[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[Senate]
[Pages 7280-7294]
[From the U.S. Government Publishing Office, www.gpo.gov]




 FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT OF 2004--MOTION TO PROCEED

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of the motion to proceed to S. 2290, which the 
clerk will report.
  The assistant legislative clerk read as follows:

       A motion to proceed to the bill (S. 2290) to create a fair 
     and efficient system to resolve claims of victims for bodily 
     injury caused by asbestos exposure, and for other purposes.

  The PRESIDING OFFICER. Under the previous order, there will be 60 
minutes for debate equally divided between the chairman and ranking 
member of the Judiciary Committee or their designees.
  The Senator from Utah.
  Mr. HATCH. Mr. President, my colleagues and I have been talking all 
week about the long overdue reforms that the Hatch-Frist-Miller bill 
will deliver.
  I think it is clear to anybody that asbestos litigation has been 
spinning out of control with no end in sight for far too long. The 
shortcomings of the current system are crippling businesses, and, at 
the same time, depriving asbestos victims of prompt and adequate 
compensation for their injuries.
  One of the most outrageous aspects of the current asbestos litigation 
system is that it allows--indeed, encourages--some lawyers of 
questionable ethics to find and bring claims that may be of 
questionable merit. In some egregious and hopefully rare instances, an 
entire plan of action has apparently evolved to track down potential 
claimants based more upon whether they can be properly coached to 
present a colorable claim than whether their claim has actual merit.
  For example, I am told that several years ago, a first-year associate 
attorney at the law firm of Baron & Budd apparently inadvertently 
disclosed to defense counsel a memorandum that provides a sad but 
startling insight into how asbestos claims are created and spun into 
recoveries.
  The memorandum, titled ``Preparing for Your Deposition,'' offers 
clients detailed instructions. They are shown how to sound credible 
when giving testimony that they worked with particular asbestos 
products. The memorandum seems to make every effort to instruct clients 
to assert particular points that will act to increase the value of 
their claim, without regard to whether those assertions are actually 
true. The memorandum even goes so far as to inform clients that a 
defense attorney will have no way of knowing whether they are lying 
about their exposure to particular asbestos products.
  One excerpt from the memorandum appears to help claimants identify 
defendant companies and prepares them for a cross-examination that 
could reveal how flimsy their claim might be. It reads as follows. This 
is from the Baron & Budd memo ``Preparing for Your Deposition'':

       You may be asked how you are able to recall so many product 
     names. The best answer is to say that you recall seeing the 
     names on the containers or on the product itself. The more 
     you thought about it, the more you remembered! If the defense 
     attorney asks you if you were shown pictures of products, 
     wait for your attorney to advise you to answer, then say a 
     girl from Baron & Budd showed you pictures of MANY products, 
     and you picked out the ones you remembered.

  Well, as you can see, that is pretty serious. Another excerpt from 
the memorandum steers claimants away from admissions that would 
undermine their claims. On this point, the memorandum equips witnesses 
with the following admonition. Again, from the Baron & Budd memo--one 
of the leading firms in these asbestos plaintiffs cases, to which more 
than $20 billion in fees--that is with a ``B''--have been given. Here 
is this counseling or coaching. Here is what this law firm memorandum 
said:

       You will be asked if you ever saw any WARNING labels on 
     containers of asbestos. It is important to maintain that you 
     NEVER saw any labels on asbestos products that said WARNING 
     or DANGER.

  Finally, apparently to drive home the point that cross-examination 
may be of little value in certain circumstances, the memorandum advises 
claimants as follows--again, the same law firm:

       Keep in mind that these [defense] attorneys are very young 
     and WERE NOT PRESENT at the jobsites you worked at. They have 
     NO RECORDS to tell them what products were used on a 
     particular job, even if they act like they do.

  Law Professor Lester Brickman has studied the asbestos litigation 
process extensively and has written detailed analyses of that process. 
Professor Brickman reviewed the law firm's memorandum and said:

       In my opinion . . . this is subornation of perjury. Now, 
     after the memorandum was discovered, the Dallas Observer 
     conducted an investigation of the Baron law firm's asbestos 
     practices. That investigation appeared to uncover an 
     extensive process geared toward manipulating the asbestos 
     litigation system.

  As the Dallas Observer wrote:

       Two former paralegals . . . both say that a client-coaching 
     system was in place at the firm. Workers were routinely 
     encouraged to remember seeing asbestos products on their jobs 
     that they didn't truly recall.

  Still another aspect of the Dallas Observer investigation into the 
Baron firm's handling of asbestos cases revealed a process that put a 
premium on schooling claimants by planting the right bits of 
information in their heads.
  As the Dallas Observer reported:

       A paralegal says that in many cases, the client had no 
     specific recollection of some products before she interviewed 
     them. ``My original caseload was a thousand, but I didn't 
     interview that many people. It was in the hundreds. I'd say 
     that probably in 75 percent of those cases I had people 
     identify at least one product they couldn't recall 
     originally.''

  Now, manipulation of claimant memories and stories appear to have 
gone beyond implanting valuable facts to improve their claims. The 
Dallas Observer found that the Baron law firm also conveniently helped 
claimants eliminate facts from their stories where that would suit 
their purpose. The Observer reported the following:

       According to the paralegals, their job didn't stop with 
     implanting memories; there were also the asbestos products 
     they had to encourage clients not to recall. Two lawyers told 
     her to discourage identification of Johns-Manville products 
     because the Manville Trust was not paying claims rendered 
     against it at the time. ... Thus, when a client would say he 
     saw, for instance, a Johns-Manville pipe covering, the 
     paralegal says, she would hand them a line. ``You'd say, `You 
     know, we've talked to some other people, other witnesses, and 
     they recall working with Owens-Corning Kaylo. Don't you think 
     you saw that?' And they'd say, `Yeah, maybe you're right.'''

  Finally, another document obtained by the Observer consisted of 
handwritten notes apparently taken by a Baron & Budd attorney during an 
internal training session. I will just say

[[Page 7281]]

these are the things that are wrong with asbestos litigation. Is this 
counseling or coaching? The memorandum states: ``Warn plaintiffs not to 
say you were around it--even if you were--after you knew it was 
dangerous.''
  These practices, if they indeed took place--and I hope they did not 
take place in the way the Dallas Observer described them in its 
investigative report--distort a system that is already struggling to 
provide fairness. If lawyers for purported asbestos victims coach 
clients to lie in this manner, they may win some big fees for 
themselves along with some unjustified awards for clients who aren't 
actually sick, such practices have a sinister effect: They deprive 
seriously injured asbestos victims of the swift and fair recoveries 
that they deserve for their injuries and they cheat the payer firm out 
of money, they cheat employees of these firms out of their jobs, and 
they cheat investors and individual retirees of these firms out of 
their investments.
  The time to act is now. I urge my colleagues to vote to invoke 
cloture against the minority's obstructive tactics. We owe it to these 
victims to put a halt to these abusive practices that enrich the few at 
the expense of many and enrich those who are not sick at the expense of 
those who are. We owe it to hardworking Americans who stand to lose 
their jobs and pensions because of this asbestos mess. And we owe it to 
everyday Americans to provide them a civil justice systems that works.
  Ray Klappert lives in Ft. Lauderdale, FL, and is actively supporting 
passage of legislation establishing an asbestos trust fund. His support 
is not surprising given the serious asbestos health problems he may be 
facing in the future. Here is Ray's story:
  Ray's father, Fred Klappert, was a Korean War veteran and self-
employed in the construction business. In 1973, Fred contracted to work 
on the renovation of the interior of a commercial building in Miami 
Beach. During the renovation, which lasted several months and involved 
a partial demolition of the old building, Fred was exposed to asbestos.
  Twenty-five years later, Fred Klappert developed a severe cough and 
doctors eventually diagnosed him with asbestosis. Fred has since passed 
away. Unfortunately, the Klapperts had nowhere to turn for help and no 
source from which to be compensated for their loss.
  Ray has since learned about the dangers of asbestos and has grown 
quite concerned for his own health. Ray worked with his father on that 
same building in 1973. Ray fears he may also acquire an asbestos-
related disease and, like his father, have nowhere to turn for help.
  An asbestos trust fund ensures a potential asbestos victim like Ray 
Klappert that there will still be adequate compensation in the future--
that will not be the case if asbestos litigation remains our method in 
the tort system. If a trust is established, Ray will not have to worry 
whether the defendant companies come insolvent, and thus the prospect 
of collecting pennies on the dollar from some bankruptcy trust. He also 
knows that the legislation will ensure that if he needs it, he will 
have access to medical monitoring as soon as the bill is enacted. This 
kind of security is essential for the peace of mind of all future 
asbestos victims.
  What is wrong with asbestos litigation? It is running out of control 
and ruining our legal system. Compensation for victims such as Fred and 
Ray Klappert, under the current system, nothing. Under the FAIR Act, 
they get compensated.
   Passage of S. 2290 will give Ray confidence that help is available 
should he need it in the future. If the legislation fails, Ray 
Klappert, like his father, will become just another victim of a tort 
system that has failed and will continue to fail thousands of Americans 
who have been exposed to asbestos.
   As the asbestos litigation crisis continues unabated, nearly all of 
the major asbestos manufacturers are bankrupt. Consequently, more and 
more small businesses are forced to defend these costly lawsuits--some 
of which are without merit. A compelling illustration of this epidemic 
is the case of Monroe Rubber and Gasket, a small Monroe, Louisiana 
business with only 15 remaining employees--a number down 33 percent 
since asbestos litigation began against the company just 4 years ago.
   Prior to 1986, Monroe Rubber and Gasket used a compressed asbestos 
sheet in manufacturing its gaskets. Mike Carter, one of its owners, 
called for a thorough examination of the company's gasket manufacturing 
process in order to determine whether any asbestos was actually 
released into the air when this sheet was cut. The results were 
negative. Additionally, not a single Monroe Rubber and Gasket employee, 
including Mr. Carter, who has worked around his company's products for 
decades, has acquired an asbestos-related disease.
   In 2000, despite its decision to end the practice of using any 
products containing asbestos in its gasket manufacturing process nearly 
fourteen years earlier, Monroe Rubber and Gasket began to be named in 
lawsuits on behalf of individuals who worked at chemical plants and 
paper mills that used the company's gaskets in their own machinery. 
There are approximately 75 lawsuits currently pending against the 
company. In some cases, Monroe Rubber and Gasket is the only defendant. 
In others, Monroe Rubber and Gasket is simply one of dozens. I must 
point out that not one such lawsuit against Monroe Rubber and Gasket 
involves a current or former employee of the company. Needless to say, 
that reeks of irony.
   Fighting these kinds of lawsuits is cost-prohibitive, especially for 
a small business that is at best a peripheral defendant. According to 
Mr. Carter, asbestos litigation costs his company more than $250,000 a 
year, and, if you can believe it, not one such claim against Monroe 
Rubber and Gasket has actually gone to trial. In addition to not 
including a case that has reached final disposition, this cost also 
fails to include the loss of productivity resulting from the thousands 
of hours spent on the litigation by Mr. Carter himself.
  What is wrong with asbestos litigation? Take the case of Monroe 
Rubber and Gasket: The cost of litigation so far, $250,000 a year; the 
lawsuits filed against the company, 75; the workforce loss, 33 percent; 
the number of company employees who are sick throughout eternity has 
been zero; the number of company employees who have sued, zero. Yet 
this company is being torn apart by litigation that it should not have 
to face.
  The impact of these considerable losses is felt not only by Mr. 
Carter and his fellow small business owners, but also by the employees. 
Moreover, Monroe Rubber and Gasket has been forced to cancel plans to 
open a new facility in Arkansas. The money that was going to be used to 
underwrite the expansion has gone instead to the lawyers. Some of them 
were not so voracious. They are defense lawyers who had to be retained 
under these circumstances.
  For Mike Carter and the employees at Monroe Rubber and Gasket, the 
issue is simple--unless we choose to act, they will be out of work. At 
the moment, most of the costs of the litigation are covered by 
insurance, but it is uncertain how long that will last. In fact, the 
employees don't know who will go bankrupt first--the company or its 
insurance carrier. What they do know, however, is that if we fail to 
act, they will soon join thousands and thousands of other American 
workers who are out of work or who lost their pensions or their health 
plans because of the nightmare of asbestos litigation. This is not a 
fair and just result, and Congress should act to rectify the situation.
  Mr. President, how much time do we have remaining on our side?
  The PRESIDING OFFICER. Fourteen minutes.
  Mr. HATCH. I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time? The Senator from Vermont.
  Mr. LEAHY. Mr. President, I am disappointed my friends across the 
aisle are insisting on proceeding to this partisan asbestos bill. I say 
that because the legislation is not ready for prime

[[Page 7282]]

time. It is not ready for floor consideration. I am one who believes 
the Senate should pass legislation to establish a national trust fund 
to compensate asbestos victims. Actually, I chaired the first Judiciary 
Committee hearing on this subject back in September of 2002.
  This bill would create a trust fund with unfair compensation, 
inadequate funding, no startup protections, delayed sunset provisions, 
and major solvency problems. Despite its title, this partisan bill is 
far from fair.
  It is a mistake for the Republican leadership to insist on proceeding 
to a bill with so many major problems still unresolved. Again, this 
bill is not ready for floor consideration.
  We did have a bipartisan dialog over the past year, and I hoped that 
would yield a fair and efficient compensation system we could in good 
conscience offer to those suffering today from asbestos-related 
diseases and also to those victims who we know are going to come in the 
future.
  Unfortunately, the Senate majority leadership decided to walk away 
from those negotiations and resort to unilateralism by introducing a 
partisan bill, and that is a shame. I believe so many of my friends on 
the Republican side would like to have a good bill, but to have a good 
bill of this complexity requires real work and we have to work as 
legislators and we have to have substance, not symbolism. We have to 
have reality, not rhetoric.
  The introduction of this bill raises many questions--most notably 
what the sponsors are trying to achieve because it is certainly not a 
fair compensation model for asbestos victims. By breaking off the 
bipartisan negotiations and hastily pushing a bill to the floor, the 
Republicans have turned their back on all of us who have worked so hard 
for so long to find a fair solution.
  Creating a fair national trust fund to compensate asbestos victims is 
one of the most complex legislative undertakings I have been involved 
with in nearly 29 years in the Senate. The interrelated aspects 
necessary for a fair national trust fund are like a Rubik's Cube, and 
that is all the more reason why we should have a fair national trust 
fund bill and have it be a consensus piece of legislation. Otherwise it 
does not work, it does not become law.
  That is why I have been involved in months of bipartisan 
negotiations. I worked so hard to encourage the interested stakeholders 
to reach agreement on all these critical details.
  I thank Senators Daschle, Dodd, Feinstein, Specter, and other 
Senators, the representatives from organized labor, the trial bar, and 
industry who worked so hard to try to reach consensus on a national 
trust fund that would fairly compensate asbestos victims and also to 
provide the financial certainty for their defendants and their 
insurers.
  We did reach bipartisan agreement on two of the four cornerstones of 
a successful trust fund. Senator Hatch and I brought together the 
Leahy-Hatch amendment that gave appropriate medical criteria to 
determine who should receive compensation and an efficient, expedited 
system for processing claims. But we have yet to reach consensus on the 
other two cornerstones of a successful trust fund--fair award values 
for asbestos victims and adequate funding to pay for the compensation. 
Even if we have the medical criteria and if we lowball the amounts, if 
we do not adequately handle it, it makes no difference.
  Bipartisan medical criteria have already eliminated what businesses 
contend were the most troublesome claims, but that kind of fair 
compensation is not free.
  The Judiciary Committee's unanimous agreement on the Leahy-Hatch 
medical criteria is meaningless if the majority, in effect, rewrites 
the categories by failing to compensate those who fall within them. 
Even with consensus on medical criteria, if the award value is unfair, 
then the bill is unfair and it is unworthy of our support. That is the 
case with this partisan bill.
  Since my first hearing on this issue nearly 2 years ago, I have 
emphasized one bedrock principle: It has to be a balanced solution. I 
cannot support a bill that gives inadequate compensation to victims. I 
will not adjust fair award values into some discounted amount to make 
the final tally come within a predetermined and artificial limit. That 
is not fair.
  It is critical that there is adequate funding at the inception of a 
national trust fund since there are more than 300,000 current pending 
cases in our legal system. Upfront contributions from defendants and 
insurers will be necessary to accommodate the inevitable, and that is 
thousands of these pending claims coming in on the very first day of 
the trust fund.
  The new Hatch-Frist bill actually provides less upfront funding and 
less overall funding than we voted out of the Judiciary Committee. That 
is not fair. The partisan emphasis in this bill on behalf of the 
industrial and insurance companies involved, to the detriment of 
victims, has produced an unbalanced bill. This bill is a reflection of 
the priorities that went into it.
  Many of us have worked hard for more than a year toward the goal of a 
consensus asbestos bill. So this new partisan bill is especially 
saddening and confounding. We could have a bill that protects 
defendants; it would protect the insurance companies; it would protect 
the corporations; and it would protect the people who have been 
sickened by asbestos. We could have done that. We could have brought 
finality to this issue. We could have ended endless litigation. We 
could have let corporations go on with their business. We could have 
made sure the victims knew they were going to get adequate 
compensation. We have missed a golden opportunity.
  After the cloture vote on this partisan asbestos bill, the Senate 
will take up and pass the Kyl-Feinstein-Hatch-Leahy crime victims' 
rights legislation. This bipartisan legislation is a good example of 
what the Senate can do when we work together to reach consensus. 
Unfortunately, the bipartisan process of the crime victims' rights 
legislation is being abandoned by the majority on this partisan 
asbestos bill.
  We should be asking ourselves this question: Does this partisan turn 
the sponsors of this bill have taken help or hurt our efforts to 
produce and enact a consensus asbestos bill? I say it does not help.
  We have enough of a debate going on behind me, so I will yield to 
someone in a different part of the Chamber, Senator Kennedy, so he can 
make himself heard for 10 minutes.
  Mr. KENNEDY. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. BAUCUS. Mr. President, will the Senator yield? I am curious as to 
how long the Senator will be speaking.
  Mr. KENNEDY. Ten minutes.
  Mr. BAUCUS. I thank the Senator.
  Mr. KENNEDY. Mr. President, the real crisis which confronts us is not 
an asbestos litigation crisis, it is an asbestos-induced disease 
crisis. Asbestos is the most lethal substance ever widely used in the 
workplace. Between 1940 and 1980, there were 27\1/2\ million workers in 
this country who were exposed to asbestos on the job and nearly 19 
million of them had high levels of exposure over long periods of time, 
and that exposure changed many of their lives.
  Each year more than 10,000 of them die from lung cancer and other 
diseases caused by asbestos. Each year, hundreds of thousands of them 
suffer from lung conditions which make breathing so difficult they 
cannot engage in the routine activities of daily life. Even more have 
become unemployable due to their medical condition.
  Because of the long latency period of these diseases, all of them 
live with a fear of a premature death due to asbestos-induced disease. 
These are the real victims. They deserve to be the first and foremost 
focus of our concern. The victims are average, hard-working Americans. 
They are the construction workers who build our houses, machinists who 
keep our factories running, assembly workers who make products for our 
home, shipbuilders who help make our country strong and secure. They 
did their jobs faithfully and now it is time for us to do right by 
them.
  All too often, the resulting tragedy these seriously ill workers and 
their

[[Page 7283]]

families are enduring becomes lost in a complex debate about the 
economic impact of asbestos litigation. We cannot allow that to happen. 
The litigation did not create these costs. Exposure to asbestos created 
them. They are the costs of medical care, the lost wages of 
incapacitated workers, the cost of providing for the families of 
workers who died years before their time. Those costs are real. No 
legislative proposal can make them disappear. All legislation can do is 
shift those costs from one party to another.
  Any proposal which would have the effect of shifting more of the 
financial burden on to the backs of injured workers is unacceptable to 
me, and I would hope that it would be unacceptable to every one of us. 
Unfortunately, that is precisely what the Frist bill would do.
  The bill before us does not reflect what is necessary to compensate 
the enormous numbers of workers who suffer from asbestos-induced 
disease. It reflects only what the companies who made them sick are 
willing to pay.
  The compensation levels in the Frist bill are unreasonably low, 
especially for the most seriously ill worker. They would receive much 
less compensation under the bill than they are currently getting on 
average in the tort system. For example, workers with 15 years of 
exposure to asbestos, who are dying of lung cancer, would get as little 
as $25,000 under the Frist bill. That is absurd.
  While most of these workers smoke, a person who smoked and was 
exposed to asbestos is over four times more likely to get lung cancer 
than a person who smoked but was not exposed to asbestos. Asbestos was 
clearly a major contributing factor to their lung cancers. Yet this 
bill would give them next to nothing. Not only does this bill not 
provide adequate levels of compensation, there is no guarantee that 
sufficient funds will be available to fully pay all injured workers who 
are eligible, even what the bill promises them.
  According to a CBO analysis, the Frist bill is underfunded by nearly 
$30 billion. If the asbestos trust fund does become insolvent, workers 
will have to wait years before they can return to the tort system, and 
many of them will be dead by then.
  Any proposal which would merely create one new, large, unfunded trust 
in place of the many smaller underfunded bankruptcy trusts which exist 
today is unacceptable. Injured workers need certainty even more than 
businesses and insurers. The Frist bill merely shifts more of the 
financial burden of asbestos-induced disease to the injured workers by 
unfairly and arbitrarily limiting the liability of defendants.
  Sick workers would receive lower levels of compensation than they 
receive on average in the current system, and payment of even those 
lower levels of compensation would not be guaranteed. That is no 
solution at all.
  I hope we would not consider this bill before us but go back to the 
drawing board and get a bill that will meet the needs of all the 
parties.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. I rise today to say I most regretfully oppose the motion 
to invoke cloture on the motion to proceed to the bill. I do not think 
we are quite ready. I do not think we are ready to tackle this 
important and complex legislation at this time.
  This is a bill that would end for decades the rights of individual 
citizens to seek justice and compensation for their injuries in a court 
of law. That is not something we should act on too quickly; that is, 
before we have a complete understanding of what it is that we are doing 
and how it will impact asbestos victims, businesses, insurers over the 
long run.
  Senators Hatch, Leahy, and Specter, though, and many others, have 
worked very hard on this bill. Because of their efforts, we have come 
closer to a final compromise than I think anyone would have believed 
possible early last year. That is why I am puzzled, frankly, that we 
feel the need to rush to the floor to finish this bill before we have 
exhausted all opportunities to come to a compromise on the outstanding 
and very tough issues. Negotiations have yielded significant progress 
in certain areas. I believe there is no reason to believe that 
continued negotiations will not yield even more progress.
  Being in the Senate, I have learned if one sticks to it and with it, 
one can find ways to work out solutions to very difficult problems.
  My primary concern, though, has always been protecting the people of 
Libby, MT, in any asbestos legislation that Congress considers. I know 
I do not need to go into the details of the Libby tragedy because my 
colleagues have heard them many times, but I will emphasize that their 
situation for me, and for them especially, is unique. An entire town 
was poisoned with asbestos for decades by W.R. Grace, a company that 
lied to its workers, lied to the community about the deadly dust which 
it was exposing its workers to, lied to the families, and lied to the 
whole community. Hundreds of people have already died or become very 
sick, and hundreds more will likely follow.
  I have pledged to the people of Libby that I will do everything in my 
power to help them make their community whole again, to make sure their 
long-term health care needs are met. The health care costs associated 
with treating asbestos-related diseases are crippling to families who 
do not have health care and are uninsurable and to a community that is 
struggling to get its economy back on track. Simple, routine procedures 
to help a person breathe more easily can cost at least $30,000.
  The Libby dust, or fiber, is also unique. The Libby fiber is 
especially vicious. It is made up of what is called tremolite, a 
special kind of asbestos, and other similar fibers, fibers that doctors 
and scientists are now only beginning to realize are more deadly than 
ordinary asbestos.
  Not only is it more likely to cause asbestos-related diseases, it 
often causes disease to progress more rapidly than traditional 
asbestos-related disease. Libby asbestos disease also looks different. 
It is hard to identify and hard to detect on x rays and CAT scans, much 
harder than traditional asbestos-related disease. That is why I was so 
concerned about Libby at the beginning of this debate.
  Because Libby is unique in terms of the type and duration of asbestos 
exposure, the manner in which asbestos disease manifests itself in 
Libby, and the fact that an entire community was affected, it was clear 
that the medical and exposure criteria in the bill would unfairly 
exclude most of the population of Libby. That would pile injustice on 
top of injustice on these people, and I could not accept that.
  Senators Hatch and Leahy worked very closely with me and my staff, 
and I want to thank them for the very important provisions in the bill 
that would exempt people in Libby from both the exposure and the 
medical criteria in S. 2290. This was a huge step forward.
  However, as we moved past these larger issues for the Libby victims, 
new concerns arose about the level of compensation that would be 
awarded to a Libby claimant. I was concerned that the administrator of 
the trust had absolute discretion to determine that a panel of medical 
experts was wrong, and that a Libby claimant was not that sick and was 
not entitled to the level of compensation they truly deserved.
  I was also concerned that the compensation levels were tied directly 
to the medical criteria in the bill, medical criteria that we had 
already determined just would not work for the Libby victims. This 
raised the possibility that the Libby victims would not be fairly 
compensated.
  Senator Hatch and I have spoken about this concern and we have tried 
to work out an acceptable way to address it. Again, I thank Senator 
Hatch for the concern he has always shown for my constituents and I 
thank him for the effort he has undertaken.
  However, this important concern has yet to be addressed in S. 2290. I 
have heard from people in Libby that they would rather we not proceed 
to this bill until we find a way to solve this outstanding uncertainty 
in the bill. I

[[Page 7284]]

know they also share some of the concerns of my colleagues about other 
factors of the bill and whether it will indeed be workable and solvent 
over the long term. This is obviously important to me and to the people 
of Libby.
  I believe that asbestos legislation is very important. I believe that 
Congress should complete work on an asbestos bill this year. It is 
important to the victims, many of whom are not being fairly compensated 
because the system is overloaded and so many companies have filed for 
bankruptcy. That is one of the reasons I will continue to work hard to 
protect Libby in asbestos legislation.
  The people of Libby face a very uncertain future right now, depending 
on what happens with the Grace bankruptcy proceedings. I believe that 
if we get the Libby provisions right in the asbestos bill, they stand a 
far better chance of receiving fair compensation under an asbestos 
trust than they would through the Grace bankruptcy.
  A bill is also immensely important to the business community that is 
seeking some level of certainty about what their future asbestos 
liabilities will be. Providing them with that business certainty, while 
at the same time providing the victims with equal certainty that they 
will be fairly and promptly compensated for their asbestos exposure and 
disease, should be our goal.
  We are very close to achieving that goal, thanks to the efforts of 
many different players in this debate. Let's go back to the negotiating 
table and see how far we can get before we take this very complex bill 
to the floor for amendment and debate, a process that will not allow us 
to be as considerate and thoughtful as we should be with this issue.
  For the sake of the people of Libby, and ensuring that they receive 
the highest degree of justice and certainty that they deserve, I must 
oppose the motion to invoke cloture on the motion to proceed to S. 
2290. I pledge to continue to work together with my colleagues to find 
an acceptable compromise as soon as possible. I also state, if we can 
work out this Libby language, then I will be for the bill. I very much 
hope that happens.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator has 6 minutes.
  Mr. CARPER. Mr. President and my colleagues, in a few minutes we will 
vote on whether to proceed to debating and amending this legislation on 
asbestos. It is an important issue and an important vote.
  Before I say anything else, I wish to express my thanks to Senator 
Hatch and Senator Leahy and others on the Judiciary Committee who have 
worked on this issue for years. I express our thanks for trying to help 
us narrow our differences. I think they have been narrowed.
  I spent a good part of the 2 years myself learning about this issue 
and coming up to speed on it so I might be able to participate in a 
constructive way. I have certainly learned a lot and hopefully made at 
least a modest contribution.
  As we have tried to develop consensus on this issue, I think there 
are about four basic principles that we can agree on and ought to agree 
on.
  One is that when people are sick and dying from exposure to asbestos, 
they ought to get the money they and their families need and they 
should get it now.
  When people become sick later on from an earlier exposure, they 
should receive reasonable compensation and it should come promptly.
  People who are not sick, who may have had an exposure to asbestos and 
may not become sick, they should have medical monitoring at no cost but 
they should not be siphoning off the moneys from folks who truly are 
sick and are in desperate straits.
  Finally, the last principle is we ought to reduce the transaction 
costs, essentially the legal costs, that are involved in this whole 
process.
  Those are four basic principles. My guess is if we could vote on 
those principles, we would all vote for them. We are not ready to vote 
yet on bringing this bill to the floor. I say that with some 
reluctance.
  I have these four core values. The Presiding Officer and I talked 
about core values before. One of my core values is just never give up. 
I have another way of saying that. I say sometimes: ``No'' means ``find 
another way.'' The ``no'' vote I am going to cast--in the ``no'' votes 
that are going to be cast, I want to be clear what ``no'' means.
  First, I will say what it doesn't mean. ``No'' doesn't mean let's 
give up. ``No'' doesn't mean this bill is dead in this session. So it 
doesn't mean that asbestos legislation is dead for all time.
  This is what ``no'' means. ``No'' means let's build on the work that 
has been done, the good work that has been done within the Judiciary 
Committee. ``No'' means let's build on the good work that has been done 
in the so-called Specter-Becker process, involving retired Federal 
Judge Becker. Let's build on that.
  There are a number of important issues that still have to be 
resolved. This is not a bill to write on the floor. I think among the 
issues we agree on is that this is complex stuff. I know it is for me 
and for a lot of our colleagues. This is not a bill to be written on 
the floor, and there is still too much that needs to be written for us 
to take the bill up today. There is a process taking place that 
yesterday, my leader, Senator Daschle, and the Republican leader, 
Senator Frist, have bought into. I have urged them both for some time 
to build on the Specter-Becker process, which has focused mostly on 
administrative issues and with some real success, but to build on that 
process, given the kind of role Judge Becker has come to play as a 
mediator, one trusted by labor, by the trial bar, by the insurers, by 
the manufacturers, and by many of the defendants in these legal cases.
  This is not something we ought to start doing next month or maybe in 
June or July. This is work that needs to continue today, tomorrow, next 
week, and in the weeks that follow.
  There is an old saying that work fills up the time that we allocate 
to do a particular job. If we say we will take a year to do something, 
we will take a year to do it. In this instance, we need to keep our 
focus and our energy concentrated on resolving most of the outstanding 
issues. I don't think the Specter-Becker process will resolve all of 
the outstanding issues, but I think it will get us a lot closer to 
resolution to enable us, on the floor, to then finally debate, amend 
the bill, and send something good, something solid to the House of 
Representatives.
  Let me close by saying there is too much at stake.
  By the way, Judge Becker said he has cleared his schedule starting 
next week, next Monday. He was here several days this week. He 
addressed our caucus yesterday. He met with leaders on both sides and 
talked to any number of our colleagues. He met with manufacturers, 
insurers here, organized labor, the trial bar, just this week in this 
building. We need to not let one bit of our momentum on this issue go 
away with a ``no'' vote today. What we have to do is build on that 
momentum.
  Let me close by saying there is too much at stake for us not to do 
just that. There are too many people who are sick. They are counting on 
us doing something about it and helping them now. Too many companies 
have gone bankrupt. Some 70 companies have gone bankrupt. I understand 
some 70,000 people have lost their jobs.
  That doesn't even begin to say how much people who were working for 
those companies that have gone bankrupt have lost in their 402(k) 
plans. They have lost it all. How about the common stockholders? They 
have lost everything because the company went bankrupt. There is a 
great need there.
  Finally, the other thing at stake is the loss of manufacturing jobs. 
We have seen an erosion of over 2 million jobs in this country over the 
last 3 years. That is a lot of manufacturing jobs. One of the reasons 
is because of the legal problems we have in this country. We have lost 
our sense of balance. We can do better, and we need to.

[[Page 7285]]

  What does ``no'' mean? No means get to work and let us resolve these 
issues. Before we break for Memorial Day, I hope we can bring this bill 
to the floor and vote yes. Let us get it done.
   Mrs. BOXER. Mr. President, I am voting against cloture on S. 2290 
because I do not believe that it is fair to asbestos victims or meets 
their needs for compensation adequately.
   Asbestos kills 10,000 Americans every year. For more than 50 years, 
manufacturing companies, asbestos producers, and insurance companies 
ignored evidence of the threat of asbestos to their employees and their 
families, as well as the public. They failed to warn their workers and 
must be held responsible for thousands of deaths and thousands made 
ill.
   Asbestos victims are people not statistics. Bill and Geneva Hornsby 
from Fontana, CA are not a statistic. Geneva was diagnosed with lung 
cancer in 1998. It was caused by asbestos that her husband brought home 
from work on his clothes. Then, in March 2003, her husband Bill was 
diagnosed with malignant mesothelioma. Again, it was cause by exposure 
to asbestos at work. Three weeks after the diagnosis, Bill died.
   Angela Ruhl from Long Beach, CA, is not a statistic. She was exposed 
to asbestos through the work clothes of her uncle who worked in the 
Navy. Now she has peritoneal mesothelioma. She has undergone three 
surgeries and two rounds of chemotherapy. She deserves justice.
   Sam Silvestro from San Mateo, CA, is not a statistic. He was exposed 
to asbestos for decades, diagnosed with malignant pleural mesothelioma 
in June 2001, and died in November of that year. His wife Doris still 
lives in San Mateo.
   The issue is not whether we do something or nothing. Most Democrats, 
if not all, could support an asbestos resolution fund that was fair to 
victims. But this proposal is not fair.
   First, the funding proposed in this legislation is inadequate. The 
FAIR Act provides $29 billion less in funding than the bill that was 
approved by the Judiciary Committee.
   Also, the FAIR Act would delay for years compensating victims with 
terminal cancer, mesothelioma, and other asbestos diseases. That is 
because while asbestos companies would be required to pay $2.5 billion 
annually into the fund, the fund will immediately be hit with 450,000 
claims representing a cost to the fund of $54 billion in its initial 
years. That means victims with claims today will have to wait until the 
fund acquires enough contributions to compensate them.
   This legislation also creates a windfall for large corporations. 
Many companies that failed their workers and owe asbestos victims under 
settlement agreements would have those agreements suspended and the 
settlements voided under this bill. Halliburton, for example, would pay 
only a small fraction of the billions of dollars it has already agreed 
to pay asbestos victims.
   And, most important, the compensation for victims proposed in this 
legislation is inadequate. Even the sickest victims--those with 
mesothelioma and other fatal cancers--would receive less compensation 
under this bill than under the current system. And the tens of 
thousands of people with non-fatal diseases caused by asbestos, such as 
permanent repressive lung damage, would receive wholly inadequate 
assistance.
   For these and other reasons, we need to go back to the table and 
negotiate a bill that would really be fair to victims.
  Mr. CRAIG. Mr. President, I rise today to speak to S. 2290, the 
Fairness in Asbestos Injury Resolution Act of 2004, or the FAIR Act. 
Last July, I voted to pass S. 1125, the original asbestos litigation 
reform bill, out of the Senate Judiciary Committee in an effort to fix 
the Nation's broken asbestos litigation system. And indeed it is 
broken.
  There have been too many losers under the current tort system. 
Claimants who are not sick receive disproportionate jury awards, 
severely sick claimants have been made to wait too long for 
compensation, companies are going bankrupt, jobs are being lost, and 
attorneys' fees are cutting away at nearly half of all money spent on 
asbestos-related litigation.
  More than 60 defendant corporations have declared bankruptcy due to 
asbestos-related litigation, leading to the direct loss of as many as 
60,000 jobs, with each displaced worker losing an average of $25,000 to 
$50,000 in wages.
  Indeed, the system is broken.
  The constituents from my home State of Idaho have written to me 
asking me to fix the asbestos problem. The United States Supreme Court 
has called upon Congress to resolve the asbestos litigation crisis. And 
today, Senators Hatch, Frist, and others are calling upon the Senate to 
pass S. 2290 with the same purpose in mind.
  I commend these Senators for their work on this issue, especially 
Senator Hatch, the chairman of the Judiciary Committee, who, through 
study, compromise, and countless hours of negotiations, produced a 250-
page bill to resolve the asbestos litigation crisis. The actions of the 
Senator from Utah, from the beginning, truly have been those of a 
statesman.
  However, these good-faith efforts have not been matched by those on 
the other side of the aisle.
  In the original asbestos litigation reform bill, the trust fund was 
to be administered by the Court of Federal Claims, a special court 
relatively removed from the political realm. However, Democrats and 
labor unions wanted the fund to be administered by the Department of 
Labor, which has the potential to keep Congress and the American 
taxpayer on the political hook of paying for claims that cannot be paid 
by the asbestos trust fund. They wanted it, and we gave it to them.
  In the original asbestos bill, those on the other side of the aisle 
wanted to increase the price tag of the bill by raising the levels of 
compensation for asbestos claims. They wanted it, and before passing 
the bill out of committee, we gave it to them. During negotiations over 
S. 2290, they wanted new levels of payouts even higher than those 
agreed to in committee. Accordingly, half of the award levels have been 
increased by an average of more than 20 percent in S. 2290. They wanted 
it, and we gave it to them.
  In the ``Additional Views'' to the committee report on S. 1125, I and 
several fellow Republican colleagues voiced concern over the bill's 
unscientific medical criteria. In fact, in addition to several 
financial experts' testimony about the unpredictability of future 
claims into the fund, Dr. James Crapo, a hearing witness and medical 
expert who specializes in asbestos-related disease, wrote that:

     the other categories compensated by the bill . . . pay 
     compensation for illnesses that, according to the clear 
     weight of medical evidence, either are not caused by asbestos 
     or do not result in a significant impairment. Simply put, 
     when medical research concludes that a condition is not 
     caused by asbestos, or is not an illness at all, medical 
     research will not be able to predict the number of such 
     claims.

  Despite these deep reservations, and in response to Democrats' 
demands, we agreed to criteria that ``erred on the side of being over-
inclusive'' with regards to asbestos-related diseases. Many financial 
and medical experts suggested that as a result of doing so, the fund is 
likely to run the risk of insolvency as a result of paying claims for 
illnesses not caused by asbestos. They wanted it, and we gave it to 
them.
  They wanted it, and we gave it to them. Yet, they still withhold 
their support from S. 2290. As a result, not only has the integrity of 
the bipartisan negotiations been compromised, but the integrity of the 
asbestos litigation reform bill itself.
  Though no asbestos bill will be perfect, any reform measure in 
passable form will provide the certainty needed by all involved 
parties: businesses will know the amount of their liability and will be 
able to adjust accordingly in order to prevent bankruptcy, and, most 
importantly, injured workers will be adequately compensated by the 
companies that caused them injury.
  However, the certainty I held hope in only a few months back has 
largely been replaced by skepticism--skepticism in the solvency of the 
asbestos

[[Page 7286]]

trust fund, skepticism in the handling of asbestos claims by the 
Department of Labor, and skepticism in the integrity of the medical 
criteria.
  However, my hope resides in further consideration and debate of the 
bill. The time for fair and efficient resolution of the asbestos 
litigation crisis is now, and I will vote for the cloture motion before 
the Senate.
  I look forward to any amendments that will strengthen the solvency of 
the bill by making defendant companies--not taxpayers--fiscally 
responsible for their actions, amendments that will restore integrity 
to the medical criteria section of the bill, and any others that 
restore S. 2290 to its principled purpose.
  Whatever a Senator's position on the bill may be, the issue of 
asbestos litigation reform must be considered and debated. Let us not 
sit this one out. This one is too important to sit out.
  Mr. KOHL. Mr. President, I rise to discuss S. 2290, the newest 
version of the asbestos bill. Like many of my colleagues, we want to 
support an asbestos bill that ensures that sick people get compensated 
quickly. The current system is broken, leaving terminally ill victims 
to spend years waiting for compensation. Congress must act to solve 
this problem, but it must do so in a bipartisan fashion. I fear that 
will not happen this week, even though we want to remain optimistic 
that there is still a chance for this legislation.
  That said, over the past year we have made more progress than many of 
us would have thought. But now we are at an impasse. What is most 
frustrating is that the remaining issues are not irreconcilable. Let's 
discuss a few of the major outstanding issues that must be resolved in 
order to broker a compromise.
  First, more than any other issue, the size of the fund is preventing 
progress on this bill. We appear unable to negotiate, or have yet to 
negotiate what this number should be. To be sure, this is a complicated 
issue and it is especially important to get it right if we want to 
adequately compensate asbestos victims for the next 50 years. There is 
just not enough money to cover all the claims that will be made against 
this fund. As a result, some of us have serious concerns that this bill 
fails to go far enough to compensate asbestos victims suffering serious 
disease.
  Though the base funding in the new bill is roughly the same as S. 
1125, $104 billion, the overall funding falls far short because the new 
version eliminates a contingency amendment I introduced with Senator 
Feinstein last summer in the committee. Our amendment would have 
provided up to an additional $45 billion over the life of the fund. The 
new Frist-Hatch version replaces it with a $10 billion contingency a 
source of funding which could not even be tapped until year 24 of the 
fund.
  Second, in order to reach a better understanding of how much this 
bill will cost, we must better come to a final agreement on the 
individual awards that will be granted victims. Quite simply, this 
agreement will drive the overall cost of the fund, and not 
surprisingly, projections vary on this point. Proponents of the new 
bill predict that there will be $114 billion in total claims. The 
Congressional Budget Office, however, estimates that, based on the new 
award values present in S. 2290, the fund will need $134 billion to pay 
out all current and future claims. And labor believes that the number 
will be even greater if we were to raise award values to a more 
equitable level. Of course, any increase in award values will require a 
increase in the overall fund amount. But these are exactly the sort of 
tough choices and negotiations that need to take place if we are going 
to find a compromise.
  Third, those of us opposed to this bill still feel that an unfair 
risk falls onto the victims if the fund goes bankrupt. Those in favor 
of the bill will argue that if they underestimate how much money the 
fund will need, victims can simply return to the court system. But it 
is not as simple at that. At the earliest, victims cannot return to the 
courts until year seven and there is a real risk that certain types of 
victims may be precluded from any further compensation for new injuries 
related to asbestos exposure.
  Furthermore, the new version of the asbestos bill also results in 
unfair treatment of victims with pending claims. There are currently 
more than 300,000 asbestos victims with pending claims in the court 
system, many who have been waiting for years for a court date or 
settlement. The asbestos bill would eliminate most pending claims and 
even final settlements and throw them into the fund. So some victims 
who won a large verdict will be forced to start over from scratch in 
the fund. This hardly seems fair.
  Finally, it is difficult to support a new bill that is the product of 
a flawed and one-sided negotiating process. Much of the new asbestos 
bill we are considering was negotiated by Senators Frist and Hatch with 
business and insurance representatives. This process, lacking any 
participation from Democrats or labor, resulted in a bill that is not 
even as good as the version we opposed last July. To be fair, Senator 
Specter has been working hard in a bipartisan group mediated by retired 
Federal Judge Becker. The group has had some modest success in 
negotiating ``non-economic'' issues, but has yet to broker any deal on 
award values or overall fund financing. Perhaps a consensus solution is 
possible if we allow that bipartisan process to proceed.
  Until then, I cannot support this bill in its current form. The new 
asbestos bill actually retreats from the progress made last summer in 
the Judiciary Committee. Until my major concerns regarding the overall 
dollar amount for the fund--an amount that will adequately satisfy the 
hundreds of thousands of asbestos victims for years to come--is 
resolved, I will vote against S. 2290. To be sure, there are several 
other issues to solve in this bill, but we must reach a consensus on an 
overall dollar amount, lest we regret supporting a fund that runs out 
of money, fails to compensate victims, and provides businesses no more 
certainty than they have today.
  Mr. ALLEN. Mr. President, I rise today in support of the Fairness in 
Asbestos Injury Resolution Act or the FAIR Act.
  Over the past decade, asbestos-related lawsuits have increased 
dramatically and have shown no sign of lessening. According to reports, 
at least 730,000 claimants have sued more than 8,400 defendant 
companies alleging some kind of injury by asbestos exposure. The number 
of defendant companies that have been sued has increased by 8,100 since 
1983 according to the RAND Institute for Civil Justice.
  There is no doubt that the current asbestos litigation system is a 
failure. The system is harmful on two fronts: it is harmful to the 
economy and harmful to the asbestos victims, who currently wait years 
for their cases to be resolved. Sadly, some of these victims die before 
even having their day in court.
  I view this measure as a jobs bill. Some would ask: How is this 
legislation going to help create jobs? I would answer that while we are 
steadily recovering from an economic downturn exacerbated by the 
terrorist attacks of September 11, 2001, and our necessary response in 
the war on terrorism, we need to make sure that willing men and women 
can find jobs. Employment is improving. However, if the Senate does not 
act on this important reform legislation, the numbers of unemployed 
Americans will increase.
  The fact is that asbestos-related bankruptcies inflict a staggering 
toll on the American workforce. Companies that have declared bankruptcy 
because of asbestos-related litigation employed more than 200,000 
workers before their bankruptcies. So far, asbestos-related 
bankruptcies have led to the direct loss of as many as 60,000 jobs, 
while each displaced worker will lose an average of $25,000 to $50,000 
in wages over his or her career, according to Joseph Stiglitz, cowinner 
of the 2001 Noble Prize in Economics.
  One economic study by the Financial Institutions for Asbestos Reform 
found that, considering the multiplying effect of private investment, 
failure to enact asbestos legislation could reduce economic growth by 
$2.4 billion per year, costing more than 30,000 jobs annually. Extended 
over a 27-year time

[[Page 7287]]

frame, this would translate into the loss of more 800,000 jobs and $64 
billion in economic growth. And RAND concluded that 423,000 new jobs 
will not be created due to asbestos litigation, and $33 billion in 
capital investment will not be made.
  My colleagues on the other side of the aisle preach the need for job 
growth and argue that Republicans are not doing enough to spur the 
economy and preserve and create jobs. This bill helps preserve jobs. 
But unfortunately, if we continue to allow this dysfunctional system to 
exist and let partisan politics run rampant, we will see a major 
dilemma in the American workplace--thousands of Virginians and 
Americans unemployed.
  In addition, a failure to resolve this situation will have an adverse 
effect on employee pensions and retirements. Each worker who loses 
their job from an asbestos bankruptcy loses on average at least 25 
percent of the value of their 401(k) retirement accounts. Thus, a 
failure to act will not only lead to job loss, but could hamper their 
long-term financial well-being. Furthermore, individuals use their 
pensions and 401(ks) for a number of things. An individual may use it 
to retire, to pay for their children's college education or for 
incurred health expenses as they grow older.
  Unfortunately, the crisis does not stop there. Opponents seem to 
forget that many victims are unable to receive just compensation 
because the courts have been burdened by the sheer volume of cases--
legitimate and less meritorious alike. They have been unable to ensure 
that even a majority of asbestos compensation goes to plaintiffs who 
are actually injured.
  Shipyard workers and Navy veterans from my Commonwealth of Virginia 
should not have to suffer in the current system. The RAND study that I 
referenced earlier found that the vast majority of new claims--
approximately 90 percent--are made by people who do not have any sort 
of cancer or mesothelioma. These individuals prevent the claims of 
those who are truly ill from being heard and given their day in court 
and zap the limited resources available to compensate true victims now 
and in the future.
  This bill will provide some consistency in the settlements that are 
awarded to victims. Far too often, the awards are unfair, inconsistent, 
and erratic. Currently, victims can only expect to see 43 cents of 
every dollar in compensation awarded. The rest of the money goes to 
lawyers and administrative costs.
  The FAIR Act seeks to remedy this injustice. This legislation will 
make sure that victims receive immediate compensation in full. By 
capping the litigation costs, we are making sure that awards are going 
into the bank accounts of the truly injured, rather than legal fees for 
companies and claimants.
  As the Chicago Tribune said in September 2002, ``Today's 
dysfunctional system benefits primarily trial lawyers and healthy 
plaintiffs--and that drains resources from those who are sick and dying 
because of asbestos. That's a national shame.'' The Fairness in 
Asbestos Injury Resolution Act is a long overdue attempt to correct 
that terrible wrong.
  So what does this bill do? In short, the FAIR Act would establish a 
privately funded trust fund composed of mandatory contributions from 
current corporate defendants and their insurers as well as moneys from 
existing bankruptcy trusts. Plaintiffs who believe they have been 
injured by asbestos exposure would submit claims to the administrator 
of the trust fund with evidence that they were exposed to asbestos for 
a period of time sufficient to cause their medical condition. Qualified 
claimants would be paid a clear compensation depending on eligibility 
and disease type on a no-fault basis. Properly administered, the trust 
fund will ensure that nearly all defendants' and insurers' asbestos 
expenditures end up in the hands of injured claimants. And by paying 
fixed generous award amounts depending on the severity of the disease, 
the FAIR Act would ensure that the truly impaired are compensated.
  I urge my colleagues to move to consider this bill. Too many jobs are 
being lost in bankrupted companies while Virginians and Americans with 
asbestos-related diseases receive inadequate compensation. The 
principal point is that action and leadership has been needed for 
years. There is no reason to procrastinate and avoid responsibility to 
remedy this current dysfunctional, failed situation. The FAIR Act is a 
reasonable, responsible way to move forward jobs and equity; to 
filibuster and block this bill is an avoidance of responsibility.
  Mr. FEINGOLD. Mr. President, I want to speak today on S. 2290, the 
revised, but still misnamed, Fairness in Asbestos Injury Resolution 
Act. Reluctantly, I will oppose the motion to proceed to this bill.
  I say ``reluctantly'' because I support the concept of a national 
trust fund to compensate victims of asbestos-related diseases and 
address the severe strain that cases brought by those victims have 
placed on our legal system and our economy. Ten thousand Americans now 
die each year--a rate approaching 30 deaths per day--from diseases 
caused by asbestos. My home State of Wisconsin ranks 16th in the Nation 
in asbestos-related deaths.
  I was encouraged when the defendant companies in some of the many 
lawsuits that have been filed, their insurers, and organized labor 
began serious negotiations back in 2002 to try to develop legislation 
for a national trust fund that the Congress could enact on a consensus 
basis to address this serious problem. This was an issue that called 
out for a bipartisan solution.
  Unfortunately, those discussions were short-circuited before an 
agreement could be reached. What began then was a process that has 
turned the asbestos issue into a partisan issue when it really 
shouldn't be. A bill very much slanted toward the defendants and 
insurers was introduced last spring by the chairman of the Judiciary 
Committee. Although I disagreed with the chairman's decision to call a 
halt to negotiations, I do give him credit for at least allowing the 
Judiciary Committee to work on the bill, in contrast to the process 
that was followed on the series of ill-advised medical malpractice 
bills that have been brought directly to the floor during this 
Congress. The Judiciary Committee held a hearing and then an 
extraordinary four meetings to mark up the bill. Two dozen amendments 
were debated and voted on.
  The bill that emerged in July 2003 after that intensive work by the 
committee still did not win my support. But all of the committee 
members who voted against it agreed that it was much improved over the 
original bill. The committee's work could have been the foundation for 
further bipartisan negotiation that might have led, if all parties were 
willing to come to the table and compromise, to a bill that could be 
overwhelmingly approved by the Senate.
  So what happened over the last 10 months? Well, the first thing that 
happened is that the insurers went to the Republican leadership and 
said they couldn't live with even the limited improvements that the 
committee approved. So no sooner had an amended bill come out of 
committee then its supporters started backing away. Instead of trying 
to make the bill reported out of the Judiciary Committee more 
acceptable to victims of asbestos in a serious effort to solve what we 
all agree is a difficult and important problem, the proponents of this 
legislation went backward.
  And so in many respects the bill that the Senate is being asked to 
take up is worse than the committee bill. Important amendments adopted 
in committee that provide some certainty that money will be available 
to future victims of the horrible diseases caused by asbestos, and we 
know with certainty that there will be thousands of such victims, were 
removed by the sponsors of S. 2290. By what definition does that 
represent ``fairness''?
  Let me talk for a minute about some of the specific provisions that 
have led me to conclude that I cannot in good conscience vote to 
proceed to this bill.
  The first issue is money. CBO estimates that between $124 billion and 
$136 billion will be needed to pay an expected 1.7 billion asbestos 
claims over

[[Page 7288]]

the 27-year life of the fund. Some experts think that estimate might be 
too low. S. 2290 provides for a maximum of only $114 billion for the 
fund. The bill reported from the committee, as a result of amendments 
offered in committee by Senators Feinstein and Kohl, included total 
funding of $154 billion. How can it be fair for a compensation fund to 
be doomed to failure from the start because it is underfunded?
  Another issue is related to the issue of the adequacy of the fund. 
Senator Biden offered an amendment that was approved by an overwhelming 
bipartisan majority of the committee. It basically said to people who 
have claims that if the fund isn't adequately funded they will not be 
left empty-handed. It called for a return to the tort system for 
claimants who do not receive the payments that the bill calls for. S. 
2290 substitutes a much weaker sunset amendment that would leave 
victims waiting for years and years without compensation before they 
are permitted to again pursue their claims in court. How is that fair?
  I am concerned in addition that this bill treats certain companies 
such as Halliburton very favorably by capping their liability to the 
fund at a fraction of what they have already set aside to pay claims to 
asbestos victims. These companies have already agreed to settle claims 
against them and agreed to pay billions of dollars in compensation. 
Those settlements have been on hold as Congress considers this 
legislation and if it passes, the companies will save literally 
billions of dollars that they otherwise were prepared to pay to 
asbestos victims. How is that fair?
  I am also very concerned that this bill would overturn longstanding 
settlements under which some victims have been receiving regular 
payments for years. How can it be fair to people who have settled their 
claims already, or who have even received jury verdicts in their favor 
that are now on appeal, to have to start over in an administrative 
process that could take years to get up and running and years to 
complete? An amendment offered by Senator Feinstein in committee would 
have postponed the effective date of the bill until the fund was up and 
running. That would have allowed at least some far-advanced cases to 
proceed to final judgment. The deletion of the Feinstein amendment is 
another step backward taken by the sponsors of this bill.
  We have an asbestos crisis not only because lawsuits are threatening 
the financial well being of American companies but because people are 
getting sick and dying. Some companies knew that exposure to asbestos 
caused asbestosis, a tragic lung disease, as early as 1918. In 1966, 
the Director of Purchasing for Bendix Corporation, now a part of 
Honeywell, stated in an internal memo `` . . . if you have enjoyed a 
good life while working with asbestos products, why not die from it.'' 
There are countless other industry documents that have been uncovered 
to show that the industry knew it was endangering its workers' health 
by continuing to use asbestos. A 1958 National Gypsum Memo, for 
example, stated: ``Because just as certain as death and taxes is the 
fact that if you inhale asbestos dust you get asbestosis.''
  We need to make sure that any national solution to the asbestos 
litigation issue keeps faith with people who have been injured by this 
dangerous product. And we now know that the problem is not limited to 
people who worked with asbestos. It is also the families of the men and 
women who worked with asbestos who have contracted asbestos-related 
diseases. Even consumers who used hair dryers, electric blankets, attic 
insulation, home siding and ceiling and floor tiles have suffered 
injury from asbestos exposure. These victims need compensation, and 
this hazardous substance needs to be banned once and for all.
  We all want to see a resolution to this crisis, we want these victims 
to get the compensation they deserve. That is why I am so disappointed 
in the final version of this bill. Instead of working toward a 
negotiated solution that the whole Senate can support, the sponsors of 
this bill have assured its failure by going backward. Again I ask, how 
is that fair? Reluctantly, I will vote against the motion to proceed, 
and I hope the message that comes from the failure of this bill is not 
that no solution to the asbestos problem is possible, but rather that 
the only way to reach a solution is to involve all the interested 
parties, and Senators from both sides of the aisle, and try to arrive 
at a truly fair bill.
  Ms. MIKULSKI. Mr. President, I rise today to oppose S. 2290, the so-
called ``FAIR Act.'' I oppose this bill because it is anything but fair 
to victims of asbestos exposure. This bill puts the interests of 
insurance companies and industry before those who are sick and often 
dying because of asbestos exposure. How can we call a bill fair--when 
it makes those who suffer as a result of asbestos exposure worse off 
and further delays their compensation. We need a balanced and fair 
approach to asbestos reform that will have bipartisan support. 
Democrats want it, business wants it, labor wants it and many of our 
friends on the other side of the aisle want it. Unfortunately, the FAIR 
Act is not it.
  Even the process by which this bill came to the floor is not fair. 
This is not the bill that came out of the Judiciary Committee, its not 
the product of the negotiations that Senators Specter, Leahy, Daschle 
and others have been pursuing, it is not a bill that has had any input 
from Democrats. Senators Frist and Hatch decided what should be in the 
bill and put it on the floor. They skirted the usual Senate process and 
introduced a partisan bill.
  This bill is not fair.
  Is it fair that those who are seriously ill as a result of asbestos 
related illnesses would receive far less on average under this bill 
than they would in our court system?
  Is it fair that victims who are suffering from lung cancer may only 
receive $25,000 when they were exposed to asbestos for 15 years and 
will likely die within a few years of diagnosis?
  Is it fair that businesses will only put $109 billion into the fund 
when conservative estimates expect the fund's claims to reach at least 
$134 billion?
  Is it fair that victims will be left with no recourse if, as many 
expect, the fund runs out of money and those who are sick are forced to 
wait years more for compensation?
  And I ask you, is it fair that those who have already spent years in 
the court system will have their settlements and judgments wiped out 
and have to wait years more for compensation under the new system? 
These defects are simply unacceptable in a bill that is supposed to 
solve the asbestos nightmare and get victims real relief now.
  None of these provisions is fair to the workers, mechanics, miners, 
and family members who have been exposed to asbestos and are now 
suffering from disease. These are the people who are relying on the 
Congress for help so they can spend their last days enjoying their 
families and loved ones and not litigating their claims. The U.S. 
Senate can do better than getting caught up in a political game when 
people's lives are at stake.
  This legislation has three major flaws--it gives victims far too 
little, forces victims into a fund that has too few resources, and 
closes the courthouse door for victims of asbestos exposure.
  Too many victims receive far too little under this bill. This new 
Frist/Hatch bill may have increased the awards for some victims over 
previous version of the bill, but it still leaves many of the most 
seriously ill victims with awards far below what they would receive if 
they went to court. For example, overall awards in this bill are far 
lower than what victims would receive in court. And to top it all off 
victims could see their awards reduced even further because of workers' 
compensation or insurers' liens, which this bill allows. That's not 
fair.
  This bill forces victims out of the courts and into a fund that may 
run out of money. The level of funding under this Frist/Hatch bill is 
well below what even conservative estimates put as the likely cost of 
the fund. How can we ask all these victims to give up their right to go 
to court and then put them in a fund that will

[[Page 7289]]

run out of money? They will be left holding the bag and waiting years 
more to get relief. Certainly business can do more for the trust fund 
in exchange for a reprieve from their litigation liability.
  I am not only worried about the fund running out of money in the long 
term--but also up front. Over 300,000 cases are currently pending and 
it is expected that 90,000 additional cases will be filed each year of 
the first few years of the trust. Under this bill there simply is not 
enough funding in the early years to cover those costs. So what 
happens? Victims again are left waiting, as they have been in the tort 
system, for years for some compensation and sadly many of them will die 
before they ever see a cent.
  This legislation shuts the courthouse door for victims. Many victims 
of asbestos exposure have already spent years in court and have 
received a settlement or judgment. The Frist/Hatch bill wipes out all 
pending claims, including those where a settlement has been reached or 
where a judge or jury has reached a judgment. These victims have spent 
years and often most of their resources litigating these cases. Now 
Congress wants to come in and say ``Sorry, you have to file your claim 
again and wait for the fund to get your relief.'' That undermines the 
civil justice system, the faith we put in judges and juries and is 
simply not fair to victims who have been waiting years.
  Senator Feinstein had offered an amendment to the original bill in 
Committee that helped take care of part of this problem. It was based 
on a simple idea--victims have waited long enough and they ought to be 
allowed to pursue their claims while the fund was getting off the 
ground. But the Frist/Hatch bill gets rid of that provision and makes 
victims wait. Wait till the money is in the fund, wait till the 
administrative system is set up, wait till Administrators are appointed 
and then wait some more. It might take years to get the fund off the 
ground and until then victims have no where to go to pursue their 
claims.
  I, like my colleagues, wanted a to be able to vote for legislation 
that would help victims, that would make sure they got the compensation 
they deserve and would also ensure that problems with the current legal 
system were addressed. But this bill is the wrong vehicle--it actually 
rolls back the progress that was made in the Senate Judiciary Committee 
and through months of negotiations between labor, business and 
insurance.
  I know that Senators Daschle, Leahy, Dodd, Feinstein and others have 
been working tirelessly with those on the other side of the aisle and 
with industry, insurance and labor to create a consensus bill. I have 
supported those efforts and am disappointed that Senator Frist 
introduced this bill which sends us in exactly the opposite direction. 
It sends us away from common ground and negotiated positions to a 
strongly partisan bill that does not reflect any of those efforts. I 
think we should go back to the table, to finish the conversations, to 
reach a balanced agreement that the majority of us can support.
  We need to protect those who have been exposed and are suffering from 
asbestos related diseases by putting sufficient amounts in the trust 
fund, by making sure that compensation levels are fair and awards are 
dispensed quickly, by ensuring that the fund is solvent and provides 
victims with the ability to go back to court if the system runs out of 
money. We also need to make sure that those who are in court can 
continue their cases until the fund is set up and that those who have 
reached a settlement or received a judgment can get the remedy their 
litigation has entitled them to.
  I stand with my Democratic colleagues in saying ``we want a bill.'' I 
want a bill that helps victims get just compensation, and that provides 
financial certainty for industry and insurers. But that cannot come at 
the cost of the rights and remedies for those who are and will become 
seriously ill as a result of asbestos exposure.
  Mrs. LINCOLN. Mr. President, I voted against the cloture motion to S. 
2290 because I did not believe this bill was ready to be debated on the 
Senate floor. Unfortunately, the process that created this bill did not 
give stakeholders an adequate opportunity to fully discuss and debate 
honest differences. As a result, significant issues remain that can and 
should be addressed before proceeding to consideration on the floor. I 
am confident, however, these issues can be resolved if the interested 
parties will come to the table and work in good faith until a 
compromise can be reached. In my conversations with asbestos victims, 
industry officials, and labor leaders a common thread has emerged; we 
are too close to walk away now.
  I have consistently expressed support for a legislative solution to 
the asbestos crisis that would establish a trust fund to pay legitimate 
claims in a fair and efficient manner. However, if we ask American 
citizens to give up their right to a day in court, we must ensure they 
will be treated equitably by the alternative. Further, we must ensure 
that the trust fund remains solvent and efficient. We also must make 
certain that the fund will be up and running as quickly as possible.
  All of the parties in this discussion have a vested interest in 
making the trust fund work. For the victims, many have waited far too 
long to receive the compensation they deserve in a timely and efficient 
manner. For the business community, they have agreed to commit a 
significant amount of money to this fund. It is in their best interest 
to make sure the fund works by paying victims a fair amount in a timely 
way to ensure they are not threatened by non-meritorious claims if this 
process returns to the courts
  We can reach agreement on this vital legislation if all sides stay at 
the table. Legislation is rarely a work of art, it is a work in 
progress. We must continue to push forward until a solution is found.
  Mr. HATCH. Mr. President, I have been listening to the arguments of 
my colleagues from the other side of the aisle.
  I thank Senators Carper, Nelson, Miller, and Baucus, who indicated 
they will vote for this bill in the end if we can resolve some of the 
problems. These Senators in every sense have worked extraordinarily 
hard on this bill, especially Senator Miller.
  I believe we can accommodate Senator Baucus so he can literally vote 
for this bill. I do not want to see people from Montana be mistreated. 
Frankly, I believe we can make the appropriate change. We have talked 
about what it will be. It is what he has told me he would accept. I 
think we can make that change. But that is what you do on the floor of 
the Senate.
  Having said that about these colleagues who have worked so hard with 
us, including Senator Feinstein, who has worked with us on these 
matters, all of them are going to vote against cloture today, at least 
as far as I know.
  Having said that, I was interested in the comments of the 
distinguished ranking member on the Judiciary Committee, that we have 
to get into reality here; reality the way the Senate is supposed to 
work, the way the legislative process works. After 15 months of meeting 
with everybody from one end of this country to the other, everybody in 
the Senate Judiciary Committee, and virtually everybody in the Senate, 
15 months of intensive negotiations, where are we? In reality, they are 
filibustering even a motion to proceed which I think shows where this 
is all going. They are not filibustering the bill which would be next. 
They are filibustering the motion to even proceed to the bill. The 
reality is if we want to be legislators and we want to legislate, then 
we bring the bill up and we fight it out on the floor.
  We have a filibuster here on the motion to proceed. We have had 15 
months of negotiations. We have bent over backward to try to 
accommodate our colleagues on the other side of the aisle. There is 
virtually only one thing many of them want more of; that is, more 
money. That is after putting in the original $108 billion, which nobody 
thought we could get done; that almost everybody said if you get that 
we will go--virtually everybody involved, including the unions. We are 
now up to $114 billion, and it is still not enough.

[[Page 7290]]

If that is not enough, then bring an amendment to the bill on the 
floor. Make it more, if you can.
  The problem is I think they know the vast majority of Senators in 
this body know it is enough. They know it is probably too much and know 
what a burden it is going to be on these companies that are basically 
near bankruptcy to pay for this. But we have done that.
  I heard the distinguished ranking member of the Judiciary Committee 
say we should be legislators. If the funds are enough, they would go. 
Bring amendments. Let us fight out. That is what we do. That is what 
this floor is for--not just filibustering a motion to proceed so we 
can't fight it out, so we can't have amendments. I think they should 
quit hiding behind outrageous figures everybody around here knows can't 
be done.
  I believe my friend said one of the problems is solvency protection. 
How can you protect from insolvency, if these companies start going 
into bankruptcy? We have had 70 so far. We will have more loss of 
health benefits, loss of pensions, and loss of jobs.
  By the way, on the award values, it is interesting to me that I am 
hearing it is not enough in award values to individual people and the 
individual categories, and yet the award values were approved by the 
Senate Judiciary Committee 14-3. Only two Democrats did not vote. All 
the other Democrats voted for the award values we have in this bill--
every one of them. The only three members on our side who didn't vote 
for the award values said they felt they were too high. The Democrats 
all agreed they were decent award values.
  If we are going to be legislators, let us be legislators. Let us not 
hide behind a filibuster of a motion to proceed.
  There have been a lot of comments by my friend on the other side 
about the fairness and adequacy of the claim values. He said they are 
low. What he failed to mention today in his remarks is the Feinstein 
bipartisan claims values amendment was adopted by the committee 14-3. 
It was a bipartisan vote. The only three who voted against it were 
Republicans who thought the claims values we had were too high. All of 
the votes from the other side of the aisle were 100 percent for the 
claims values.
  I am not sure why my friend from Vermont is now saying the claims 
values we have adopted in a bipartisan fashion--he was there last 
July--are now too low. It is amazing to me. It is typical of what we 
have gone through for 15 months trying to work this out. I think they 
may figure as long as they can keep this going, there will be more and 
more demands on these few companies that are now stuck after the main 
companies that caused the problem are all bankrupt. These companies, 
such as Monroe, which I mentioned earlier, are stuck having to try to 
win but the defense costs alone would eat them alive and put them into 
bankruptcy.
  We can talk about this forever. We can negotiate forever. But if it 
means more and more money, bring amendments to the floor. Maybe they 
will win on it. I don't know. All I can do is show how exorbitant they 
are under the circumstances.
  We still have a hedge factor in this matter. If for some reason there 
are not enough funds at the end of this process to pay off claims--and 
we believe not only there will be, but there will be more than enough 
funds--then this will revert back to the tort system again.
  Nobody will want that to happen. Nobody will let that happen. But 
even if it does, then these voracious claims lawyers, these personal 
injury lawyers--about 10 percent or even less of the American 
Association of Trial Lawyers--will be able to do the same things we 
have just mentioned they have been doing in this matter.
  I think everybody is protected. There is no question about it.
  Why are we not going to invoke cloture here and kill this bill? Why 
aren't we going to have amendments to make this bill more pure, if we 
can? Why don't we have amendments to increase the funding, if that is 
what they think should occur? The fact is they don't want to do it 
because they know darned well if they did, they probably couldn't win 
on these outrageous claims. But if they did, then the Senate will have 
worked its will. That is what legislators do. They don't hide behind 
filibustering every bill. They do not have obstruction tactics on every 
bill. Around here, we have to get 60 votes for virtually any bill that 
means anything. That is pretty pathetic. Sooner or later, we are going 
to have to address that. That includes judges for the first time in 
history.
  But this bill is important. I acknowledge cloture will not be invoked 
today. I have known that for a long time. The fact of the matter is at 
least everybody is going to know where everybody stands on this matter. 
Does that mean we are going to quit negotiating and quit trying to 
bring people together? No. We will. But if we don't get that down in 
another week, it seems to me this bill is going to be dead. If it is 
dead, then I pity those 8,400 companies plus all the insurance 
companies--about 16 of those--because they are all headed toward 
bankruptcy and this country is going to suffer a tremendous problem 
while the truly sick are not going to get compensated. The truly sick 
are not going to get compensated. We have seen the sleazy approach of 
at least one of the personal injury law firms toward manipulating the 
process so those who aren't getting sick get a recovery which they 
should never have gotten. That takes money away from those who are 
sick. Guess who the beneficiaries of this whole process are. These 
personal injury lawyers, some of whom are honest, but probably some who 
are not.
  This chart shows it all. The word ``filibuster'' comes from the 
Spanish word ``filibustero,'' meaning pirating and hijacking. I shudder 
to think we will consign all of these people who have asbestos-related 
illnesses to oblivion and not do the best we can to help them when we 
have a system that is broken.
  I am prepared to yield back the remainder of my time and proceed to 
the vote.
  The PRESIDING OFFICER. All time is yielded back. Under the previous 
order, pursuant to rule XXII, the Chair lays before the Senate the 
pending cloture motion which the clerk will report.
  The 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 
           V. Voinovich, John Ensign, Wayne Allard.

  The PRESIDING OFFICER. By unanimous consent, the call of the quorum 
is waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to the consideration of S. 2290, the FAIR Act of 
2004, shall be brought to a close? The yeas and nays are mandatory 
under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Colorado (Mr. 
Campbell) and the Senator from Pennsylvania (Mr. Specter) are 
necessarily absent.
  Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry) 
is necessarily absent.
  The PRESIDING OFFICER (Mr. Chafee). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 50, nays 47, as follows:

                      [Rollcall Vote No. 69 Leg.]

                                YEAS--50

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Chafee
     Chambliss
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeWine
     Dole
     Domenici
     Ensign
     Enzi

[[Page 7291]]


     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner

                                NAYS--47

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carper
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Wyden

                             NOT VOTING--3

     Campbell
     Kerry
     Specter
  The PRESIDING OFFICER. On this vote, the ayes are 50, the nays are 
47. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected.
  The majority leader.
  Mr. FRIST. Mr. President, I am disappointed that we did not invoke 
cloture on the asbestos reform bill. As I have said numerous times in 
recent days, this is an important issue, an issue we are not going to 
give up on. It is too important to the American people. It is an issue 
with victims, with veterans, with all people who are affected by 
asbestos. It would be a great disservice just to drop this issue; 
therefore, we are not going to drop it.
  We have devoted now more than 300 days trying to work out the details 
of this bill, which I do believe is more than adequate time to reach 
consensus. Thus, later today, the Democratic leader and I--we have been 
in discussion over the course of the morning--will be discussing on the 
Senate floor a possible method of moving these discussions forward with 
the stakeholders over the next several days and possibly weeks. We will 
engage in a colloquy later in the day as to what that specific proposal 
will be.
  I am confident we can make progress on this important issue, that we 
can move the stakeholders to a final agreement. I say that because 
people just saw the vote and that does not close the door in any way. 
In fact, it inspires us to work together more over the next several 
days and weeks.
  For the information of Senators, next we will begin consideration of 
S. 2329, which is the victims' rights bill. It was introduced yesterday 
by Senators Kyl, Feinstein, and others. The order provides for up to 2 
hours of debate before the vote on passage of that bill. That vote will 
likely be the last vote of this week.
  Following the victims' rights bill, we will turn to, in the early 
part of next week, Monday, the Internet access tax bill. Discussions 
have been underway over the course of the morning and afternoon on that 
bill as to when we will actually begin consideration, and later this 
afternoon, I will have more to say about that bill.
  As I believe I said this morning, following completion of the 
Internet tax bill, we will be turning to FSC/ETI, the JOBS bill. That 
is several days from now.
  Mr. President, again, I am very disappointed in the cloture vote 
today, but we will be back, and I will talk more about that this 
afternoon.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I wish to make a couple of comments about 
the asbestos bill. I see my colleague from Delaware. Does he want to 
say something before I make a short speech?
  Mr. CARPER. Mr. President, yes, I want to mention to Senator Frist, 
as I did to Senator Daschle in the last few minutes, my appreciation 
for the way each of them are, as leaders, engaging in a bipartisan way 
to address the asbestos issue as something we have to get done; we can 
do better than the status quo and take up the bill under the good work 
of the Judiciary Committee and the Specter-Becker process. There is a 
good process in place showing results, and I am delighted both Senator 
Frist and Senator Daschle are embracing that process and enabling us to 
work together and resolve the remaining issues.
  I mentioned when Senator Frist was not here that work has a way of 
expanding to fill the amount of time we allocate to a project. Senator 
Frist knows that better than I do. If we say we are going to take the 
rest of the year to resolve the asbestos bill, it will take the rest of 
the year. There is value in setting a date certain. Senator Frist may 
want to consider returning to this bill right before the Memorial Day 
recess. That gives us 3 weeks to buckle down, get the interested 
parties in a room together, and Senators who want to participate and 
their staff, along with Judge Becker, our leaders, and let's get this 
job done.
  I thank the Senator for yielding.
  Mr. FRIST. Mr. President, briefly in response, I understand the 
importance of setting dates and also of having a sense of urgency, 
since we do have victims who are suffering today. We will have more to 
say about overall timing when I have a colloquy with the Democratic 
leader a little bit later today.
  The PRESIDING OFFICER (Mr. Graham of South Carolina). The Senator 
from Arizona.
  Mr. KYL. Mr. President, I ask unanimous consent that following the 
remarks of Senator Nickles we proceed to consideration of the 
legislation which the leader announced so that Senator Feinstein can 
commence her presentation and hopefully have her first presentation 
concluded before 1 o'clock.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I wish to make a few remarks concerning 
the asbestos legislation we failed to reach cloture on a motion to 
proceed. I am disappointed that we did not go to the legislation. I 
came down yesterday to speak and others were engaged. Maybe it is more 
appropriate that I speak now.
  We have a very serious problem dealing with asbestos in this country. 
I held a hearing in the Budget Committee 2 years ago and stated that 
some of the biggest problems that we face, as far as our economy, is 
regulations and litigation abuse. And heading the list of litigation 
abuse in this country is asbestos litigation. We have 8,000 companies 
now listed as defendants in suits, and 60 or 70 companies have already 
gone bankrupt. Thousands of jobs have been lost. I believe over 60,000 
jobs have been lost from the bankrupt companies that have gone out of 
business. Maybe another 100,000 jobs have not been created as a result 
of the negative impact that asbestos litigation has on the economy, and 
it is wrong. When we find out that two-thirds of the awards or 
settlement payments have been going out to people who are not sick, 
something is wrong. So this system needs to be fixed.
  I also want to compliment Senator Hatch, Senator Frist, and Senator 
Specter for their efforts. There has been a lot of work going into this 
legislation.
  However, I have very serious problems with this particular 
legislation, S. 2290. In my opinion, a legislative solution that would 
propose creating a large federal trust fund is a mistake. I think there 
simply is a better way to do it. I asked the Congressional Budget 
Office to provide the Budget Committee analysis of the legislation, 
that we had before us, and the essence of its potential cost effects. I 
now ask to include their entire statement into the record. It states 
that CBO estimates operations of the fund would increase federal budget 
deficits by $13 billion over the first 10 years of the fund.
  Thus, they estimate, that even though it will take in $118 billion of 
contributed funds over the life of trust, in the first 10 years it is 
going to add $13 billion to the deficit. Though the legislation says 
you can borrow against future anticipated revenues, it is still going 
to add to the deficit, and the Fund itself will become insolvent at 
some point because fund resources will be overwhelmed by anticipated 
claims liability. There are going to be major problems with this fund, 
too many problems.

[[Page 7292]]

  As a matter of fact, I estimate that if we go with the trust fund 
approach there are going to be a lot of unqualified claimants saying, 
``We want to be covered under this fund.'' We can expect that, unless 
there is very strict medical criteria enforced, and this bill does not 
have very strict medical criteria. By very strict medical criteria, I 
mean there should be legislation in place that requires claimants to 
prove that they have an asbestos-related disease before they are 
compensated by the fund. And this bill does not do that.
  Also, I hope we would abandon the idea of creating a trust fund, 
under this legislation, that has a fixed, capped, amount that must be 
contributed into the fund by insurers and defendant companies involved, 
while the liability remains virtually unlimited. What one should easily 
see, is that the insurers are limited in what they must contribute and 
the defendant companies are limited in what they must contribute, but 
the extent of liability is unlimited. This should indicate to my 
colleagues that this Fund may not work. The claims may greatly exceed 
the fund, there is a shortage, and we end up with an insolvent fund.
  The bill says, well, we presume if the fund goes insolvent, the fund 
will terminate from a Government-funded fund managed by the Department 
of Labor, and then claimants who did not get in on the money are going 
to simply seek redress in the federal courts. I question that. I can 
see people coming back to Congress and saying: ``Hey, we want the 
Federal Government to pay for it.'' This puts the taxpayer at risk.
  So what is the solution? I am not trying to be critical. But, I think 
we should come up with realistic solutions. I have a couple of ideas I 
think we could do. One is to impose strict medical criteria in the 
existing tort system. The American Bar Association has said Congress 
should establish strict medical criteria in the tort system: in other 
words, a person must prove they have an asbestos related injury before 
they file a claim and get compensated. Let's make sure we are not 
paying payments to people who have lung cancer resulting from other 
causes, like a life-long smoking habit. My mother had lung cancer and 
my brother had cancer as a result of smoking. They should not be 
compensated out of an asbestos compensation fund. We should hold to the 
principle that if people are going to receive compensation from 
asbestos exposure they should have an asbestos-related disease; and 
they must prove it was the substantial contributing factor to the 
injury. If they prove it, they should be compensated.
  We should also toll the statute of limitations for asbestos injuries 
to protect the legal rights of claimants who should develop a disease 
or impairment in the future. If they discover they have an asbestos-
related disease in the distant future, the statute of limitations 
should not begin to run until that time. They would be able to file 
suit. That would eliminate a lot of these bogus claims and the mass 
action claims where people are filing claims saying, ``We think we 
could develop asbestos disease in the future, and we understand the 
statute of limitations is going to run out, so therefore we are going 
to file claims now.'' Over two-thirds of the claimants today do not 
have asbestos-related disease, but they are filing claims. Let's enact 
legislation to toll the statute of limitations, so if it is proven that 
10 or 20 years from now an individual develops asbestos-related 
disease, and it is proven, they can be justly compensated.
  Finally, let's eliminate the abusive venue shopping. Let's keep it in 
court jurisdiction where the claim belongs, and stop bargain-hunting 
plaintiffs from shopping their claims in only the most lucrative 
district or State courts in the country.
  There does not have to be a new Federal fund, or a new entitlement 
program, created to provide a reasonable solution to this problem. If 
we simply require claimants to prove in court that they have an 
asbestos-related disease or impairment, then we can compensate those 
who are truly sick and they can be compensated well. The defendants 
companies and the insurance companies could all pay a lot more to the 
most deserving victims of asbestos exposure, if they did not have to 
needlessly pay money to the two-thirds who do not have asbestos-related 
disease.
  Many of these plaintiffs lawyers who are involved in these mass 
action suits, those who represent legitimate victims who are being 
pushed aside by the non-injured, actually say that a medical criteria 
bill would be the right solution. We do not need take away anybody's 
ability to go to court. The truly sick can be truly compensated. And do 
not need to pay false or premature claims. We simply do not need to pay 
claims to people who, frankly, should not be receiving benefits. The 
fact is, people who do not have asbestos-related disease are clogging 
the courts, and they are denying people who do have the disease just 
compensation.
  I have introduced such legislation that will go a long way to solving 
these problems. I have kind of held back to see whether or not this 
trust fund approach would work, and, frankly, I do not believe it will 
work, whether it is $118 billion or $153 billion.
  I heard many of my Democratic colleagues say if it had a little more 
money maybe they could support it. It will not work. My guess is if 
there was a fund of $153 billion or even $173 billion, as much money as 
that is, with the medical criteria being lax as it is in this bill 
especially for smokers, it will not work because you will still have 
thousands of unqualified people saying, ``My lung cancer should be 
covered too.''
  As a matter of fact, if one looks at one of the compensation plans 
under this bill, yes, under levels VII, VIII and IX section C, smokers 
get compensation without having clear proof it was caused by their 
asbestos exposure. Now, maybe they worked in a plant that might have 
had asbestos present, but if they cannot prove that it was the cause of 
their cancer and not, for example, the five packs of cigarettes they 
smoked each day for thirty years, then they should not be compensated, 
but this Trust Fund bill would do this.
  My point is, let's go back to the drawing board. I do not believe a 
trust fund approach is the right approach. I happen to think that S. 
2290 is almost an invitation for people to say here is a bunch of 
money, probably not enough money, so let's make sure we run our claims 
early, fast, and get in while the money is still there. So the claims 
would greatly exceed the money available no matter what size the pot of 
money is on the table. And when it runs out the net result will be that 
people will come to the Federal Government to keep it going. This trust 
fund will simply not be adequate to compensate all the claims, 
especially not with lax medical criteria.
  So I urge our colleagues to rethink this. Let's establish medical 
criteria in the courts using medical evaluation standards proposed by 
the American Medical Association, and consistent with a resolution 
endorsed by the American Bar Association, that calls on Congress to 
establish criteria standards along those lines and toll the statute of 
limitations for those who may become sick in the future. Let's 
compensate those families, those individuals, who are truly sick. Let's 
help the victims, and not reward people who do not even have asbestos 
disease or injury by giving them two-thirds of the benefits under this 
present flawed system.
  I urge my colleagues to seriously review such an alternative approach 
when we reconsider this bill in the not too distant future.
  I ask unanimous consent that the CBO letter of April 20, 2004, 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

[[Page 7293]]

     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.
     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.

[[Page 7294]]



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

  Mr. NICKLES. I yield the floor.

                          ____________________