
I will read from a letter dated July 2, 2003, to me from the Fuller-
Austin asbestos settlement trust:

Passage of this legislation undoubtedly will set-off a
firestorm of litigation challenging its constitutionality.
The Trustees' present view is that their mandates under the
Fuller-Austin Trust agreement and the Fuller-Austin plan of
reorganization would require them to file litigation to
challenge the taking of the Trust's assets and the violation
of the rights of its claimants. Other existing trusts
doubtless will reach the same conclusion. The resulting
litigation will likely take years to resolve. In addition, it
will take years to establish the claims handling facility
mandated by the bill and for that entity to become
operational.

We have $4 billion in this fund from bankruptcy trusts, and $2.1
billion additional dollars from the Western Mac Arthur trust. So that
tells us something about how this bill is going to start up and whether
the money is actually going to be there to pay the people.
In this bill, the people lose their right to go to court. It is a
little bit diabolical if one thinks about it for a few minutes. That is
why the startup amendment I offered in committee was so important,
because it said nothing begins until the fund has its money and is
operational. Therefore, those people had recourse. Once the start-up
amendment was taken out, they had no recourse, and the CBO report says
that is a $5 billion cost item right off the top.
Now, I offer the principles as a basis for compromise on this
legislation. I offer this as one who sat through the hearings and the
medical testimony and committee debates and participated in bipartisan
amendments offered on the bill.
Thanks to Goldman Sachs, we ran numbers after numbers and Goldman
Sachs has been good enough to run another set of numbers for me. We
have changed some of the values to try to meet some of the concerns. I
have those numbers with me.
I ask unanimous consent that the Fuller-Austin asbestos settlement
letter to me dated July 2 be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Fuller-Austin Asbestos

Settlement Trust,

Greenville, TX, July 2, 2003.
Hon. Senator Dianne Feinstein,
U.S. Senate, Washington, DC.
Re: S. 1125, The Fairness In Asbestos Injury Resolution Act
Of 2003
Dear Senator Feinstein: The Fuller-Austin Asbestos
Settlement Trust (the ``Fuller-Austin Trust'') was
established in December 1998 by order of the United States
District Court for the District of Delaware (the ``Court'')
in connection with the confirmation of the Chapter 11 plan of
reorganization of Fuller-Austin Insulation Company (``Fuller-
Austin''). The purpose of the Fuller-Austin Trust is to
review and pay allowed asbestos claims of individuals who
were exposed to asbestos-containing materials sold,
distributed, installed or removed by Fuller-Austin Insulation
Company. Pursuant to the plan of reorganization, the Fuller-
Austin Trust was funded with limited cash and other assets
and received the right to the proceeds of insurance policies
that covered Fuller-Austin's asbestos liabilities. The
purpose of this letter is to express the concerns of the
Trustees regarding the application of Senate bill 1125 to the
Trust.
The Trustees, pursuant to Section 524(g) of the Bankruptcy
Code, are mandated to provide fair and equitable treatment to
all beneficiaries of the Fuller-Austin Trust over the
expected claims period, which is anticipated to be the next
35 to 40 years. These are beneficiaries who must provide
proof of their asbestos-related illness and exposure at one
of approximately 360 sites where Fuller-Austin worked from
1947 through 1986. There is a finite amount of funding
available to the Fuller-Austin Trust to fund its current and
anticipated future liability to claimants. The claims
procedures for the Trust, as approved by the Court, require
the Trustees to make provision for equivalent treatment for
present known claimants and the currently unknown claimants
who will make claims in the future as their asbestos-related
diseases are diagnosed. This requires a careful analysis and
balancing by the Trustees to assure the long-term solvency of
the Fuller-Austin Trust to meet the anticipated claims. In
addition to the trustees, there is a Trust Advisor, whose
mandate is to provide advice and consent to the Trustees with
respect to issues regarding present, known claimants, and a
legal Representative, whose mandate is to provide advice and
consent to the Trustees with respect to issues regarding
currently unknown claimants, including safeguarding their
rights to equivalent treatment.
Since 1998, the Trustees have managed the Trust's small
base of liquid assets to pay a small percentage of the
allowed liquidated value of allowed claims and to cover the
cost of insurance coverage litigation to pursue the major
asset of the trust--the insurance available to Fuller-Austin
to fund its asbestos liabilities. The litigation has been
active since 1994. A second phase followed in September 2001,
and a jury trial (the final phase) was just completed in May
2003. The litigation resulted in (i) settlements with nine
insurers for approximately $200 million, some to be paid over
the next few years, and (ii) a $188 million jury verdict
against the remaining insurers in favor of Fuller-Austin on
May 6, 2003. As a result of the settlements, the Trustees
have increased the percentage of payments for each
established disease value paid to holders of valid asbestos
claims. The claims facility that receives, reviews,
determines and pays these claims has been fully operational
since August 2001.
Senate Bill 1125 presents the Trustees with several
conflicts. First, the proposed law would take away the cash,
property and insurance assets that were dedicated or
transferred to the Fuller-Austin Trust pursuant to the
Fuller-Austin plan of reorganization confirmed by the Court,
undermining the orders of the Court. It would take away the
assets in the form of settlements and verdicts the Trustees
carefully have fought to muster for the beneficiaries of the
Fuller-Austin Trust. The foreign insurers that are now the
subject of a jury verdict, will argue that they now escape
all liability under the proposed law, avoiding their
contractual obligations as affirmed by the verdict of a
dedicated jury,

[[Page 6993]]

who spent more than eleven weeks hearing and deciding the
Fuller-Austin case. Fuller-Austin's insurers used and abused
the court system for nine years to delay paying their
obligations under the policies they issued. The proposed law
would reward that behavior. In return, the proposed law
cannot provide any assurances when the national fund will be
in a position to begin paying claims or what those payments
will be, and it cannot provide any assurances that the
national fund will be solvent and able to provide equivalent
benefits to future claimants when their claims are asserted.
Second, passage of this legislation undoubtedly will set-
off a firestorm of litigation challenging its
constitutionality. The Trustees' present view is that their
mandates under the Fuller-Austin Trust agreement and the
Fuller-Austin plan of reorganization would require them to
file litigation to challenge the taking of the Trust's assets
and the violation of the rights of its claimants. Other
existing trusts doubtless will reach the same conclusion. The
resulting litigation will likely take years to resolve. In
addition, it will take years to establish the claims handling
facility mandated by the bill and for that entity to become
operational. Finally, the limited annual funding provided by
the bill will result in the need for years of build-up in the
fund before current claim obligations can be paid. In the
meantime, the beneficiaries of the Fuller-Austin Trust, many
of whom gave up valuable rights in the tort system in
exchange for the promised certainty of being paid by the
Trust, would not be paid. Many would die before payments
began from the federal fund and many more would not have
funding for much-needed medical care over the next few years.
Please remember that most of our beneficiaries are senior
citizens, and a delay of a few years could be critical.
The Trustees realize that many oppose the bill on a number
of grounds, including constitutional challenges and concerns
as basic as that the proposed funding levels will be
insufficient to pay expected claims over the life of the
trust. However, if the Committee decides to approve the bill,
the Fuller-Austin Trust urges that existing asbestos trusts
be exempted from the legislation or at least given the option
not to participate. As a solution to (i) the issue that the
proposal would take away the rights of beneficiaries of
trusts established by court order under confirmed plans of
reorganization and (ii) the funding crisis that would result
for many present and future asbestos claimants, we suggest
that existing trusts be allowed the option of continuing to
function as intended and funded, leaving in place the
obligations of the insurers to fund existing policies,
settlements and judgments.
While we personally have concerns about the constitutional
issues, the proposed funding levels for the trust, the
medical criteria to be utilized, the award values and the
potential windfall to certain insurers, our primary concern
is to be able to continue to meet our mandate using funds and
assets provided by Fuller-Austin's court-approved plan of
reorganization through its fully operational trust and claims
processing facility. The Fuller-Austin Trust is currently
receiving, reviewing, determining and paying valid asbestos
claims that meet the requirements of the procedures
established by its plan. Senate Bill 1125 would completely
derail this efficient and effective process to the extreme
detriment of the beneficiaries of the Fuller-Austin Trust. In
an effort to find a global solution to the asbestos
litigation problem, pleas do not ignore the workable
solutions already confirmed, in place and funded in the form
of the existing trusts.
Sincerely yours,
Anne M. Ferrazzi,
Trustee.
W.D. Hilton, Jr.,
Managing Trustee.
Mark A. Peterson,
Trustee.

Mrs. FEINSTEIN. I also ask unanimous consent that the CBO report
dated as of today to Senator Don Nickles also be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

U.S. Congress,

Congressional Budget Office,

Washington, DC, April 20, 2004.
Hon. Don Nickles,
Chairman, Committee on the Budget,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: As you requested, CBO has prepared a
cost estimate for S. 2290, the Fairness in Asbestos Injury
Resolution Act of 2004, as introduced on April 7, 2004. The
bill would establish the Asbestos Injury Claims Resolution
Fund (Asbestos Fund) to provide compensation to individuals
whose health has been impaired by exposure to asbestos. The
fund would be financed by levying assessments on certain
firms. Based on a review of the major provisions of the bill,
CBO estimates that enacting S. 2290 would result in direct
spending of $71 billion for claims payments over the 2005-
2014 period and additional revenues of $57 billion over the
same period. Including outlays for administrative costs and
investment transactions of the Asbestos Fund, CBO estimates
that operations of the fund would increase budget deficits by
$13 billion over the 10-year period. The estimated net
budgetary impact of the legislation is shown in Table 1.
S. 2290 contains both intergovernmental and private-sector
mandates as defined in the Unfunded Mandates Reform Act
(UMRA). CBO estimates that the aggregate direct cost of
complying with the intergovernmental mandates in S. 2290
would be small and would fall well below the annual threshold
($60 million in 2004, adjusted annually for inflation)
established in UMRA. CBO also estimates that the aggregate
direct cost of complying with the private-sector mandates in
S. 2290 would well exceed the annual threshold established in
UMRA ($120 million in 2004 for the private sector, adjusted
annually for inflation) during each of the first five years
those mandates would be in effect.

TABLE 1.--ESTIMATED BUDGETARY IMPACT OF S. 2290
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Claims and administrative expenditures of the Asbestos Fund:
Estimated budget authority................................ * 18.5 12.8 12.9 5.3 5.3 5.3 5.2 5.0 4.9
Estimated outlays......................................... * 7.5 10.7 14.6 9.8 7.6 5.3 5.3 5.2 5.0
Investment transactions of the Asbestos Fund:
Estimated budget authority................................ 5.4 2.0 -4.8 -3.3 0 0 0 0 0 0
Estimated outlays......................................... 5.4 2.0 -4.8 -3.3 0 0 0 0 0 0
Total direct spending:
Estimated budget authority................................ 5.4 20.6 8.0 9.6 5.3 5.3 5.3 5.2 5.0 4.9
Estimated outlays......................................... 5.4 9.5 5.9 11.3 9.8 7.6 5.3 5.3 5.2 5.0
CHANGES IN REVENUES

Collected from bankruptcy trusts\1\........................... 1.0 0 0 4.6 0 0 0 0 0 0
Collected from defendant firms................................ 3.3 2.8 2.8 2.8 2.7 2.7 2.7 2.7 2.7 2.6
Collected from insurers....................................... 2.7 7.5 2.2 1.6 1.6 1.6 1.6 1.6 1.6 1.6
-----------------------------------------------------------------------------------------
Total revenues.......................................... 7.0 10.3 5.0 9.0 4.4 4.3 4.3 4.3 4.3 4.3
Estimated net increase or decrease (-) in the deficit from -1.5 -0.8 1.0 2.3 5.5 3.2 1.0 1.0 0.9 0.8
changes in revenues and direct spending......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Cash and financial assets of the bankruptcy trusts have an estimated value of about $5 billion. The federal budget would record the cash value of the
noncash assets as revenues when they are liquidated by the fund's administrator to pay claims.

Notes.--Numbers in the table may not add up to totals because of rounding. * = less than $50 million. CBO estimates that by 2014 the Asbestos Fund under
S. 2290 would have a cumulative debt of around $15 billion. Borrowed funds would be used during this period to pay claims and would later be repaid
from future revenue collections of the fund. We estimate that interest costs over that period would exceed $2.5 billion, and CBO's projections of the
fund's balances reflect those costs. However, they are not shown in this table as part of the budgetary impact of S. 2290 because debt service costs
incurred by the government are not included in cost estimates for individual pieces of legislation.

Major provisions
Under S. 2290, a fund administrator would manage the
collection of federal assessments on certain companies that
have made expenditures for asbestos injury litigation prior
to enactment of the legislation. Claims by private
individuals would be processed and evaluated by the fund and
awarded compensation as specified in the bill. The
administrator would be authorized to invest surplus funds and
to borrow from the Treasury or the public--under certain
conditions--to meet cash demands for compensation payments.
Finally, the bill contains provisions for ending the fund's
operations if revenues are determined to be insufficient to
meet its obligations.
S. 2290 is similar in many ways to S. 1125. A more detailed
discussion of the fund's operations and the basis for CBO's
estimates of the cost of compensation under these bills is
provided in our cost estimate for S. 1125, the Fairness in
Asbestos Injury Resolution Act of 2003, which was transmitted
to the Senate Judiciary Committee on October 2, 2003.

[[Page 6994]]

Budgetary impact after 2014
CBO estimates that S. 2290 would require defendant firms,
insurance companies, and asbestos bankruptcy trusts to pay a
maximum of about $118 billion to the Asbestos Fund over the
2005-2031 period. Such collections would be recorded on the
budget as revenues.
We estimate that, under S. 2290, the fund would face
eligible claims totaling about $140 billion over the next 50
years. That projection is based on CBO's estimate of the
number of pending and future asbestos claims by type of
disease that would be filed with the Asbestos Fund, as
presented in our cost estimate for S. 1125. While the
projected number of claims remains the same, differences
between the two bills result in higher projected claims
payments under S. 2290. The composition of those claims and a
summary of the resulting costs is displayed in Table 2.
Although CBO estimates that the Asbestos Fund would pay
more for claims over the 2005-2014 period than it would
collect in revenues, we expect that the administrator of the
fund could use the borrowing authority authorized by S. 2290
to continue operations for several years after 2014. Within
certain limits, the fund's administrator would be authorized
to borrow funds to continue to make payments to asbestos
claimants, provided that forecasted revenues are sufficient
to retire any debt incurred and pay resolved claims. based on
our estimate of the bill's likely long-term cost and the
revenues likely to be collected from defendant firms,
insurance companies, and certain asbestos bankruptcy trust
funds, we anticipate that the sunset provisions in section
405(f) would have to be implemented by the Asbestos Fund's
administrator before all future claimants are paid. Those
provisions would allow the administrator to continue to
collect revenues but to stop accepting claims for resolution.
In that event, and under certain other conditions, such
claimants could pursue asbestos claims in U.S. district
courts.

TABLE 2.--SUMMARY OF ESTIMATED ASBESTOS CLAIMS AND AWARDS UNDER S. 2290
[Dollars in billions]
------------------------------------------------------------------------
Initial 10-year Life of fund
period ---------------------
----------------------
Number of Number of Cost of
claims Cost claims claims
------------------------------------------------------------------------
Claims for malignant 59,000 $36 127,000 $82
conditions.................
Claims for nonmalignant 627,000 17 1,230,000 36
conditions.................
Pending claims.............. 300,000 22 300,000 22
-------------------------------------------
Total................... 986,000 75 1,657,000 140
------------------------------------------------------------------------

Major differences in the estimated costs of claims under S.
1125 and S. 2290
You also requested that CBO explain the major differences
between our cost estimates for S. 1125 and S. 2290. On March
24, 2004, in a letter to Senator Hatch, CBO updated its
October 2, 2003, cost estimate for S. 1125, principally to
reflect new projections about the rate of future inflation
and an assumed later enactment date for the bill. That letter
explains that we now estimate enactment of S. 1125 at the end
of fiscal year 2004 would result in claims payments totaling
$123 billion over the lifetime of the Asbestos Fund (about 50
years).
Three factors account for the difference between the
estimated cost of claims under S. 1125 and that under S. 2290
(see Table 3):
The award values specified in S. 2290 are higher for
certain types of diseases. That difference would add about
$11 billion to the cost of claims, CBO estimates.
Under S. 2290, most asbestos claims could not be settled
privately once the bill is enacted. In contrast, under S.
1125, asbestos claims could continue to be settled by private
parties between the date of enactment and the date when the
Asbestos Fund is fully implemented; defendant firms could
credit any payments made during that period against required
future payments to the fund. Consequently, CBO estimates that
the fund created by S. 2290 would face about $5 billion in
claims that, under S. 1125, we anticipate would be settled
privately.
S. 2290 specifies that administrative expenses of the
program would be paid from the fund. Under S. 1125, in
contrast, administrative costs would be appropriated from the
general funds of the Treasury. That difference would increase
costs to the fund by about $1 billion over its lifetime.
In the limited time available to prepare this estimate, CBO
has not evaluated the differences between the two bills in
administrative procedures. Under S. 2290, the Asbestos Fund
would be operated by the Department of Labor rather than the
U.S. Court of Federal Claims. This and other differences
between the two bills could affect the cost of
administration, the timing and volume of claims reviewed, and
the rate of approval for claims payments.

TABLE 3.--DIFFERENCES IN ESTIMATED CLAIMS AGAINST THE ASBESTOS FUND
UNDER S. 1125 AND S. 2290
------------------------------------------------------------------------
In
billions
of
dollars
------------------------------------------------------------------------
Estimated cost of asbestos claims under S. 1125: 123
Added costs due to higher award values under S. 2290....... 11
Additional claims not privately settled after enactment 5
under S. 2290.............................................
Administrative costs under S. 2290\1\...................... 1
------------------------------------------------------------------------
Total estimated claims against the fund under S. 2290.... 140
------------------------------------------------------------------------
\1\Under S. 1125 administrative costs would be appropriated from the
general fund of the Treasury.

Major differences in estimated revenue collections under S.
1125 and S. 2290
CBO estimates that the Asbestos Fund under S. 2290 would be
limited to revenue collections of about $118 billion over its
lifetime, including contingent collections. CBO has not
estimated the maximum amount of collections that could be
obtained under S. 1125, but they could be greater than $118
billion under certain conditions. In our cost estimate for S.
1125, we concluded that revenue collections and interest
earnings were likely to be sufficient to pay the estimated
cost of claims under that bill. That is not the case for S.
2290.
Over the first 10 years of operations, we estimate that
revenue collections under S. 1125 would exceed those under S.
2290 by $7 billion. Thus, under S. 2290 we estimate that
there would be little interest earnings on surplus funds and
that the Asbestos Fund would need to borrow against future
revenues to continue to pay claims during the first 10 years
of operations.
Estimates of the cost of resolving asbestos claims are
uncertain
Any budgetary projection over a 50-year period must be used
cautiously, and as we discussed in our analysis of S. 1125,
estimates of the long-term costs of asbestos claims likely to
be presented to a new federal fund for resolution are highly
uncertain. Available data on illnesses caused by asbestos are
of limited value. There is no existing compensation system or
fund for asbestos victims that is identical to the system
that would be established under S. 1125 or S. 2290 in terms
of application procedures and requirements, medical criteria
for award determination, and the amount of award values. The
costs would depend heavily on how the criteria would be
interpreted and implemented. In addition, the scope of the
proposed fund under this legislation would be larger than
existing (or previous) private or federal compensation
systems. In short, it is difficult to predict how the
legislation might operate over 50 years until the
administrative structure is established and its operations
can be studied.
One area in which the potential costs are particularly
uncertain is the number of applicants who will present
evidence sufficient to obtain a compensation award for
nonmalignant injuries. CBO estimates that about 15 percent of
individuals with nonmalignant medical conditions due to
asbestos exposure would qualify for awards under the medical
criteria and administrative procedures specified in the
legislation. The remaining 85 percent of such individuals
would receive payments from the fund to monitor their future
medical condition. If that projection were too high or too
low by only 5 percentage points, the lifetime cost to the
Asbestos Fund could change by $10 billion. Small changes in
other assumptions--including such routine variables as the
future inflation rate--could also have a significant impact
on long-term costs.
Intergovernmental and private-sector mandates
S. 2290 would impose an intergovernmental mandate that
would preempt state laws relating to asbestos claims and
prevent state courts from ruling on those cases. In addition,
the bill contains private-sector mandates that would:
Prohibit individuals from bringing or maintaining a civil
action alleging injury due to asbestos exposure;
Require defendant companies and certain insurance companies
to pay annual assessments to the Asbestos Fund;
Require asbestos settlement trusts to transfer their assets
to the Asbestos Fund;
Prohibit persons from manufacturing, processing, or
distributing in commerce certain products containing
asbestos; and
Prohibit certain health insurers from denying or
terminating coverage or altering any terms of coverage of a
claimant or beneficiary on account of participating in the
bill's medical monitoring program or as a result of
information discovered through such medical monitoring.
S. 2290 contains one provision that would be both an
intergovernmental and private-sector mandate as defined in
UMRA. That provision would provide the fund's administrator
with the power to subpoena testimony and evidence, which is
an enforceable duty.
CBO estimates that the aggregate direct cost of complying
with the intergovernmental mandates in S. 2290 would be small
and would fall well below the annual threshold ($60 million
in 2004, adjusted annually for inflation) established in
UMRA. CBO also estimates that the aggregate direct cost of
complying with the private sector mandates in S. 2290 would
well exceed the annual threshold established in UMRA ($120
million in 2004 for the private sector, adjusted annually for
inflation) during each of the first five years those mandates
would be in effect.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Lanette
J. Walker (for federal costs, who can be reached at 226-2860,
Melissa Merrell (for the impact on state, local, and tribal
governments), who can be reached at 225-3220, and Paige
Piper/

[[Page 6995]]

Bach (for the impact on the private sector), who can be
reached at 226-2960.
Sincerely,
Douglas Holtz-Eakin,
Director.

Mrs. FEINSTEIN. Where we have made some changes--and I would suggest
them--is in the second class, raising the Hatch-Frist values from
$20,000 to $25,000; in class III, raising the values for asbestosis/
pleural disease B from $85,000 to $100,000; in class VI, other cancers,
going from $150,000 to $200,000; in class VII, giving nonsmokers with
15 years weighted exposure a range of $225,000 to $650,000--that is
$50,000 more than in the Hatch-Frist proposal; in class VIII, lung
cancer with pleural disease, giving nonsmokers a range of $600,000 to
$1.1 million--a $100,000 increase; in class IX, giving nonsmokers a
range of $800,000 to $1.1 million a $100,000 increase; and for
mesothelioma, the last category, a $1.1 million average award on a
sliding scale.
These numbers have been run by Goldman Sachs. They total $123.6
billion, as opposed to the $114.4 estimated for the Hatch-Frist
proposal.
Because I have not been party directly to any of the discussion,
regretfully, the only way I can get my views through, it appears, is
through the floor of the Senate. I believe this is much more fair to
nonsmokers and I believe the methodology of giving the trust
administrator the ability that, if nonsmoker cases rise above a certain
percent in the next year, at the end of the previous year the
administrator be given the power to put all of those cases into the
tort system which will not only act as a deterrent, but will also
provide the ability to fund this.
One other point I want to make before I yield the floor has to do
with the CBO letter. The CBO letter, in addition to the additional $5
billion that removing my startup amendment would cost the fund, also
points out the bill on the floor is different from the bill we passed
out of committee because in the bill we passed out of committee,
administrative costs would be appropriated from the general funds of
the Treasury. That difference increases costs to the fund $1 billion
over its lifetime.
So those are the reasons why CBO determined that the Hatch-Frist bill
will cost $17 billion more than the Committee-passed bill.
By way of conclusion, I would very much hope this bill will go back
to the Judiciary Committee. I very much hope all members of the
Judiciary Committee would have input into this bill. Or a bill should
be negotiated between the two leaders, so it is bipartisan. There is no
way I see a bill being written in private passing this body. Too many
of us have put in too much time to try to get a fair solution to let
that happen.
I yield the floor.
The PRESIDING OFFICER (Mr. Allard). The Senator from Utah.
Mr. DODD. Will the Senator from Utah yield for 1 minute?
Mr. HATCH. I am delighted to yield.
Mr. DODD. I commend the Senator from California for her statement and
comments. She has been deeply involved in this effort, as have many of
us over the last number of months, if not years. She has made a very
comprehensive set of suggestions, to which I think our colleagues want
to pay serious attention. I know my colleague from Utah will. He is a
fairminded individual who cares deeply about this legislation as well.
But I commend her for her comments.
Mrs. FEINSTEIN. Thank you very much.
Mr. DODD. At an appropriate time, I say to the distinguished chairman
of the committee, I will ask unanimous consent that following the
remarks of the Senator I may have some time, too. I don't know what the
order is, but is such a request appropriate, Mr. President?
The PRESIDING OFFICER. The Senator can seek consent.
Mr. DODD. I ask unanimous consent at the conclusion of the remarks by
the chairman of the Judiciary Committee, the Senator from Utah, that
the Senator from Connecticut be recognized for 30 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Utah.
Mr. HATCH. Mr. President, I listened to the distinguished Democratic
leader on the Judiciary Committee, Senator Leahy. He made a number of
statements I feel need to be corrected. I know he sincerely made them.
I am not trying to disparage him in any way, but he has made the same
mistake I think the minority leader made this morning, that only
$25,000 is given to these people who are heavy smokers, who have no
sign of asbestosis, no markers, no signs on their X-rays, where we have
$25,000 to $75,000 for these people, even though in all likelihood
their maladies have come from their smoking.
If smoking and asbestos work in concert, together, why don't any of
the bankruptcy trusts pay any money for lung cancer claims that do not
present any markers or impairment at all? They do not.
Here we are giving $25,000 to $75,000 for complaints that get
absolutely zero in court. Why are these same claims almost always met
with a defense verdict in the tort system? Even the tort system, as out
of whack as it is, will not give these people money. Yet we do. You
would think it was a crime that it is not more. That is typical of the
arguments on the other side. You will never have enough money here to
satisfy some on the other side no matter what you do. What we are
trying to do is resolve this problem so the country can go forward, so
these businesses don't all go belly up, so the jobs are not lost,
pensions are not lost, and so people can get money without paying 60
percent of the recoveries to attorneys and for transaction fees.
By the time you add the defense attorneys' costs, the plaintiffs'
attorneys' contingent fees, and the transaction costs, it is 60 percent
of every dime that is raised in these horrendous court decisions that
are paying people who are not sick to the exclusion of people who are.
This bill solves that problem.
Isn't it true this bill pays up to $1 million to lung cancer claims
where there is more certainty it was caused by asbestos exposure? The
fact is, it is true. That is $1 million some of these--a lot of these
people will never get under the current tort system. But a lot of
people who have never suffered 1 day of impairment in these
jurisdictions I have been talking about will wind up with millions of
undeserved dollars because this system is out of whack.
I am getting a little sick and tired of hearing my colleagues blast
Halliburton. There is only one reason they do that. That is because,
even though he has nothing to do with it, even though he has long been
gone from it, even though everything he has had to do with it has been
finalized and closed, the Vice President used to work for Halliburton.
It gets old. I mean it is cheap shots, there is no question about it.
Frankly, let me say I have to respond to the dubious argument that
Halliburton is gaining a windfall by this fund. Anybody who believes
that should call them and ask how they feel about this fund. The truth
is they may actually be better off by not having this legislation.
Even some personal injury lawyers involved in the settlement with
Halliburton believe that is the case, that they are better off not
being part of raising the $124 billion.
The truth has not stopped some of my colleagues from making
exaggerated statements about this bill. I suppose it is no surprise
that when they get the chance to take a shot, truthful or not, at their
favorite whipping boy, they are not going to pass it up. That is what
they do--as if all big businesses are bad and all big businesses screw
their employees and all big businesses are out to hurt the economy.
Let me state for the record how this bill compares to the Halliburton
settlement. The conditional settlement reached with the plaintiffs'
lawyers is just over $4 billion. There is a conditional settlement that
Halliburton entered into that is a little over $4 billion. Only $2.7
billion of that amount is cash. Of this $2.7 billion, about $2.3
billion may be recovered by Halliburton

[[Page 6996]]

from insurers. The remaining amount of the settlement, about $1.3
billion, involves issuing shares of stock. If the legislation is
adopted, it seems likely the stock value will increase so that any
dilution of stock values in the short run will be offset by medium- and
long-term capital gains. So the actual cost to Halliburton is not the
$4 billion they throw in, which some of my colleagues claim.
We understand the firm believes recoveries from insurers in issuing
new stock--two elements that those who argue this is a bailout always
neglect to mention--will act together to create an actual out-of-pocket
liability to the firm of less than $1 billion.
How does their fund liability compare? As a tier 1 company in this
bill, under the fund they would pay $86.5 million per year. The total
nominal value of their liability under the fund would be just short of
$2 billion. This is a bailout? It is a lot more than they would have to
pay under their settlement. I hesitate to even say this in the Senate
because if I were with Halliburton, I would take care of the
settlement, the heck with this. But it would take some real effective
money away from this trust fund. Halliburton is not the only one.
Again, it appears some of my colleagues are not interested in hearing
details such as these. They would rather confuse the facts and do
anything they can to make sure the personal injury lawyers who support
them do not lose out on their more than $60 billion of projected fees--
just from asbestos litigation--if this bill is not passed.
No wonder they can afford to run these stupid ads all over America,
acting as if they are fighting for little individual people. Give me a
break. The fact is, everybody in this body knows there is a tremendous
rip-off of a lot of people who have suffered from mesothelioma and
other related asbestos diseases who are not going to get anything, or
will get relatively nothing, if this bill does not pass.
Now, we are faced today with a historic opportunity to right a
serious wrong being committed against victims of asbestos exposure, as
well as the thousands of companies and individuals who stand to lose
out in terms of potential bankruptcies, loss of jobs, loss of pensions,
under today's downright irrational system of compensation under our
current tort system.
For more than 20 years, our compensation of legitimate asbestos
victims has been unacceptably diminished and delayed. It has become
quite evident to the Judiciary Committee that tens of thousands of true
asbestos victims, including their families, are faced with agonizing
pain and suffering, with uncertain prospects of any meaningful recovery
in the existing tort system.
These inequitable results are particularly troubling when viewed
against the reality that large dose exposures to asbestos, associated
with asbestos-related diseases, ended in the 1970s. That is when they
ended. Asbestosis is considered by many as a ``disappearing disease.''
These victims are left with little to nothing because, among other
things, precious resources are being diverted toward the defense and
payment of a massive influx of asbestos claims brought largely by a
group of overzealous personal injury lawyers on behalf of these many
unimpaired plaintiffs, people who have never suffered from anything to
do with asbestos.
Cardozo law school professor, Lester Brickman, found that more than
80 percent of claims made in recent years and 90 percent at present do
not involve a medically recognizable injury. You wonder what is going
on. That would not happen but for courts that literally are not abiding
by the law, where judges are bought by trial lawyers, and where they
are totally plaintiffs oriented and the jurors come from areas where it
is not their money, so they will put up any amount of money for people
who are not even injured.
In other words, a great majority of asbestos lawsuits today are
brought by those who are not even sick. These claimants show lung
conditions similar to the general population, including that of
individuals with absolutely no asbestos exposure at all.
To put the asbestos litigation problem in perspective, I will share
the story of Mary Lou Keener, the daughter of an asbestos victim, who
has spoken out in support of this legislation. Mary Lou knows all too
well how the current asbestos crises has failed some of our Nation's
true patriots, our veterans.
Mary Lou Keener's father served in the engine rooms of the USS
Mayrant, Lindsey, and Columbus in World War II in the Pacific. Both the
Mayrant and Lindsey suffered serious damage from enemy attacks. Mary
Lou's father had the dangerous assignment of helping to bring these
crippled ships back to port, spending months fighting to keep them
afloat, and beginning massive repair work while they were still at sea.
He then spent months at the shipyard helping to finish the repairs.
What Mary Lou's father did not know was that the countless hours
spent in the engine rooms and boilers would cost him his life. The same
is true of thousands of veterans like him. These ships, like almost
every vessel in our fleet at the time, contained massive amounts of
asbestos. Every moment he spent working to return these ships to
battle, breathing the contaminated dust and debris, worsened his
condition and guaranteed that he would never ever be able to recover.
Not surprisingly, he developed mesothelioma, ultimately succumbing to
this horrible, painful, and deadly disease on--guess what--Veterans
Day, 2001.
Mary Lou's father was more fortunate in one way than many veterans:
He had a daughter, a truly exceptional woman who is a nurse, a lawyer,
and a Navy Vietnam veteran. She is also a member of the Veterans Rights
Commission.
When she learned of her dad's condition, she rushed to help him and
her mother navigate the complicated maze of regulatory and legal
systems that he faced. Unwilling to take no for an answer, Mary Lou
pushed to have him examined at the National Cancer Institute, part of
the National Institutes of Health. It was there that Mary Lou's father
received the definitive diagnosis that he suffered from mesothelioma.
Mary Lou made sure he received the best treatment available from
experts throughout the country.
After his death, Mary Lou helped her mother fight through the
regulatory requirement to obtain dependent indemnity compensation from
the Federal Department of Veterans Affairs for a service-connected
death. She helped her mother find an asbestos plaintiffs law firm to
file a tort and wrongful death claim. Now, despite Mary Lou's efforts,
her father's lawsuit, even with a resourceful and tenacious advocate
like his daughter, has been languishing in the courts for over 18
months.
As most veterans learn, there are few viable defendants left who are
responsible for supplying asbestos to the Navy. Mary Lou's mother
received three checks from defendant companies, but they are all
bankrupt and the amounts are very tiny. She can only cling to the hope
that there may be other viable defendants, but the reality is that far
too many veterans will go uncompensated under the current tort system.
Perhaps this is why Mary Lou Keener spoke out in support of S. 2290,
stating:

The courts are clogged with asbestos cases, and even if [my
mother] finally has her day in court, the law firm will
collect almost half of any jury award. That's why passage of
[the FAIR Act] is so important. The Trust Fund solution to
this problem envisioned by [the FAIR Act] will bring much
needed compensation to veterans suffering from asbestos
related diseases and end the vagaries and lengthy delays of
the current/tort wrongful death systems.

Last year, Mary's mother received a call from her attorney.
Unfortunately, it was not about her husband's case. Instead, she was
told she should consider contacting her Senators immediately and ask
them to vote against the asbestos legislation. Needless to say, she
declined that request. She understands that for veterans like her
husband, while the status quo might benefit a handful of personal
injury lawyers, it completely fails the one group that should be given
the ultimate priority; that is, the asbestos victims.
Now, let me refer to this chart: What is wrong with asbestos
litigation? This is for the Navy veteran I have been

[[Page 6997]]

talking about with mesothelioma. Under the tort system, he gets
nothing. Under the FAIR Act, each of them gets $1 million. I have to
say, no amount of money will compensate people for what they have gone
through, but that is so much more than any of them are ever going to
get without this bill.
Now, as I say, unfortunately, the asbestos litigation problem reaches
beyond our veterans and into the lives of everyday, hard-working
Americans who are victimized by asbestos and the very system designed
to vindicate their rights. One matter I find particularly troubling is
the case of Huber v. Taylor. That is a class action lawsuit currently
pending in the Western District of Pennsylvania. The suit was filed by
2,644 plaintiffs in asbestos personal injury suits against the personal
injury lawyers who represented them. The suit charges that the lawyers
treated their clients as mere inventory, distributing only a few
thousand dollars to each plaintiff for their injuries, while retaining
tens of millions of dollars in attorneys' fees.
Now, I bring this case to the Chamber's attention because it
underscores the severity of the asbestos litigation crisis and why it
is imperative we, as a legislative body, must now act to address this
problem.
Ronald Huber spent 35 years as a steelworker, inhaling asbestos
fibers while working on the job. In 1995, he joined a class action
against nearly 200 companies that made or distributed asbestos or
asbestos-containing products. Although that class action settled for
approximately $140 million, Mr. Huber has not seen a single penny from
this award. How much did Mr. Huber's lawyers walk away with? They
received $56 million.
Look at this chart: What is wrong with asbestos litigation? Huber v.
Taylor. The trial lawyers got $56 million; asbestos victims basically
nothing. Think about it. That is right, the lawyers received $56
million and the asbestos victims received nothing.
In response to this severe injustice, Mr. Huber and over 2,000 of his
fellow class members filed a lawsuit on February 7, 2002, in the U.S.
District Court for the Western District of Pennsylvania against the
personal injury lawyers who represented them in the first action. As of
today, the court is still hearing arguments on various motions.
The complaint charges the defendants with breach of fiduciary duty;
failure to disclose the identity and nature of the actions they had
joined; false representation to deprive the plaintiffs of funds
belonging to the plaintiffs; failure to exercise the degree of
competence and diligence exercised by lawyers in similar circumstances;
and misrepresentation of material facts. The plaintiffs are seeking
compensatory and punitive damages.
All of the plaintiffs to this action are described as ``hard-working
union members in blue-collar trades.'' All of them were exposed to
asbestos during their working years. All, to a large extent, have
little knowledge or experience in the legal system. All state they were
``recruited'' by plaintiffs' law firms for inclusion in ``mass
actions,'' and all say their lawyers told them nothing about the
lawsuits in which they were involved.
Their complaint arises from what they call the ``corruption of the
personal injury bar.'' The lawsuit states that, as early as the early
1980s, the prosecution of asbestos personal injury claims had evolved
into an industry and the lawyers who were prominent in that industry
had accumulated a vast amount of wealth. To quote the complaint:

The promise of such wealth drew additional plaintiffs'
lawyers into the field, and this resulted in more and more
aggressive efforts to recruit asbestos personal injury
plaintiffs.

I think it is a sad state of affairs when asbestos victims have to
sue their own lawyers to receive compensation for their injuries. We
cannot allow the current, broken system to continue in this manner. It
deprives victims of a meaningful remedy and diminishes public
confidence in our civil justice system.
I think we have to do something now to ensure there are no more
Robert Hubers who are left with no recourse other than to sue their own
lawyers.
We must also act now to ensure that the tireless efforts of everyday
Americans such as Mary Lou Kenner are not taken in vain. These are two
of just thousands and thousands of people.
It is because of these problems that I urge my colleagues to support
S. 2290. Under this bill, victims will receive prompt and certain
compensation through a privately funded trust administered by the
Department of Labor. Moving existing claims to the fund will
significantly cut out the exorbitant transaction costs inherent in our
tort system--especially given the no-fault nature of the new system
being proposed.
In today's tort system, victims bear the heavy burden of proving that
a specific product caused their illness. They must show culpability
through causation and connect the dots that lead to the ultimate
defendant. Unfortunately, few victims today are capable of producing
sufficient evidence to show their illnesses were caused by a particular
company's products. In fact, because of the long latency period
associated with these asbestos-related diseases, the quality of
evidence will inevitably degrade over time where memories fade and
documents get lost. Thus, for the scores of victims who do not have an
ironclad case against any one defendant, a no-fault system is an
extremely important component when crafting a solution to the asbestos
problem.
Now, to illustrate my point, I would like to share the story of
siblings Paul and Suzanne Verret. After being diagnosed with plural
mesothelioma, both brought suit against four defendants, each a
potentially responsible party under tort law. But after hearing
evidence presented by the defense, a Texas jury ruled, just last month,
that the Verrets' conditions were not caused by any of the four
defendants who were likely to have been the result of exposure to
asbestos from a Johns Manville factory in the neighborhood.
Asbestos tailings from the plant have been used for driveways and
parking lots in the neighborhood where the Verrets grew up. Johns
Manville, however, is now bankrupt and its asbestos trust is paying
pennies on the dollar on all claims. As a result of the jury's verdict,
the Verrets are unlikely to recover any compensation for their
injuries, but under S. 2290 they stand to recover $1 million each in
compensation.
Now, look at these Texas mesothelioma victims, Paul and Suzanne
Verret. Under the current tort system, as shown on the chart on the
left, victims hire lawyers and sue defendants. After years of trial
processes and delays, victims are unable to prove causation. They use
trial lawyers and collect zero. But under this bill, S. 2290, with the
trust fund--if enacted--each of these people will collect $1 million in
compensation.
By the way, unless they are lucky enough to get a lawyer who is going
to forum shop for them into a jurisdiction where the judges are
basically in the pockets of the plaintiffs' lawyers, the personal
injury lawyers, they might get something that way, but there are going
to be very few who get that, and most of those people are not going to
be ill. They are not going to have suffered and not going to be able to
prove their case in other courts of law in the country. It is pathetic.
Naturally, there are some great lawyers who do what is right here. I
do not mean to find fault with them. I find fault with these phonies
who use forum shopping jurisdictions and really what I consider to be
corrupt judges and, in many cases, corrupt juries, to obtain humongous
verdicts for people who are not even sick, taking the moneys away from
those who are sick, which this bill would solve.
In the coming days, we will be engaged in a historic debate regarding
the asbestos litigation crisis facing this country. The outcome of this
debate will have very real consequences on the victims of asbestos and
their families. These victims are counting on us, their elected
Senators, to do the right thing and address the problems in our tort
system that is badly broken by asbestos litigation.
I have to say, when you folks out there see these phony ads about how
this bill is bad and the tort system is

[[Page 6998]]

good, those ads are paid for by these attorneys who have already taken
$20 billion in fees away from victims, and will take another $40
billion more, for a total of $60 billion, out of their pockets. It is
easy to see why they do not want this bill. It is a gravy train they do
not want to stop.
They certainly don't want it to be stopped by this bill, which is
where the gravy train would end for lawyers and recoveries that are
worthy will begin for victims.
Let me say, although the stakes in this debate are high, the risk of
not acting or allowing a broken system to remain broken is even more
consequential. We at the very least owe it to people such as Mary Lou
Kenner and Ronald Huber to make this bill the pending business of the
Senate. We really need to do that.
Let me tell you one more story about the impact of the current
asbestos system on American business. The reach of the personal injury
lawyers--I am talking about the dishonest ones--and their web of
abusive litigation practices appears to have no limit. At last count
these personal injury lawyers have cast their asbestos net to include
some 8,400 defendant companies representing virtually every industrial
sector of the U.S. economy.
Approximately 70 companies, 35 since the year 2000 alone, have now
been driven into bankruptcy as a result of asbestos litigation.
Disturbingly, most of these companies that now find themselves named as
defendants in asbestos cases had little or nothing to do with the
manufacture, sale, or distribution of asbestos or asbestos-containing
products. Under the ``deep pocket'' theory of law now commonly
subscribed to by many personal injury lawyers, liability is not based
on culpability; instead, it is based on the nearest available pot of
money.
What is more, an estimated 90 percent of the claims now being filed
are on behalf of persons with no discernable illness, many of whom were
recruited by for-profit, mass- screening operations being sponsored by
enterprising trial lawyers.
I would like to talk about a company that has facilities in my home
State of Utah. Philadelphia-based Crown Cork & Seal is representative
of all too many of the businesses that have found themselves targeted
by the personal injury lawyers over asbestos.
In 1963, Crown Cork & Seal, a consumer products packager in the can
and bottle cap business, purchased, for $7 million, the stock of Mundet
Cork Company, a New Jersey-based firm that made cork-lined bottle caps
and insulation that contained asbestos. Because Crown was only
interested in the bottle-cap business, Mundet sold its insulation
division approximately 90 days after the purchase of its stock by
Crown. Thereafter, Mundet, consisting only of its bottle cap business,
was merged into Crown.
Crown never operated Mundet's insulation business, nor had it ever
intended to operate its insulation business. Crown was only interested
in acquiring Mundet's bottle-cap assets; no Mundet insulation managers
ever worked for Crown, and no Mundet stockholders ever had any
ownership interest in Crown.
The trial lawyers have made Crown Cork & Seal pay dearly for the 90
days it owned the insulation division of Mundet. To date, Crown has had
to pay out over $400 million in asbestos claims. To give this some
context, that is over 57 times what Crown paid for Mundet in 1963. In
fiscal year 2003 alone, Crown paid over $200 million in asbestos-
related costs, of which only $25 million--or 12.5 percent--went to real
victims of asbestos-related diseases, and that is what is going on.
It is a rip-off. That is what is going on. That is what our
colleagues are arguing for. It is a rip-off. Why? Some say it is
because these personal injury lawyers are going to put up $50 million
or $100 million for their nominee for President. I hope that is not
true, but it is all too evident that that probably is.
Here are these victims who should not have been able to sue Crown
Cork & Seal to begin with. Crown Cork paid over $200 million in
asbestos-related costs last year alone, and the victims got $25 million
out of $200-plus million or 12.5 percent. All the rest went to lawyers,
claimants who were not ill, and other costs.
Look at this Crown Cork & Seal chart. What is wrong with asbestos
litigation? Crown Cork & Seal: $25 million out of $200 million total.
Of the more than $200 million paid by Crown Cork & Seal in 2003,
actually only $25 million went to individuals impaired with asbestos-
related illnesses. Where did the $175 million go? It is a rip-off. That
is what is happening.
This bill will stop that. It is an expensive bill for the companies
involved. They are going to have to pay for 27 years and pay through
the nose. Many of them are in the same position as Crown Cork. They
should never have had to pay a dime to begin with. The story of Crown
Cork & Seal is just one of thousands of examples why we cannot put off
fixing this problem any longer. Our current system is one that does not
serve businesses and their employees whose livelihoods depend on them.
Our current system surely has not served the victims of asbestos.
I urge my colleagues to join me in supporting the FAIR Act, to vote
for cloture so that we can stop this obstructionist filibuster being
led by some of my Democratic colleagues. Think about it. They are
filibustering a motion to proceed to this bill so we can debate the
bill itself, filibustering it so we cannot add amendments to the bill.
If they have good amendments, bring them up. We will listen to them and
hopefully pass them, if they are good. If they are not, they might get
them passed anyway. The point is, let's at least allow the Senate to
work its will. Let's not stop even a motion to proceed this bill.
I would like to respond to claims that were made earlier today that
the Hatch-Frist-Miller bill is not fair to pending plaintiffs. This
bill preempts and supersedes those claims pending in the tort system
today, including verdicts that are still subject to appeal or judicial
review. Preemption of such claims assures an end to a broken tort
system that everyone agrees is slow, unwieldy, and fundamentally unfair
to asbestos victims.
The opponents' solution to their concern that the FAIR Act is unfair
for pending plaintiffs is to keep the tort system open for pending
claims. These critics are asking Congress to perpetuate the very
problem this bill is seeking to rectify; that is, a broken system that
is failing victims by misallocating resources away from the truly sick,
where such victims receive too little because so much is going to the
unimpaired and to attorneys who take most of the money.
We all know the statistics. The vast majority of the claims being
filed today, as high as 90 percent, are by individuals with little or
no current functional impairment. Let me tell you how this translates
into real money. Using the values cited by the minority views in the
report of the Judiciary Committee on S. 1125 for unimpaired claimants,
it is $40,000 to $125,000. Allowing pending claims to continue could
direct anywhere from $10.8 billion to $33.8 billion or more to
unimpaired claimants.
How many of these claims are based on mass screenings? It has been
estimated that the abuse of mass screenings has resulted in $28.5
billion having been paid for meritless claims. That is almost $30
billion that has gone to people who don't really have claims. This
completely undermines the consensus public policy decision to redirect
these funds to those who are truly sick from asbestos exposure and the
whole purpose of this asbestos legislation.
The bipartisan medical criteria argument forged in the Judiciary
Committee recognizes unimpaired claimants should be monitored but
should not be paid for illnesses they have not and may never develop.
But we will pay for monitoring.
Opponents of the bill who seek to perpetuate the tort system would
also preserve the exorbitant attorney's fees associated with such
claims. As much as 40 to 50 percent of awards go to the personal injury
plaintiffs' lawyers fees and costs. Indeed, while we debate the

[[Page 6999]]

bill, personal injury attorneys likely will file a large number of
claims in the tort system, most of which undoubtedly will be for
unimpaired claimants which would be allowed to continue if these
opponents have their way. The rest, probably another 10 percent, goes
to the defendant attorneys who have to defend these companies, many of
which should not have any liability at all.
There is no justification for allowing personal injury lawyers to
continue to siphon significant resources out of the system when these
resources could be dedicated to compensating those who are truly sick
from asbestos exposure. The intent of the FAIR Act is to fix a system
that everyone agrees is badly broken and in desperate need of repair.
John Hyatt, the counsel for the AFL-CIO who testified before the
Judiciary Committee in 2002, described the tort system as having ``high
transaction costs, inequitable allocation of compensation among
victims, delays in payment to victims, and a general climate of
uncertainty that is damaging business far more than it is compensating
victims.'' That is the counsel for the AFL-CIO. I have often heard
Democratic colleagues make similar statements perpetuating the tort
system, claims that undermine the bill, saying that would be better or
more ``fair'' treatment than they would get under the FAIR Act.
``Fair'' has to be in quotes in that manner.
In fact, the Hatch-Frist-Miller bill provides relief to current
pending claims. Any claimant who has filed a lawsuit in any State would
be eligible for prompt compensation from the fund provided they meet
the eligibility criteria set forth in the bill. These criteria are
quite wrong. We should not treat plaintiffs in court as second class
citizens. Cases filed in the tort system take years to process, and
there is no guarantee that even with the trial date, a case will
proceed. Cases in New York City given trial dates in 2002 have yet to
go to trial. Even then, in most jurisdictions, cases that actually have
been tried are often appealed, and years pass before the case is
formally resolved. In the interim, plaintiffs are without relief, and
money is being spent on lawyers, with no relief. There is no reason to
leave this type of system in place. Moreover, the mere fact that a case
is filed is no guarantee it will proceed. Claimants' cases proceed
sometimes based on how many slots the trial has for your lawyer, where
the cases were filed, what defendants are left, and other vagaries
completely out of a claimant's control. That day will stop with the
passage of this bill, which now provides expedited payments to anyone
who can demonstrate a hardship, who has been diagnosed--anybody who can
demonstrate a hardship or who has been diagnosed with mesothelioma or
with another asbestos-related disease who has less than a year to live
or can otherwise establish a circumstance requiring accelerated
payment. The money is there now, when it is needed, and it can be paid
out quickly to help these families. This bill also fixes the judicial
system, unclogs the courts, allowing these judges to deal with other
matters, not asbestos cases in the wings waiting for court time that is
precious and, at this point, unavailable.
There is no need or benefit to leave these cases which have been
clogging the courts pending in the courts. These cases are the very
reason we are seeking to fix a broken system. There is no evidence the
courts can or will handle them properly and not prejudice the litigants
waiting their turn. Creating a two-track process is likewise unfair to
victims and defendants. Despite all the rhetoric from opponents to the
bill, when compared to what the current tort system will provide,
legitimately ill claimants will fare much better under this FAIR Act.
We will have victims who get immediate relief through the fund, while
those with litigation pending must wait and hope for a court date and
then hope the company responsible is still solvent and can afford the
cost. What will we say to them when we have left a system that we agree
is broken, and they are sitting in court for years? Great care has been
made to ensure that the compensation program would be processing and
paying claims soon after the date of enactment. There are no assurances
that plaintiffs would have claims resolved in the tort system within
this same amount of time. Indeed, experienced staffs say they are
likely to continue to sit in court even longer.
Furthermore, awards in the tort system are disparate and depend
largely on where the claim was filed, what judge is presiding, rather
than the severity of the illness. In other words, it is a phony system.
Professor Laurence Tribe described the system as resembling a
lottery, noting: Some victims receive astronomical awards, while others
receive little or nothing. Quite a few severely injured victims die
before their cases could can be heard. Plaintiffs point to the larger
awards in some cases and cannot be denied, so some have been able to
win in this lottery system, or win the lottery. These awards, however,
are the exception and reserved for the few claimants who can survive
through a long and hard trial, as well as appeals, often taking many
years to see any moneys at all. Then they will find that about 60
percent of the moneys are gone anyway.
The plaintiffs bar doesn't point to the majority of claims receiving
significantly less money for more severe claims or even up to 40
percent taken out for attorneys' fees. As a stark example, a 2001
asbestos verdict awarded Mississippi plaintiffs $25 million each, where
none of the plaintiffs claim prior medical expenses or absences from
work due to any related illness with the case of a cancer victim who
underwent a lung removal operation. This cancer victim grudgingly
agreed to join a class action suit against an asbestos company. He
never lived to see the outcome of the case, and after 7 months his
estate was awarded a mere $3,000. The others didn't even have injuries.
Substantial judicial proceeds dating back to the early 20th century
supports the constitutionality of Congress' authority to preempt tort
claims when it believes it is in the public interest. It is clearly in
the public interest, and especially in the interest of asbestos
victims, that Congress used the full extent of its powers to preempt
the current asbestos litigation system.
Finally, Mr. President, allowing personal injury lawyers and the
unimpaired to continue to drain resources out of the system and away
from those who deserve the resources would not only be unfair to the
truly ill, it is likewise unfair to defendants who ask them to pay into
a no-fault system, give up some of their insurance company, and still
expose them to the litigation lottery. We cannot expect the defendants
to bear the costs and risks if it fails the judicial process. This
system will continue to take 60 percent of every dollar and waste it on
lawyers' experts and administrative costs.
The Hatch-Frist-Miller bill will stop the litigation lottery in its
tracks and instead replace it with a fair administrative process that
treats all participants fairly and consistently.
I want to respond to a few statements made by my friend and colleague
from South Dakota earlier this morning regarding S. 2290, the Fairness
in Asbestos Injury Resolution Act of 2004.
Senator Daschle stated there was no reversion to the tort system. In
fact, there is reversion to the tort system. It is one of the
concessions we made. Should the fund become insolvent, then claimants
with asbestos injuries who have not received compensation under the
fund may pursue their claims in the courts. The statement that there is
no reversion is simply wrong. I want to correct the record.
Senator Sarbanes stated that we ``sprung'' the bill on the Democratic
Senators and their staffs. Senator Daschle called attention to the
total fund value. For the record, Senator Daschle's staff was informed
of the new numbers last October. That was 6 months ago. Since October,
there have been repeated and continuing discussions of these numbers
over the ensuing months. We repeatedly asked the Democrats for a
response to the numbers. We have received absolutely none.

[[Page 7000]]

We repeatedly asked the Democrats for a legislative proposal--some
language, an outline, a concept of a structure, something, anything. We
received nothing.
As Senator Daschle knows, this so-called new bill that we allegedly
``sprung'' on him includes the very numbers we released months ago, the
changes demanded by the Democrats, and the changes demanded by the
unions. We have had 8 months of serious negotiations. I don't think it
is justified for anybody to say they have been kept out of the process,
we have not tried to accommodate them about these matters.
Mr. President, I have one more comment that I would like to make to
senator Daschle's statements this morning. He stated that a lung cancer
victim with 15 years of exposure would receive only $25,000 in
compensation. He painted an incomplete picture which I would like to
finish. First, that figure is the bottom of the range of compensation.
Under the claims values in FAIR Act, claimants who were exposed to
asbestos and still smoking will receive between $25,000 to $75,000 in
compensation. And for the record, Senators Leahy and Kennedy have
stated that they want $50,000 for claimants falling into this category.
Mr. President, I have come here to discuss the FAIR Act. We have a
chance to help those who have suffered from asbestos-related injuries
for far too long. Many people have spent many months getting us to this
point and I want to ensure that we have a complete picture of the bill
for the record. We owe at least that much to those victims.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Chaffee). The Senator from Connecticut is
recognized.
Mr. DODD. Mr. President, let me begin by, first of all, commending my
colleagues on the Judiciary Committee. I am not a member of this
distinguished committee. I had the good fortune of serving on the
Judiciary Committee in the other body years ago, in the House of
Representatives. I have great respect for my colleagues who serve on
the Senate Judiciary Committee in either body because they deal with
some of the most contentious issues before the American public.
It is not easy to be the chairman of that committee, regardless of
which party is in the majority in the Senate. I have the utmost respect
for my friend from Utah. He and I have spent many years serving in this
body together. There have been countless pieces of legislation that we
have worked on together that are the law of the land today. I have
great admiration for him.
He is a legislator. I say that because there seems to be a shrinking
number of legislators around here regardless of party affiliation. He
is a legislator. That means someone who is willing to sit down and work
out issues. I wish to begin by thanking and commending him for his
efforts on this difficult subject matter, asbestos. This is an area in
which I have had a longstanding interest, as many of my colleagues
know, going back a number of years. This issue is of critical
importance to my State of Conneticut, because it is the home of
numerous small and large manufacturers, as well as several major
insurance companies. They have a strong interest in the outcome of a
resolution of this very perplexing problem of asbestos litigation and
related issues.
I have a strong interest in trying to come up with a solution for,
first and foremost, victims of asbestos exposure. It is estimated that
more than 27 million people who have been exposed to asbestos over the
years.
Regrettably, we know there are many who will die prematurely because
of their exposure to this product. In fact, last year alone, 10,000
people in this country died as a result of their exposure to asbestos.
The numbers are truly staggering. We know there are over 600,000 past
and pending cases involving over 6,000 businesses, that have been cited
as defendants in these cases. And we know there are going to be
literally millions of people who are going to suffer.
So we must attempt to provide a better answer than the present system
which has clogged up our courts, which has denied too many victims--
seriously impaired victims--of the kind of compensation they deserve. I
have had a longstanding interest in trying to come up with a solution.
We have gotten very close to such a solution.
Let me begin by reporting on the progress that has been made. There
is a tendency to only discuss the areas where there is still
disagreement, and I think that only tells part of the story. People
such as Senator Hatch and Senator Leahy, have worked tirelessly on this
issue. The majority leader, Senator Frist, and the minority leader,
Senator Daschle and their staffs have also spent a great deal of time
on this legislation. Senator Daschle has always kept his door open, and
repeatedly tried to see if we could proceed with a meaningful
negotiation process. Such a process must occur in order to bring the
various parties together around a resolution of this issue.
There are many others who have been critically involved in this
issue. We heard from Senator Feinstein earlier and other members of the
Judiciary Committee. Senator Nelson from Nebraska has also worked hard
on this issue. Senator Carper has also worked on this issue. There are
many others who care about this issue and have spent a great deal of
time on it. Senator Specter has been performing an invaluable service
in trying to work out the administrative structure of the proposed
compensation fund. I am sure I am leaving some of my colleagues out,
and I apologize for that, knowing, as I do, that almost every State,
without exception, is affected by this lingering question. When there
are over 600,000 total cases, every State and Senator is affected.
Seventy companies have already declared bankruptcy on this issue
alone because of the judgments that have come in against them.
As a result of those 70 bankruptcies, over 70,000 jobs have been lost
from these companies. This is a major economic problem, as well as a
major health issue that needs and demands resolution.
The good news is this: There are about five or six major issues
involved in the question of whether we can establish a bona fide trust
that would allow for fair and equitable compensation to those who have
been determined to suffer from diseases related to exposure of
asbestos. The five or six major issues are the following:
One, can we establish medical criteria which would make it possible
to determine who has been exposed and to what extent have they been
adversely affected as a result of that exposure. I thought that issue
would never get resolved. This has not been an easy task. Can you
imagine trying to bring doctors together with organized labor,
manufacturers, and insurance companies, all sitting down and agreeing
on what the medical criteria for this legislation should be? I am
pleased to announce that months ago we were actually able to reach an
agreement on the medical criteria. Amazingly, the issue of medical
criteria has been resolved.
The second issue is whether we could create an administrative system
to process and review claims. This is also not an easy undertaking.
Thanks to Senator Arlen Specter of Pennsylvania and thanks to his
constituent, Judge Becker, and, by the way, the involvement of a number
of our Senate colleagues under the auspices of Senator Specter's
leadership--we have reached an agreement in this area we think is going
to work.
Creating an administrative system is a major accomplishment. Many
people thought we would never be able to resolve this issue. On two of
the major five or six issues, we have already achieved results. But it
took weeks to work out the details behind these agreements.
An asbestos compensation trust fund idea is complex. It is very
complex. When we envision a trust fund that might have to last for 30
years or more, that must deal with thousands and thousands of cases of
people who have been exposed to asbestos, it is a serious undertaking.
Every comma, every period, every semicolon can and does mean something.
So we have to be very careful in how we draft this legislation.

[[Page 7001]]

We have hundreds of manufacturers who have been, and continue to be
affected by what we are doing. There are major insurance companies that
clearly must be involved and will contribute to a trust fund, as the
manufacturers will be. Organized labor, representing the hundreds of
thousands of victims, must ensure that a trust fund is going to have
adequate funding, and that monetary awards are fair and efficiently
provided.
We have seen the consequences of the current system. In fact, in the
Johns-Manville trust resolution, the trust that was established under
the name of that particular company, is a example of the problems with
the current system. They believed that the amount of money initially
placed put into that trust was going to more than adequately provide
for the victims who have been exposed under the Manville situation. As
it turns out today, the Manville trust is only paying about 5 percent
of the compensation victims should be receiving.
It went very wrong, not because the people who put it together
planned it that way, but nevertheless that is what happened. No one I
know of wants that to happen here, but it makes my point that this is a
complex issue. And that getting this right is very important. We must
be sure that this solution is going to work well. So it takes a little
time--and in my opinion, it is time well spent.
I do not know why at this very hour we have this legislation before
us. It is not ripe yet. It has not matured enough yet. There are still
huge issues outstanding.
Obviously, one of the major open issues is the overall dollar
amounts. I know it sounds like a lot of money--and there is a lot of
money at stake here. But when we start talking about 25 or 30 years of
a trust fund's existence, the difference is somewhere around $115
billion and $155 billion, give or take a billion here and there. As
Senator Everett Dirksen said: A billion here and a billion there and
pretty soon you are talking about real money. This is real money. We
are not talking about hundreds of billions of dollars difference. We
are talking $20 to $30 billion or so over 30 years, spread among a
large number a defendant companies and insurers who face greater losses
and greater uncertainty under the current system.
It seems to me if we get actuaries together, and agree at the
universe of potential claimants, and provide them fair compensation, we
should be able to come up with a neutral number to satisfy the needs of
expected claimants.
We have changed approaches from where we started at the outset of
this debate. We initially tried to create a bill that was
``evergreen,'' that is, that it would be the complete solution to this
problem for as far as the eye could see in the future. However, we
began to realize the difficulties of creating a fund that lasts
forever. Several factors caused us significant uncertainty. For
example, we still import asbestos in this country. There is still
asbestos being used, or at least people are being exposed to it even
though we now know the problems that result from exposure. So the idea
that we are going to have a final number in perpetuity, I think, was
abandoned by all sides.
We have contended that this number is somewhere between $115 billion
and $155 billion. If that does not end up being right at the end of the
day, then we ought to resort back to the present tort system to solve
the problem.
I just heard my colleague from Utah say his bill includes that
provision. With all due respect, I must disagree with my friend from
Utah because the provision in the bill being offered by the Senator
from Utah and the Senator from Tennessee, the majority leader, has a 7-
year gap between when the trust fund may run out of money and when the
tort system could be used by a victim.
Now, that is hardly reassuring to the victims and their families that
the system that presently is in place which provides them some
financial relief will be taken off of the table in the event that the
trust fund becomes insolvent.
Let me quickly point out as well, that these numbers of 115 or 155--
if one takes the high end or the low end, are hardly unreasonable. The
Rand Corporation, which is hardly an organization that identifies
ideologically with the left or right or Democrats or Republicans, has
estimated that the cost of the current problem is somewhere around $300
billion. So at the outset we are talking about a trust of only $155
billion.
While we disagree over actual dollar amounts at this point, I believe
that people of good will, sitting down, can come to an honest
compromise that would satisfy all parties involved in this debate.
Another open issue is the value of the claims themselves. If we are
able to reach agreement on the medical criteria and able to reach
agreement on an administrative system, it seems to me, again, that good
people who care about this should be able to resolve this issue and
provide fair compensation to victims of asbestos.
Another outstanding issue that needs resolution is what to do with
pending claims. There are some claims that have been adjudicated. Some
are completely adjudicated, others are only in the discovery process. I
do not want to get too technical legally, but I think most people would
understand there are some cases that are already mature in the judicial
system. Determining at what point in the judicial process, should cases
be abrogated and claimants directed into the trust fund is a difficult
question. When is the judicial process allowed to be completed where
those claims exist? I do not have an answer for that one today, but,
again, I think people of good will who care about this issue and
realize what a huge problem this is could come to some thoughtful,
reasonable compromise on how to deal with pending claims.
That is not the complete universe of all the problems, but those are
the major ones. Two of them we have solved. Three or four of them
deserve additional time and effort to resolve. Certainly the intent of
the amendments adopted in Committee by Senators Feinstein and Biden
that addresses pending claims and returning back to the tort system in
the event of insolvency are ideas that should be reconsidered and
adapted. There may be others ideas that are also helpful.
The point is there are people making suggestions to resolve these
questions. I do not understand why this body is being asked to make a
definitive decision on this bill that none of us have seen because it
was introduced only 2 or 3 days before the last senatorial recess. We
are being asked to accept voting on cloture on this matter on Wednesday
or Thursday of this week. I might point out that last November or early
December we reached an agreement, a compromise, on how to proceed to
the class action issue. I happened to be one of those involved in that
negotiation. Why do we not bring up that bill? That bill is ripe and
ready to go, not that many of my colleagues would support it. But for
those of us who are willing to support a class action reform bill, we
reached an agreement on that 4 or 5 months ago, and yet that bill is
not being brought up. Why not? That bill is ready to go. This bill is
not ready to go.
Why are we taking 3 days in a very abbreviated session of the Senate,
when we do not have much time remaining, some 30 days, to bring up a
matter where there is so much disagreement that could be resolved if we
would spend the time doing it as Senator Specter has done, as Senator
Daschle has done, and as Senator Leahy has done? I know Senator Hatch
and his staff have also worked tirelessly on this topic.
Legislating on a matter like this is hard work. It is labor
intensive. Any one of my colleagues, Republican or Democrat, who has
been in the Senate for any length of time will say that on major
legislation, particularly legislation that is precedent setting such as
this is, people are required to roll up their sleeves and put in a
tremendous amount of hours to resolve these matters. In my view, it
cannot be done thoughtfully or carefully by engaging in open-ended
floor debate with amendments flying around that no one really

[[Page 7002]]

knows the implications of, some of which are passed 51 to 49, others
defeated 51 to 49. When we are dealing with something as serious as
this, where literally thousands and thousands of lives depend upon
receiving adequate compensation, we know we are dealing with a very
complex problem.
I urge that a cloture motion not be filed. I know one has not yet
been filed, and my strong appeal to the majority leader would be please
do not file this cloture motion. There is still time. This is only
April. I presume we are going to be here until sometime in early
October. Give us the chance, insist upon people meeting and trying to
resolve these issues. It may come down that a few of these matters are
not resolvable through negotiation, and the only way to resolve them is
by having some floor votes on them. I accept that may be the final
determination. But we ought not to jump to that when there still is an
opportunity to resolve some of these outstanding questions.
I have spoken to organized labor, John Sweeney, and his
representatives. They want a bill. It is their membership, many of
them, who suffer from the exposure to asbestos. It is their membership
that is losing jobs in companies that are declaring bankruptcy. They
want a bill, but they want to make sure when they have a bill that the
resources will be there to provide adequate compensation.
By and large, the insurance industry, with some exceptions, wants a
bill because they realize that the current system is flawed and could
cause untold economic hardships on some of these companies. It could
cause some of them to collapse, and I am not exaggerating when I say
that. They are very interested in getting a bill. I know the
overwhelming majority of manufacturers, those that were either involved
in the production or use of asbestos over the years, in most cases
before anyone knew of the great harms caused by this product, they want
a bill.
This is one of those unique situations where all of the parties, all
of them, and including, I might add, many of the trial lawyers involved
in this area, understand some different resolution of this issue is
needed other than the present tort system. Obviously, that is not the
view of everyone who is a trial lawyer, but many of them have already
spoken out on this issue.
So we have a unique political environment where the major
participants are anxious to get a bill. I rarely find that. Normally
one finds people highly divided where labor or business is at complete
opposite ends of the spectrum on a matter that is before us. Here,
nearly all stakeholders want a bill. Instead of sitting down and
keeping people at the table and working it out, we are prematurely
bringing up something causing this bill likely to fail, and fall before
we have an opportunity to resolve the differences. As I said a moment
ago, why not bring up class action? Why not bring that up? That is
ready to go. Where is the business community that has said to me over
and over again: Why don't we get a class action bill here? We have been
ready since November and December. Here it is April and nothing has
happened on class action. Yet you bring up and consume 3 days of time
on the floor of the Senate with a bill that everyone knows, if you
invoke cloture or file a cloture motion on the motion to proceed, it is
going to fail. And it should fail. It should fail. I say that with deep
regret.
I have committed the time of staff members and my own time over the
last number of years on this issue. I think to come this close to
resolving a major issue affecting the lives of hundreds of thousands of
people and their families and attempt to address it in a premature
fashion is a huge mistake.
So my appeal to my colleagues is: Sit back and work this out. It is
hard, but it can be done. And, if we get near the end of the session
and we have not been able to resolve everything, either wait until we
get back in January or bring it up and leave a smaller number of issues
out on the floor to be resolved by votes on the floor and healthy
debate. But don't jam this now, particularly when we know the outcome,
taking up the valuable time of this body on the floor where the time
can be better used to take up issues where there has been agreement, at
least agreement by a significant majority of us to move forward on the
legislation. That has been done now on class action.
Why doesn't the majority leader come over and move to proceed to that
bill so we can vote on it? We have been ready for that now, as I said,
since 3 or 4 or 5 months ago. There has been no action at all. No
action. Why not? Why is that bill not on the floor right now, being
debated and discussed?
Of course we have seen the same thing with medical malpractice. There
is no effort to negotiate it out. There is a proposal on the Democratic
side. It is different from what the majority has proposed, but not that
different. You could bring those two sides together and resolve the
issue. Doctors deserve better than they are getting. They are being
told the Democrats are stopping everything. Why is it the majority
refuses to even sit down and try to work out the differences?
I stand ready. My staff does. Again, I am not a member of the
committee. Obviously, Senator Hatch and Senator Leahy, as I mentioned
earlier, have done a tremendous amount of work on this and deserve a
great deal of credit for trying their best at this.
The leader on this side, politically, is Senator Daschle. I have been
with him on numerous occasions when we met with the manufacturers, met
with the insurance industry. As Senator Daschle has said over and over
again, his door has been open to do whatever it takes to try to get a
bill done. I know from personal knowledge he has offered on numerous
occasions to meet with the majority leader and others to try to figure
these things out.
I mentioned Senator Specter already. Senator Biden, obviously,
Senator Feinstein, and a number of others have been involved in this,
trying to get this done. My hope is that the majority leader will not
wait until Thursday. Listen to us over here. We can get this done. It
could be a proud moment of this Senate's session, to have actually come
up with an answer to a major problem in this country. We are getting
very close to resolving it. It will take a little more work, in my
view, over the next coming weeks, but it could be done.
My plea this afternoon would be that filing a cloture motion on the
motion to proceed would be withheld, that we bring up other matters
that are ripe and ready to go forward, and send the people back to work
on this bill and let's see if we cannot draft a piece of legislation of
which America can be proud.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

JOBS Act

Mr. REID. Mr. President, right before we had our break we were asked,
Senator Daschle and I, to see what we could do to move the FSC bill
along. The majority has affixed the name the jobs and opportunity bill,
or something like that.
We have always known the importance of this legislation, and we did
our very best to move this along. It was held up initially because we
wanted a vote on overtime. The majority, for reasons I fully don't
understand, refused to allow us to have a vote on this.
As the Chair will recall, this amendment passed previously. What our
amendment would do is say the President does not have the right to take
away the ability of American nurses, firemen, police, and a total of 8
million people, from getting overtime. In effect, what we have been
told by the administration is they were going to promulgate a rule that
would take away overtime pay for people who make more than $22,000 a
year.
We wanted a vote on this. You can't do that. It passed once; it was
stricken

[[Page 7003]]

in a Republican-only conference. The House passed a resolution saying
they wanted their conferees to do the same thing the Senate did and
stop the President from doing this.
We have been told by the majority--the distinguished majority leader
has come out here on a number of occasions and said this is a must-pass
bill. American businesses are getting hurt. So Senator Daschle and I
worked for the better part of a day calling individual Members. We had
75 amendments. We worked to get them cut down. We not only cut down the
amendments to 18, but we have time agreements on these amendments, as
little as 5 minutes on some of the amendments. We clearly could have
finished all of these amendments in 1 day. All of them wouldn't require
votes but, if they did, we would be willing to put in an extra-long
day. Therefore, we, through our Democratic leader, went to the
Republican leader and said, Here is what we have. Some of these
amendments, quite frankly, would not require votes and some would not
even be offered. So we wait one night, come back to the majority and
say, We are willing to do this deal. We know this is an important bill,
that tariffs are being applied against American manufacturers and other
business people; what is the problem?
To make a long story short, we were told the majority had 50
amendments with no time limits on them whatever.
The FSC bill is not going forward not because of anything we have
done. It is because this Congress, I am sorry to say, using the Harry
Truman term, is a do-nothing Congress. We do not do anything. If we
have to work past 5 or 6 o'clock at night, that is not a good idea. We
cannot even consider coming in and voting at noon on Monday. To think
we could vote past 9 or 10 o'clock on Friday, even on a bad day, is out
of the question. We usually vote Tuesday afternoon and finish the votes
as early on Thursday as we can. This is not a good way to accomplish
things. That is why this Congress is doing nothing.
I don't want another word ever said about the FSC bill not going
forward because of the Democrats. We want to go forward. We have done
everything we can to move this forward. We have wasted on this piece of
legislation many days of legislative business when we could be working
on things that need to be done in addition to that.
Gasoline prices in Nevada have increased 46 cents a gallon since the
beginning of the year, almost 50 cents a gallon. I have not checked
today. They may be up another 4 cents. Since the first of the year the
prices in Nevada have gone up 46 cents per gallon.
I talked to a contractor who is the largest contractor, he says, in
northern Nevada, the Reno area. Diesel fuel prices for his company are
costing his company $7,500 a day in addition to what he was paying at
the first of the year. This is in addition to the mess we have with
steel prices. This is a tremendous burden.
There is no doubt the price of crude oil has contributed to higher
prices in Nevada and throughout the country. However, the outrageous
46-cent-a-gallon increase in Nevada since January is not driven by
crude oil but corporate greed and profit.
We are used to it in Nevada because during the Enron debacle we were
told it was supply and demand. It had nothing to do with supply and
demand. It had everything to do with Enron reaping windfall profits.
Enron told consumers it was a matter of supply and demand. But it
turned out Enron was manipulating the supply of electricity.
In Nevada we get all of our gasoline from California refineries, so
any problem with the supply in California is a problem for Nevada. This
is a lot of talk about the tight California gasoline market, where
prices are typically 20 to 30 cents above the national average. We hear
about the law of supply and demand all the time driving prices higher.
One thing I know for certain about the law of supply and demand with
the Enron situation, is that it cost the Nevada ratepayers nearly $1
billion during the electricity crisis almost 3 years ago. Based on this
bitter experience which is still being litigated in the courts, I was
concerned Nevadans might be getting ripped off again when gasoline
prices went through the roof early this year. I asked the Federal Trade
Commission to investigate these wild price increases, particularly with
an eye toward any possible manipulation of gasoline markets. After 5
weeks, the FTC responded by saying prices in Nevada were ``unusually
high'' and above predicted norms. An informal FTC investigation is
still looking into the cause of the price hike.
There are spikes FTC says they cannot understand. They are having a
hard time showing collusion or market manipulation, but they know
something is wrong. As they said, the usually high prices are above
predicted norms.
I don't need an investigation to tell me big oil profits have soared
at the expense of working families. These markets are not competitive
when a handful of companies can decide what price they are willing to
sell for and what price a consumer is forced to pay.
As a nation, we need to address both the supply and demand side of
the energy equation to promote a truly competitive market. On the
demand side, we have to increase the fuel efficiency of cars and
promote public transit. Maybe that is wishful thinking. On the supply
side, we can increase the use of alternative fuels and renewable
energy.
In the short term, we have to increase supply. We can do that, in my
opinion, by having the President at this time, when the Saudis and
others are turning off the spigots and making the supply less--we can
increase supply by pulling oil from our petroleum reserves. We need to
do that. President Clinton did it. The first President Bush did it.
In the long term, we have to do something with alternative energy. We
have to. It is important. I was encouraged before the recess when the
energy tax incentives were added to the FSC bill, which I just talked
about. I applaud Senators Grassley and Baucus for the excellent
provision dealing with section 45 production tax credit for renewable
energy resources that expands and extends the credit for wind,
geothermal, solar, and biomass energy. We must harness the brilliance
of the sun, the force of the wind, and the heat within the Earth. By
using the bountiful resources to diversify our energy supply, we
protect the air we breathe and we protect consumers from these wild
price swings.
We cannot lose sight of the fact renewable energy will make our
Nation more secure because it is made in the United States of America.
I was disappointed to learn we will put off consideration of the FSC
bill, even though we have agreed to the finite list of amendments.
The other thing the President can do on a short-term basis is have
the Saudis provide more oil. We are told in Woodward's book he has a
deal to do this in the fall. Move it up, make the deal a little
earlier.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Crapo). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. FRIST. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FRIST. Mr. President, it is time for us to bring the asbestos
bill to a floor vote and to bring it to discussion so we can continue
the progress that needs to be made on this important bill. As I said
earlier this morning, every day we do not act is a day victims are not
receiving appropriate compensation for what they need and deserve.
The bill we put forward provides a reasonable solution to the
asbestos litigation crisis and has numerous consensus-building changes
that have been added to the underlying bill, many made at the request
of Democrats and representatives of organized labor.
What has emerged is a collective effort to date on a proposal that
comes from the original S. 1125 and has critical modifications that
have been added on the counsel of stakeholders. As I said this morning,
there will be a lot of constructive proposals put on the

[[Page 7004]]

table through the amendment process from Senators on both sides of the
aisle to further refine and improve this bill.
I encourage this process. We have had numerous discussions throughout
the day, solidly since this morning. I have had the opportunity to talk
to the Democratic leader on several occasions discussing both options
and how we can best bring this bill to appropriate closure. We will
continue these conversations over the course of this evening and
tomorrow. A lot of stakeholders are at the table discussing issues that
are very important.
Reference has been made to Judge Becker on numerous occasions and
over the course of the day and in the statements this morning, and of
the mutual respect both sides of the aisle have of the work he has done
to date. I would like to continue those discussions tonight and
tomorrow to see if there is some way we and the Democratic leadership
can put a process in order where we can help mediate some of the
differences we all know exist.
My colleagues on the other side of the aisle say we need more time,
and I respect that. In truth, we have made real progress, and we are
getting real focus on a very important bill. We have been discussing
and negotiating and changing and working on this bill for over a year
now, and I believe all our colleagues are coming to the table in
earnest at this point.
We are going to be filing a cloture motion. The cloture vote will
give everyone an opportunity to put their views on the record as we go
forward and continue to work on this bill.
Again, every day we do not reach an agreement on this bill is another
day victims of asbestos litigation malfunction are suffering.
Therefore, I believe working together we are going to be able to bring
resolution.
Having said that, we will be filing a cloture motion.

Cloture Motion

Mr. President, I now send a cloture motion to the desk.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The assistant legislative clerk read as follows:

Cloture Motion

We the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on the motion to
proceed to calendar No. 472, S. 2290, a bill to create a fair
and efficient system to resolve claims of victims for bodily
injury caused by asbestos exposure, and for other purposes.
Bill Frist, Orrin Hatch, Gordon Smith, Lamar Alexander,
Saxby Chambliss, Ted Stevens, Michael B. Enzi, Trent
Lott, Kay Bailey Hutchison, Susan M. Collins, Pete
Domenici, Rick Santorum, Jon Kyl, George Allen, George
Voinovich, John Ensign, Wayne Allard.

Mr. FRIST. Mr. President, I ask unanimous consent that the mandatory
quorum under rule XXII be waived.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FRIST. Mr. President, we will continue discussions tonight and
tomorrow. We will talk with the Democratic leadership as we go forward
over the next several days. I am very hopeful we are going to work out
a suitable and appropriate process to address these important issues.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The assistant Democratic leader.
Mr. REID. Mr. President, I have been listening to the discussions
today on asbestos litigation, and there have been some provocative
statements made on both sides. This is a very important issue. I have
to say I have some sympathy for the businesses. But the sympathy I have
for the businesses is overwhelmed by what I have seen in the personal
suffering of the people who have been injured, some of whom are dead.
We do not know how many thousands will die this year. Estimates are
probably 10,000 from asbestos.
We still import thousands of pounds of this poison into our country.
So I hope all the people who have good intentions--I know they all do--
talking about this asbestos reform will, first of all, understand Judge
Becker, whom I have never met, is not a Senator. It is nice he has
agreed to come in and work on these proposals, but Judge Becker is not
a Senator, I repeat. He is not a member of the staff. I do not know who
he is meeting with, why he is meeting with them. There are a lot of
judges in America, retired judges. It so happens this one is from
Pennsylvania. There are retired judges in other places who have the
same expertise he has.
I listened to Senator Hatch speak today. I listened to Senator Leahy
speak today. We cannot write an asbestos bill in the Senate. We cannot
write it outside here in some office building downtown. The only way I
will ever feel comfortable about legislation dealing with asbestos is
if it goes through the channels it is supposed to go through: the
Judiciary Committee.
We have men and women on the Judiciary Committee, both from the
majority and the minority, who have spent years working on this issue.
They are certified experts. They not only understand litigation, they
understand legislation.
So I hope everyone understands it is good people who are interested
in this legislation do everything they can to weigh in on this issue,
but I hope we all look to the Judiciary Committee to come to us with a
product. It cannot come out of the Environment and Public Works
Committee that I work on. It cannot come out of the Appropriations
Committee. It cannot come out of the Governmental Affairs Committee. It
cannot come out of any other committee. It has to come out of the
Judiciary Committee.
But we have people who have worked on this issue--not only the two
leading members of the committee; that is, the ranking member and the
chairman--but also people on that committee who have listened to hours
and hours and days of testimony. Maybe they should listen to some more.
But this is legislation we are talking about that is going to have a
price tag on it from $150 billion--I should say, the figure in this
bill is a very ridiculously low figure of $109 billion, to maybe as
much as $700 billion or $800 billion, maybe $1 trillion. So this is not
something we need to rush into.
We need to help victims of asbestosis, mesothelioma. I would hope we
would do as the State of Illinois has done, have some type of pleural
registry so people who have worked around asbestos and are afraid they
are going to get sick would be able to go on to that registry so the
statute of limitations is not tolled.
In short, the Judiciary Committee has jurisdiction over this
legislation, and this is from where the legislation should come that we
deal with on the floor, not some retired judge, or not a Senator who
feels he knows more about it than others. I am not pinpointing any
Senator. I am saying there are a lot of people who think they have an
interest in this issue. Everyone has an interest in this issue. All 100
Senators care greatly about this issue. Some feel more strongly about
the businesses than I do; others feel for the victims.
But I would hope we do not try to rush into this and do something
that is written here or downtown someplace; that whatever we do,
whatever suggestions, whatever people feel will improve our ability to
pass this legislation, they will work through Senators Hatch and Leahy
and have the full committee vote on what we do.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I did not hear all the Senator from Nevada
had to say about this subject. I have listened to some of the
presentations this afternoon. I want to make a couple of comments about
the asbestos issue and then I want to talk about a couple of other
unrelated matters.
First, on the asbestos issue, I am one of those Senators who has in
the past year or year and a half written letters to my colleagues, to
Senator Frist and to Senator Daschle, in support of efforts to find a
negotiated solution.
On July 31 of last year, I sent a letter to our joint leadership
urging that we reach a bipartisan compromise on the issue of asbestos.
That letter was signed by a number of other colleagues: Senators
Miller, Breaux, Ben Nelson, Baucus, Carper, Kohl, Lincoln, Levin, and
Stabenow.

[[Page 7005]]

In late October, I sent another letter to Senators Frist and Daschle
urging that we seize the moment and pass an asbestos bill, but
recognizing that in order to do that, there needs to be serious
negotiation. All of the stakeholders--and there are big stakeholders on
this matter--need to come together to resolve the issues in a way that
reflects a true compromise.
There are a couple of things that are necessary to say at this point.
One, I believe there is an urgency to deal with this issue. The failure
to deal with it causes great economic uncertainty for companies and for
our economy. The failure to deal with it means there are some who are
sick as a result of having contact with asbestos during their lifetime
and who will not be compensated. There are others who are not sick who
will receive compensation. There are lawyers in the middle of some of
these suits who will receive a disproportionate percentage of awards. I
don't think this system works at all. The system is broken.
For that reason, I believe it is in the interest of everyone for us
to have legislation in the Senate that can truly reflect a bipartisan
compromise. But the bill before us now is not such legislation.
I was surprised, frankly, the week before last, just before the
Senate took a 1-week break, to read statements made on the floor of the
Senate. I shall not ascribe them to any particular colleague, but those
who want to know can look in the Record.
One of the colleagues who brought this bill to the Senate floor
suggested that the asbestos negotiations were being blocked because the
personal injury bar would not otherwise put up $50 million for John
Kerry in the election. This colleague of mine said that such a
suggestion, if true, was ``pathetic.'' Well, these words are an affront
to all those colleagues on my side of the aisle who have been working
very hard to get a good asbestos bill through the Senate this year. And
these words are hardly appropriate from someone bringing a bill to the
Senate floor, for which he seeks bipartisan support.
This is not a serious proposal. We understand that. Senator Specter,
who I think has done much of the serious work in the Senate trying to
bring people together and reach a compromise, does not support this
proposal. Let me read what Senator Specter said, again a Member of the
majority party:

I decline to join with Senator Frist and Senator Hatch in
their substitute bill because I think it is the better
practice to try to work through these problems.

I completely agree with Senator Specter. I think the approach to have
taken on this would have been for Senator Frist to have engaged with
Senator Daschle and have all of the stakeholders work over a period of
months to reach a compromise. And it is not too late to do that.
In recent months, Senator Daschle has attempted numerous times to
meet with Senator Frist to hammer out these issues, but those meetings
have not taken place. I don't know all that has happened with respect
to that, but I do know this: Putting a bill on the floor of the Senate
that is far short of a true compromise with the stakeholders is not
going to solve the problem.
Yet this is an urgent problem that needs solving. I believe, as some
of my colleagues do--Senator Carper, for example, on my side, who has
worked very hard on this issue, who believes very strongly, as do I--
that there needs to be a solution. I certainly believe that if we end
this session of the Congress without addressing this issue, without
passing some legislation, we will have failed. All of us will have
failed.
It is simple enough to bring legislation that is unacceptable to the
Senate floor so you can then have a press conference and say: Well, the
other side killed this legislation. That is simple enough, but it does
not address any problem or solve any issue.
My hope is that in the coming days, the joint leadership--Senator
Frist, Senator Daschle--might join with the stakeholders in this issue
around a table and have some hardnosed negotiating and hammer out and
develop a proposal that represents a true bipartisan proposal that
represents a true compromise by all of those engaged in this issue so
that we can pass legislation. Bringing what has been brought to the
floor of the Senate the week before last and filing cloture on it is
not a way to legislate. They know and we know that this means this
legislation does not advance. I fail to see how that solves a problem
or begins to address an issue that I believe is urgent.
Once again, there are some principles involved. One, I don't believe
that people who are not sick and have never been sick should be
compensated. Two, I believe those who are sick should be compensated
and compensated fairly and not have to go through a tort system and
spend a lot of money for lawyers to be compensated. Three, I believe
that the American business community deserves some certainty and that
certainty does not exist at this point. That is why I believe a trust
fund of sorts that is set up and established with appropriate medical
criteria and other definitions is the best way for us to resolve the
issue. I believe we should get to that point--the sooner, the better.
But we have wasted a great deal of time.
The process that has now been embarked upon by the majority leader
will almost certainly guarantee we will not get to that point. I regret
that because I hope at the end of this process, this Congress will
understand the urgency for workers, for business, for all of the
stakeholders to pass asbestos legislation.

The Office of Foreign Asset Control

Mr. DORGAN. Mr. President, I would like to speak for a moment about a
subject I discussed with the Treasury Secretary this morning when he
testified before my Appropriations subcommittee. We are fighting
terrorists who want to attack this country. They have killed thousands
of innocent Americans. They wish to attack this country and kill
innocent Americans once again. It is an enormous challenge to fight and
defeat terrorism. It takes all of our energy every day in our law
enforcement areas, in the intelligence community. It takes a lot of
coordination and good work. It takes getting it right.
So we have the homeland security office. We have the CIA. We have the
FBI, the Defense Department. We have everybody working on these
issues--the U.S. Customs Service, and a little agency in the Treasury
Department called OFAC, the Office of Foreign Asset Control. These are
the people whose principal responsibility is to try to track the
financial transactions happening between terrorists, to shut down the
financial connections that finance terrorist activities.
But that is not all that is done in the Treasury Department with
respect to OFAC. This rather small office is doing other things. Their
principal job ought to be to track terrorism and to shut down the
financial root that funds terrorist activities. But there are some at
the OFAC who are doing other things. Let me describe them.
First, from a speech in December by the Under Secretary of Homeland
Security, in Miami, a speech by Asa Hutchinson, where he talked about
the crackdown on enforcement of the U.S. embargo against Cuba and goes
into some detail; and then the Secretary of the Treasury, also in
Florida, on February 9 gives a speech. The Office of Foreign Assets
Control at Treasury, he said, is working closely with customs agents
inspecting all direct flights to Cuba at Miami, JFK airport, Los
Angeles Airport. That is hundreds of aircraft, tens of thousands of
passengers, and agents are being meticulous.
Well, I wonder if we are checking quite so closely with respect to
trying to track terrorists. You know what they are looking for? I will
give you an example. They are enforcing the embargo that we have with
respect to Cuba, and part of that embargo is to prohibit Americans from
traveling in Cuba, so we have all of these resources and personnel at
airports tracking every passenger and every plane to see if someone has
done something wrong. This is an example of what they discovered.
This agency in the Treasury Department that is supposed to track
terrorism tracked down Joanie Scott. She

[[Page 7006]]

went to Cuba 4 years ago to distribute free Bibles. Four years later,
the folks who wear suspenders at OFAC at the Treasury Department decide
they are going to slap her with a $10,000 fine because 4 years ago she
went to Cuba to give away free Bibles. She said she didn't know she
needed to get a license. Four years later, they slapped her with a
$10,000 fine. That is not all of it.
This is a picture of Joan Slote, a 74-year-old grandmother, who is a
bicyclist. She is a senior olympian. She rides bicycles all over the
world. She happened to ride one in Cuba with a bicycling group from
Canada. Guess what happened to Joan Slote? She got fined by OFAC, this
little agency in Treasury that is supposed to be tracking terrorists.
They are tracking little grandmothers who are riding bicycles in Cuba,
in order to punish Castro and enforce the travel ban. They fine
American citizens for traveling in Cuba. So she gets fined $7,630 for
riding a bicycle in Cuba.
These are some folks who are disabled athletes. They got to go to
Havana about 2 years ago for the games for disabled athletes, the world
games. They applied again this year, but as the Treasury Secretary and
Mr. Hutchinson and others have said, including President Bush, we have
this crackdown now on travel to Cuba; so these folks were denied a
license to compete in the games for disabled athletes in Havana. The
result is that they lost the $8,000 they paid to a travel agency for
transportation to Havana to participate in world team sports for
disabled athletes. Quite the terrorists, aren't they?
So we have people down at the Treasury Department tracking these
folks, a retired grandmother, a woman who takes free Bibles for
distribution in Cuba, to see if we can find them. That is what is going
on--levying fines of $5,000, $10,000.
There is another man from the State of Washington who decided his
father's last wish was to be buried or have his ashes distributed in
the church he once ministered at in Cuba. Cevin Allen of Washington
State traveled to Cuba to bury his father's ashes on the church grounds
where his father once ministered. They decided to fine him $20,000.
That is what they are tracking down at OFAC. They ought to be ashamed
of themselves. Their job is to track terrorists.
Let's look at what they have done. They have people stationed at
airports. They have trained Homeland Security agents. Hundreds have
been trained to do this. Here is what they have nabbed with 45,000
passengers. They have actually worked overtime to thwart terrorists
importing cigars from Cuba.
On October 10 of last year, they had this directive from the
President and, boy, they went at it. Homeland Security and OFAC at
Treasury grabbed this issue. They found that 215 of the 45,461
travelers to Cuba were suspected of taking a vacation. Maybe that is a
felony. They were suspected of taking a vacation. What an awful thing.
And 283 tobacco and alcohol violations were found. The Homeland
Security spokesperson, Christine Halsey, said each violation involved a
small amount of rum or cigars; 245 are going to take a vacation, and a
small number are bringing in rum. There were 42 narcotics seizures, but
it involved prescription drugs, not heroin. There was one hazardous
material violation. We have this ramp-up and we are supposed to protect
America against terrorism, and you have these folks in green eyeshades
trying to levy fines on Americans, and you have agents at airports
trying to see who comes back from Cuba, and who traveled illegally so
we can fine them. One hazardous material violation was discovered. It
was apparently a carbon bioxide canister, which was probably used to
add fizz to seltzer water.
Does this sound stupid? It does to me. That is a harsh word.
Sometimes our public policies seem flatout dumb. We are confronted with
the specter of terrorists who want to kill Americans, cross our borders
and commit acts of terror. Yet we have people at airports, Homeland
Security agents, and OFAC trying to track little old ladies that went
on bicycle trips in Cuba. What are they thinking at the Department of
Treasury? Is that the way they want to use their resources?
All of us know that lifting the travel ban to Cuba would happen
instantly if we had a vote in the House and Senate. The only way they
prevent it is to prevent a vote. But to use assets at the Department of
Treasury, agents are supposed to be tracking terrorists, but instead
are tracking little grandmothers riding bicycles, or women distributing
Bibles, or a son who wants to bury his father's ashes at his home
church in Cuba. That defies description to me.
So I am going to find a way during the appropriations process to find
out how many resources they are using at the Department of Treasury to
do this, and if they don't want to use them properly, they should lose
them. If they want to keep them, they ought to use them to protect us
against terrorists, not to slap a fine on a grandmother who rode a
bicycle in Havana. I think that is nuts.
As we go into the appropriations process, I want to bring attention
to that single issue. That is an important issue, and one that I think
ought to be dealt with.
I wish to make a comment on an additional issue today. We are heading
into an appropriations process. We have a huge budget deficit,
significant fiscal policy problems. Three years ago, it looked as if
there were going to be surpluses forever. Now we have the biggest
budget deficit in the history of this country. There is no prospect in
sight of anything resembling a surplus for the next 10 years and
beyond. Despite all that, we still have some needs in this country. We
need to find a way to meet them.
With respect to a number of functions, it is Katie bar the door,
whatever they need. We are spending $100 billion more for defense than
we used to spend. I understand that. We are spending $130 billion
already in Iraq, $5 billion a month, $4 billion in Iraq, $1 billion in
Afghanistan. Nobody is being asked to pay for it. Increases in homeland
security spending, I understand that. Tax cuts, tax cuts, and more tax
cuts, and a President who says: Let's make all of them permanent. I
understand why he is saying that as well. I don't support it.
I think someone who makes $1 million a year is fortunate, and good
for them. I am all for them, but suggesting they should have a $123,000
tax cut per year on their $1 million salary, at a time when we are up
to our neck in deficits, in my judgment, defies description.
Let me mention one other issue that I think we need to deal with--the
issue of the Indian Health Service. I want to show a picture of a
little girl named Avis Littlewind. She died 2 weeks ago. Her aunt said
she took her own life around noon in her home. She missed 90 days of
school since the start of the school year. She is a 14-year-old girl
who apparently felt there was no hope. She lives on an Indian
reservation. On the reservations, there are precious few resources to
deal with the kinds of problems this young girl obviously confronted--
one psychologist, a social worker, no psychiatrist, no automobile to
provide necessary transportation.
There is a crisis in resources to deal with these issues. A young
girl takes her own life and nobody seems to say much about it. It is
just what happens. The fact is, this should not happen. It should not
ever happen.
I remember speaking one day on the floor of the Senate about another
young girl, a Native American, a young Indian girl, age 3, placed in a
foster home, but they did not check out the foster home before they
placed her there. The caseworker worked 150 separate cases and did not
check out the foster home.
This young girl had her nose broken, her hair pulled out by its
roots, and her arms broken at a drunken party. She will never outlive
the scars of that beating she took. Why? Because one person was
handling 150 cases involving children.
We have a full-blown crisis on Indian reservations in this country
dealing with the basic social services that every American family ought
to be

[[Page 7007]]

able to expect to access. When a young girl has serious problems,
serious emotional difficulties, and needs help, that young girl ought
not to take her own life at age 14 because help is not available. This
is a better country than that.
When we come to funding the Indian Health Service this year, we can
no longer pretend Third World conditions do not exist on some of the
Indian reservations in this country when it comes to health care for
kids. We just cannot any longer pretend. Lives are being lost, lives
are being ruined, and we can do something about it.
I am going to have more to say as we get into the appropriations
process, but I did want to simply say there is a tragedy that is
unfolding every day, every hour in parts of this country that are in
America's shadows. Out of mind, out of sight for some, but not for all.
We, in this Congress, must shine a light on these problems and begin to
solve them.
Mr. President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. CORNYN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CORNYN. Mr. President, I ask unanimous consent that I be allowed
to speak as in morning business for such time as I may consume.
The PRESIDING OFFICER. Without objection, it is so ordered.

Patriot Act

Mr. CORNYN. Mr. President, I rise to speak about the PATRIOT Act, a
subject which has been much misunderstood. I think some of the
misunderstanding has been perhaps just from lack of information or has
been misinformation that has been spun in an effort to confuse people
and perhaps even to scare people about what is in this important
legislation. Indeed, we are all committed to making sure not only that
our Nation is secure, and I believe the PATRIOT Act has contributed
tremendously to improving the security of the United States of America,
but at the same time we have a fundamental commitment in this country
to civil liberties. I believe, and I think the American people believe,
the Founders of this country believed firmly that we can have both our
national security and our civil liberties. Particularly, in a time of
war such as we are in now, while there will be some tension, we need
not sacrifice our civil liberties.
Nevertheless, there are those who would play politics with this issue
in an effort to score political points, or I think others who perhaps
for more benign reasons might just be not very well informed and kind
of go along, not really knowing the truth. So I want to talk just a few
minutes about the PATRIOT Act and what it has done.
Of course the PATRIOT Act has passed overwhelmingly, just a short
time after the terrible events of September 11. Indeed, the purpose of
the PATRIOT Act was to give law enforcement the tools and our
counterterrorism experts and agents the tools they needed in order to
prevent future 9/11s.
Indeed, the evidence is clear that the PATRIOT Act has served that
important purpose. The Department of Justice has broken up four
terrorist cells in the United States since September 11, in Buffalo,
Portland, Detroit, and Seattle. It has filed criminal charges related
to terrorism against more than 300 individuals. So far it has secured
176 convictions or guilty pleas. Perhaps the best evidence of the
success of the PATRIOT Act has been the fact that, thank goodness,
America has not suffered another horrific event like 9/11 since that
terrible day some 2\1/2\ years ago.
I might add we have also been successful in freezing some of the
funding that has been essential to financing terrorism around the
world. In fact, the PATRIOT Act has allowed us to freeze more than $200
million in funds from organizations that have been sponsoring and
funding international terrorism.
Particularly, last week, I guess it was, when we heard the testimony
of the former FBI Director Louis Freeh, the former Attorney General
Janet Reno, and the current Attorney General John Ashcroft, the
American people became introduced more or less the same way that law
students are to fundamental principles of law enforcement and due
process. Even more than that, the American people were introduced to
something that was referred to as ``the wall.''
The wall was the subject of a 1995 memo by Jamie Gorelick, then
Deputy Attorney General, now on the 9/11 Commission. Indeed, as she has
pointed out, the wall between our antiterrorism and intelligence-
gathering efforts and our law enforcement efforts has been
longstanding. But it is not a matter that is constitutionally required;
it is something the American Government had done to itself. It is a
limitation that Congress had placed on information sharing between law
enforcement officials. Some only investigate crimes after they have
occurred, trying to root out the guilty and then to convict the guilty
of the crimes they have committed. The wall is between those law
enforcement officials and those intelligence agencies, counterterrorism
officials whose job it is to prevent a terrorist attack from even
occurring and to preempt that terrible event from occurring. So it was
through the PATRIOT Act that we saw this wall come down that has been
so important to information sharing.
Indeed, this is not a partisan issue. Attorney General Janet Reno
said just a few short days ago, on April 13, with respect to the
problems of information sharing within the FBI and other Federal
officials, that:

Many of these issues will be or have been resolved by the
passage of the PATRIOT Act or other statements.

Indeed, to my recollection, that is not the same words but
essentially the same testimony that was presented by former FBI
Director Louis Freeh. Former FBI Director Louis Freeh, who served
during the previous administration, in talking about this wall that had
been brought down as a result of the PATRIOT Act said:

. . . the wall is not an appropriate one with respect to
counterterrorism, and that's been repaired both by the
PATRIOT Act and the court of review.

I believe the court of review he is referring to is the Foreign
Intelligence Surveillance Act, which creates a court of seven Federal
judges who review requests for various intelligence mechanisms that try
to make sure or, in fact, do make sure as much as is humanly possible
that the rights of people who are accused of crimes are not unfairly
jeopardized in this process.
The point is that the wall that had been erected separating our law
enforcement personnel and preventing them from sharing information with
our counterterrorism officials has now been torn down and we now allow
information sharing which, indeed, has made America safer.
The PATRIOT Act specifically makes it easier to track terrorists in
the digital age. When journalist Daniel Pearl of the Wall Street
Journal was kidnapped in Pakistan, the terrorists made the mistake, as
it turned out, of sending the ransom demands by e-mail. The PATRIOT
Act, having brought our laws into the information age, allowed
investigators to quickly obtain essential information from the Internet
service provider that the terrorists were using. This in turn led them
to cybercafes in Pakistan and then to some of Daniel Pearl's killers,
who are now in prison thanks to the expanded tools provided by the
PATRIOT Act.
Some have worried aloud that we are jeopardizing our civil liberties
by creating a law which allows expanded authority to law enforcement
and counterterrorism authorities. But what many people don't
understand, or don't know--there is no reason they should know other
than the fact that they have now learned more about it--is the PATRIOT
Act actually applies tools that have already been in use in other
contexts. For example, before September 11, investigators had better
tools to fight organized crime than they did to fight terrorism. For
example, for years law enforcement officials

[[Page 7008]]

used roving wiretaps to investigate organized crime. I think it was
Senator Joe Biden who said if roving wiretaps are good enough for the
mob, then they are good enough for terrorists. He, of course,
advocated, as many on this floor did, for that. Here is a copy of his
remarks. I paraphrased it. Let's go to the exact quote. He said:

. . . the FBI could get a wiretap to investigate the Mafia,
but they could not get one to investigate terrorists. To put
it bluntly, that was crazy. What's good for the Mob should be
good for terrorists.

Those are statements with which I agreed, made by Senator Joe Biden
on October 25, 2001, which I submit were true then and remain true
today.
I already mentioned that aspect of the PATRIOT Act which has made it
easier for us to cut off the financial support that has been used to
support terrorist acts. Osama bin Laden, when he first left Saudi
Arabia and went to Afghanistan as part of the anti-Communist Jihad,
after the Soviets invaded Afghanistan, he and other Jihadists declared
holy war against the Soviets at the time. The way he got started in his
terrorist activities was financially supporting the acts of other
Jihadists, other Muslim extremists. At that time, he directed their
fire at the Soviet Union until, of course, the Soviet Union left
Afghanistan. Then they turned their fire on America and other freedom-
loving countries.
My point is, getting at the financial support for terror was very
important. Indeed, the PATRIOT Act has made it much easier to get to
that and was responsible for capturing some $200 million in terrorist
financing, which has been very important.
One of the things that has concerned me, and no doubt others, about
the PATRIOT Act has been the way people have used the PATRIOT Act as
almost a dirty word. It has been used to scare people. It has been used
to mislead people about what the act does. It is important to
understand what the act does and what it does not do.
It has also been used to raise money. This is part of the scare
campaign the American people deserve to know about and we as Members of
this body need to remind ourselves of and make ourselves aware of. I
happened to get a solicitation from the American Civil Liberties Union
at my home. This is an excerpt. It caught my eye because I thought, now
I understand why there are so many people who are misled and frightened
by the PATRIOT Act because there are organizations such as the ACLU
that are misleading people about what it does. They are using that fear
to raise money. We know one of the strongest motivations there is for
human beings is to scare them. Indeed, that is exactly what is
happening by misleading the American people about what the PATRIOT Act
does, by organizations such as the ACLU.
This solicitation letter I received at my residence said in part:

We need your immediate help to stop radical anti-liberty
proposals from becoming radical anti-liberty laws of the land
with Congress' and the White House' seal of approval.

Indeed, that sort of statement is not alone. We have another chart
that talks specifically about the PATRIOT Act, and another excerpt from
the same solicitation by the ACLU:

The USA PATRIOT Act expands terrorism laws to include
``domestic terrorism'' which could subject political
organizations to surveillance, wiretapping, harassment, and
criminal action for political advocacy.

If that were true, I would be standing and saying we need to look at
this twice. We need to do something about it. We need to look further
to see whether perhaps we have done something wrong or it needs
correction or review.
I was at a hearing of a subcommittee of the Senate Judiciary
Committee, and Senator Feinstein put her finger on this and pointed out
the kind of hysterical scare tactics the ACLU and others have used in
mischaracterizing what the PATRIOT Act does are flatly unfounded. I was
there at this hearing, but I had the statement made into a chart so the
quote is clear. Senator Feinstein, to her credit, is always a Senator
who does her homework. She does her homework in every case, sometimes
to my aggravation when she is on the other side of an issue, but
sometimes I am glad she does. This is a case where I am glad she did
her homework as she always does.

I have never had a single abuse of the PATRIOT Act reported
to me.

She was not just sitting passively back waiting for people to write
or call as they do to our offices to complain or to register some
concern about legislation or some Federal activity.
She went on to say:

My staff e-mailed the ACLU and asked them for instances of
actual abuses. They e-mailed back and said they had none.

It is very disturbing that the same organization that mails
solicitations to houses of not just Members of Congress but to people
all across America, trying to frighten them, mislead them, and scare
them into believing Congress has acted without concern for civil
liberties or perhaps some law we passed has been abused by Attorney
General John Ashcroft and others, when, in fact, it is just not true.
Everyone should be concerned about that. It ought to be exposed for
what it is.
Notwithstanding the comments of people like Senator Biden, who
supports the PATRIOT Act, Senator Feinstein, who has done this
investigation to find out whether, in fact, there has been abuse--and
there has been none reported, even when asked for examples to support
their scare tactics--there are some now who say it is time to eliminate
the PATRIOT Act or to replace it, using other similar scare tactics.
I might point out this is not limited to the Congress. I had my staff
refresh my recollection because I had remembered--indeed, the Presiding
Officer may remember, too--there are press reports about city councils
around the United States that passed resolutions condemning the PATRIOT
Act based on the disinformation and scare tactics the ACLU and others
have used to mislead them about whether there was, indeed, a threat to
the civil liberties of their constituents. In fact, 287 local
governments across the United States of America have passed such
resolutions condemning the PATRIOT Act. I am sad to say, three of those
were in Texas: If my recollection is correct, the Dallas City Council,
Austin City Council, and one from a smaller municipality.
So we know at least there is some evidence that the kind of scare
tactics and misinformation people have been spreading, people at the
ACLU have been spreading, is, unfortunately, working, because not
enough people like me and others in this body are standing up and
correcting the record and providing the truth.
Unfortunately--it is not unfortunate; it is our system. We have
elections for President every 4 years. We have elections for the House
every 2 years and every 6 years for the Senate, but it should not be
too surprising some of this disinformation and misinformation and scare
tactics have gotten into the Presidential campaign.
Indeed, I listened with some concern during the race for the
Democratic nomination for President where various candidates for that
Democratic nomination for President continued along this line of
disinformation, misinformation, and scare tactics specifically
regarding the PATRIOT Act. The current nominee for President of the
Democratic Party participated in that, what I call ``piling on.'' He
said in a speech at Iowa State University:

So it is time to end the era of John Ashcroft.

Unfortunately, this is an instance, I will interject in the quote, in
which Attorney General Ashcroft has been reviled, he has been called
all sorts of names, held up as a boogeyman in part of the scare tactic
for doing his job, for enforcing the laws Congress has passed and the
President has signed. If the Attorney General of the United States of
America will not enforce the laws Congress passes and the President
signs in order to make America more secure, who will? Thank goodness,
we have a courageous individual who is willing to stand up against
unwarranted criticism and this sort of misinformation or disinformation
campaign and enforce the law Congress passes because he believes, as
Congress believed when it

[[Page 7009]]

passed the law, as the President believed when he signed the law, the
PATRIOT Act makes America more secure.
Going back to the quote by Senator Kerry at the Iowa State
University:

So it is time to end the era of John Ashcroft.

He goes on to say:

That starts with replacing the PATRIOT Act with a new law
that protects our people and our liberties at the same time.

He later had an interview on ``Morning Edition'' on National Public
Radio on August 18, 2003. He said:

If you are sensitive to and care about civil liberties, you
can make provisions to guarantee that there is not this blind
spot in the American justice system that there is today under
the Patriot Act.

Unfortunately, this disinformation campaign, which stands in stark
contrast to the lack of any evidence that Senator Feinstein found in
her investigation about abuses, continues now into the Presidential
campaign, now that the Presidential nominee of the Democratic Party has
been chosen.
Indeed, this is on Senator Kerry's Web site, John Kerry for President
Web site. He said:

John Ashcroft has used new authority under the Patriot Act
to perform ``sneak and peek'' searches without ever notifying
anyone and without any judicial oversight.

Well, besides this campaign of disinformation and misinformation and
scare tactics, I can assure you neither the Attorney General nor any
other United States attorney or Federal law enforcement official can
legally perform any kind of search without judicial oversight. That is
wrong. It is a false statement.
Even if we pulled this out of all the other contexts I have talked
about--the disinformation, the misinformation, and the scare tactics--
this is a flat misstatement. I hope Senator Kerry will correct that on
his Web site because no search under any kind of warrant can be
conducted without the approval of a judge or an impartial magistrate.
That is a basic part of our criminal law. But, here again, I am worried
that unless people stand up and correct the record, this kind of
disinformation will continue.
But the worst part of it is this: Notwithstanding the kind of
statements I covered by Senator Kerry and others, these are some of the
same people who voted for the PATRIOT Act when it passed. Indeed, on
October 25, 2001, Senator Kerry said:

I am pleased at the compromise we have reached on the
antiterrorism legislation, as a whole, which includes the
sunset provision on the wiretapping and electronic
surveillance component.

Then later, more specifically to the subject at hand, this quote is
talking generically about the laws that changed included in the PATRIOT
Act and others. But he was interviewed on Fox News on October 25, 2001.
John Gibson of Fox News said:

Senator Kerry, today, Attorney General Ashcroft said that
terrorists have reason to be afraid, very afraid of this new
terror legislation. Why? What's in it that has so much
sharper teeth?

Senator Kerry said:

It streamlines the ability of law enforcement to do its
job. It modernizes our ability to fight crime.

Well, I agree with the comments of Senator Kerry in October of 2001
about the benefits of the PATRIOT Act. And I disagree with the comments
Senator Kerry--the same person--made when he decided to run for
President, and now that he is a Presidential nominee, where he is using
the misinformation, this disinformation, these scare tactics,
unfortunately, in contrast to the lack of evidence Senator Feinstein
was able to glean from even the ACLU about any evidence of abuses.
The fact is, the PATRIOT Act has made America a safer place. And no
political campaign, no fundraising goal justifies misleading the
American people about what is good about the PATRIOT Act and how it has
contributed to bringing down this wall separating law enforcement and
counterterrorism officials from sharing information. Indeed, as I said,
the best evidence about why the PATRIOT Act is good law, good public
policy, is the fact we have not been hit like we were on 9/11. Thank
God for that. I know, of course, we hope and pray we never will again
be hit in that way. But we are not going to be safer if we play
politics with our national security, even in a Presidential year when
the attraction is so irresistible, it appears, to some.
The PATRIOT Act has made America safer. Janet Reno, John Ashcroft,
Louis Freeh, people on both sides of the aisle, people who have put
their hand on a Bible and sworn to uphold the laws of the United States
of America, to protect the Constitution--these are people who have
testified under oath the PATRIOT Act has made America safer.
So I say, let's not play politics with this important law. Let's not
play politics and risk American lives by continuing the disinformation
and misinformation and the scare tactics to the point where we would go
back and eliminate or revise or neuter this important protection which
has made our country so much safer.
So, Mr. President, with that, I would like to turn to some additional
matters on behalf of the majority leader.
I see Senator Reid on the floor. At this time, on behalf of the
majority leader, I would ask----
Mr. REID addressed the Chair.
The PRESIDING OFFICER (Mr. Alexander). The assistant Democratic
leader.
Mr. REID. If the Senator would yield for a comment?
Mr. CORNYN. I would be happy to yield.
Mr. REID. The staffs are not quite ready to do the close yet. They
should be ready in a matter of a few minutes. So if the Senator would
allow us a few more minutes?
Mr. CORNYN. Under the circumstances, Mr. President, I ask----
Mr. REID. I will make a statement that will take a couple minutes.
Senator Daschle is going to make a statement. We can go ahead and do
the close, and he can speak after the close, but we are not quite ready
on this side to close. It will take another few minutes.
Mr. President, if the Senator will yield for me to make a very brief
statement?
Mr. CORNYN. I will be glad to yield.
The PRESIDING OFFICER. The assistant Democratic leader.

Patriot Act

Mr. REID. Mr. President, I would agree with my friend, the former
attorney general of Texas, the PATRIOT Act has made America a safer
place. I think that is a fair statement. But I would also say the
PATRIOT Act is something we have to watch very closely. We realized
when we passed this legislation there may be provisions in it that went
too far, not far enough. As a result of that, we have put a provision
in this very important bill, the PATRIOT Act, that it would sunset;
that if we did not renew that legislation, it would fail; therefore,
next year we have to renew this act.
I am confident, based on what is going on around the country, in
spite of the statement from the American Civil Liberties Union--we can
look to Las Vegas, my home, on one criminal prosecution, what the
authorities did there. It is my understanding they used the PATRIOT
Act. A person bought a car with global positioning in it. The reason
they bought that, of course, is in case something went wrong you could
press a button and come and find out where the car is, or, if it was an
emergency, someone trying to hijack the car, emergency authorities
would be notified. The person never realized law enforcement
authorities could focus on that vehicle and listen to everything that
went on in that car. That is what they did.
I would have to think without getting a judge's order, without doing
some things in addition to what I have described, that was probably
going a little too far. The point being, the PATRIOT Act is something
we need to take a look at. That is why we have this legislation that
will sunset.
I hope the Judiciary Committee and other committees that believe they
have jurisdiction will begin as soon as possible taking a look at this
legislation to see if there are provisions that should be revised,
eliminated, added to. I don't think we need to criticize Senator Kerry
because he thinks we need

[[Page 7010]]

to take a look at the PATRIOT Act. I believe we do, and that is
certainly appropriate. The Senate agreed. That is why we included a
sunset provision in this most important legislation.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CRAPO. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

____________________