[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 1326-1351]
[From the U.S. Government Publishing Office, www.gpo.gov]




     FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT OF 2005--Continued

  The PRESIDING OFFICER (Mr. Graham). The Senator from Montana.
  Mr. BAUCUS. What is the pending business before the Senate?
  The PRESIDING OFFICER. The Senate is on S. 852, the asbestos 
legislation.
  Mr. BAUCUS. I ask the Presiding Officer, is there an amendment 
pending?
  The PRESIDING OFFICER. There are several amendments pending.
  Mr. BAUCUS. Is one of the amendments the Cornyn substitute?
  The PRESIDING OFFICER. There are two Cornyn amendments pending. There 
is a perfecting amendment pending and a second degree to that 
perfecting amendment.
  Mr. BAUCUS. I thank the Chair.
  Mr. President, I strongly oppose the Cornyn amendment to the 
underlying bill. I want the record to reflect my deep disappointment in 
those two amendments. I am deeply concerned we are losing sight of what 
is at stake.
  What is that? Making sure that people who are sick, who are likely to 
become sick from exposure to tremolite asbestos are not denied the 
ability to fight for their rights against the persons or companies that 
injured them. That is absolutely the bottom line. If these amendments 
are agreed to, people in the small county of northwest Montana will not 
get justice. These people will not get relief. They will not get 
support. They will not be able to pay for needed health care as they 
die.
  We are talking about hundreds of sick and dying people. This 
amendment turns our back on them. It will hurt them while they are 
already down. It will hurt the people of Libby. The people in Libby are 
proud. They have had more than their share of hard knocks. They just 
keep going, getting up and keep trying. They are good, proud people. 
But they have been injured. They have been deceived. They have been 
wronged. They have been lied to.
  They have tried to put their faith in our Congress and in our 
legislative process to make things right. They are survivors. I am 
privileged to know them so well and to represent them.
  Let me tell you about the first time I went to Libby. It was January 
of the year 2000. I traveled to Libby to meet with 25 extremely ill 
people for the first time. I had been briefed a number of times on what 
I might expect to hear that night. These kind men and women, some of 
whom are no longer with us, gathered to share huckleberry pie and 
coffee in the home of Gayla Benefield.
  They opened their hearts. They poured out unimaginable stories of 
suffering and tragedy on a scale that absolutely stunned me. Entire 
families--fathers, mothers, uncles, aunts, sons, and daughters--all 
sick, hundreds are dead--they are all bound together by their exposure 
to the company mine, exposure to tremolite asbestos mined by W.R. 
Grace.
  This is an isolated community of a few thousand people located as far 
away from Washington, DC, as you could possibly get, way up in 
northwest Montana.
  I will never forget a man I met that night. He has become my dear 
friend. His name is Les Skramstad. I mentioned Les yesterday. Let me 
tell you about our first introduction.
  At that meeting in the home of Gayla Benefield, Les watched me 
closely all evening. He was weary and came up to me after his friends 
and neighbors finished speaking and said to me:

       Senator, a lot of people have come to Libby and told us 
     they would help, then they leave and we never hear from them 
     again.
       Max, please, as a man like me, as someone's father, too, as 
     someone's husband, as someone's son, help me. Help us. Help 
     us make this town safer for Libby's sons and daughters not 
     even born yet. They should not suffer my fate, too. I was a 
     miner and I breathed that dust in.
       And what happened to me and all the other men and women who 
     mined wasn't right--but what has happened to the others is a 
     sin. Every day I carried that deadly dust home on my clothes. 
     I took it into our house. I contaminated my own wife and each 
     of our babies with it too. Just like me, they are sick and we 
     will each die the same way.
       I just don't know how to live with the pain of what I have 
     done to them. If we can make something good come of this 
     maybe I will stick around to see that, maybe that could help 
     make this worthwhile.

  That is what Les said to me that evening. It riveted me. I told him I 
would do all that I could, that I would not back down, and I would not 
give up. I said to myself that evening, if I do anything, I am going to 
help get justice for the people of Libby, MT.
  Les accepted my offer and then pointed his finger at me and said: 
I'll be watching, Senator.
  Les is my inspiration. He is the face of thousands of sick and 
exposed folks in this tiny Montana community. When I get tired, and I 
see the difficulties we face to try to get justice for the people of 
Libby, I think of Les, and I cannot shake what he asked me to do. In 
all my years as an elected official, this issue of doing what is right 
for Libby is among the most personally

[[Page 1327]]

compelling things I have ever been called on to do.
  Doing what is right for the community and making something good come 
of it is my mission in Libby. I thank Les Skramstad every day for 
handing me my marching orders. My staff and I have worked tirelessly 
for Libby--not for thanks, not for recognition but because the tragedy 
is that gripping. There is no other choice. It is a no-brainer. We do 
all we can. It is such a tragedy for the people of Libby.
  The extent of asbestos contamination in Libby, the number of people 
who are sick and who have died from asbestos exposure is staggering. 
The people of Libby suffer from a deadly asbestos-caused cancer, 
mesothelioma, at a rate 100 times greater than the rest of the Nation. 
Mr. President, 1 in 1,000 residents of Libby suffers from this disease. 
The national average is 1 out of 1 million. Libby residents suffer from 
all asbestos-related diseases at a rate of 40 to 60 times the national 
average.
  So how could this happen? Well, a company named W.R. Grace owned and 
operated a vermiculite mining and milling operation in Libby. It just 
so happened the vermiculite was contaminated by a deadly form of 
asbestos called tremolite asbestos. It is much more pernicious than the 
ordinary chrysotile asbestos. Tremolite asbestos is so bad, it gets 
into your lungs. It has hooks in it. It stays there and does not ever 
get out.
  Mr. President, 5,000 pounds of tremolite asbestos was blown over the 
town every day. Every day this dust contaminated the air. Dust settled 
in the town of Libby, on cars, on homes, in gardens. Think of it. You 
get up in the morning to go outside, and there is this tremolite 
asbestos dust on your car. It is on your home. It is everywhere, your 
garden. It settled on children as they played in the parks. Workers 
brought the dust home on their clothes and exposed their families. 
Hundreds have died, hundreds more are sick.
  The very worst part about this story is that W.R. Grace knew exactly 
what it was doing and did not tell anyone. It was making a buck while 
it was hurting people. It knew that the vermiculite dust was 
contaminated with deadly tremolite asbestos. Yet it had told workers in 
the town it was harmless. It was just dust, they said. W.R. Grace not 
only said it was harmless, then what did it do? To add insult to 
injury, it bagged this stuff. It put all this tremolite asbestos in 
bags and then gave bags to residents for their gardens and to the high 
school for covering for the high school track and for parks and 
playgrounds.
  Well, W.R. Grace filed for bankruptcy. Before they did that, what did 
they do? They transferred almost all their assets away to other 
companies so they could not be sued. So people in Libby could not get 
justice. Through all of this, W.R. Grace has yet to step up and do the 
right thing for Libby.
  So I stepped up. I stood up for the people of Libby. And I am 
standing up now for Les and his family to do all I can to help him and 
those other people in Libby.
  I worked hard with the Judiciary Committee, especially my colleagues, 
Senator Specter and Senator Leahy, to tailor a solution that addresses 
the unique problems in Libby. I am extremely grateful to Senator 
Specter, the chairman of the committee, and Senator Leahy, the ranking 
member, for all their work to help protect Libby. I spent a lot of time 
explaining to them the problems of Libby, and to their credit, they 
listened and put provisions in the bill, the underlying bill, that 
address the very unique, special problems of the tragedy in Libby.
  The original medical criteria in the bill did not address the 
specific needs of Libby because disease resulting from exposure to 
tremolite asbestos progresses differently than disease from exposure to 
the traditional form of asbestos. Tremolite asbestos, the latency 
period is a lot longer. You cannot detect it until much later. It is 
also a pernicious kind of asbestos that causes much more injury and 
makes it much more difficult to breathe. It is wicked stuff.
  So we worked hard, and we included medical criteria that specifically 
address the unique needs of Libby. My colleagues, I hope, understand--
they must understand; the right thing to do is to understand--this 
whole community was exposed, not just the mine workers but everyone.
  W.R. Grace mined the raw vermiculite in the mines of Libby and then 
milled that vermiculite to remove up to 96 percent of the tremolite 
asbestos contained in the vermiculite. That milling process then shot 
5,000 pounds of tremolite asbestos into the air each and every day. 
That asbestos blanketed the town. The asbestos did not discriminate 
where it fell. It covered the school playground and little league 
baseball field. And it is now growing in the bark of trees, if you can 
imagine. It is everywhere.
  I am offended some of my colleagues think they know best. I am 
offended some of my colleagues, who think they know better, have not 
taken the time to know the issue, to travel to Libby, to understand 
what is going on there, to open up their minds and their hearts, to try 
to understand. They have not taken the time to meet the people, to 
understand there are different types of asbestos or that the disease 
from exposure to tremolite asbestos progresses very differently and is 
much more pernicious.
  So if you do not support the bill, I ask my colleagues to say so. But 
do not hold the people and the community of Libby hostage. Whatever we 
do, however we deal with the underlying asbestos bill, we cannot hold 
the people of Libby hostage. Do not ask the innocent people of Libby to 
do your bidding for you.
  And if this amendment passes--the Cornyn amendments--I will have to 
go back to Libby. I will look into the eyes of that community, and I 
will tell them that their Nation turned its back on them.
  Let me be very clear. I will keep fighting for Libby until they get 
the help that is desperately needed and long overdue. Until they get 
the compensation they deserve, I am going to keep fighting. We are 
going to find a way, eventually, to give these people the justice they 
deserve.
  Thank you, Mr. President.
  I see the chairman of the committee on the floor. I thank him for his 
help and his recognition of the unique differences in Libby, MT. I tell 
him, I appreciate that.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I thank the Senator from Montana for 
those comments and for his leadership in structuring the bill now on 
the floor, S. 852. He has accurately described the very serious 
situation in Libby, MT, where many people have been exposed to asbestos 
in a dreadful situation, a situation where the W.R. Grace Company sent 
this deadly substance into the atmosphere knowing its dangers.
  The bill which has been structured would compensate the people there. 
The Senator from Montana accurately and forcefully articulates the 
reasons why the pending amendment for medical criteria is totally 
insufficient. It simply does not cover people such as those in Libby, 
MT. It does not cover the thousands of people who worked for companies 
which were bankrupted--77 of them. It does not cover the veterans of 
America who are suffering from exposure to asbestos. It does not cover 
the real core of the issue and the problem at hand.
  I have talked to Senator Cornyn about scheduling a vote. We would 
like to have a vote reasonably soon. A vote is always a salutary method 
of getting Senators to the floor to move the bill along in other 
respects. Senator Cornyn wanted to have some time for discussion and 
argument. And a few minutes after 2, I said I would try to accommodate 
him on what he wanted to do in that respect. But I hoped we could have 
a vote no later than 3 o'clock. That is still my hope, and to get 
there, I am going to be brief.
  I see Senator Leahy on the floor, and I yield to him.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, did the Senator from Montana wish to say 
something?

[[Page 1328]]

  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I do not care who has the floor, but I 
wish to say I appreciate the comments of the chairman of the committee 
and, also, how much I appreciate the efforts of the ranking member of 
the committee, Senator Leahy from Vermont. He has also, as has the 
chairman of the committee, been very receptive in his understanding of 
the issue.
  I might say, I thank again the Senators. They sent staff to Montana 
to get a firsthand understanding of what is going on. I thank the 
chairman. I also again thank the Senator from Vermont for his deep 
understanding. He has taken the time and effort to learn the problems 
that face Libby, MT. I again thank both Senators.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, I thank the distinguished senior Senator 
from Montana for his comments. I should note that from the first day 
Senator Specter and I started talking about this legislation, the 
distinguished Senator from Montana was there visiting with us. He made 
it very clear he wanted to make sure that whatever we passed took care 
of what is an extraordinary and unique situation in Libby, MT. His help 
and his counsel have been extraordinarily important throughout.
  We had so much testimony that said the same thing, that said the 
current system for compensating asbestos victims is broken. Victims are 
dying. Ironically, they are dying while they are waiting for their day 
in court--a day that will not come. Even for those who finally receive 
their day in court, they often receive only a small percentage of the 
costs involved in our tort system. Of course, if the defendant has been 
forced to file for bankruptcy, or decided to file for bankruptcy, these 
victims receive little or no compensation.
  I think, as both Chief Justice Rehnquist and Justice Ruth Bader 
Ginsburg have said, this cries out for a solution outside of the court 
system that streamlines the claims process for victims, to make sure 
they receive timely and fair compensation relative to the severity of 
their injuries. That will protect compensation they receive from 
subrogation by insurance companies.
  Actually, we find from the most recent RAND study asbestos victims 
receive an average of only 42 cents for every dollar spent on asbestos 
litigation. What may surprise some, 31 cents of every dollar goes to 
defense costs. A somewhat smaller amount, 27 cents, goes to plaintiffs' 
attorneys and other related costs. All that is eaten up before the 
victim, the one suffering, sees anything.
  I think the enactment of a medical criteria bill, such as the 
amendment the distinguished Senator from Texas, Mr. Cornyn, has 
proposed, for asbestos would fail to reduce the high transaction costs 
of the asbestos tort system.
  Medical criteria bills do nothing to protect businesses from going 
bankrupt or victims who were injured by bankrupt companies to receive 
fair compensation.
  The plain fact--the plain and easy fact--is many of these asbestos 
manufacturers are in bankruptcy proceedings and, therefore, are immune 
from suit. Victims, such as our Nation's veterans, are unable to 
recover for asbestos exposure while serving their country in the 
current tort system. Think of that, our veterans.
  We received the following testimony from Hershel Gober, the national 
legislative director of the Military Order of the Purple Heart. He 
said:

       We believe the compensation fund approach is the only 
     solution that will provide veterans suffering from asbestos-
     related illnesses with fair [with fair] and certain 
     compensation.

  But he also pointed out:

       The avenues open to veterans to seek compensation through 
     the tort system, however, are very limited. The Federal 
     government, as the members of this Committee know, has 
     sovereign immunity, thereby restricting veterans' ability to 
     recover from the government; and most of the companies that 
     supplied asbestos to the Federal government have either 
     disappeared or are bankrupt and, therefore, are only able to 
     provide a fraction of the compensation that should be paid to 
     asbestos victims, if anything at all.

  This distinguished veteran went on to say:

       Even if there is a solvent defendant company for a veteran 
     or his/her family to pursue, there remains the lengthy, 
     costly, and uncertain ordeal of filing a civil lawsuit and 
     going through discovery and trial, where the plaintiff bears 
     a heavy burden of proof and often has the very difficult to 
     impossible task of establishing which defendant's product 
     caused their injuries.

  Criteria bills, such as that of the distinguished Senator from Texas, 
will do nothing to compensate victims such as our Nation's veterans who 
are injured by bankrupt companies during their service to our great 
country. Legislation imposing medical criteria on the tort system is 
inherently unfair to victims. These measures don't alleviate the delays 
victims face when they are confronted with overwhelmed court dockets. 
Criteria bills, such as the Cornyn amendment, allow defendants and 
insurers to enjoy the delays of litigation and maintain all of their 
defenses in the tort system. They are far away from streamlining a 
procedure to help people who are sick and dying, and they impose new 
hurdles for plaintiffs and continue to require the identification and 
proof of the manufacturer or entity responsible for exposing them to 
asbestos decades ago.
  In contrast, the bill Senator Specter and I have brought to the floor 
will not require victims to identify and prove the manufacturer or 
entity that exposed them to asbestos. They only have to show the 
suffering they have had from asbestos. They will not have to hope that 
the entity responsible for their exposure is still in existence or 
financially solvent. They will recover compensation under the fund in 
proportion to their impairment or disease. The current system for 
compensating victims of asbestos exposure is inefficient and 
inequitable.
  This medical criteria amendment is not a solution. It actually 
operates within that same broken tort system.
  I could go further, but I know the distinguished chairman hopes we 
will come to a point where we can vote. I would note that this 
amendment will preempt the silica claims of thousands of victims. I 
understand that the AFL-CIO and other labor unions representing 
thousands of workers, like this distinguished veterans association, 
oppose the Cornyn amendment.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HATCH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Coleman). Without objection, it is so 
ordered.
  Mr. HATCH. Mr. President, I rise in support of S. 852, the bipartisan 
Fairness in Asbestos Injury Resolution Act of 2005. Over the last 
several days, several of the opponents of this legislation have made 
serious, misleading claims, and I would like to take a moment to 
respond.
  Opponents of this bill have claimed that it amounts to a bailout of 
big business generally, and asbestos manufacturers specifically. Guess 
what. They are, as usual, almost right. Webster's Dictionary defines 
``bailout'' as a rescue from financial distress. It is true that we are 
trying to save 90 percent of this country's industry from financial 
distress. It is also true that we are trying to rescue literally 
hundreds of thousands of asbestos victims from the plague of 
uncertainty that advances from the efforts of asbestos attorneys and 
the cruelty of asbestos bankruptcies. So using the word ``bailout'' is 
not a complete mischarac-
terization of what this bill does.
  This bill saves an overburdened legal system. We have been asked by 
no less than the Supreme Court of the United States of America three 
times to do something about this mess. If we don't do something about 
this mess, we are going to have a severe economic crises in this 
country, driven by this approach that is literally bankrupting some 
very innocent companies.
  This bill saves asbestos victims from unfair and untimely 
compensation.

[[Page 1329]]

This bill saves ordinary Americans from the tremendous strain on our 
national economy. And this bill saves veterans who have nowhere else to 
turn. I ask my colleagues if they know that once vibrant companies, now 
bankrupt due to asbestos liability, employed over 200,000 workers--
200,000. The asbestos crisis affects over 85 percent of the U.S. 
economy. Over $200 million in lost wages--$200 million--gone. Almost no 
one has been spared. Mr. President, 75 out of 83 industrial sectors in 
this country are affected.
  Has not this body been working for several years now to save domestic 
jobs and help our industries? Not a single Senator questions the fact 
that this Nation faces an immediate crisis. Not a single Senator 
disputes the fact that our legal system cannot handle the thousands 
upon thousands of asbestos claims. And, hopefully, not a single Senator 
questions that we must do something, and do it now, and this is the 
only vehicle we have.
  Too much time has passed, too many people have died, too many people 
have lost their jobs, too many people have gone uncompensated, and too 
many asbestos lawyers have private jets and luxurious yachts as a 
result.
  Some colleagues claim this bill lets defendant companies off the 
hook. I believe the distinguished senior Senator from Massachusetts 
said yesterday that S. 852 would shift more of the financial burden 
onto the backs of injured workers. I share my colleague's concern for 
injured workers. I disagree with his assessment of how this bill works.
  The FAIR Act does not add to the burden on injured workers; it 
lessens it. This bill will ensure that asbestos victims are compensated 
over a 3- to 4-year period. Individuals with exigent claims will 
receive their compensation within 1 year.
  Moreover, asbestos victims under this bill will receive the entire 
award themselves instead of giving enormous percentages to attorneys in 
transaction costs. Of course, claimants may elect to utilize an 
attorney, in which case attorney's fees are capped at 5 percent, rather 
than 40 percent. That is a far cry from some of the exorbitant 
attorney's fees that are being charged today.
  I wholeheartedly believe attorneys should be compensated for their 
efforts, but I also believe that such compensation should be 
reasonable. Under the FAIR Act, defendant companies are not let off the 
hook. Defendant companies, along with insurers and reinsurers, do not 
get a free ride under S. 852--unless one thinks a combined $136 billion 
obligation constitutes a free ride. Defendant companies are responsible 
for payments up to $90 billion over the life of the fund. Insurer 
participants are responsible for payments up to $46 billion. That is 
not pocket change. Indeed, as some of my colleagues have pointed out, 
there are companies and insurers who oppose this bill because of this 
obligation.
  I ask my colleagues: Why would some of these companies oppose this 
legislation if it amounted to a free ride? This brings me to my next 
subject.
  Some of my colleagues have alleged that taxpayers will be footing the 
bill for the FAIR Act--$140 billion, they claim. That would be a truly 
frightening allegation if it were true. Fortunately for us, if you read 
this bill, it is not true. The FAIR Act is entirely funded by private 
means. American taxpayers do not pay one dime. Although an argument 
could be made that during the war our Government used asbestos in 
shipbuilding and so many other ways. And I am just talking about the 
war. You can extrapolate way beyond that. But we haven't asked the 
Federal Government to pay anything. This bill does not require any 
payments by the Federal Government--not one nickel, not one penny.
  The truth is, as I mentioned before, private entities provide the 
funds for this bill--$140 billion--and none of it comes from the 
coffers of the United States of America. Defendant companies pay $90 
billion, participant insurers pay $46 billion, and the remaining $4 
billion? Bankruptcy trusts: At present, there is somewhere in the range 
of $4 billion to $7 billion that sits in bankruptcy trust. This bill 
would consolidate those moneys and fold them into the trust it creates.
  It is true that some of those trusts do not relish this idea. I don't 
blame them. I do not like living in the shadow of this problem either. 
But the fact is, Congress can and should consolidate the existing 
bankruptcy trusts as part of the comprehensive solution to a critical 
national problem.
  Let me also say this: If we don't do something about this--and this 
is just step 1. We have to get the House to do something. I doubt 
seriously they are going to do this bill. If they don't do this bill, 
they have to come up with one of their own. When they do, that means we 
have to go to conference and hopefully work out any of the problems we 
uncover between now and then.
  If we don't do this bill, then I personally believe the economy is 
going to be very badly damaged and ultimately hurt. I hate to be a 
doomsayer, but I really believe that is what is going to happen. I 
think virtually everybody in this body knows we need to do something. 
This is the vehicle that we have to get through the Senate, and then we 
are going to have to, hopefully, get the House to come up with a 
similar vehicle, or at least whatever they think is the best way of 
doing this. Then we have to go to conference, and people working with 
goodwill have to try to solve these problems, hopefully using the best 
things in this bill and the best things in a House bill so we can solve 
this problem for our country, for our economy, for our workers, and for 
companies so that in the future they aren't going to go bankrupt.
  When I first started working on this, there were only 30 companies in 
bankruptcy. Today there are almost 80. That is just a few years. It is 
going to get worse.
  As I understand it, the problem is going to get worse because of 
superficialities and a tort system run amok, and because we are 
unwilling to stand together and do something about it, and because of 
special interests. No, not special interests down at K Street, special 
interests that are the largest hard-money supporters of our friends on 
the other side today.
  As I understand the situation, there are two primary claims against 
including the existing bankruptcy trusts in this legislation. The first 
argument amounts to a finality claim. Some argue that Congress should 
let sleeping dogs lie. Critics in this camp believe we should not undo 
what has been done in the bankruptcy court since victims in those 
circumstances have been compensated to a degree and the channeling 
injunction that accompanies a 524(g) trust effectively terminates 
residual liability.
  There are problems here. In many instances the sleeping dog here is, 
in fact, a very sick puppy. It cannot take care of itself. The Manville 
Trust, for example, pays only pennies on the dollar and it does not 
address the global problem. In fact, the Supreme Court has, on more 
than one occasion as I have said, struck down attempted global 
settlements while simultaneously calling upon Congress to act.
  The fact is, the Supreme Court is right. The asbestos problem is a 
horrific mess and it is time for Congress to intervene. I understand 
why companies on the receiving end of a channeling injunction would not 
want to upset the balance they have struck. But they will have the 
protections of this bill while simultaneously providing much needed 
funding that will be used to compensate the true victims of the 
asbestos crisis.
  One further point on existing asbestos bankruptcy trusts. For reasons 
I will explain in a moment, most bankruptcy trusts in this context were 
established by the plaintiffs' trial bar. The provisions of 11 United 
States Code 524(g) do not permit a channeling injunction unless 75 
percent of the claimants approve of the measure. That means that 
plaintiffs' attorneys in these cases--and there are about 12 major law 
firms, that is what it comes down to--have a very big say in how the 
trust is set up and, more troubling, how they, the asbestos lawyers in 
these 12 firms, basically are compensated. I can see why the asbestos 
plaintiffs' bar would not like to see this change. Can

[[Page 1330]]

you blame them? This is a cow they want to milk. It is high quality 
milk at that.
  The second problem is a little more complicated. Certain asbestos 
bankruptcy trustees have argued that the inclusion of their assets in 
the larger trust established under the FAIR Act constitutes an unlawful 
taking in violation of the fifth amendment to the Constitution. I admit 
I was surprised when I discovered that my friend Professor Laurence 
Tribe and I actually agree on a point of constitutional law. But it is 
true. He was correct to say:

       It is a well-settled rule that legislatures may act 
     rationally to modify or abolish causes of action, impose 
     assessments, and create new compensation programs without 
     violating due process or triggering the right to just 
     compensation under the Takings Clause.

  I also agree with Professor Tribe's assessment:

       The bankruptcy process, and in particular the confirmation 
     of a plan of organization, does not provide a debtor or a 
     resulting trust with ongoing immunity from the operation of 
     federal law as it might evolve over time.

  In a nutshell, there is not a final property interest at issue in 
this context. I agree with Mr. Carter G. Phillips:

       Any property rights arising from the trusts are contractual 
     in nature and the law is well established that contracts, 
     however expressed, cannot fetter the constitutional authority 
     of the Congress.

  I do not believe a valid takings claim can exist in a vacuum of 
property rights.
  In the interest of time, I will not bore my colleagues with a more 
detailed legal explanation on the takings issue, but I wish to submit 
two letters for the Record, the first dated February 6, 2006, from 
Professor Laurence H. Tribe, and the second dated February 7, 2006, 
from Mr. Carter G. Phillips. I ask unanimous consent they be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                                Cambridge, MA,

                                                 February 6, 2006.
     Hon. Arlen Specter,
     Chairman, Committee on the Judiciary,
     U.S. Senate, Washington, DC.
       Dear Senator Specter, I am writing in response to your 
     request for my current views of the constitutional questions 
     posed by S. 852, the Fairness in Abestos Injury Resolution 
     Act (``FAIR.''). The bill was voted out of committee on May 
     26, 2005, with a bipartisan majority of 13-5, and is 
     scheduled for floor debate in the near future.
       As I testified before the Committee on June 4, 2003 (and as 
     I reiterated in subsequent responses to questions from 
     members of the Committee), Congress has ample constitutional 
     authority to replace the current avalanche of asbestos 
     litigation with an administrative compensation scheme to 
     minimize transaction costs and to allocate responsibility 
     more rationally than the badly broken status quo. Carte G. 
     Phillips of Sidley Austin Brown & Wood, LLP, and former 
     Solicitor General Seth P. Waxman, now of Wilmer Cutler & 
     Pickering, joined in my conclusions at the hearing in 2003.
       Nothing since that time has led me to alter my legal views. 
     I continue to believe that Congress possesses clear 
     constitutional power to use past histories of payments for 
     asbestos-related judgments, combined with current revenues, 
     to substitute predictable fiscal obligations for 
     unpredictable future liabilities. The aim of S. 852 is to 
     apportion liability according to likely responsibility, 
     tempered by some attention to ability to absorb the burden--
     not (as in cases like Eastern Enterprises v. Apfel, 524 U.S. 
     498 (1998)) to saddle one company with liability because it 
     is the last remaining solvent defendant. Indeed, a principal 
     aim of S. 852 is precisely to avoid such a scenario, which is 
     currently being played out in the tort system.
       Urging Congress to let the litigation avalanche continue 
     lest the Supreme Court invalidate the proposed alternative 
     makes little sense. After all, it was that Court that wrote 
     in 1997, in a landmark asbestos case I successfully argued, 
     ``a nationwide administrative claims processing regime would 
     provide the most secure, fair, and efficient means of 
     compensating victims of asbestos exposure.'' In 1999 and 
     2003, the Supreme Court repeated this invitation to 
     congressional action.
       In your latest request of me, you have called special 
     attention to the transfer of assets held by certain 
     bankruptcy trusts to the FAIR Fund. In particular, former 
     Senator Don Nickles argued in a February 1, 2006 op-ed on 
     behalf of a group of existing trusts that ``[m]ore than $7 
     billion currently set aside to compensate 524(g) 
     beneficiaries would be taken from the trusts and paid to the 
     national fund created by S. 852. This represents a `taking' 
     of property by our government without just compensation, 
     which is expressly prohibited by the Fifth Amendment.'' With 
     all respect to Senator Nickles, I believe his objection has 
     no merit as a constitutional matter.
       First, it is not enough to assert that S. 852 changes the 
     rules applicable to bankruptcy trusts. After all, the bill 
     changes the rules applicable to other participants as well. 
     It abrogates insurance contracts, eliminates causes of 
     action, and overrides numerous existing legal entitlements. 
     All of these changes could be said to upset expectations 
     regarding future liabilities and tort recoveries. But none of 
     the changes states a takings claim, in light of the well 
     settled rule that legislatures may act rationally to modify 
     or abolish causes of action, impose assessments, and create 
     new compensation programs without violating due process or 
     triggering the right to just compensation under the Takings 
     Clause. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 432-
     33 (1982); Martinez v. California, 444 U.S. 277, 281-83 
     (1980). State workers' compensation laws, federal pension 
     regulation, and the Black Lung D1sability Trust Fund, 30 
     U.S.C. Sec. 901, et seq., all rely on this principle. 
     ``[L]egislation readjusting rights and burdens is not 
     unlawful solely because it upsets otherwise settled 
     expectations . . . even though the effect of the legislation 
     is to impose a new duty or liability based on past acts.'' 
     Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16 (1976).
       Second, it is well settled that the bankruptcy process, and 
     in particular the confirmation of a plan of reorganization, 
     does not provide a debtor or a resulting trust with ongoing 
     immunity from the operation of federal law as it might evolve 
     over time. Midlantic Nat'l Bank v. New Jersey Dep't of Envtl. 
     Protection, 474 U.S. 494, 502 (1986). See NLRB v. Bildisco & 
     Bildisco, 465 U.S. 513, 534 (1984) (bankrupt debtor not 
     relieved of labor law obligations); In re Baker & Drake, 
     Inc., 35 F.3d 1348, 1353-55 (9th Cir. 1994) (reorganization 
     plan does not immunize debtor from state law on ongoing 
     basis); see also City & County of San Francisco v. PG & E 
     Corp., 2006 WL 44315, *9 (9th Cir. Jan. 10. 2006) 
     (governmental regulatory actions are exempt from bankruptcy 
     court jurisdiction).
       This principle is particularly salient with respect to 
     bankruptcy trusts, which are themselves the specialized 
     creatures of the federal Bankruptcy Code. Having responded to 
     the asbestos litigation crisis by creating such trusts in 
     1994, Congress is not in any way disabled from taking further 
     legislative steps toward reform a decade later. Cf. Dames & 
     Moore v. Regan, 453 U.S. 654, 674 n.6 (1981) (President's 
     action in nullifying government-created attachments of 
     Iranian assets pursuant to hostage release agreement did not 
     effect a taking of property in violation of Fifth Amendment).
       Bankruptcy trusts are subject to the longstanding rule that 
     ``[p]rospective relief under a continuing decree remains 
     subject to alteration due to changes in the underlying law.'' 
     Miller v. French, 530 U.S. 327, 344 (2000). ``The provision 
     of prospective relief is subject to the continuing 
     supervisory jurisdiction of the court, and therefore may be 
     altered according to subsequent changes in the law.'' Id. at 
     347.
       Otherise, the bankruptcy system would create a whole 
     constellation of black holes in the fabric of the U.S. Code. 
     To avoid such profound disruption of innumerable federal 
     statutory regimes--from product liability reforms to 
     telecommunications auctions, from energy conservation 
     legislation to coal safety laws--courts have routinely 
     applied statutory changes to debtors in ongoing 
     reorganization plans, even post-confirmation, and even when 
     the effect has been to leave the estate without property that 
     private parties expect to receive. For example, the 1996 
     amendment to 28 U.S.C. Sec. 1930(a)(6), governing the 
     imposition of quarterly fees for the United States Trustee in 
     certain Chapter 11 bankruptcy reorganizations, has been 
     repeatedly applied even to debtors in confirmed 
     reorganization plans that had made no provision for the 
     payment of such fees.
       In exactly the same way, S. 82 represents an intervening 
     change in federal law that is neutral in design and general 
     in application and accordingly must be accommodated 
     prospectively by bankruptcy trusts. If bankruptcy trusts won 
     some special exemption or immunity on a prospective basis 
     from intervening changes in federal law in relation to 
     asbestos liability, there would be no field within the broad 
     reach of Congress' legislative power that would not be 
     compromised by the unpredictable appearance of a potentially 
     limitless number of financially crippling gaps.
       An order establishing a bankruptcy trust hardly resembles a 
     final judgment for money damages, of the kind that creates 
     ``vested'' rights. Bankruptcy trusts are ongoing 
     administrative entities created for the processing and 
     payment of claims. They typically pay claims at a small 
     fraction of their face value, and those rates may change 
     overtime. For example, the Manville Trust is paying out 
     claims at approximately 5% of their face value. In fact, the 
     Supreme Court has squarely rejected any analogy between 
     bankruptcy orders and final judgments for money damages. In 
     Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440 
     (2004), the

[[Page 1331]]

     Court held that, precisely because bankruptcy orders are 
     completely unlike judgments for money damages, a confirmation 
     order can bind a nonconsenting state under the Eleventh 
     Amendment, even if the state does not participate in the 
     bankruptcy process. The Court used much the same reasoning in 
     Central Virginia Community College v. Katz, 2006 WL 151985 
     (U.S. Jan. 23, 2006), to hold that states are subject to in 
     rem bankruptcy proceedings to recover preferential transfers.
       Finally, any ``takings'' claim by bankruptcy trusts would 
     be ill-founded because any assets they hold are uniquely 
     dedicated to the payment of asbestos-related claims. Yet S. 
     852 would eliminate the trusts' liability in that regard. It 
     is difficult to understand why the trusts would have a 
     reasonable expectation of retaining property in the situation 
     where their pertinent liabilities have been eliminated. See 
     Keystone Bituminous Coal Ass'n v. DeBenedictis. 480 U.S. 470, 
     488 (1987) (noting that ``reciprocity of advantage'' ``has 
     been recognized as a justification of various laws'' to 
     defeat takings claims) (quoting Pennsylvania Coal Co. v. 
     Mahon, 260 U.S. 393, 415 (1922) (Holmes, J.); Penn Central 
     Transportation Co. v. New York City, 438 U.S. 104, 140 (1978) 
     (no compensation due where there is a ``reciprocity of 
     advantage'').
       For all these reasons, I adhere to my conclusion that S. 
     852 falls well within Congress' constitutional authority to 
     enact.
           Sincerely,
     Laurence H. Tribe.
                                  ____



                                            Sidley Austin LLP,

                                 Washington, DC, February 7, 2006.
     Re S. 852 Fairness in Asbestos Injury Resolution Act.

     Hon. Arlen Specter,
     Chairman, U.S. Senate, Committee on the Judiciary, Dirksen 
         Senate Office Building, Washington, DC.
       Dear Senator Specter: On April 28, 2005, I submitted a 
     letter explaining my views that S. 852's requirement that the 
     assets of asbestos bankruptcy trusts be transferred to the 
     national compensation fund was fully constitutional. You have 
     asked whether my views have changed in the interim, and also 
     how I would respond to the points raised by former Senator 
     Nickles in his recent editorial, Let Existing Trusts Opt Out 
     Of Asbestos Plan (Feb. 1, 2006), available at http://
thehill.com/thehill/export/TheHill/Comment/OpEd/
201006_oped.htl (attached as an addendum to this letter 
     (``Add.'')).
       My views have not changed in the interim. As more fully set 
     forth in my letter of April 28, 2005, which responded to 
     arguments raised by Theodore B. Olson, there are multiple 
     reasons why S. 852 presents no constitutional difficulties. 
     Asbestos trusts created under section 524(g) of the 
     Bankruptcy Code, 11 U.S.C. Sec. 524(g), even when they assume 
     the form of state law trusts, are prospective federal 
     judicial remedies authorized and defined by Congress to 
     administer the ongoing payment of asbestos-related injury 
     claims, present and future. They are claims-paying mechanisms 
     subject to the ongoing superintendence of the federal court 
     during the pendency of the bankruptcy case, as the terms of 
     confirmation orders and reorganization plans creating 
     asbestos trusts generally reflect. See Findley v. Blinken (In 
     re Joint E. & S. Dists. Asbestos Litig.), 982 F.2d 721, 750 
     (2d Cir. 1992) (noting that the Johns-MansviUe Trust, after 
     which section 524(g) trusts were modeled, ``is not an 
     ordinary private undertaking of a settlor to carry out 
     private preferences. It is the mechanism established under 
     the auspices of the Bankruptcy Court to implement a plan of 
     reorganization. The Bankruptcy Court has continuing 
     responsibilities to satisfy itself that the Plan is being 
     properly implemented''). There are no separation of powers 
     concerns when Congress modifies the law applicable to such 
     trusts. As the Supreme Court has repeatedly declared, 
     ``[p]rospective relief under a continuing, executory decree 
     remains subject to alteration due to changes in the 
     underlying law.'' Miller v. French, 530 U.S. 327, 344 (2000). 
     A bankruptcy confirmation order itself is not kindred to a 
     final and unappealable judgment for damages in federal court; 
     moreover, to the extent other aspects of a confirmation order 
     may be deemed to create some vested rights, there is 
     certainly no finality in a prospective claims-paying 
     mechanism. See United States Tr. v. CF & I Fabricators of 
     Utah, Inc. (In re CF & I Fabricators of Utah, Inc.), 150F.3d 
     1233, 1239 (10th Cir. 1998); Hillis Motors, Inc. v. Hawaii 
     Auto. Dealers' Ass'n, 997 F.2d. 581, 587 n.11 (9th Cir. 
     1993); Findley v. Trustees of the Manville Personal Injury 
     Settlement Trust (In re Joint E. & S. Dists. Asbestos 
     Litig.), 237 F. Supp. 2d 297, 316-17 (B.D.N.Y. 2002). Just 
     like any other prospective remedial decree, the trust is 
     subject to the continuing jurisdiction of the federal 
     district court, and thus subject to the power of Congress to 
     change the governing law that the court will apply in 
     exercising that jurisdiction.
       Furthermore, any property rights arising from the trusts 
     are contractual in nature, United States Tr. v. Craige (In re 
     Salina Speedway, Inc.), 210 B.R. 851, 855 (10th Cir. B.A.P. 
     1997), and the law is well established that ``[c]ontracts, 
     however expressed, cannot fetter the constitutional authority 
     of the Congress.'' Norman v. Baltimore & Ohio R.R., 294, U.S. 
     240, 307-08 (1935). For all the foregoing reasons, nothing in 
     the decrees creating asbestos trusts under section 524(g) 
     create property rights that would be subject to a federal 
     takings analysis.
        Finally, the only ``property right'' that an asbestos 
     plaintiff can colorably claim is the right to file a claim 
     with the trust and to prove that his injury meets the 
     criteria for compensation; no individual beneficiary of the 
     trust with an unliquidated claim has a property right in the 
     trust assets themselves. In essence, a bankruptcy court 
     creating a section 524(g) trust converts the plaintiff's 
     claim against the debtor under state tort law into a claim 
     against the trust. While a claim for relief is a species of 
     property right, it is not a vested right that entitles the 
     plaintiff to compensation under the Takings Clause if 
     abrogated. Indeed, if the law were otherwise, Congress could 
     not pass legislation preempting accrued state or federal law 
     claims without federal takings liability. That is not the 
     rule; rather ```a legal claim affords no definite or 
     enforceable property right until reduced to final 
     judgment.''' Arbour v. Jenkins, 903 F.2d 416, 420 (6th Cir. 
     1990) (quoting Sowell v. Am. Cyanamid Co., 888 F.2d 802, 805 
     (11th Cir. 1989)); see also, e.g, Hammond v. United States, 
     786 F.2d 812 (1st Cir. 1986) (no vested right ``until a 
     final, unreviewable judgment is obtained''). Finally. as more 
     fully reviewed in my April 28, 2005 letter, even if all these 
     hurdles could be overcome, asbestos claimants would have no 
     right of recovery under regulatory takings analysis.
       Former Senator Nickles' editorial lacks force because it 
     does not recognize these legal principles. Senator Nickles 
     characterizes the bankruptcy court orders as ``final court 
     judgments approving reorganization plans that resolved 
     asbestos claims against debtor companies].'' Add. 1. However, 
     as noted above, bankruptcy reorganization plans (and 
     especially settlement trusts) are subject to the continuing 
     jurisdiction of the bankruptcy court and are not final in the 
     constitutional sense; they do not limit the power of Congress 
     to change governing law. Nor do the confirmation orders 
     themselves ``resolve claims'' against the debtor; instead, 
     they crate a new prospective remedial mechanism and new form 
     of claim that must be proven in order to secure payment. 
     Beneficiaries with the right to file a claim against federal 
     asbestos trusts are not ``entitled to timely compensation 
     from those trusts,'' and they have no greater property right 
     (and no more ``certainty and security'' against abrogation by 
     Congress in the public interest) than any other asbestos 
     plaintiff. Add. 1, 2. Senator Nickles asserts that the 
     transfer of trust assets is an unconstitutional ``taking of 
     trust beneficiaries' property'' without just compensation, 
     Add. 2, but that claim cannot withstand legal analysis.
       Senator Nickles is absolutely right that Congress must be 
     vigilant against legislation that results in the 
     unconstitutional taking of vested property rights; however, 
     those doctrines are not implicated here. In essence, S. 852 
     requires all asbestos defendants to contribute substantial 
     assets to a national fund to create a uniform federal 
     administrative remedy; the requirement that the assets of 
     asbestos trusts (which were originally the assets of the 
     debtor) be transferred to the national fund serves the same 
     end of marshaling defendant assets for the benefit of injured 
     parties. Not only are no vested property rights of trust 
     claimants ``taken'' under the Fifth Amendment, but there is 
     no inequity in having plaintiffs all treated the same, 
     regardless of whether the defendant who allegedly injured 
     them happened to have sought bankruptcy protection. S. 852's 
     requirement that the assets of asbestos trusts be transferred 
     to the national fund is not only perfectly legal, but it is 
     also highly just and equitable.
       Sincerely,
                                               Carter G. Phillips.

  Mr. HATCH. I wish to close by taking a brief moment to address the 
budgetary issues. Earlier I spoke to the private versus public funding 
issue. Some of my colleagues believe the taxpayer is on the hook for 
this bill and I wish to help explain how that is not the case. These 
are serious concerns, but the FAIR Act does not use Federal funds. It 
is privately funded--lock, stock, and barrel.
  Those of you who might be watching at home might be wondering why 
some people are worrying about the FAIR Act, if it is privately funded, 
and in the spirit that underlies this bill I will try to explain it. To 
my knowledge, there is only one way by which the FAIR Act may touch 
Federal funds and that is through the borrowing mechanism. The 
administrator created by this act may borrow such funds as are 
necessary to maintain the liquidity of the fund, but--and this is a big 
``but''--the administrator may not borrow amounts which exceed the 
fund's ability to repay. So the bottom line is that American taxpayers 
do not pay for this fund. The defendant companies and insurer 
participants do.

[[Page 1332]]

  At the end of the day, asbestos victims cannot wait any longer. 
Veterans cannot wait any longer. The overburdened legal system cannot 
wait any longer. The only group that does not mind waiting consists 
mainly of 12 law firms filled with asbestos lawyers who do not mind 
exploiting a broken system because of the billions of dollars that are 
in it for them. You can hardly blame them. It is a plum tree waiting to 
be picked. They are slow walking this bill. I have to implore my 
colleagues to resist these efforts.
  Before I conclude my remarks, I wish to speak briefly to Senator 
Cornyn's medical criteria amendment. I agree with my colleague from 
Texas that the FAIR Act is not a perfect bill. I think Senator Specter 
has made that clear. Others have made it clear. We have done the best 
we can through the Judiciary Committee. This is the first step in a 
number of steps that simply have to be taken. I have several concerns 
of my own about this bill, and I suppose most everybody does. But I 
have to say, as much as I agree in principle with Senator Cornyn, I am 
not sure his approach does the trick.
  I might add, my colleague from Utah raises the point that there are 
some companies that will go bankrupt if we pass this bill. That may be 
the case. I will do everything in my power through the whole process 
here to make sure that doesn't happen, and I believe Senator Specter is 
dedicated to doing everything in his power to make sure that doesn't 
happen. I personally believe Senator Leahy will do everything in his 
power to make sure that doesn't happen. I believe there are 435 Members 
of the House who will do everything in their power to make sure that 
doesn't happen. I believe any conference committee that comes up is 
going to make sure that doesn't happen. I wouldn't tolerate that, in 
the end.
  But we have to have a vehicle. We have to have a bill. If we do not 
have a bill, we have nothing. And, we have a future prospect of a 
number of very fine companies--with the loss of hundreds of thousands 
of more jobs--going into bankruptcy at a cost to our economy that may 
be overwhelming after a while--all because of a runaway tort system 
that basically is out of whack.
  In my opinion, the medical criteria approach fails to help too many 
sick and injured people. It does nothing for the mesothelioma victims. 
These are the ones who deserve compensation. First and foremost, the 
reason we basically started this bill, was to help those who are going 
to die because they have mesothelioma. They are going to die. Once they 
are diagnosed, it is just a matter of months, and their families are 
left with nothing. They didn't cause this problem and they are the ones 
who deserve compensation. Yet they are the ones who, if we do nothing, 
are left out while others--hundreds of thousands--who are not sick at 
all are going to get rewards. This is wrong.
  In my opinion, as I say, the medical criteria approach fails to help 
too many sick and injured people. Let me give another illustration. The 
veterans, for example, have very few places to turn under a medical 
criteria bill. We just had 10 veterans organizations on Capitol Hill 
holding a press conference this week--I was there with them--making it 
clear that of all people who deserve to be compensated, they do. This 
medical criteria approach does nothing for them. This is the main 
reason why we switched to the trust fund approach; so we can take care 
of the truly sick--those who really have difficulties.
  But, as I do with every amendment, I am going to give the medical 
criteria approach a very hard look as we go through this process. In an 
ideal world we could run with my colleague's idea. But, unfortunately, 
the realities of the asbestos crisis prevent a medical-criteria-only 
solution. There may be, down the line, a way of doing a medical 
criteria bill that will take care of people who truly deserve to be 
taken care of. This amendment is not that. But I am willing to work 
with my colleague from Texas and see what we can do to come up with 
something that will work as well, if not better, than what we have 
here. But right now this is it.
  This is a bill that is well thought out in spite of the difficulties 
with it. But I submit that any bill this size is going to have some 
difficulties.
  As I say, this is step No. 1 in what always has been a legislative 
process that does not end here. It starts here. If we do not start it, 
we don't have a chance of correcting these tremendous ills to our 
society that could swamp us. So it is very important that we support 
Senator Specter and Senator Leahy and get this bill out of the Senate. 
If we don't, I have to say I believe this is probably the last chance 
to resolve issues that deserve to be resolved, and to do justice 
instead of continue the injustices that are currently resulting from 
the current out-of-control asbestos tort system.
  I commend my colleagues for their steadfastness in working on this 
very difficult, complex set of issues. It is a difficult problem for 
us. There are very sincere and good people on both sides of this issue. 
There are very sincere and good people on both sides of this aisle. I 
have tremendous respect for my colleagues.
  On the other hand, for those who are voting against the bill because 
the trial lawyers are their largest hard-money supporters, I don't 
think that is a good enough reason. I admit it is a powerful reason, 
but not if you are interested in the country, not if you are interested 
in our economy, not if you are interested in the people who have 
suffered from asbestosis and from all of the derivatives of asbestosis, 
not if you are interested in helping these mesothelioma victims who 
deserve help, helping the veterans who did nothing to cause these 
problems but are left high and dry.
  This is an effort by the leadership of the Judiciary Committee, led 
by Senator Specter and Senator Leahy, to do justice. It is an effort to 
comply with at least three requests by the U.S. Supreme Court: 
Congress, please do something about this awful issue because we can't.
  They can't legislate from the bench to resolve this issue. Some 
people think individual States can resolve this issue. That might be 
so, if you had absolutely honest judges and absolutely nonpartisan 
judges down the line, and if they were willing to work hard, and if 
every State would do it. But only a few are going to. Only a few are 
going to pass laws that possibly will help in this area. It is up to us 
to get this done.
  I hope our colleagues who want to do something right here will 
realize this is step one. You have to go ahead with it. Good people of 
good values, well-intentioned people are going to be able, hopefully, 
in the end to get this so it works; so no company is going to be hurt 
by it, but the economy as a whole will be helped by it. But above all, 
people who deserve compensation will receive compensation with a 
minimum of charges that reduce that compensation, compared to the 
almost 60 percent attorneys' fees and transaction costs it is costing 
us today.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, we have been trying to set a vote here on 
the amendment offered by Senator Cornyn since about 2, 2:15. I had 
hoped to vote at 3, and then I had hoped to vote at 3:30. The Senator 
from Illinois advised me a few moments ago that his preference would be 
to vote at 4:15. We are willing to accommodate that preference unless 
there is some inclination to vote sooner than 4:15.
  Therefore, I ask unanimous consent that we set the vote on the Cornyn 
amendment for 4:15, with the time equally divided between now and then.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. REID. Reserving the right to object, is this a vote on the Cornyn 
amendment? My understanding was there was going to be a tabling motion. 
If it is on the Cornyn amendment, I don't agree, but if it is on the 
tabling motion, I am willing to agree to 4:15. But if it is on or in 
relation, I am not willing to do that at this time.
  The PRESIDING OFFICER. Is there objection?
  Mr. SPECTER. I withdraw my request. I suggest the absence of a 
quorum.

[[Page 1333]]

  The PRESIDING OFFICER. The request is withdrawn. The clerk will call 
the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SPECTER. Mr. President, I ask unanimous consent that the order 
for the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER. Mr. President, after lots of discussion, as usual around 
here, I ask unanimous consent that at 4:45 I be recognized for a motion 
to table Cornyn amendment No. 2748, and that the time between now and 
then be equally divided between the two managers or their designees.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Mr. President, reserving the right to object, the manager 
on this side of the aisle is Senator Durbin. I wonder if the 
distinguished Senator from Pennsylvania would change the unanimous 
consent request so the time would be divided between Senator Durbin and 
Senator Specter.
  Mr. SPECTER. I agree.
  Mr. REID. Mr. President, I have a very brief statement on an 
unrelated matter. Could I be recognized?
  The PRESIDING OFFICER. Is there objection to the request as modified?
  Mr. CORNYN. Mr. President, reserving the right to object, I want to 
make sure I have an opportunity to address the debate, and under the 
unanimous consent request there is ample opportunity given to me.
  Mr. SPECTER. Mr. President, the way the sides are aligned here, we 
need a scorecard to figure out who will give Senator Cornyn time. I 
think the manager in favor of Senator Cornyn's amendment would give him 
time, and that turns out to be Senator Durbin.
  The PRESIDING OFFICER. Is there objection to the request as modified? 
Without objection, it is so ordered.
  Who yields time?
  Mr. DURBIN. Mr. President, I hope to restate the unanimous consent 
request which was agreed to accurately. It is my understanding that at 
4:45 we will have a vote on the motion to table the pending amendment 
by Senator Cornyn of Texas, and that the time be equally divided 
between now and then, which would be 60 minutes, 30 minutes to each 
side; that I am controlling the 30 minutes in opposition to the motion 
to table. I will yield from that amount 15 minutes to Senator Cornyn to 
speak during the same period. He can use that time, even if I don't 
have to give him the floor at the moment.
  We have to understand what we are considering. I am sure people who 
are watching this debate wonder why we take so much time going into 
quorum calls and talking among ourselves trying to come to some 
agreement about what we are going to do. That is the way the Senate 
operates. We operate by unanimous consent. Everyone has to agree. Think 
about that--100 different Senators coming to an agreement. However, we 
have managed, at least to the point of bringing this to a vote.
  The vote is important because the bill before the Senate right now is 
a bill about asbestos. Everyone knows asbestos is a lethal substance 
which, if inhaled, can kill you. It can cause your lungs to stop 
functioning, you can start to suffocate, and you can develop something 
like lung cancer called mesothelioma and die. People all across 
America, since we started using asbestos in products, have been exposed 
to it. Some are fortunate and they do not get sick. Others, with very 
minor exposure inhaling these asbestos fibers, have set off little 
timebombs in their lungs, and they never know when they will detonate. 
Victims can go for 10, 20, 30, 40 years after exposure and nothing 
happens; then something terrible happens. How do they know it is 
asbestos that causes it? Some of these conditions are only related to 
asbestos. Mesothelioma is one of them.
  People who have been exposed to asbestos over the years have gone to 
court and said: The companies that exposed me to products that harmed 
me should be held accountable. Some courts and some juries have said, 
yes, they should pay; others have said, no, they should not pay. But 
what is the nature of our system of justice? You go to a court for your 
day in court, you tell them how you were injured, and you let a judge 
or jury of your neighbors and peers decide your fate. It happens every 
day across America in thousands and thousands of courtrooms.
  Now comes this bill, Senate bill 852, which wants to change the way 
people across America will be able to recover for their injuries from 
asbestos. The first thing it does is to eliminate your option to go to 
court. As an American, you could be injured from exposure to some toxic 
chemical and go to court, have your day in court, and let the court 
decide. But if you have been exposed to this substance, to asbestos, if 
this law is passed, you will no longer be able to go to court.
  What happens to you? This bill creates a brand new approach--
replacing the courtrooms of America with a trust fund created by this 
bill, administered by an agency which does not exist at this moment, 
which will handle hundreds of thousands of people who have been exposed 
to asbestos.
  Some Members come to the floor skeptical that we can change a 
judicial system in America and eliminate access to court to hundreds of 
thousands of people and get it right. If we do not get it right, the 
losers are not going to be embarrassed Senators; the losers are going 
to be victims across America, people whose lives have been changed and 
in some cases ended because of asbestos.
  I don't know of a single person in America who said: Listen, I know 
asbestos will kill me; let me take a whiff of it. Not one. Virtually 
all the victims and families I have run into were unsuspecting people--
workers on the job; a mechanic putting in an asbestos brake lining; 
somebody trying to put in a heating duct in a home and using an 
asbestos substance; asbestos shingles on your roof; asbestos tile on 
the floor--grinding it, cutting it, powder flying in every direction. 
Who knew? Who had any idea what was going on? So these victims, 
innocent victims, are the ones who will be affected by this bill.
  It is a large bill, a bill of 393 pages. It should be because it is 
changing the basic system of justice in America. But this morning, this 
bill has become a dead letter. We are no longer considering that bill. 
We have a new bill. We were handed this bill this morning. It is 392 
pages. It includes some 40 significant changes to the bill we had on 
our desks when we came to work this morning. We knew it was coming, we 
knew there would be a change, but these changes are significant.
  Many Members believe that before we start enacting laws that are 
going to impact millions of victims across America, before we close 
down the courtrooms of America and say to people, what you used to 
assume was your right as an American citizen is no longer your right, 
we ought to be careful and we ought to take the time to get it right.
  Some of the things that have been filed with this bill reflect the 
fact that even those preparing it really do not have it quite clear in 
their minds how it is going to work.
  One of the amendments filed this morning, amendment 2747 by the 
chairman of the Judiciary Committee--I am certain this was 
inadvertent--inadvertently included the following on lines 7 through 9:

       (Note: I recognize that this may not be the most adequate 
     indicator of insurance matching liabilities--however, it is a 
     political reality that must be addressed.)

  Does that sound like a sentence out of a law? I am sure it is not. It 
is a sentence from a staffer who, in preparing this language, notified 
someone that they were not sure what they were writing would achieve 
the goal they want to achieve. That happens all the time. I expect my 
staff to be candid with me when they are preparing a law. But it tells 
something. By inadvertently including this staff note with this 
amendment, it is clear that the people writing this bill are not sure 
what is in it. They are not sure what the impact will be.
  What is driving this debate? Why are we so hellbent on passing this 
legislation at this moment? There are many good reasons, and there are 
many real reasons. One of the real reasons is that

[[Page 1334]]

for many of the major corporations in America, this bill is a windfall.
  This morning, Senator Bennett, a Republican from Utah, brought a 
chart to the Chamber and showed 10 of the major corporations in 
America, corporations that could be taken to court today because people 
were exposed to their products and have asbestos disease. He calculated 
how much they would pay into this trust fund under this bill against 
what they have said they would have to pay if they went to court. Those 
10 corporations will save, with this bill, $20 billion. Do you think 
they want to see this bill passed? Why, of course they do. They have an 
economic interest in it. But the obvious question is: If they do not 
pay the $20 billion to victims, who will? Other companies?
  Senator Bennett brought to the Senate another chart of companies that 
have never been sued for asbestos, never been held liable. Those 
companies will end up paying into this fund even though they never, 
ever have been sued successfully.
  There is a basic unfairness here. There is a transfer of wealth in 
this bill from some of the largest corporations in America and a burden 
to smaller companies, not to mention that at the heart of this issue 
are hundreds of thousands, perhaps millions, of asbestos victims.
  Now comes Senator Cornyn of Texas. He says: Consider another 
approach. Consider an approach that will look to what the States are 
currently doing to deal with this. Are there ways to change asbestos 
lawsuits so that victims get more, so that people are treated fairly, 
so that those who are trying to rip off the system on either side are 
not advantaged? And he turns to State laws. There have been several 
State laws, including Texas, Florida, and Ohio.
  He says in his amendment: Let's establish medical criteria so that if 
you want to go to court, we know you are truly sick. Perhaps you cannot 
go shopping around for the friendliest court in your State or the 
Nation. He goes through a variety of different scenarios. All of them 
are worthy of debate.
  The good thing about Senator Cornyn's amendment is it is based on the 
fundamental American right to have your day in court. Senator Cornyn is 
trying to achieve a procedural change in the courts of America which 
will not extinguish a basic American right to have your day in court.
  I believe he filed the amendment early this afternoon, maybe late 
this morning. I am not certain. And now the other side is saying: That 
is it, we do not want to talk about that amendment anymore, let's get 
rid of it. They want to table that amendment.
  As it is currently written, I could not support the amendment by the 
Senator from Texas, but I will stand with him to keep this amendment on 
the floor so we can try to find a bipartisan solution which does not 
have such great damage to our judicial system and to the people who 
rely on it. There will have to be significant changes in the Cornyn 
amendment before I would support it. But he has said to me that he is 
willing to sit down on a bipartisan basis in good faith to work out 
those differences, and he tells me there is significant support on the 
Republican side of the aisle for that effort.
  Wouldn't that be the best outcome--an outcome that is bipartisan, one 
which tries to work out differences between both sides, keeping in mind 
the innocent victims, tries to make this system a little fairer, not 
basically abandoning our judicial system, which this new bill, new 
version of the bill we have been handed, would do? That is a sensible 
approach.
  I am going to support the efforts of Senator Cornyn at this moment to 
resist a motion to table, with the understanding that before I will 
make any commitment to vote on his final amendment, we will have to sit 
down and try to work out our differences. It is not too much to ask.
  Do you know how long this program is supposed to affect America? For 
50 years. Is it worth a few hours, maybe even a day, to get it right? I 
believe it is.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Mr. President, I believe this is one of those situations 
where there is broad bipartisan consensus that we need to find a 
solution to this national crisis which not only affects people who are 
sick with asbestos-related diseases, including cancers, but also the 
companies that are in bankruptcy because they have been put underwater 
by the huge volume of claims from people who are not yet sick but who 
are worried the statute of limitations will run and bar them from 
bringing their claims in the future.
  I am proud of the work the Judiciary Committee has done under Senator 
Specter's leadership to try to bring us this far. On many of the 
differences we have had, he has ably negotiated a resolution. Where we 
are today is much better than where we were a year ago.
  There was a strategic decision made, as there had to be, whether to 
go with the trust fund approach or with a medical criteria approach. 
Frankly, the trust fund approach left the station, and everyone put 
their hopes and their work and effort into that approach. I am sorry to 
say that notwithstanding the hard work and effort which has gone into 
the bill, I still believe the trust fund is fundamentally flawed for 
reasons I have already talked about.
  There are problems with regard to the allocation; that is, the long 
arm of Uncle Sam will reach out and send you a bill for a lot of money 
to pay into this fund. We have been told by a number of companies that 
in order to pay that bill, they will simply have to shut their doors 
and go out of business, put their employees on the streets, possibly 
causing pension funds to be jeopardized. People who have come to rely 
on the solvency of those companies and their ability to pay their 
retirees the benefits they have agreed to, we are told they would be 
seriously jeopardized by this trust fund as currently written.
  Then there is the issue of, how do we know how much money should go 
into the trust fund? That has been a subject of a lot of negotiations, 
and $140 billion is where we are today. As we have heard before, there 
is a wild variation on estimates by very smart people as to how much 
the claims for this fund will total, ranging from $120 billion to $695 
billion, which is the high number. Just having a predictable bill we 
can vote for with some confidence that we believe will actually work as 
intended is lacking.
  Of course, there is the huge bureaucracy that will be created within 
the Department of Labor to administer this fund. We have no idea what 
that will look like, but it will be a new addition to the bureaucracy 
in Washington, DC. I can tell you, the last thing I want to do, coming 
from my State to the Senate, is to grow the size of the bureaucracy in 
Washington, DC, unless there is no other option. I do not want to do 
that.
  Then there is the issue of the medical criteria, where here again the 
chairman had to negotiate carefully in order to keep his votes on the 
committee. But it is my contention that the medical criteria in the 
trust fund are way too loose--authorizing the payment of substantial 
funds under the claim to people who are not demonstrably sick from 
asbestos-related disease, thus further jeopardizing the solvency of the 
fund.
  In response to my colleague, Senator Hatch of Utah, who expressed 
concern for the veterans who could benefit under the fund but who would 
not directly, anyway, benefit under a medical criteria approach, I 
think it would be a cruel joke--a cruel joke--for our veterans, if we 
built their expectations up, that they were going to receive benefits 
under the trust fund, only to have it explode or go bankrupt in a year 
or two and dash those hopes to the ground.
  So I am as concerned as anyone is about our veterans. But I certainly 
do not want to give anyone unrealistic hope or expectation that this is 
going to be a panacea, because of the concerns I have raised.
  I would agree with the Democratic whip that we have only today seen a 
substitute for the underlying bill filed

[[Page 1335]]

which totals almost 400 pages. While a number of us have been working 
on asbestos legislation for a long time, neither I nor my staff, I am 
confident, had a chance to read each and every one of those 393 pages, 
I believe it was, to determine what is in it and to determine whether 
there are amendments we need to file in response. Likewise, I would 
say, as to the 50-page bill we filed this morning, the amendment that 
contains the medical criteria approach, people are only now beginning 
to understand what their choices are.
  Basically, what this amendment presents is a choice, either for a 
trust fund or an alternative medical criteria bill or, third, no bill 
at all, a continuation of the current crisis, about which I think we 
have a bipartisan consensus that it is a scandal and needs to be 
addressed.
  So I believe the amendment does present a good alternative. But I 
would like to have a chance for my colleagues to look at it further. We 
have had a number of good discussions across the aisle. I have talked 
to a number of colleagues on the other side of the aisle, and they 
said, well, they would like to keep the amendment alive. They want to 
vote against the motion to table, but they are not yet ready to vote 
for the amendment because they may want to try to negotiate and work 
out some minor differences so they can support it. I would like to have 
the opportunity to do that with them.
  I would, by the way, point out, I guess as further evidence of what I 
am talking about--Senators reading the bill, coming to understand now 
they are not left with either the trust fund or nothing at all, that 
they have a third choice with the medical criteria bill--we have had 
two additional Senators come forward and ask to cosponsor it.
  Mr. President, I ask unanimous consent that Senator Saxby Chambliss 
and Senator Mike Enzi be added as cosponsors to the Cornyn amendment.
  The PRESIDING OFFICER (Mr. Chafee). Without objection, it is so 
ordered.
  Mr. CORNYN. Mr. President, I believe, given adequate time, there will 
be other Senators who will be interested in this alternative approach. 
Here again, I believe we are all committed to trying to find a 
solution. I hope we are because we know the status quo is a scandal. 
Here again, it is with great respect and admiration for the long and 
arduous effort put into this by the chairman that I hesitated even to 
offer this alternative. But I do believe that based on the merits, 
based on the choice it provides to the Members of the Senate, and based 
upon the need to have a little bit more time for Members of the Senate 
to understand what is in the amendment and to negotiate perhaps 
agreement so we can come back with some modification and an up-or-down 
vote on that, that I urge my colleagues to vote against the motion to 
table, both on the merits and based on the need for more time for 
deliberation and adequate consideration.
  I yield the floor and retain the remainder of my time.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, when the Senator from Texas says the 
status quo is a scandal, he is right. But the medical criteria bill is 
a ``scandal lite.'' It is a light scandal. You hear about Coke and Coke 
Lite. Well, this bill is a scandal in its own right, not quite as big a 
scandal but a scandal nonetheless.
  The only change which this medical criteria bill makes that is an 
improvement over the present system is that it does not allow 
collection by people who have been exposed but who are not yet sick. 
But this medical criteria bill does not go to the heart of the problem; 
that is, the thousands of people suffering deadly and serious injuries 
who have no one to sue.
  This bill is directed to protect the veterans of America who have 
been exposed to asbestos in a variety of contexts, sometimes during 
work at shipyards, sometimes during work at other governmental 
facilities, but they have no one to sue. This bill is directed to 
provide compensation to employees of some 77 companies which have gone 
bankrupt, where they have no one to sue because the company is in 
default and the company is bankrupt.
  This bill, similarly, does not answer the grave problem of the 
economy of the United States, with companies continuing to go bankrupt 
because litigation continues. You still have the costs of going to 
court--the costs of filing papers, the costs of depositions, discovery, 
interrogatories, taking the case to trial.
  And then you continue to have the lawyers taking the lion's share of 
the compensation. The fact is that only 42 cents of every dollar spent 
on asbestos litigation goes to the victims. The fact is, surprisingly, 
more money goes to defense costs--31 cents of every dollar--and 27 
cents of every dollar goes to plaintiffs' attorneys. That is a 
statistic compiled by the reliable RAND Corporation.
  So the medical criteria bill does nothing at all to deal with the 
real problems with regard to asbestos litigation but is designed, pure 
and simple, to defeat the trust fund concept which is on the floor.
  When the Senator from Illinois and the Senator from Nevada argue 
strenuously against the trust fund proposal, they do not want this 
bill. It is window dressing and a red herring to cite the companies 
which are going to save money because the thrust of the bill is to make 
an equitable allocation, which we think we do here. There has never 
been any real attack on that, except this wild talk about secrecy, 
which is unfounded. And you continue to have the problem of companies 
going bankrupt and people not being able to collect because there is no 
one from whom to collect.
  When the Senator from Illinois and the Senator from Texas complain 
about the new bill, there again, it is something they know better. They 
have the original bill. We had managers' amendments totaling some 47. 
And as a tactical matter, the Senator from Illinois and the Senator 
from Nevada said they would put us through every one of these 
amendments individually. The procedural way to deal with it was to put 
them all in another bill called the substitute bill. But they know what 
is involved. They know what bill is involved. And the substance is 
before them. So you have one charade after another.
  And you have a system which is scandalous. Nobody who has addressed 
this problem disagrees with the nature of the problem. Scandal is a 
good characterization for it. Scandal is an equally good 
characterization for the medical criteria bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I respect my colleague from Texas and 
those others who believe this amendment will be a preferable way to 
deal with the asbestos morass we now have. I, however, based on my best 
judgment, cannot agree. It perhaps will make some businesses happy and 
some plaintiffs' lawyers happy, but the one group I clearly think will 
not be as well treated and will not have the same guarantees and 
protections will be the victims.
  We are not here to represent any one group. We are here to look at a 
litigation problem that has gone wild. It has lost control. It is not 
operating properly. I think the trust fund concept is the only way to 
make this thing have any sanity about it.
  As I understand it, the medical criteria will help a great deal in 
making sure that claims by people who are not sick are not maintained 
in court, that they can be dismissed short of trial. That would be a 
tremendous benefit. I will not dispute that. It would certainly reduce 
those kinds of lawsuits.
  However, it would have no coherence. It seems to me that two people 
could file a lawsuit, and one could draw a favorable judge or favorable 
jury and win $50 million and the other one, I suppose, could win 
nothing or $1 million. I do not know that it would represent any 
predictability for the defendant companies so they could show on their 
balance sheets precisely what they are going to be looking at in the 
future as they go forward.

[[Page 1336]]

  It also would maintain the current litigation method of handling the 
lawsuits. That, to me, is where we have had the most difficulties 
because 60 percent of the money that is being paid out is being eaten 
up by lawyers. So if you have lesser numbers of lawsuits but they are 
bigger and will be more intensely litigated, the defendant companies 
have to hire expensive attorneys to defend themselves, and the 
plaintiffs' attorneys, facing top defense attorneys, will charge their 
normal high fees, as the case may be, and you end up back where we are, 
as the RAND Corporation said, with 60 percent--58 percent--of the money 
being paid out in expenses, which is what I would like to see avoided.
  The attractiveness of the legislation that is before us is we take 
the 60 percent that has been eaten up and we take probably 50 percent 
of that and allow it to go to the victims. They get it, with certainty, 
in an equal amount. So if you have mesothelioma, a deadly disease, 
under this system, you could file your claim, with a doctor's 
certificate stating you have mesothelioma--a fairly indisputable 
diagnosis--and you get $1.1 million; half of it within 30 days and I 
believe the other half within 6 months before you die.
  As I noted before, why have we had so many mesothelioma widows here? 
It is because these lawsuits take years. I am not just saying that. 
This is a fact. These cases take years, and people die of diseases or 
become disabled without receiving money.
  Under this bill, you will be able to get your money promptly. The 
proposal, as I understand it, will not necessarily fix that. Maybe the 
cases could be settled.
  Again, I say to my distinguished colleague from Texas, we agree on so 
much of this. I certainly will say this. His proposal would be far 
better than the current system.
  There is no doubt about that. The current system is absolutely 
indefensible. It is to the point that it is immoral, and the Congress 
has no higher responsibility than to make sure our legal system is 
working effectively. It is not happening that way.
  I believe the medical criteria in the base bill before us is not 
tight enough, that it will still allow a large number of people to 
maintain lawsuits for diseases they were going to get anyway from other 
natural causes or misbehavior such as smoking. They were going to get 
those diseases anyway, and they want the asbestos fund to pay for it. 
When it is connected to asbestos exposure, and it can be shown 
scientifically, this bill allows for that. It actually allows for 
people to draw on the fund who probably shouldn't qualify for it.
  I am for tightening up those criteria. I am for eliminating the 
frivolous, baseless lawsuits where people are not sick, which this 
Cornyn bill would do. But I do believe it would undermine one of my 
highest goals in this legislation, and that is that we would be in a 
position where you make a claim like you would in workers' 
compensation. You have so much injury, you get so much money, and you 
get it promptly. And the maximum attorney's fee would be 5 percent.
  I don't see how you can limit attorney's fees if you are going to 
have a long, competitive trial. The victims are going to need top-
flight attorneys, and the defendants are going to need top-flight 
attorneys. The juries are going to be calling these cases. Some of them 
are going to say big verdicts, and some of them are going to say little 
verdicts. We will have more inconsistencies, more jackpot justice than 
I would like to see.
  I am reluctantly of the opinion that this would not be the best 
approach. If this bill gets any worse, I would certainly see that the 
suggestions of the Senator from Texas would be preferable. If this bill 
were to flounder and isn't successful, I certainly would agree that his 
proposal is better than the current law and would support it. Right 
now, the Specter legislation is preferable.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Mr. President, I find myself in an unusual position of 
both agreeing and disagreeing with my colleague from Alabama. That 
probably typifies how most of us feel about the proposed solution in 
the trust fund. If my colleague from Alabama and I could sit down and 
hammer out some meaningful tort reform, we would not have any trouble 
doing it, if it were just he and I. I know he is concerned about the 
scandal that 58 cents on the dollar for every asbestos recovery there 
is goes to transaction costs, attorney's fees for the plaintiff, 
attorney's fees for the defendant, court costs, and the like. And that 
is not just in asbestos litigation. That is common, unfortunately, in 
personal injury litigation generally. If we could get 60 votes to get 
cloture on some meaningful tort reform and have an up-or-down vote, we 
could be in business and address his concerns, with not only asbestos 
but with our civil justice system generally. It is out of sync and 
benefits too few people at the expense of the many.
  My colleague from Alabama mentioned our effort to try to reduce 
attorney's fees because this is, under the trust fund, a system where 
an individual does not even need a lawyer to make a claim against the 
fund. So we decided in committee to keep it down to 5 percent. But it 
is my understanding, and my colleague can check me on this, that in the 
managers' amendment, that negotiated provision on attorney's fees was 
changed to further expand the recovery of attorney's fees under the 
trust fund bill.
  My point is that for every time the chairman, Senator Specter, tries 
to address one concern, he has to address another concern that loses or 
undermines support by someone else. After spending a long time trying 
to come to terms with this and understand it and be constructive about 
a solution, I came to the reluctant conclusion that it was futile, that 
the trust fund was fatally flawed. That is why I have offered my 
colleagues a choice. In addition to a choice between the trust fund and 
nothing at all, I have offered them another choice, and I would like to 
have a chance for more colleagues to think about it, to consider it, 
and to work with us to try to make it even better. That is why I urge 
my colleagues to vote no on the motion to table.
  Finally, one of the other things we have not spent much time on, 
there is actually a huge amount of money, hundreds of thousands of 
dollars, put in the trust fund to look for new claimants. It pays for 
screening of people who have not voluntarily come forward but basically 
goes out and looks for more claimants, which further stresses the fund 
and increases the likelihood that it will go under because of an 
overwhelming number of claims that have not been taken into account in 
arriving at the amount of the fund or the medical criteria for which 
claims would be paid and which would be excluded.
  I hope my colleagues, both on the merits and on the basis of process, 
the need for more time to carefully consider our alternatives and come 
up with the best possible solution, will vote no on the motion to 
table.
  I yield the floor and reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. THUNE. Mr. President, I rise in support of the Cornyn substitute 
amendment to S. 852. I thank the Senator from Texas for his work on 
this issue. He is someone who comes to this debate with great knowledge 
of the subject matter and has modeled his legislation after what has 
been a very successful model in the State of Texas.
  As the Senator from Texas has noted, this is a problem that needs to 
be addressed. Out-of-control asbestos litigation has become a disease 
in our economy. It threatens to drive scores of companies into 
bankruptcy. It diverts compensation away from legitimate victims of 
asbestos. It discourages investment in companies under suit and drives 
stock values down and diverts funds away from expansion and growth and 
results in job loss. In short, it has become an obstacle to economic 
recovery.
  Few of us in this Chamber can disagree with those very basic facts. 
However, I am not persuaded that creating

[[Page 1337]]

 a new Federal program, yet another entitlement program, one more 
compensation program, is the right solution. We need to seriously 
assess the wisdom of Congress's growing inclination to create more of 
what are virtually uncapped entitlement funds. The problem is in the 
courts. That is where the solution should be. We cannot continue to 
have the Government take every litigation quagmire out of the court 
system and put the problem on the back of the Federal Government and 
ultimately on the backs of the taxpayers. We cannot continue to do so.
  I voted to proceed to debate on this bill because this is a problem. 
It needs to be solved. Indeed, Congress must act. But what is the best 
solution? Should we create yet another entitlement trust fund or should 
we reform the tort system by imposing reasonable medical criteria 
standards in the courts?
  We need to find a solution that protects both the economy and the 
legal rights of those truly injured by asbestos or who will develop 
asbestos-related injuries in the future. It is my belief that it would 
be a mistake to establish an asbestos trust fund. I know this fund 
relies on private financing. Unfortunately, this may turn out to be 
only the seed money and unable, over time, to sustain the fund for very 
long, creating a high risk that Congress, at some point in the future 
may have to step in to keep it operating. The last thing we need is 
another uncapped Government entitlement, especially with our existing 
deficits.
  The major problem with the trust fund is that the private funding is 
capped but the potential liability is not. We have to face reality. 
This fund will go insolvent. I don't believe it is a question of if; it 
is a question of when. The underlying bill supposedly answered that by 
putting in a sunset provision that, when the fund goes insolvent, sends 
all unpaid claimants back to the tort system, the same broken tort 
system that we have today. Does anybody really believe that will 
happen? This Senator certainly does not.
  With hundreds of thousands, perhaps millions of unpaid claimants, 
would those claimants be happy about going back into a court system to 
spend 3 or more years litigating a case for an award that probably 
would be less than they could have received under this trust fund bill? 
I don't think they will do that.
  Political pressure on Congress from union and victims groups to bail 
out the trust fund and sustain it would be immense. These liability 
trust funds typically do not go back to the tort system. Trust funds in 
general rarely ever go away, not after creating an entirely new class 
of entitled people. So let's not delude ourselves.
  President Reagan once said that the closest thing to immortality on 
this planet is a government program. Once we create a whole new class 
of entitled people, it will be very difficult to go back or in any way 
sunset this program. The result would be the taxpayers being left on 
the hook. That is why I support the Cornyn substitute amendment.
  I ask my colleagues to seriously consider where Congress is going if 
it creates such a fund. What kind of precedent is this creating and 
where will this end?
  There has been a dangerous inclination by Congress to rescue segments 
of our economy from out-of-control litigation by simply taking claims 
out of the courts and creating a Government-administered liability 
trust fund. The solution should be commonsense tort reform, not to have 
the Government become some gigantic claims processing and payment 
agency.
  The best solution, one that has no cost to the Treasury, that does 
not require the creation of new Government agencies or battalions of 
Government administrators and one that will have immediate positive 
effect for both business and victims is a simple solution that, one, 
establishes reliable and verifiable medical criteria standards in the 
courts; two, tolls the statute of limitations to protect future 
victims; and, three, prohibits abusive venue shopping. That is it. It 
is simple. It is not loaded up with tort reform that our friends on the 
other side of the aisle often object to. And importantly, many trial 
lawyers who represent malignant claims of asbestos exposure have in the 
past endorsed this approach.
  It is time to consider a more modest solution. It may not provide the 
grand, comprehensive solution that many have wished for, but it takes a 
substantial bite out of the problem and is certainly better than 
nothing, which is what all parties will have if we continue to pursue 
the impossible.
  I ask my colleagues to vote against the motion to table and to 
support the Cornyn substitute amendment.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Mr. President, I ask unanimous consent that Senator Hagel 
be added as a cosponsor of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CORNYN. I yield the floor and retain the remainder of my time, if 
any exists.
  The PRESIDING OFFICER. The Senator has no time remaining.
  Mr. CORNYN. I thank the Chair.
  Mr. SESSIONS. Mr. President, how much time is left?
  The PRESIDING OFFICER. There is 15 minutes.
  Mr. SESSIONS. Mr. President, I will yield the floor when Senator 
Specter returns. I will say a couple of things. First, under this 
criteria bill--which has good criteria and some very good provisions in 
it--veterans are not going to be able to recover. Veterans don't have 
anybody to sue, and they would be very much disadvantaged. That is why 
they oppose it.
  No. 2, we would still have litigation, and the reason litigation now 
ceases to be wise is because the defendants are prepared to pay. It is 
basically not a question so much of how they are responsible--whether 
anybody is responsible for damages; they are prepared to pay, but they 
want to know a predictable amount that they are paying, No. 1, and they 
want to have it paid fairly.
  Under this system, if you meet the illness criteria and you are able 
to proceed with your litigation, one person with asbestosis, who 
seriously has a disability, maybe is on oxygen--as I have known people 
to be as a result of breathing asbestos--they might get $100 million, 
literally. Another person may get zero. So I think we have this 
aberrational way that a certain limited amount of resources would be 
utilized to help people who are sick.
  We are at a point now where we have created a circumstance that would 
allow a fairly even workmen's compensation type distribution of it. 
Secondly, it allows the litigation spasm to continue. Yes, it will take 
out the bogus claims from people who are not sick and who don't need to 
be in court. Those claims will be able to be removed. But they will 
have large numbers of trials of those who actually are injured by 
asbestos, and the lawyers on both sides have to be compensated. We know 
today that those compensation arrangements turn out to eat up 58 
percent of the cost of what the defendant companies pay out. In other 
words, many of these companies that are in bankruptcy, and many more on 
the verge of bankruptcy and could be pushed into bankruptcy, are paying 
out to victims, but only 42 percent of what they are paying out gets to 
the victims.
  So I was hoping in this legislation--my vision has always been, how 
can we not fix this system? How hard is it to take this 60 percent, 
allow the business community some predictability and certainty over 30 
years, and get more money to the victims quicker and faster? If, 
instead of 300,000 pending lawsuits, let's say you have now 150,000 
pending lawsuits, that is a lot of lawsuits. That is a lot of lawsuits. 
And they are pending by the thousands in certain districts in America. 
People are not going to get trials right away. They are not going to be 
able to say I want to have my trial today; I have a serious asbestosis; 
I am on oxygen; I may die soon, or I have mesothelioma, and this is a 
deadly disease, and the doctors say I only have 9 months to live, and I 
want to have my case tried. It is not going to happen that way. It is 
not happening that way now, and it will not under this bill.

[[Page 1338]]

  Therefore, people are going to die and suffer in poverty for years 
before they get any payment; whereas, in this bill, we can get the 
money to the victims promptly and fairly, in an objective way, with 
plaintiffs similarly injured, similarly situated, getting similar 
amounts of money--generous amounts of money. As I noted, a mesothelioma 
case gets $1.1 million. Half would be paid within 30 days, without any 
need for an attorney whatsoever. You go in with a medical claim, and if 
an attorney is involved, the maximum he could get is 5 percent.
  My colleague from Texas said we modified the attorney fee rule, and I 
was at fault for that. Senators Specter and Leahy and others asked we 
consider the fact that when cases are appealed, they tend to become 
complex and require quite a bit of lawyer time, and we ought to allow 
lawyers to have more than that, if the judge approves it. So I thought 
that was a reasonable request. We have amended it only to that small 
degree. It is not an opening up of attorneys' fees under this bill.
  I am concerned that some of the primary advantages of asbestos reform 
would not be availed under this amendment. That is why I am reluctantly 
not able to support it. I hope we can continue with the bill and that 
other people will bring forth thoughtful amendments, as Senator Cornyn 
has, and those who joined with him and presented it in a thoughtful 
way. But as I have stated, I don't believe it is the proper vote.
  I yield the floor.
  Mr. SPECTER. Mr. President, how much time remains?
  The PRESIDING OFFICER. There is 8\1/2\ minutes.
  Mr. SPECTER. For the opponents of the amendment?
  The PRESIDING OFFICER. That is correct.
  Mr. SPECTER. Mr. President, as we wind down on this debate, I want to 
emphasize to my colleagues the importance of this vote because this 
amendment, essentially, after looking at it in some detail, is a poison 
pill. If this amendment is not defeated, the whole thrust of the 
compensation program for victims of asbestos who cannot now collect one 
penny will be defeated. The whole thrust of this trust fund was to 
compensate victims whose employers had gone bankrupt, compensate 
veterans who have served the country, who have no one to sue, and to 
stop the rush of bankruptcies, now totaling some 77, resulting in a 
loss to the economy estimated at some $300 billion.
  This proposal for a medical criteria bill doesn't even rise to the 
level of being palliative. It doesn't do anything except defer the 
claims of people who have been exposed until they become ill. It 
doesn't do anything about the rash of bankruptcies. It doesn't do 
anything about the people who suffer from mesothelioma, which is a 
deadly ailment, where they have no one to sue. So when the sponsor of 
the bill characterizes the current system as scandalous, that 
approbation could apply equally well.
  This is one of the many votes on the floor of the Senate where the 
outcome is uncertain. There is a curious alliance here, with some on 
one side of the aisle and some on the other side of the aisle. Trial 
lawyers may be for this amendment if it can be modified because they 
see the medical criteria bill as a way of continuing to bring cases to 
court, and to continue with the current structure. I don't criticize 
the trial lawyers. I don't criticize anybody. I don't criticize the 
trial lawyers for exercising whatever rights the current system allows. 
But it is up to the Congress of the United States to make the 
determination as to what is the appropriate public policy. That is a 
congressional decision to make.
  Mr. LEAHY. Will the Senator yield for a moment?
  Mr. SPECTER. I am delighted to.
  Mr. LEAHY. Mr. President, the Senator from Pennsylvania is absolutely 
right; it will not be a party-line vote. I hope the Senator from 
Pennsylvania succeeds. It is interesting, the people who represent 
victims and people who don't have legal representation support the 
Senator from Pennsylvania. Just about every labor union supports the 
Senator from Pennsylvania, as veterans groups do. I will not go through 
the list again. Just about every veterans group that has spoken on this 
issue supports the Senator from Pennsylvania. There are a lot of others 
who support the Senator from Pennsylvania, but I mention veterans and 
labor as an interesting coalition. They are speaking for people who 
would not have a voice otherwise. They support what the Senator from 
Pennsylvania is doing, as do an awful lot of businesses, I might add. I 
hope he is successful.
  Mr. SPECTER. If the Senator will yield for a question, to pinpoint 
what the Senator said about labor's support. The AFL-CIO, which 
represents labor, the working men and women of America, has been a 
party to the discussion for 2\1/2\ years, at some 36 meetings, which 
Judge Becker and I have presided over. When they heard about this 
medical criteria bill, they were alarmed at the impact it would have on 
the working men and women and the veterans, their constituency, and 
they put out an all-points to those people as to what was going on.
  I wonder if the Senator from Vermont would care to amplify, as the 
senior Democrat and principal cosponsor of the Leahy-Specter bill, as 
to what labor is doing in this area.
  Mr. LEAHY. It is interesting. We have a lot of labor unions coming 
out foursquare for the bill. Some held back and they want a couple of 
changes they are looking for. It is interesting that all of them are 
against this amendment--those who haven't yet endorsed the bill and 
those who have endorsed the bill. It is the same with the veterans 
groups. I think they know that this amendment, no matter how well 
intentioned it would be, if it went through, basically kills the 
chances of people to recover anything. It puts us back into the decades 
of litigation where, as people across the spectrum were saying, from 
the late Chief Justice William Rehnquist to Ruth Bader Ginsburg, we 
need a solution on the floor.
  Mr. SPECTER. If the Senator will yield further, as to what happened 
in today's maneuvering and negotiations on the floor, where we have had 
initially the trial lawyers being against this amendment. If people 
were wondering what all the maneuvering and negotiation was about, why 
we could not have an up-or-down vote, but a tabling motion, that is 
because the trial lawyers think that the amendment offered by Senator 
Cornyn may be better for them, but they want to change it around so 
that if this motion to table is not defeated, they will have time to 
rework it to their satisfaction.
  That is the way the system works, and if that happens--this is now 
Thursday afternoon at 16 minutes to 5--there will be frantic 
negotiations between now and Tuesday, when we come back to work on this 
bill--or perhaps Monday afternoon--to come to an alliance. I won't call 
it an unholy alliance, but it will be an alliance in very curious ways, 
where people who oppose the bill do so out of the mistaken notion that 
it is going to cost the Government money. This bill is ironclad not to 
cost the Government money. People on my side of the aisle who are 
opposed to it don't want to have the Government undertake an 
obligation, and I agree with that. This bill accomplishes that, with no 
governmental obligations. Now the issue is whether sufficient trial 
lawyers on your side of the aisle may come to a majority.
  Mr. LEAHY. Well, if the Senator will yield, like him, I was a trial 
lawyer. But I know with all trial lawyers, there are times when you 
have a superb settlement before you, you take it. The bill the Senator 
from Pennsylvania and I put together, after countless hours, months, 
and years of work, is a lot better settlement than going to a jury. I 
will support the Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I move to table the Cornyn amendment and 
ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. ENSIGN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page 1339]]

  The assistant legislative clerk proceeded to call the roll.
  Mr. SPECTER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  Mr. ENSIGN. I object.
  The PRESIDING OFFICER. Objection is heard. The clerk will continue 
with the call of the roll.
  The assistant legislative clerk continued with the call of the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is on agreeing to the motion. The yeas and nays have 
previously been ordered.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. McCONNELL. The following Senators were necessarily absent: the 
Senator from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. 
McCain).
  Mr. DURBIN. I announce that the Senator from Colorado (Mr. Salazar) 
is absent due to family illness.
  The PRESIDING OFFICER (Mr. Cornyn). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 70, nays 27, as follows:

                      [Rollcall Vote No. 13 Leg.]

                                YEAS--70

     Akaka
     Alexander
     Allen
     Baucus
     Bayh
     Biden
     Bingaman
     Bond
     Boxer
     Burns
     Burr
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Cochran
     Coleman
     Collins
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Frist
     Harkin
     Hatch
     Inouye
     Isakson
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Snowe
     Specter
     Stabenow
     Stevens
     Talent
     Vitter
     Voinovich
     Warner
     Wyden

                                NAYS--27

     Allard
     Bennett
     Bunning
     Chambliss
     Coburn
     Conrad
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hutchison
     Inhofe
     Kyl
     Lott
     Martinez
     McConnell
     Smith
     Sununu
     Thomas
     Thune

                             NOT VOTING--3

     Brownback
     McCain
     Salazar
  The motion was agreed to.
  Mr. REID. Mr. President, I know the distinguished majority leader 
filed cloture on Eric S. Edelman to be Under Secretary of Defense for 
Policy. Senator Levin has indicated he is agreeable to letting that go 
forward on a voice vote. We are ready to do that as soon as necessary 
when the majority leader believes it is appropriate.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I ask unanimous consent that the pending 
amendments be set aside so the Senator from Arizona, Mr. Kyl, may be 
recognized to lay down an amendment.
  Mr. REID. Reserving the right to object.
  Mr. DURBIN. Reserving the right to object.
  Mr. REID. Mr. President, I know there is no consent order in effect. 
We were of the understanding that we were going to go back and forth 
with amendments--there would be a Republican amendment, a Democratic 
amendment. If that is not the case, I am certainly willing to live by 
that, but I thought that was the agreement. I certainly have not spoken 
to the managers of the bill, Senator Specter and Senator Leahy, nor did 
I, in fact, speak to Senator Durbin, but that was my understanding.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, as the Senator from Nevada has said, 
there has been no understanding. It is agreeable with me to have an 
understanding as to that effect in the future. I have already talked to 
Senator Kyl, who is poised to offer this amendment. I am glad to enter 
into such an understanding. There is not one at the present time. I 
would like to proceed with Senator Kyl and alternate.
  Mr. REID. Mr. President, if I could, we have no problem with Senator 
Kyl offering the next amendment. The only problem is we have not seen 
it. Could we have some idea of what it is all about?
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Pennsylvania has the floor.
  Mr. SPECTER. I yield the floor for the purposes of letting the 
Senator from Nevada be recognized.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Arizona is recognized.


                Amendment No. 2754 to Amendment No. 2746

  Mr. KYL. I send an amendment to the desk.
  The PRESIDING OFFICER. Is there objection to setting aside the 
pending first-degree amendment?
  Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. Kyl] proposes an amendment 
     numbered 2754 to amendment No. 2746.

  Mr. KYL. I ask unanimous consent that the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To reduce the impact of the trust fund on smaller companies 
                  and to expand hardship adjustments)

     SEC. I. PROPORTIONAL PAYMENTS.

       (a) At page 171, after line 5, insert new (c) as follows 
     (the subsection references assume that the required 
     renumbering has occurred):
       ``(c) Limitation.--For any affiliated group, the total 
     payment in any year, including any guaranteed payment 
     surcharge under subsection (m) and any bankruptcy trust 
     guarantee surcharge under section 222(c), shall not exceed 
     the lesser of $16,702,400 or 1.67024 percent of the revenues 
     of the affiliated group for the most recent fiscal year 
     ending on or prior to December 31, 2002, or for the most 
     recent 12-month fiscal year as of the date the limitation is 
     applied, whichever is greater. For purposes of this 
     subsection, the term ``affiliated group'' shall include any 
     defendant participant that is an ultimate parent. The 
     limitation in this subsection shall not apply to defendant 
     participants in Tier I or to any affiliated group whose 
     revenues for the most recent fiscal year ending on or prior 
     to December 31, 2002, or for the most recent 12-month fiscal 
     year as of the date the limitation applied, whichever is 
     greater, exceeds $1,000,000,000. The revenues of the 
     affiliated group shall be determined in accordance with 
     section 203(a)(2), except for the applicable date. An 
     affiliated group that claims a reduction in its payment in 
     any year shall file with the Administrator, in accordance 
     with procedures prescribed by the Administrator, sufficient 
     information to allow the Administrator to determine the 
     amount of any such reduction in that year. If as a result of 
     the application of the limitation provided in this subsection 
     an affiliated group is exempt from paying all or part of a 
     guaranteed payment surcharge or bankruptcy trust surcharge, 
     then the reduction in the affiliated group's payment 
     obligation due to the limitation in this subsection shall be 
     redistributed in accordance with subsection (m). Nothing in 
     this subsection shall be construed as reducing the minimum 
     aggregate annual payment obligation of defendant participants 
     as provided in section 204(i)(1).''
       (b) Renumber subsections following new subsection (c).
       (c) Subsequent to renumbering the subsections following new 
     subsection 204( c), make the following cross-reference 
     changes:
       At page 142, line 7, replace ``204(g)'' with ``204(h)''
       At page 151, line 20, replace ``204(i)(6)'' with 
     ``204(j)(6)''
       At page 160, line 21, replace ``204(l)'' with ``204(m)''
       At page 167, line 24, replace ``204(d)'' with 
     ``204(e)''
       At page 170, lines 21 and 22, replace ``(d) and (m)'' with 
     ``(e) and (n)''
       At page 171, line 22, replace ``(i)(10)'' with ``(j)(10)''
       At page 172, line 3, replace ``(j)'' with ``(k)''
       At page 177, line 12, replace ``(j) with ``(k)''
       At page 178, line 25, replace ``(j)(3)'' with ``(k)(3)''
       At page 179, line 2, replace ``(k)(1)(A)'' with 
     ``(l)(1)(A)''
       At page 182, line 16, replace ``(i) with ``(j)''

[[Page 1340]]

       At page 183, line 6, replace ``(i)'' with ``(j)''
       At page 186, lines 7 and 8, replace ``(d), (f), (g), and 
     (m)'' with ``(e), (g), (h) and (n)''
       At page 186, line 11, replace ``(d) and (m)'' with ``( e) 
     and ``(n)''
       At page 186, line 20, replace ``(d) and (m)'' with ``(e) 
     and ``(n)''
       At page 186, line 23, replace ``(l)'' with ``(m)''
       At page 187, line 8, replace ``(f)'' with ``(g)''
       At page 196, line 20, replace ``(d)'' with ``(e)''
       At page 196, line 22, replace ``(m)'' with ``(n)''
       At page 197, line 13, replace ``(h)'' with ``(i)''
       At page 198, line 11, replace ``(d)'' with ``(e)''
       At page 198, line 16, replace ``(h)'' with ``(i)''
       At page 198, line 17, replace ``(j)'' with ``(k)''
       At page 198, line 23, replace ``(d)'' with ``(e)''
       At page 199, line 10, replace ``(h)'' with ``(i)''
       At page 199, line 12, replace ``(d) and (m)'' with ``(e) 
     and (n)''
       At page 199, line 20, replace ``(k)'' with ``(l)''
       At page 199, line 22, replace ``(h)'' with ``(i)''
       At page 200, line 3, replace ``(h)'' with ``(i)''
       At page 200, line 7, replace ``(d), (f), (g), and (m)'' 
     with ``(e), (g), (h) and (n)''
       At page 200, line 22, replace ``(d), (f), and (g)'' with 
     ``(e), (g), and (h)''
       At page 201, line 5, replace ``(i)(9)'' with ``(j)(9)''
       At page 203, line 6, replace ``204(i)'' with ``204(j)''
       At page 204, line 23, replace ``204( d)'' with ``204(e)''
       At page 205, line 11, replace ``(i)(10)'' with ``(j)(10)''
       At page 205, line 16, replace ``204(h)'' with ``204(i)''
       At page 248, line 21, replace ``204(f)(3)'' with 
     ``204(g)(3)''
       At page 261, line 14, replace ``204(i)(10)'' with 
     ``204(j)(10)''
       At page 266, line 14, replace ``204(f)'' with ``204(g)''
       At page 289, line 9, replace ``204(i)'' with ``204(j)''
       At page 289, line 11, replace ``204(d)'' with ``204(e)''
       At page 289, line 12, replace ``204(m)'' with ``204(n)''
       At page 289, line 19, replace ``204(i)'' with ``204(j)''
       At page 289, line 20, replace ``204(d)'' with ``204(e)''
       At page 289, line 21, replace ``204(m)'' with ``204(n)''
       At page 289, line 23, replace ``204(i)(10)'' with 
     ``204(j)(10)''
       At page 334, line 8, replace ``204(f)'' with ``204(g)''

     SEC. 2. HARDSHIP ADJUSTMENTS.

       (a) Strike page 172, line 6, through page 173, line 17, and 
     insert the following:
       ``(2) Financial Hardship Adjustments.--
       (A) In general.--Any defendant participant in any tier may 
     apply for an adjustment under this paragraph at any time 
     during the period in which a payment obligation to the Fund 
     remains outstanding and may qualify for such an adjustment by 
     demonstrating to the satisfaction of the Administrator that 
     the amount of its payment obligation would materially and 
     adversely affect the defendant participant's ability to 
     continue its business and to pay or satisfy its debts 
     generally as and when they come due. Such an adjustment shall 
     be in an amount that in the judgment of the Administrator is 
     reasonably necessary to prevent such material and adverse 
     effect on the defendant participant's ability to continue its 
     business and to pay or satisfy its debts generally as and 
     when they come due.
       (B) Factors to consider.--In determining whether to make an 
     adjustment under subparagraph (A) and the amount thereof, the 
     Administrator shall consider--
       (1) the financial situation of the defendant participant 
     and its affiliated group as shown in historical audited 
     financial statements, including income statement, balance 
     sheet, and statement of cash flow, for the three fiscal years 
     ending immediately prior to the application and projected 
     fmancial statements for the three fiscal years following the 
     application;
       (2) an analysis of capital spending and fixed charge 
     coverage on a historical basis for the three fiscal years 
     immediately preceding a defendant participant's application 
     and for the three fiscal years following the application;
       (3) any payments or transfers of property made, or 
     obligations incurred, within the preceding 6 years by the 
     defendant participant to or for the benefit of any insider as 
     defined under section 101(31) of title 11 of the United 
     States Code or any affiliate as defined under section 101(2) 
     of title 11 of the United States Code;
       (4) any prior extraordinary transactions within the 
     preceding 6 years involving the defendant participant, 
     including without limitation payments of extraordinary 
     salaries, bonuses, or dividends;
       (5) the defendant participant's ability to satisfy its 
     payment obligations to the Fund by borrowing or financing 
     with equity capital, or through issuance of securities of the 
     defendant participant or its affiliated group to the Fund;
       (6) the defendant participant's ability to delay 
     discretionary capital spending; and
       (7) any other factor that the Administrator considers 
     relevant.
       (B) Term.--A financial hardship adjustment under this 
     paragraph shall have a term of 5 years unless the 
     Administrator determines at the time the adjustment is made 
     that a shorter or longer period is appropriate in the light 
     of the financial condition of the defendant participant and 
     its affiliated group and other relevant factors, provided 
     that a financial hardship adjustment under this paragraph 
     shall terminate automatically in the event that the defendant 
     participant holding the adjustment files a petition under 
     title 11, United States Code.
       (C) Renewal.--A defendant participant may renew a hardship 
     adjustment upon expiration by demonstrating that it remains 
     justified. Such renewed hardship adjustments shall have a 
     term of 5 years unless the Administrator determines at the 
     time of the renewed adjustment that a shorter or longer 
     period is appropriate in the light of the financial condition 
     of the defendant participant and its affiliated group and 
     other relevant factors, provided that a renewed financial 
     hardship adjustment under this paragraph shall terminate 
     automatically in the event that the defendant participant 
     holding the adjustment files a petition under title 11, 
     United States Code.
       (D) Procedure.--
       (1) The Administrator shall prescribe the information to be 
     submitted in applications for adjustments under this 
     paragraph.
       (2) All audited financial information required under this 
     paragraph shall be as reported by the defendant participant 
     in its annual report filed with the Securities and Exchange 
     Commission in accordance with the Securities Exchange Act of 
     1934 (15 U.S.C. 78a et seq.). Any defendant participant that 
     does not file reports with the Securities and Exchange 
     Commission or which does not have audited financial 
     statements shall submit financial statements prepared 
     pursuant to generally accepted accounting principles. The 
     chairman, chief executive officer, and chief financial 
     officer of the defendant participant shall certify under 
     penalty of law the completeness and accuracy of the financial 
     statements provided under this sub-paragraph.
       (3) The chairman, chief executive officer, and chief 
     financial officer of the defendant participant shall certify 
     that any projected information and analyses submitted to the 
     Administrator were made in good faith and are reasonable and 
     attainable.''
       (b) Conforming changes.
       At page 177, line 10, strike ``hardship and''
       At page 178, lines 19-20, strike ``financial hardship 
     adjustments under paragraph (2) and''
       At page 178, lines 22-23, strike ``--(A).''
       At page 179, line 2, insert a period after ``(k)(1)(A)'' 
     and delete; ``or''
       At pages 179--181, strike line 10 on page 179 through line 
     2 on page 181.
       At page 181, at line 3: Insert ``Rulemaking and'' before 
     ``advisory''
       At page 181, line 5: Strike ``shall'' and insert ``may''
       At page 181, following line 14, insert: ``The Administrator 
     may adopt rules consistent with this Act to make the 
     determination of hardship and inequity adjustments more 
     efficient and predictable.''
       At page 197, line 8, strike ``Hardship and''
       At page 197, line 15, strike ``hardship and''
       At page 197, line 19, strike ``hardship and''
       At page 197, lines 24 and 25, strike ``severe financial 
     hardship or''

     SEC. 3. STEPDOWNS AND FUNDING HOLIDAYS.

       (a) At page 205, line 20, strike ``The'' and insert: 
     ``Except as otherwise provided in this paragraph, the''
       (b) At page 205, lines 22 through 24 strike: ``, except 
     with respect to defendant participants in Tier I, Subtiers 2 
     and 3, and class action trusts'' and insert the following:

     ``. The reductions under this subsection shall not apply to 
     defendant participants in Tier I, subtiers 2 and 3, and class 
     action trusts. For defendant participants whose payment 
     obligation has been limited under section 204(c) or who have 
     received a financial hardship adjustment under section 
     204(e)(2), aggregate potential reductions under this 
     subsection shall be calculated on the basis of the defendant 
     participant's tier and subtier without regard to such 
     limitation or adjustment. If the aggregate potential 
     reduction under this subsection exceeds the reduction in the 
     defendant participant's payment obligation due to the 
     limitation under section 204(c) and the financial hardship 
     adjustment under section 204(e)(2), then the defendant 
     participant's payment obligation shall be further reduced by 
     the difference between the potential reduction provided under 
     this subsection and the reductions that the defendant 
     participant has already received due to the application of 
     the limitation provided in section 204(c) and the financial 
     hardship adjustment provided under section 204(e)(2). If the 
     reduction in the defendant participant's payment obligation 
     due to the limitation provided in section 204(c) and any the 
     financial hardship adjustment provided under section 
     204(e)(2) exceeds the amount of the reduction provided in 
     this subsection, then the defendant

[[Page 1341]]

     participant's payment obligation shall not be further reduced 
     under this paragraph.''
       (c) At page 207, line 10 through 12, strike the text 
     following ``except'' in line 10 and insert ``as otherwise 
     provided under this paragraph. The reductions or waivers 
     provided under this subsection shall not apply to defendant 
     participants in Tier I, subtiers 2 and 3, and class action 
     trusts. For defendant participants whose payment obligation 
     has been limited under section 204(c) or who have received a 
     financial hardship adjustment under section 204(e)(2), 
     aggregate potential reductions or waivers under this 
     subsection shall be calculated on the basis of the defendant 
     participant's tier and subtier without regard to such 
     limitation or adjustment. If the aggregate potential 
     reductions or waivers under this subsection exceed the 
     reduction in the defendant participant's payment obligation 
     due to the limitation under section 204(c) and the financial 
     hardship adjustment under section 204(e)(2), then the 
     defendant participant's payment obligation shall be further 
     reduced by the difference between the potential reductions or 
     waivers provided under this subsection and the reductions 
     that the defendant participant has already received due to 
     the application of the limitation provided in section 204(c) 
     and the financial hardship adjustment provided under section 
     204(e)(2). If the reduction in the defendant participant's 
     payment obligation due to the limitation provided in section 
     204(c) and any the financial hardship adjustment provided 
     under section 204(e)(2) exceeds the amount of the reductions 
     or waivers provided in this subsection, then the defendant 
     participant's payment obligation shall not be further reduced 
     under this paragraph.''

  Mr. KYL. Mr. President, I will be brief.
  For those who have been involved in this issue, it has been discussed 
actually since last August and deals with the small companies or 
businesses that would be paying into the fund that is the subject of 
this bill. The amendment is designed to reduce the impact of the trust 
fund on the small- and medium-sized companies and to ensure that the 
fund does not drive them into bankruptcy.
  It does principally two things.
  First, it provides across-the-board relief to small- or midsized 
companies, those with annual gross revenues of less than $1 billion, by 
limiting their trust fund contributions to 1.67 percent of their gross 
revenues. This per se relief should resolve most ability-to-pay 
problems that are created by the fund with certainty and without 
administrative burdens.
  For those who do not qualify for this across-the-board relief or for 
whom it is not enough, the amendment provides a second form of hardship 
relief. It authorizes the administrator to reduce the company's fund 
assessments if the company otherwise would go out of business and would 
be unable to pay its bills. To be exact, under the amendment, a company 
can qualify for an adjustment if it can show that its fund payments 
``would materially and adversely affect the defendant participant's 
ability to continue its business and to pay or satisfy its debts 
generally as and when they come due.'' Under this amendment, access to 
this form of relief would be unlimited.
  This amendment does not solve all of the problems with the trust fund 
allocation of payments. I anticipate there will be other amendments to 
address some of those issues, and I support some of those amendments, 
as well. I believe this amendment does go a long way toward solving the 
problem I identified.
  What this amendment does do is shave off some of the roughest edges 
of this bill. This amendment makes the hardship adjustment a real and 
predictable guarantee. The way that the bill currently is written, some 
small- and medium-sized companies will be hit with trust fund payments 
that will constitute a major portion of their gross revenues. These 
companies obviously will not be able to make these payments. While the 
bill currently authorizes an insolvency hardship adjustment, that 
hardship adjustment is vaguely stated and includes limitations that 
undercut its usefulness for many companies on the margins. Literally, 
companies faced with crushing payments under the bill would be forced 
to tell potential creditors or capital markets, ``yes, we will be 
required to pay 25 percent of our gross revenues into the trust fund 
under the FAIR Act, but we might be able to get a hardship 
adjustment.'' You can see why these companies might have trouble 
getting a loan. Under my amendment, these same small- and medium-sized 
companies will be able to tell the banks and potential investors that 
they will not be forced to pay more than one and two-thirds of a 
percent of their gross revenues into the fund. By providing guaranteed 
reasonable limits on assessments, this amendment will make it possible 
for these companies to continue to engage in normal business 
transactions.
  This amendment does not directly affect the availability of inequity 
adjustments under the trust fund. The amendment does, however, 
indirectly expand the availability of inequity adjustments by making 
hardship adjustments into a separate category that is not drawn from 
the $300 million that is currently set aside for both kinds of 
adjustments. That $300 million will now be set aside solely for equity 
adjustments.
  Also, the amendment does not in any way affect the fund's guarantee 
of producing $3 billion a year for compensating victims. Under the bill 
as it is currently written, in the event of any shortfall in reaching 
that $3 billion, a guaranteed payment surcharge is imposed on all 
defendant participants in order to make up the difference. Thus, to the 
extent that relief received by any defendant pursuant to this amendment 
prevents the fund from reaching the $3 billion target, that gap will be 
filled by the payment surcharge. This amendment, therefore, in no way 
adversely affects the FAIR Act's funding guarantee.
  Allow me to describe in greater detail exactly how this amendment 
works. Under the amendment, no defendant participant, other than a Tier 
I participant, with 2002 revenues of less than $1 billion is required 
to contribute more than the greater of 1.67 percent of its revenues as 
of December 31, 2002, or 1.67 percent of its revenues for the most 
recent 12-month fiscal year. The revenue cap employed by this amendment 
matches the 1.67 percent of gross revenues that is the measure of Tier 
I contributions. Also, only companies that elect to report on a 
consolidated basis may take advantage of this revenue cap.
  This amendment's revenue cap is only a rough measure of ability to 
pay. It is, however, easy to administer, and it is less subject to 
manipulation than other measures, such as net income.
  As for the amendment's changes to the hardship adjustment, first, 
there currently are two hardship provisions in the bill--section 
204(d)(2), which provides relief generally for severe financial 
hardship and which is subject to the $300 million hardship and inequity 
cap, and section 204(d)(5), which allows the cap to be exceeded if 
otherwise a company would be forced into insolvency. My amendment would 
rewrite (d)(2) to provide clearer standards, eliminate (d)(5), and make 
clear that there is no cap on hardship relief. The result is a simpler 
proposal more attuned to the needs of potential hardship-adjustment 
applicants.
  Under the amendment, any defendant participant can apply for hardship 
relief, whether it is in Tier I or not, and whether or not it reports 
on a consolidated basis. However, in the case of defendant participants 
that do not file on a consolidated basis, the administrator must 
examine the real financial situation of the defendant participant by 
taking into consideration the financial position of the affiliated 
group.
  Again, under the revised hardship adjustment in this amendment, the 
Administrator may grant an adjustment if he concludes that the amount 
of a defendant participant's payment obligation would materially and 
adversely affect the defendant participant's ability to continue its 
business and to pay or satisfy its debts generally as and when they 
come due. The amount of relief would be limited to the amount necessary 
to avoid the problem.
  In determining whether to grant an adjustment under this revised 
provision, the administrator will required to consider, among other 
things: the historical audited financial statements for the defendant 
participant or affiliated group for the three years immediately prior 
to the application for relief; projected financial statements for

[[Page 1342]]

the 3 fiscal years following that application; an analysis of capital 
spending and fixed charge coverage on a historical basis for the 3 
fiscal years preceding and the 3 fiscal years immediately following the 
application; any payments or transfers of property made, or obligations 
incurred, by the defendant participant during the 6 fiscal years prior 
to the application to or for the benefit of any insider; any 
extraordinary transactions of the defendant participant, including 
payments of extraordinary salaries, bonuses, or dividends, within the 6 
fiscal years prior to the application; the defendant participant's 
ability to satisfy its payment obligations to the fund by borrowing or 
financing with equity capital, or through issuance of securities to the 
fund; and the defendant participant's ability to postpone discretionary 
capital spending for a reasonable period.
  The term of any adjustment under the amendment shall be 5 years, 
unless the administrator determines that a shorter or longer period is 
appropriate in light of the financial condition of the defendant 
participant. Any adjustment under the amendment may be renewed upon a 
showing that it continues to be justified--and it is automatically 
terminated if the defendant participant files for bankruptcy 
protection.
  The amendment also eliminates provisions for recapture of hardship 
adjustments, except in cases of fraud. The current bill's provisions 
for frequent review of hardship adjustments and potential for giving 
adjustments back have significantly reduced the usefulness of these 
adjustments in addressing the concerns of companies on the margins. If 
these adjustments aren't reasonably predictable, they are not useful 
either.
  Finally, under the amendment, companies that have received discounts 
off their tier/subtier allocation because of the cap or hardship 
adjustments would only get the benefit of cumulative step downs to the 
extent that the step downs exceeded the amount of the discounts the 
company already had. The same rule applies for hardship adjustments.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I thank the Senator from Arizona for 
offering this amendment.
  This is a good amendment. There has been a great deal of concern that 
smaller businesses--although we are talking about businesses which are 
substantial, but they are smaller than many in the field--should not 
pay more than they can afford to pay. This amendment achieves that 
result.
  I add that Senator Kyl has been an outstanding member of the 
committee for many years, and in the past year and a half since I have 
become chairman, he has been a stalwart and has worked tirelessly on 
this bill. I don't know how many meetings he and I and others, 
including the presiding Senator, Mr. Cornyn, have had. This has been a 
matter very much on the Senator's mind and many others who have 
suggested many other provisions. It is a very good amendment. I thank 
and compliment the Senator.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. ENSIGN. Mr. President, I make a point of order that the pending 
bill violates section 407 of H. Con. Res. 95, the concurrent resolution 
on the budget for fiscal year 2006.
  Mr. SPECTER. I move to waive the point of order under the applicable 
provisions of the rules and statutes.
  The PRESIDING OFFICER. The motion to waive is debatable.
  Mr. SPECTER. Mr. President, the essence of this issue is that the 
point of order should not be sustained because there is no Federal 
money involved. All of the money involved comes from private sources. 
This is a make-or-break issue for this bill.
  The Federal budget is not involved in this bill. To repeat, which I 
don't like to do, but for emphasis, the Federal budget is not involved 
in this bill. The money comes from private sources. It goes through the 
Department of Labor as a conduit. Technically, there is a Federal 
expenditure, but it is not the Federal Government's money. Now, the 
only issue which has been raised is that at some point in the future, 
the Federal Government might seek to bail out this trust fund. The bill 
is emphatic in a number of places that the Federal Government has no 
obligation to pay out any money. If the trust fund runs short, there 
are provisions to meet that situation. It is a complicated provision, 
but the administrator makes an analysis, and if he sees the necessity 
to make some modifications in the trust fund, he can take it to a 
committee and the committee can then make a recommendation to Congress. 
The Congress has to act.
  The real safety valve is the one provided by the Biden amendment in 
July of 2003 that if the fund runs out of money, claimants can go back 
to court. So the claimants are no worse off going back to court if the 
trust fund runs out of money than they are now. But in the interim, 
thousands of people who suffer from deadly diseases--mesothelioma and 
exposure to asbestos--will be paid where they cannot be paid now 
because their companies are bankrupt or they are veterans and there is 
no one to sue.
  The consideration that some future Congress, decades down the road, 
in the year 2030, might have a different view is up to the Congress in 
that year. We cannot bind them as to what they are going to do, nor 
should we try to bind them. But what we do here does not implicate or 
involve the Federal Treasury. To say that there may be a temptation in 
the future for some Congress to spend Federal funds is not something we 
should do. It is not within our purview. It is not within our 
responsibility. In fact, we ought to keep our hands off the future 
Congresses. We should not presume that we know enough in the year 2006 
to tell the Congress in the year 2026 what to do. They will be elected. 
They may well be a lot smarter than this Congress. Perhaps it is hard 
not to be. But it is up to them at that time.
  This is a convenient maneuver to defeat the bill by requiring 60 
votes. That is like the motion to proceed, the filibuster, to try to 
structure a vote for 60 votes, to try to find enough people who do not 
like the bill; only takes 41 who do not like the bill to defeat the 
bill on this kind of a maneuver, whereas it takes 51 to defeat this 
bill otherwise.
  The administration is for it. If this bill goes 50-50, the Vice 
President votes for it. The President issued a statement of support on 
S. 852. There are caveats in it. He said there are concerns. I don't 
know of any Member of this Senate who does not have some concerns about 
this bill. But that is what the debate is for. That is what we are here 
to consider. We will not be able to consider this if this point of 
order is sustained.
  I yield to the real expert on budgets, a man who was chairman of the 
Committee on the Budget for 73 years.
  Mr. DOMENICI. I am 73 years old, but I didn't chair it all the time.
  Mr. SPECTER. I thought he chaired it his entire life. Senator 
Domenici was the chairman of the Committee on the Budget the day I was 
sworn in. I have great respect for Senator Gregg, chairman of the 
Committee on the Budget today, but I yield to the chairman of the 
Committee on the Budget emeritus.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. So that I understand, I am speaking on my own time now; 
is that correct?
  The PRESIDING OFFICER. The Senator is recognized in his own right.
  Mr. DOMENICI. Right. First, let me say the Senator who is raising the 
point of order has every right to raise the point of order. The 
question is, is this a real point of order? I want to tell the Senate, 
I am not the Parliamentarian. I am not the Congressional Budget Office. 
But if I were either, I would say this point of order does not even 
lie, not that we should defeat it, it just does not lie. It is not a 
proper interpretation of the existing budget law to say this point of 
order can be raised and can invalidate this bill because the bill 
violates the budget.
  I want the Senators who are worried about voting to waive this point 
of order to understand this is not a budgetary issue. This is a 
technical point of

[[Page 1343]]

order that got to the Senate because the Congressional Budget Office, I 
assume, or the Parliamentarian in consultation with the Congressional 
Budget Office, ruled that any expenditure of money exceeding $5 billion 
over a baseline in the year 2016 cannot be sustained.
  You see, Senator Byrd, this was done by our distinguished new 
chairman of the Budget Committee because he found that budgets were 
being broken in future years by putting in a program that ran at $2 or 
$3 billion a year and increased, way out there in future years, up to 
$10 or $15 billion.
  Now, fellow Senators, what I have described was perfectly valid until 
the distinguished chairman, within his rights, decided that this was a 
problem he wanted to solve. Now, you see, the goal is to prevent the 
bump-up of expenditures in future years that are unexpected by 
everybody voting today--unexpected because the increase comes along 10 
years later and costs much more than what you thought you were voting 
for.
  Now, I cannot explain it any better than that. That is about the best 
I can do. Somebody must have determined that this budget rule applies 
because there is no way to disburse this trust fund money without going 
through the Department of Labor. That must be it. Because some 
Government agency must take this money--not tax money, not Federal 
money--and run it through their books and write the checks, somebody 
has decided that this fear of a bump-up in some future year applies.
  My good friend from Nevada is absolutely right to bring up this point 
of order if what he wants to have happen to this bill is for it to be 
proven by 60 votes. That is fine. But I want everybody to know, if the 
point of order is not sustained and this bill goes forward, I don't 
think the deficit of the United States is going to be affected in 2016 
by one dollar if this $5 billion estimate is true because the money is 
not really on the Federal books. The trust fund has no real 
relationship to the expenditure of Federal money.
  So in considering this budget rule--I have explained it to you--I 
ask: how are we going to break the budget when this money is not even 
part of the budget? It is not on the budget. The money is going to be 
collected and then go through the Department of Labor, but it is not 
Federal money.
  I say to Senator Byrd, when they send the budget up in 2016, there is 
not going to be any of this trust fund money. This money might get a 
footnote. The Department of Labor is going to have to run the trust 
fund, but it cannot add to or subtract from the deficit because the 
Government is not spending its money. And it is not tax money.
  So let me say, if you want to kill this bill based upon a point of 
order that is--it is almost not a point of order, it is just a little, 
tiny technicality--it gets in by the skin of its teeth on an 
interpretation--then vote for it. If you are worried about saving 
money, and being a tightfisted budgeteer, then understand that this has 
nothing to do with being a tightfisted budgeteer because there is no 
budgeting involved.
  So I thank the good chairman who has worked so hard on this bill. I 
have never sat on the committee that produced this bill in my 34 years 
here. I never chose to go on the Judiciary Committee, so I am not 
intimately knowledgeable about this. But I know we better do something 
about asbestos. We run around talking about fiscal responsibility and 
helping business and cutting taxes so we will have more business. If we 
do not do anything about asbestos, and leave it in the courts, it will 
be the biggest abuse of the court system that we have ever known.
  If you want to tell these new countries becoming democracies, ``boy, 
are we a gifted country, we have this great rule of law, this fantastic 
court system,'' please, don't let them ask about asbestos because they 
will laugh: Why should they be like America? Why should they have a 
legal system that is so messed up that there are hundreds of thousands 
of claimants running around this country with scores of lawyers who, 
when we were practicing law, would not even have been lawyers? You 
could not run around soliciting these cases when I was sworn into the 
bar. You could not run around hiring these doctors when I was a member 
of the bar. You could not run around saying: Go get your neighbors and 
sign them up.
  That is American law today. It is business. It is entrepreneurial 
law. That is what we have. But it is not very orderly and it is not 
very ``due'' in terms of due process. Nor is it very fair because the 
claimants do not get very much money. The lawyers get a lot.
  I do not know why we would want to kill this bill. Lawyers get less. 
There is an orderliness involved. There is a way to adjudicate claims 
instead of waiting around for years. So with this point of order, while 
I think it is not even a point of order in the sense of what we 
intended with the 10-year-out rule--let's call it that; the 10-year-out 
rule--I do not know what we are even trying to protect against. It is 
not going to affect anything except to possibly kill the bill.
  So with that I thank the Senate for yielding me a few minutes. I 
regret having to intervene before the proponent got to speak. But I 
thank the Senate nonetheless.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I have listened with great interest to the 
interpretation of my colleague on the Budget Committee. I must say, I 
come to a totally different conclusion based on the law and based on 
the Congressional Budget Office's own reports.
  Here is the report from the Congressional Budget Office itself with 
respect to the issue of whether the point of order raised by the 
Senator from Nevada has merit or not. The Congressional Budget Office, 
which is nonpartisan, has said very clearly that this does involve 
Federal direct spending, does involve deficit spending. A point of 
order clearly lies.
  Mr. ENSIGN. Mr. President, will the Senator yield for a question?
  Mr. CONRAD. Yes, I will be happy to yield to the Senator.
  Mr. ENSIGN. Is the Senator aware, the ranking member on the Budget 
Committee, that the current Republican chairman of the Budget Committee 
has indeed ruled that the point of order I raised today is actually 
valid?
  Mr. CONRAD. Yes. I have talked directly to the chairman of the Budget 
Committee, and he has said to me he believes that clearly this budget 
point of order does lie. And he is buttressed, I might say to my 
colleague, by the Congressional Budget Office itself, which says on 
page 2 of their report on this legislation called S. 852, the Fairness 
in Asbestos Injury Resolution Act, in the last paragraph:
  Pursuant to section 407 of H. Con. Res. 95 (the Concurrent Resolution 
on the Budget, Fiscal Year 2006), CBO estimates that enacting S. 852 
would cause an increase in direct spending greater than $5 billion in 
at least one 10-year period from 2016 to 2055.
  That is the point of order raised by the Senator from Nevada. It is 
absolutely appropriate, and it clearly lies.
  People can come out and be unhappy about the result, but the reality 
is we have a problem. And we have a big problem here. Why? Well, we 
have done an analysis, my professional staff. Here is what they found. 
The claims and administrative expenses will likely exceed the 
contributions to the trust fund. No. 2, that upfront claims will far 
exceed contributions, so the trust fund will have to borrow substantial 
amounts. I have heard over and over it stated on the floor that there 
is no Federal money, there is no Federal money. Really? Why is it, 
then, that in the legislation they provide for borrowing Federal money? 
Why is that? Because everybody knows that point No. 2 is true, that the 
upfront claims are going to greatly exceed the revenue, and the result 
will be borrowing. And guess who they are going to borrow from. They 
are going to borrow from the Federal Treasury.
  It is also our conclusion that small adjustments in the amount and 
timing of the assumptions quickly bankrupt the trust fund; and, 
finally, that it is unrealistic to assume the trust fund

[[Page 1344]]

will ever terminate. Because the other thing they are saying is: Well, 
the legislation provides, if they run out of money, we will terminate 
the trust fund. Let's think about that for a moment. Companies will be 
on the hook for tens of billions of dollars that they will have to pay 
back that have been borrowed, and then they are thrown back in the 
court system too. Can you imagine the outcry that will come from them?
  Let me go to the next chart. I had hoped to not be engaged in this 
debate, frankly, but we were asked to do a report. And we have done 
that report. Professional staff did it. These are the conclusions. They 
looked at the CBO estimates, and here is what we found. CBO did not 
score many items that are likely to increase the costs, including 
dormant claims. Those are claims that are not currently being pursued 
but would have a possibility of getting recovery if they went after 
this pot of money.
  No. 2, exceptional medical claims. There are nine categories that 
people can fit into. But if you do not neatly fit into those, there is 
an opportunity for the costs to rise.
  And third, CBO did not score any claims of family members of workers 
who were exposed to asbestos.
  We also--the professional staff found that CBO's estimate of the 
number of future cancer claims is likely to be too low. The CBO 
analysis concluded there would be 78,000 new cancer claims. The 
Tillinghast study--which we believe is the most objective study out 
there, which was done by the Johns Manville trust--ran 14 different 
scenarios. They found, on average, 133,000 new cancer claims is the 
likely result, not 78,000. By the way, if they are right, if the 
midpoint of their range is correct, the increase in cost will be very 
dramatic. Finally, CBO's estimate of the percent of nonmalignant claims 
that will receive a cash award is likely too conservative.
  In this legislation, there are five tiers for non-malignant claims. 
Tier 1 gets medical monitoring. They do not get money. Tier 2 gets cash 
awards of $25,000; tier 3, $100,000. CBO has estimated only 15 percent 
of claimants will get cash awards.
  When our people went out and talked to experts, they said the range 
is 10 to 40 percent. Our people took the midpoint of that range, 25 
percent. The Tillinghast study suggests it will be in the range of 23 
or 24 percent. That increases the cost over CBO's analysis.
  The conclusion of the Budget Committee staff on the minority side is 
that the shortfall over the period of the fund will be $150 billion, 
the net present value difference being $50 billion. In other words, the 
$150 billion shortfall is over the life of the fund. That turns into a 
net present value of $50 billion. But to show you how sensitive this 
is, we were very conservative in terms of new cancer claims. CBO said 
78,000. Our study said 90,000. Tillinghast, in 14 different scenarios, 
on average found 133,000 new cancer claims. If they are right, this 
number is not $150 billion, it is $295 billion, with a net present 
value of $85 billion.
  Let's reality test for one moment. We went out and looked at what has 
happened in other cases where funds were set up, what the initial 
estimates were and then what actually happened. In the case of the 
Manville trust, the original range was that there would be on the low 
end 50,000 claims and on the high end, they said 200,000 claims. Here 
is how many there have actually been to date--not 50,000, not 200,000--
there have already been 690,000 claims. That is not the end of it. They 
now estimate there will be another 1.4 million claims on top of that, 
for a total of over 2 million claims. So what is the result? The result 
is, people who were promised certain recovery are getting 5 cents on 
the dollar. That is what they are getting now, 5 cents on the dollar.
  We also looked at the black lung fund. In the black lung fund they 
projected at the beginning, the original estimate, it would cost $3 
billion. Here is what it has cost so far--$41 billion. That is through 
2004.
  The assertion has been made that CBO has said this is paid for. That 
isn't their conclusion. CBO said this in the letter:

       The proposed trust fund might or might not have adequate 
     resources to pay all valid claims. There is a significant 
     likelihood that the fund's revenues would fall short of the 
     amount needed to pay valid claims, debt service, and 
     administrative costs.

  If you look at the numbers behind the numbers, I think it is very 
hard to conclude anything other than what my professional staff 
concluded. The strong likelihood is that this fund is way under water. 
Our conclusion is $150 billion under water. It is entirely possible----
  Mr. SPECTER. Will the Senator from North Dakota yield for a question.
  Mr. CONRAD. I would be happy to, when I have finished my sentence. It 
is entirely possible that it is $295 billion under water. I regret to 
conclude it may be more serious than that.
  With that, I am happy to yield.
  Mr. SPECTER. Mr. President, I have noted the chart. If you could put 
the chart back up, please.
  Mr. CONRAD. Which one?
  Mr. SPECTER. The last one. The one the Senator from North Dakota is 
talking about, the one that has the letter going to Senator Arlen 
Specter. I received that letter. You may be surprised to know that I 
read that letter.
  Mr. CONRAD. I am not surprised at all.
  Mr. SPECTER. Senators receive lots of letters; relatively few are 
read.
  My question to the Senator from North Dakota is, isn't it true that 
the two sentences which you left off following the chart you have read:

       There is some likelihood that the fund's revenue would be 
     sufficient to meet those needs.

  Isn't it true that that is the next sentence in the letter?
  Mr. CONRAD. That is the next sentence in the letter. It is also true 
that the CBO analysis is very clear. They have not even attempted to 
put a cost behind a whole series of things that they have told us are 
very likely to cost money and increase the cost in a way that puts this 
fund over into insolvency.
  I regret being in this situation. I have no desire to be involved in 
this debate, but we are here.
  Mr. SPECTER. If the Senator will yield for another question.
  Mr. CONRAD. I am happy to yield.
  Mr. SPECTER. Isn't it true that following the sentence I just read, 
which was ``there is some likelihood that the fund's revenues would be 
sufficient to meet those needs,'' the next sentence reads:

       The final outcome cannot be predicted with great certainty.

  Isn't that pretty much standard CBO, where they are making 
projections, and the thrust of what CBO has said and the Senator from 
North Dakota has cited is that you don't know ``with great certainty''? 
And isn't it true that in any projection of this sort you cannot have 
``great certainty,'' that you don't even have that on proof for the 
death penalty in a first-degree murder case where it is only proof 
beyond a reasonable doubt? Isn't it true that CBO in the letter which 
they sent to me, dated August 25, made a projection that the cost would 
be between $120 and $150 billion, and the final line on page 8 was $132 
billion which is well within the $140 billion figure?
  Mr. CONRAD. Let me say to my colleague, the problem with that is, it 
doesn't include debt service. It doesn't include any additional amount 
for dormant claims. It doesn't include any additional amount for 
exceptional medical claims. It doesn't include any additional amount 
for claims of family members. CBO's estimate of the number of future 
cancer cases, we believe, is likely to be far too low. And CBO's 
estimate of the percent of nonmalignant claims that will receive a cash 
award is likely far too low.
  I will go further in answering my colleague and say, when you reality 
test all of these things against what has happened in other funds like 
this, what we see is a consistent pattern, a very consistent pattern, 
that the initial estimates of how many claims there will be have been 
vastly understated.
  Mr. SPECTER. Will the Senator yield for another question?
  Mr. CONRAD. I am happy to.
  Mr. SPECTER. As the Senator from North Dakota outlines the situation,

[[Page 1345]]

CBO is incompetent, grossly incompetent. When the Senator from North 
Dakota shows different conclusions which his staff has reached, why 
wouldn't it be sensible to disband the Congressional Budget Office and 
just rely on his staff?
  Mr. CONRAD. Because first, I say to my colleagues, those are his 
words and his conclusions. I have great respect for the Congressional 
Budget Office. I think the Senator knows that is the case.
  I say this in seriousness. They have been very clear with us. They 
have said there are areas that are extremely difficult to predict. I 
accept that. It is very difficult to know how many dormant claims will 
come out of the woodwork. But to suggest there are not going to be any 
is unrealistic. To say that the number of future cancer claims is going 
to be 78,000, when the Tillinghast study that was paid for--not by the 
trial bar, not by the labor unions, not by any of the companies who are 
against this legislation--it was paid for by the Manville trust, they 
said they ran 14 different scenarios, and on average there were 133,000 
new cancer claims. That one change, if they are right, increases this 
fund from being under water by $150 billion to being under water by 
almost $300 billion.
  Finally, CBO's estimate of the percentage of nonmalignant claims--
again, this is a hard thing to know--the Tillinghast study suggests 
that the range will be 10 to 40 percent. The midpoint of that range is 
25 percent. If you think about it, people come in and they go to their 
doctor and you have a situation in which they might qualify for $25,000 
or even $100,000. There is going to be a tremendous tendency to push 
them into those categories. It is human nature.
  Again, if we reality test and go back to what has happened with these 
other funds, there is a very consistent pattern. Black lung, they said 
it was going to cost $3 billion. It cost $41 billion, 14 times as much.
  I reluctantly come to the conclusion that this is not only under 
water by the amount my professional staff came to--they came to the 
conclusion it was $150 billion--I think it is entirely possible, even 
likely, that it is at least $295 billion under water, and it may be a 
multiple of that because the history of these things is so clear. When 
you stack up a bunch of money and you say, come and get it, guess what. 
People come and get it. All of a sudden there are all kinds of people 
coming forward and making a case that they are owed money.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Sununu). The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I am somewhat querulous at the 
representation of the reluctance of the Senator from North Dakota to 
take the position which he has articulated. It is certainly obvious 
that he wasn't prepared to take the position, certainly obvious that 
this point of order, which was articulated this afternoon, has taken 
him by surprise. As I look at his elaborate charts, I think he has been 
anticipating this moment for some time, which doesn't necessarily 
impugn his comment that this is with reluctance, but it looks to me as 
if it is with calculation.
  I am not unaware of the obvious facts of life--that colleagues of the 
Senator from North Dakota on the Democratic side of the aisle are not 
too fond of this bill. I am not unaware of that. I won't go into the 
reasons behind it, but it happens to be a fact.
  Senator Conrad is experienced and articulate. He has been chairman of 
the Budget Committee and ranking member for a long time and a 
distinguished Senator, after having been elected in 1986. I have served 
with him in this body for 20 years now. But when he talks about the 
Tillinghast study and when he projects what his own staff has done, he 
is undercutting the Congressional Budget Office which puts this $140 
billion well within the ballpark. I put these letters in the Record--I 
have already done that today--where there is the comprehensive analysis 
of the Congressional Budget Office, in a letter to me, dated August 25, 
2005, and a letter dated December 19, 2005. The long and short of the 
Congressional Budget Office analysis is that you are dealing in a range 
of $120 to $150 billion, and the point they struck on is 132, which is 
$8 billion under the 140.
  When the Senator from North Dakota talks about dormant claims, he 
doesn't know how many dormant claims there are. Nobody does. You can't 
sit here in the year 2006 and speculate about how many other claims 
there are that he has articulated. We are not going to vote on this 
issue tonight. There aren't enough Senators in the Chamber to vote 
tonight. We are going to have a battle royal of charts by the time we 
revisit this issue a few days from now. We are going to have fancier 
charts than the Senator from North Dakota has. This whole bill may turn 
on who has the fanciest charts. We have some pretty good chart makers 
ourselves.
  When the Senator from North Dakota says it will be terrible if, after 
companies have paid money into this trust fund, the trust fund becomes 
exhausted and they are asked to pay more money going back to court--
well, the companies who committed to pay $140 billion understand that. 
Don't feel sorry for them. They know what they are getting into.
  The reality is this: As Mr. Thomas Donahue, head of the U.S. Chamber 
of Commerce, has estimated, they are dealing with a $500 billion issue 
here, which can be accommodated with $140 billion because you cut out 
transaction costs, because when claimants only get 42 cents on the 
dollar, $140 billion may be enough, when it may cost as much as $500 
billion otherwise. The economy has already suffered to the extent of 
$300 billion. So don't feel sorry for the companies. If the trust is 
terminated because we believe Senator Biden was right when he offered 
his amendment, which I supported in committee, that the claimant should 
not bear the risk if the fund was insufficient, that claimants ought to 
have the right to go back to court, that is the real safety valve if we 
are wrong.
  But I don't think we are wrong, because we are going to have some 
fancy charts in a few days that will show the decline of asbestos 
claims. Senator Sessions is usually erudite, but he is especially 
erudite on that subject, as to how the claims have gone down and how 
the projections show that we will realistically being paying out less, 
certainly well within $140 billion.
  I know Senator Ensign and Senator Sessions want to speak, so I will 
reserve some of my time.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. ENSIGN. It was with great reluctance that I raised this budget 
point of order. I have a great deal of respect for Senator Specter and 
believe there is a great need to enact asbestos legal reform. There are 
companies that are shutting down. Many of the current tort claims are 
fraudulent. There are victims who are not getting the compensation they 
need and deserve.
  The asbestos crisis is a serious problem that is threatening the 
economy of the United States. I recognize that. I voted for the Cornyn 
substitute because I believed it was a better answer to help the United 
States, our economy, and the victims. The Hippocratic oath, to first do 
no harm, has been mentioned on this floor before. Unfortunately, this 
Chamber has, on many occasions, done more harm than good. There is so 
much unpredictability in this bill that my fear is we are considering 
doing far more harm than the current system.
  In the December 19 letter written to Senator Specter from the 
Congressional Budget Office, that Senator Specter and Senator Conrad 
were just talking about, it says:

       There is a significant likelihood that the fund's revenues 
     would fall short of the amount needed to pay valid claims, 
     debt service, and administrative costs. There is also some 
     likelihood that the fund's revenues would be sufficient.

  So there is a significant likelihood that they won't be enough and 
some likelihood that they will. CBO's final conclusion is that they 
cannot predict the Budget impact of this bill with any degree of 
certainty. We have all seen

[[Page 1346]]

the Congressional Budget Office or the Joint Tax Committee's work 
product. It is put together by hard-working folks who do their best to 
estimate. But I have not seen their estimates turn out to be accurate 
very often. This is because what they do is an incredibly inexact 
science. What they are trying to estimate in this bill is even less 
precise, less exact of a science than what they normally do. Just a 
given example with respect to JCT, I had a tax provision about a year 
and a half ago that had to do with bringing money from overseas back 
into this country. The CBO estimated it would result in $125 billion to 
$140 billion coming back into this country for investment. We thought 
that estimate was very low. It turns out we were right. To date over 
$350 billion has been reinvested in the United States, far in excess of 
the estimate.
  Now if CBO's estimate is off on this particular legislation to the 
degree that the estimate was on my legislation, we are in serious 
trouble. That is why the CBO says, and the Democratic ranking member 
and the Republican Budget Committee chairman say, the point of order is 
valid and lies on this bill.
  I think there are problems with this bill. One problem has to do with 
the medical criteria. It allows all kinds of people to recover without 
any degree of certainty as to how many future claimants there will be. 
The potential is huge. So despite my strong desire to fix this 
legislation, I believe that it cannot be fixed. I wish Senator Cornyn's 
substitute would have passed. I thought that was the right place to 
start working on solving the asbestos crisis. This body could have 
worked with that legislation. We could have made sensible changes to 
move that version forward. I don't think that the underlying piece of 
legislation can be fixed to provide any certainty. I don't see how we 
can ensure that the taxpayers do not end up with a huge mess that 
includes a great deal of debt for future generations.
  When will the uncertainty occur? Will it be 8, 10, 12, or 15 years 
from now? I don't know. When the uncertainty comes, the debt that the 
taxpayers will be asked to shoulder could be enormous. And this bill 
could come due at exactly the wrong time. When we can least afford it. 
It will come due when the baby boomers start affecting Medicare, 
Medicaid, and Social Security. I respect the chairman of the Judiciary 
Committee a great deal for the work he has done, and I know he has 
tried to work in a bipartisan fashion and with many industries. They 
say politics makes strange bedfellows. This legislation proves that to 
be true. When the positions that we take on this bill or on the point 
of order do not break down by party lines and when liberals and 
conservatives are likewise divided, you know that this bill has strange 
dynamics. Industries that are normally allies are also split on this 
bill. Trial lawyers are split on this bill. The reasons for such a 
split are a result of the uncertainty about this piece of legislation.
  I appreciate the indulgence of my colleagues to allow me to speak for 
a few minutes. I look forward to the debate on this point of order. I 
am not sure exactly when we will vote on it, but I hope the point of 
order is sustained.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, I serve as a member of the Budget 
Committee, and I am very pleased that Chairman Gregg put in language 
that allows for this budget point of order. I think it has a potential 
in many of our entitlement programs to help rein in abusive spending. 
But this is quite a different matter, I say to my distinguished 
colleague, Senator Ensign. He is such a terrific asset to this Senate, 
a great member of the Budget Committee, and is rightly engaged in 
trying to make sure we don't throw away money. I hope I have been an 
ally with him in that process.
  But this is not Government money. This is money put up by the 
defendants who are paying out every day in judgments and lawsuits all 
over America. They have said: We are tired of having 58 percent of the 
money we pay out not get to the victims. Only 42 percent gets to the 
victims. We ought to create a system to allow victims to get more 
money, and we can have a little certainty as to what we pay out. So 
they agreed to pay into this fund. It is not the Government's money. It 
simply would be administered by the Department of Labor and, therefore, 
apparently the experts say it qualifies for this objection.
  Let me say what happens if there is a shortage. What happens is the 
fund fails, the FAIR Act ends, and the plaintiffs get to go back to 
court, as they are today, and file their lawsuits. And the Government 
is not on the hook for that money, if there is a shortfall, No. 1.
  Senator Ensign correctly guessti-
mated that more money would come back from foreign company profits into 
the United States with his tax relief bill than CBO did. Well, I would 
say this. I can guesstimate this. At one point, I represented 
plaintiffs. I see that the lead plaintiff lawyer in the history of this 
litigation has made an estimate on it and he has concluded there is 
plenty of money in this trust fund. Why is it likely, in my opinion, 
that there is enough money? People say there is not enough money here 
and it is going to fail. Why would I conclude that may not be so, that 
probably the fund may survive?
  First, those who are putting money into it think it is enough. They 
would not subject themselves to this if they didn't think it would 
work. Second, CBO estimates it, and why would they estimate something 
in this nature? The reason is, somewhere in the 1970s--probably early 
1970s--people became sensitized to the dangers of asbestos. They 
learned about it and crackdowns were undertaken to limit exposure. By 
the time 1980 got here, very strict rules were imposed--and that was 26 
years ago--on how to handle asbestos, and exposure today is nil 
compared to what it was in the 1940s and 1950s, when people were 
unknowingly placed in positions where their health was destroyed as a 
result of massive exposure to asbestos fibers.
  So it is obvious we have very little asbestos in our society today. 
If you even see somebody take asbestos out of a building today, they 
have masks on. All of this stuff is required by OSHA so that not one 
fiber will touch them. I think the likelihood is that we are going to 
see a continued decline in the asbestos claims and, as a result, I 
think it is possible--although I am certainly not an expert--that CBO, 
plaintiff lawyer Dicky Scruggs, and others are correct to conclude 
there is enough money in the fund to make it go.
  There are a few things we need to do, however. We need to tighten up 
several of the medical criteria issues in this legislation so it will 
be sure to be successful. If we allow people to come into the fund 
because at one time or another they were exposed to some asbestos and 
they may contract some cancer or some other disease, and they can then 
claim they are, therefore, owed payment from the asbestos fund, we will 
never have enough money. The criteria we have today are far better than 
exist in the courts of America, but I think there needs to be some 
further tightening up, so that people who are sick from asbestos get 
paid and paid generously, but people who contract other diseases are 
not unjustly enriched by being paid out of a fund that is designated 
for people who have contracted disabilities and diseases as a result of 
asbestos. That is what is fair and just. That is what the fund should 
do. I hope we will be successful in reaching that.
  I say again that I respect this point of order and I respect Senator 
Ensign for raising it. I point out this is indeed technical in the 
sense that the monies in this fund are not Federal Government money, 
and that if the fund runs out of money, the Government doesn't put in 
extra funds. It goes back into the litigation system and the plaintiffs 
continue their lawsuits in that fashion. Therefore, I think it would be 
wise under these circumstances to waive the Budget Act.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.

[[Page 1347]]


  Mr. SPECTER. Mr. President, I thank the distinguished Senator from 
Alabama for his comments, and I thank him for his extensive work on the 
committee, especially on this bill and especially for being on the 
floor so much this week and making such very strong arguments.
  Our general counsel said to me in the corridor a few hours ago: Jeff 
Sessions has been around all the time. He is doing the work, and he 
used a four-letter word, a blank of a good job. I thank Senator 
Sessions for his work.
  I wish to make a few comments in closing. We probably lost a few 
people who watch C-SPAN2, in any event. We certainly lost the Senators.
  When the Senator from Nevada, Mr. Ensign, made a comment about 
unpredictability, there is one thing which is not unpredictable, and 
that is the suffering of the mesothelioma victims and the other victims 
from asbestos exposure. We talk a lot about mesothelioma--abbreviated 
to meso but that is a fatal disease which is caused by exposure to 
asbestos, and there are many gradations.
  When we talk about unpredictability, we also ought to talk about 
predictability, about the tens of thousands of asbestos victims who are 
not being compensated today because their companies are bankrupt. There 
are tens of thousands of veterans who are not being compensated because 
they have no one to sue, even though they contracted illnesses from 
asbestos in the service of their country. We know of the 77 companies 
that have gone bankrupt, and more are on the way. We do know that 
predictability.
  When the Senator from Nevada, Mr. Ensign, talks about estimates which 
are inexact, that is true. You can fault the Congressional Budget 
Office, but they do the best they can. We do know of the exact 
estimates, exact reality of the people who are suffering.
  I believe the conclusion is that we have a duty to do something about 
that. When private companies are willing to put up $140 billion to 
compensate those victims of asbestos to save future bankruptcies, to 
save and eliminate and cure pain and suffering, we ought to take that.
  We are not infallible. If we are wrong and we do not have enough 
money, they understand the consequence of going back to court. But I 
think it all points to the conclusion that we ought to pass this bill. 
We ought to consider a number of problems that we have in the floor 
debate and improve this bill. Then when we have come to the end of the 
rainbow on improving this bill as much as we can, we have to make a 
judgment: Is this bill, albeit not perfect, albeit not satisfying 
everybody's interests, better than the current chaotic system?
  It has to be an enormously terrible bill to be worse than what we 
have today. That we know with certainty.
  When you don't meet the Congressional Budget Office test of ``great 
certainty,'' that is all of life. Again, I analogize the standard for a 
death penalty in a criminal first-degree murder case is proof beyond a 
reasonable doubt, and in a civil case is more probable than not. And in 
our legislative judgment, we have done the most we can do in good faith 
to craft legislation to meet a pressing problem, on which everyone 
agrees--the Senator who is advancing this point of order starts off 
conceding the terrible problems of asbestos and the pain and suffering 
to the victims and the terrible blight on the economy.
  We will be debating this some more in the days ahead. I urge my 
colleagues to consider this issue very carefully because this is an 
issue which will kill the bill if this point of order is not defeated.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I am glad we have finally come to this 
portion of the argument because it reinforces a lot of things that have 
been said on this Senate floor over the last several days. It really 
comes down to a very basic question, the question as to whether this 
bill has been carefully crafted, whether it contains enough money in 
the trust fund to compensate the hundreds of thousands of asbestos 
victims who will have to count on it.
  I have raised this issue repeatedly as to the $140 billion figure. 
There are reliable estimates of the actual cost over a 50-year period 
of time that almost double the amount of this trust fund, some even 
higher.
  Senator Kent Conrad on our side of the aisle is well respected as the 
ranking member of the Senate Budget Committee. His background as the 
head of taxes in his State of North Dakota, his own personal education 
and experience give him extraordinary credibility when it comes to 
issues of cost and issues involving accounting. He has made a 
convincing case to our caucus and to those who are listening on both 
sides of the aisle that the $140 billion that is part of this trust 
fund is not nearly adequate to the task.
  Of course, if it isn't, what choices do we have? Senator Specter 
suggested on the floor the other day that if $140 billion wasn't enough 
to pay the victims, then we will pay the victims less. Today when I 
asked him a similar question, he said there are other options. You can 
say to these victims, if you have taken away their lawsuit that they 
worked on for a year or two, they have to stop their case in court. 
Then put them into this new trust fund system, and then the trust fund 
system fails them at some later date and doesn't pay them all they are 
entitled to, you can say to these victims: You can go back and start 
over in court now.
  That is cold comfort to a family that is doing its best to take care 
of medical bills and lost wages and burial expenses for someone they 
love.
  They have made a point over and over that under no circumstances will 
the Federal Government step in and make up the difference. I guess that 
verbal assurance is good, but we know there is always that possibility 
at some later date if this program doesn't work, if it fails, that 
someone will say we can't go back to the companies and ask them to put 
more money in the trust fund; we can't turn the victims loose; the 
right, compassionate thing to do is for the Federal taxpayers to step 
in.
  It is not a farfetched argument, and it is one we have to consider as 
a possibility.
  Now a Republican Senator steps forward, Senator Ensign of Nevada, 
raising a valid point of order, a point which goes to the heart of the 
funding of this bill and how it will pay out any benefits that might 
accrue in the future.
  I would like to note some of the points that have been made during 
the course of this debate that I think are worthy of repetition and, 
for those following the debate for the first time, worthy of note.
  The Congressional Budget Office has warned us of the significant 
likelihood that this asbestos trust fund will fail.
  In a letter to the chairman, who spoke just before me, they wrote:

       The proposed trust fund might or might not have adequate 
     resources to pay all valid claims. There is a significant 
     likelihood that the fund's revenues would fall short of the 
     amount needed to pay valid claims, debt service, and 
     administrative costs.

  So we are saying to hundreds of thousands of victims and their 
families: Trust us, we have created a trust fund, and with that trust 
fund, we will take care of your needs in the future. There is enough 
money, the proponents of this legislation say, but the Congressional 
Budget Office, looking at the victims, their injuries, and the 
compensation promised in this bill, came to a different conclusion. 
They concluded:

       There is a significant likelihood that the fund's revenues 
     would fall short of the amount needed to pay valid claims. . 
     . .

  As Senator Specter said on the floor the other day, one of the 
options, then, is to pay the victims less.
  One of the reasons we need to take a look at this trust fund 
shortfall is when we look at the elements that are behind it, the 
claims and administrative expenses are likely to exceed contributions 
to the asbestos trust fund. The upfront claims will far exceed 
contributions.
  Understand, people who are told they have to leave the courthouse and 
can no longer pursue a claim in court will have to turn to this trust 
fund. There is no place else to go. They will come

[[Page 1348]]

in large numbers, but the amount that is being contributed to the fund 
by businesses is not going to match the demand. At the outset, claims 
will far exceed contributions, so the trust fund will have to borrow 
substantial amounts of money.
  How much? The trust fund is supposed to be $140 billion. There are 
estimates that the interest and administrative costs may reach $52 
billion, more than a third.
  Small adjustments in amount and timing of assumptions quickly 
bankrupt the trust fund. If you guess wrong how many people are sick 
and how often they will file their claims and in what numbers, the 
estimates of the solvency of the trust fund could fail. It is 
unrealistic to assume that the trust fund will ever terminate.
  The reasons for likely trust fund shortfalls: The Congressional 
Budget Office didn't count dormant claims that may surface once this 
trust fund is created, exceptional medical claims, or claims of family 
members of workers exposed to asbestos.
  CBO's estimate of the number of future cancer claims is likely to be 
too low, according to consulting firms that have taken a look at their 
formulation.
  The CBO's estimate of the percent of nonmalignant claims that will 
receive a cash award is likely to be very conservative.
  Take a look at this chart. This chart tells the story. The red part 
of the graph is trouble. The red part of the graph reflects the 
liability, the amount that should be paid out that cannot be covered by 
the revenues coming into the trust fund.
  So we make a promise to people. We say to them: Give up your claim in 
court, come to this trust fund and trust us. Yet when we project the 
needs of these victims against the revenues coming into the trust fund, 
we see a dramatic shortfall.
  The fund stops paying claims in 2009. Claims filed in 2009 and all 
later years will not be paid. Too many claims, not enough revenue into 
the fund.
  Let me indicate what this shortfall can mean. Mr. President, $150 
billion--remember, this trust fund is funded at $140 billion--to fall 
short $150 billion is a substantial miscalculation. In present value 
terms, it means we would have to put $50 billion into the fund today to 
cover the $150 billion shortfall over the 30-year life of collections 
and 50-year life of disbursements under this trust fund. So this is a 
significant shortfall.
  Keep in mind that we are saying to people: You cannot continue to go 
to court to be compensated; you have to turn to a trust fund with a 
hole in the pocket.
  Let me tell you how badly others have miscalculated the number of 
asbestos cases that can be filed.
  I remember Johns Manville, a big company, based in Colorado. They 
were one of the first firms hit because they sold a lot of asbestos 
products. When they went bankrupt, they tried to create a separate fund 
to pay off all the victims of Johns Manville products, their workers, 
and others. They set aside money, and in order to set aside a proper 
amount they had to speculate and give some calculation about how many 
people would be making claims for asbestos injuries.
  The original range of claims went from 50,000 to 200,000. That is 
what they said they would ultimately have to cover. The claims received 
through the summer of last year were almost 700,000. They had estimated 
a high of 200,000. Almost 700,000.
  The recent estimate of the total number that could be paid is 2.1 
million. So how can those who have written this bill say with any 
degree of reasonable certainty that we know how many people were 
exposed to asbestos at some point in their lives and will later come 
and make a claim? Because for many people, they will live a long time 
with asbestos fibers in their lungs, ticking timebombs that could go 
off 10, 20, 30, 40 or 50 years after exposure. There could be anyone on 
the Senate floor today harboring in their lungs asbestos fibers. Those 
fibers may or may not cause a problem. We just don't know because for 
years no one paid close attention.
  Many people were told it is safe. Expose yourself to asbestos, it 
can't be a problem. Some were misled. Some operated out of ignorance. 
But the fact remains. Johns Manville, in calculating its liability for 
its own trust fund, blew it. Instead of 200,000, it was 2.1 million.
  (Mr. Coburn assumed the Chair.)
  Mr. DURBIN. This is not the only case of miscalculation. For coal 
miners, we created a program called black lung. I know it pretty well 
because I have met a lot of coal miners suffering from it in my home 
State of Illinois. Exposure to coal dust, inhalation of coal dust 
causes lung problems, so we tried to set up a separate fund for these 
miners to take care of it. We estimated it was going to cost us about 
$3 billion to compensate all these coal miners. Our actual black lung 
payments through 2004 are $41 billion.
  So if some of us come to this floor skeptical of this trust fund, 
skeptical of this $140 billion, and wonder if we can say to victims in 
good conscience, we are going to stop your going into court and force 
you into a trust fund which will pay you, when we know full well how 
many times we failed in estimating how much these trust funds need to 
have banked away, I think that really goes to the heart of this whole 
issue.
  Also, a critical element here is why we are on this bill today. 
People who are following this Senate debate maybe tune in to watch C-
SPAN, follow the debate in other places, and some will say to them: 
What is the Senate talking about today? They may report: Well, it is 
about asbestos.
  Sure, it is an important issue. But my guess is most families across 
America would probably step back and say: I sure wish they would talk 
about the cost of health insurance for families, businesses, and 
individuals or maybe the cost of this heating bill I have in my hand, 
where the cost of heating this home has doubled since last year or 
maybe they ought to talk once in a while about this Medicare 
prescription Part D Program which has become a mess for seniors across 
America. Why aren't they talking about pension security when our 
neighbors next door worked a lifetime at that plant, and then the plant 
went into bankruptcy and dumped the pension, and now this man and his 
wife, who thought they had done everything right in life, don't have 
retiree benefits and don't have health benefits? Why aren't they 
talking about those things?
  No, the Senate is engaged in a debate on the asbestos bill which I 
have characterized as a clash of the special interest titans--huge 
companies on both sides, for and against asbestos; insurance companies 
for and against this bill; trial lawyers opposing the bill; others 
supporting the bill; labor unions by and large opposing the bill with 
two or three exceptions. Why are we on this bill today? Because what 
drives this debate is what is at stake. What is at stake is not just 
recovery for hundreds of thousands of asbestos victims but a lot of 
money.
  Earlier today, a Republican Senator, Mr. Bennett of Utah, came to the 
Chamber with two charts which I thought really told the story. I don't 
have those charts, but I have summaries here. What Senator Bennett 
pointed out is that for about 10 of the largest companies affected by 
this bill, this bill is a windfall. It is a windfall in this respect: 
They estimated how much each of these companies would have been 
required to pay out to asbestos victims if they went through the 
regular court process, and then they estimated how much the same 
companies would pay into the trust fund we are talking about today. And 
the difference is startling. For these 10 companies, the difference is 
$20 billion. In other words, if they paid the claims of victims in 
court, they would have paid $20 billion more than the amount they paid 
into the trust fund.
  One of the companies which has been publicized recently is U.S. 
Gypsum. The reason people talk about it is they recently did a public 
filing, and here is what they said. They said: If we are held liable in 
court for all the asbestos claims we think could be filed against us, 
we believe we would pay out something in the range of $4 billion. But 
if this bill passes, we will be required to pay into the trust fund 
$797 million.

[[Page 1349]]

  What a dramatic difference. So for this company, the passage of this 
bill is worth more than $3 billion. That is the reason we are here.
  We are here because so many of these corporations know that if this 
bill passes, their exposure to liability is reduced dramatically. The 
obvious question is, If they don't pay the $20 billion to victims, who 
will make up the difference? And that is the point made by Senator 
Bennett earlier in the day. He gave the names of eight or nine other 
companies, much smaller, some of which have paid small amounts to 
asbestos victims in court cases in settlements, some which have paid 
none. In each case, these companies had to step up and pay substantial 
amounts of money, ranging from $75 million to $578 million.
  So here is one of the largest companies, U.S. Gypsum, with the 
largest exposure--$4 billion--paying about $800 million into the fund.
  And then you take a look at a company named Foster Wheeler, a pretty 
well-known company. They will pay out $80 million in their experience 
in asbestos over the next 10 years. That is their estimate, I should 
say, $80 million. And they are asked to pay $578 million into the fund? 
Where is the fairness in that, that these companies with little or no 
exposure have to pay so much money while companies with so much 
exposure pay dramatically less? That is the fundamental unfairness in 
what we are discussing in the Senate here this evening.
  I might also add, many of us are struggling to try to absorb this 
bill because this morning, as we had expected, the chairman filed a new 
version of the bill. We had been debating this for months, maybe years, 
and this morning comes a new version which, according to the chairman, 
makes 47 significant changes in the first bill we were handed.
  Think about that for a moment. When you consider how many lives and 
how many families are dependent on our doing the right thing in the 
passage of this legislation, we are rushing to pass a trust fund that 
will take these families and individuals out of the courthouse into a 
trust fund.
  The Presiding Officer is a medical doctor from the State of Oklahoma. 
We may not see eye to eye on a lot of things, but I listened as he 
speculated on what the exposure might be on this trust fund. He has 
made some statements as to whether something should be covered or 
should not be covered. But what he said, at least in the course of the 
Judiciary Committee hearing, is that there is some real uncertainty 
about how many people will be filing claims and what those claims will 
be worth.
  That is what troubles me. I think there is more we can do to make 
this system more fair. First don't abandon America's court system. 
Don't abandon our system of justice. Don't conclude that 200 years of a 
court system in America is not proof positive that it is a valuable 
part of our American heritage and a valuable part of America's life. 
Start with our court system.
  If there are abuses, and I will concede there are abuses, let's deal 
with them. I will tell you point blank, based on my legal education of 
long ago, if you want to recover for injury in court, you must have 
injuries or damages. Simple exposure to asbestos, which could include 
all of us, is not enough. You have to show some injuries or damages 
before you recover. That is why, in our State of Illinois, we set up 
what we call the pleural registry, and that says if you have been 
exposed but you are not sick, no symptoms, come in and sign up. If you 
don't contract an illness or something that is fatal, then you will 
have escaped any problem related to asbestos. If you do, you can come 
through the court system and you will not be held back by any statute 
of limitations.
  Some have argued about where lawsuits should be brought. That is a 
valid issue. We should debate it. Some have argued about what 
attorney's fees should be. That is a valid issue. But there have been 
some misstatements on the floor about attorney's fees, and I wish to 
clarify them. Some have said on the floor that 58 percent of all the 
money generated in these asbestos verdicts and settlements goes to 
lawyers. Technically, that is true, but look more closely: 31 percent 
is legal fees claimed by the victims' attorneys; 28 percent or 27 
percent is from defense attorneys.
  I practiced law for a number of years, and it was not uncommon for a 
person of modest means to come in my office and say: I have been 
injured, I need to file a lawsuit. And you would say to them: I know 
you can't put up thousands of dollars to pay for all the time I have to 
put in as a lawyer to get ready to go to court, argue the case, do 
everything lawyers do, so I will take it on a contingent fee basis. If 
you win, I win. If you lose, I lose.
  For many people, that is the only way they can come to a courtroom. 
They can't put up $10,000, $20,000, $30,000 to pay for a team of 
lawyers to prepare a case. They just don't have it. So contingent fee 
cases are all across America.
  If you file a case in Workers' Compensation in Illinois, you may pay, 
I guess--it has been a few years since I have done it--around 20 
percent in attorney's fees. An ordinary case for personal injury might 
be a third. That is usually what the lawyer's fees are when it is a 
contingent fee basis. To say that asbestos victims are paying 31 
percent in attorney's fees doesn't suggest to me that there is a built-
in scandal here; it suggests that is fairly ordinary and routine in the 
legal practice.
  It is interesting to note that for every dollar paid out, the 
defense--companies that are hiring defense attorneys--is receiving 28 
cents on the dollar. That is an indication to me, with 30 cents and 28 
cents, the victims' attorneys and the defense attorneys are comparable 
amounts. But having said that, if there is a discussion about how to 
make those attorney's fees more fair, I am willing to sit down and work 
on it.
  I also believe we ought to look at the States that have already 
stepped forward and said: We are not going to abandon our courts, we 
are not going to abandon our system of justice, we will make changes so 
it works better--States such as Florida, Texas, Ohio. They give us good 
guidance. Senator Cornyn of Texas gave us an amendment--and may come 
back with another version of it soon--which addresses that particular 
approach. I would feel a lot more confident in making certain that our 
court system worked a little better than abandoning our court system to 
set up a trust fund that is not paid for.
  I hope my colleagues in the Senate on both sides of the aisle will 
seriously consider the point of order raised today by my Republican 
colleague, Senator Ensign of Nevada. It is a valid point of order. It 
goes to the issue as to whether $140 billion is adequate, whether the 
payout of this money is consistent with the budget rules of the Senate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, I think the first time I heard the 
figure 31 to 27 was by Senator Durbin. It didn't surprise me, really. 
The asbestos defendant companies are hiring some of the best lawyers in 
America, and they charge them big fees. It is part of what they cost. 
If it is 31 percent for the defendants' attorneys and 27 percent for 
the plaintiffs' attorneys, I am not really surprised. I had no idea 
precisely how it would come out, but I am not surprised at that.
  What I would say to my colleagues here in the Senate, however, is 
that it is not disputed that 58 percent of the money paid out by the 
defendants is going to lawyers and not to the victims. It goes to the 
plaintiff, and the plaintiff has to pay almost half of the judgment to 
his lawyer, so he or she doesn't get to keep all the money. He has to 
pay this big lawyer fee. Plus the corporation is being sued and has 31 
percent of what he is paying out going to his own lawyers. So who is 
winning here? This is really indisputable. Who is winning here? The 
legal system is grinding up people and companies in an extraordinary 
way which just has to be ended. We have to work our way through this.
  It is so great to have a Presiding Officer, a medical doctor, try to 
help us deal with some of the medical criteria.

[[Page 1350]]

  There still remains a great weakness in this bill in a number of 
things.
  My colleagues present the most contradictory arguments. One time they 
are in here saying we have to have it in the Department of Labor, or we 
have to pay more and more and more, and then they come in and make the 
argument that these funds traditionally get out of control.
  When Senator Coburn and Senator Cornyn propose an amendment that 
tightens the medical criteria a little bit, they object and vote 
against them.
  This would be sort of amusing if it wasn't such a serious thing.
  Some of my colleagues have been saying that the fund is clearly going 
to fail because we underestimate the number of claims. Claims are not 
the real problem. This bill is going to help with the claims. I don't 
know how many claims this bill will reduce--not quite as much as the 
Cornyn bill did because it was better criteria, in my view; more 
realistic, according to medical data and science.
  But under this bill, I would guess that 40 percent to 50 percent of 
the current claims are not legitimate.
  It prohibits and bars claims when a person is not sick. The latest 
estimates are that half the claims being filed today are by people who 
are not sick.
  If you have asbestos exposure and you can see some scarring in a 
person's lungs, the chance of that person getting sick are enhanced. 
And under this legislation they don't get paid right then. But if they 
are monitored medically, and if they become sick, they will get 
compensation.
  That is the best way to handle that, for sure.
  If you get sick, you simply walk in with your doctor and with a 
report that says what the degree of illness is, another doctor will 
probably check that, and if it is verified, they will write you a 
check. You do not have to give a third, a fourth, or 40 percent to a 
plaintiffs' lawyer, and a defendant corporation isn't having to hire 
lawyers to defend against the lawsuit.
  My colleague, Senator Durbin, is so eloquent and is a skilled lawyer. 
He made an argument that I suppose people listening probably took a bit 
of an interest in and wondered about. He declared that the 10 companies 
with the most exposure would pay substantially less under this trust 
fund than under a court process--$20 billion less.
  Let me say two things about that.
  It is not a question of how much they pay out, it is how much gets to 
the victims, people who are sick. That is the most important question. 
How do we get more money to people who are sick without having to have 
the whole business collapse?
  Second, he did not point out the fact about these tier I companies. 
These are the companies that are in bankruptcy. They are in bankruptcy 
already as a result of this litigation. There is only so much a company 
can carry. If you kill off the company, what do you do then? How can 
anybody be paid?
  You can't destroy the companies totally and take them out of business 
if you expect them to continue to pay, for 25 years, people who become 
sick.
  That is why they already have protections in bankruptcy, and they are 
paying through the bankruptcy court less than they would be otherwise. 
To keep these companies in the game, keep them alive, we give them a 
certain amount they have to pay depending on how big the companies are. 
And some are big and can pay a sizable amount--and they will pay a 
substantial amount of money, but they won't be going bankrupt.
  A lot of people do not understand this. If the company that is 
responsible for exposing you to asbestos no longer exists, whom do you 
sue? If there are two people who have been exposed to asbestos, both of 
them have serious lung damage and it reduces their capacity to 
function, let us say both of them are entitled to a $200,000 judgment. 
One of them wants to sue a company that is gone, no longer exists, the 
company that is responsible, you would say: Well, they will be able to 
recover somewhere. No. If the company no longer exists that exposed 
him, that person won't collect $200,000; he won't collect a dime. But 
the other one happens to have been exposed by a company that is still 
in existence and has money, or insurance, they can collect the full 
$200,000.
  That is happening today.
  To make it crystal clear, I will ask you about an automobile 
accident. Have you ever heard of people who have been run into, have an 
automobile accident as a result of a drunk driver who is uninsured and 
somebody is injured, they say, I am going to sue them and I am going to 
get a $1 million verdict. You know what the lawyer says? Does the 
defendant have any money? Well, no. Does he have any insurance? No. 
What does he have? He has a rental, that is the only car he had, it is 
a piece of junk, and it is not worth anything. The lawyer says: If you 
get a $50 million verdict, you will not collect one dime. It is not 
worth the trouble to go to court over.
  This happens in America. It is the way the law is.
  But this trust fund says whether the company that exposed them and 
injured them is in existence or is not, they will be able to recover 
too out of a uniform trust fund. And companies that are bankrupt will 
be able to pay at a level that allows them to stay in business and 
continue to pay into the trust fund.
  Seventy-seven companies are already bankrupt. They say: Well, we are 
going to make more companies pay. We are going to make more companies 
pay than are supposed to pay--somehow make them pay more than they are 
supposed to pay. But let me say this to my colleagues or anyone who may 
be listening. Now there are 8,400 companies being sued, being dragged 
in, and many of them have the most tenuous exposure.
  I remember very vividly a man coming into my office. He bought a 
company that at one time sold asbestos and had not sold asbestos for 
many years before he bought it. He buys it and makes it a part of his 
company. The next thing he knows, all of them are beginning to go at 
that little company as a defendant which he bought, and he is liable 
for it. Money is being sucked out of his whole, big company and going 
into this fund.
  These companies realize that. They may not be the main target today, 
but the clever and sophisticated and determined plaintiff lawyers have 
demonstrated a capacity to add on companies and make them liable more 
than they were before. Many companies are willingly prepared to pay 
into this fund so they won't be sued for the rest of their existence; 
so when they go to a stockholders' meeting and write a prospectus which 
shows what their liabilities are, they can say exactly what their 
asbestos liability is rather than being required to list 5,000 asbestos 
cases filed against them.
  Somebody may say: How much is that going to cost? Well, we don't 
know. Well, could it be $1 million each? Well, we do not know. We don't 
think so. I may not want to invest in your company. I may not want to 
buy stock in your company. I have to have some more certainty about how 
much you are going to pay.
  That is one of reasons we are trying to pass this trust fund, so the 
defendant companies can say to their stockholders and would-be 
investors and those who would contract with them what their future 
financial prospects are.
  Isn't that a good public policy thing to try to do?
  Veterans, if we don't pass this bill, you are not going to be able to 
recover. Most of them have nobody to sue. You can't sue the Federal 
Government for this. A lot of other people already have found that the 
people they are entitled to sue by law either have no money or no 
longer exist.
  I will say this: I think the legislation is headed in the right 
direction. I believe that Senator Coburn is correct. We need to watch 
this criteria. If we get that wrong, it can take this bill down. A 
doctor knows that thousands of Americans every day who are not exposed 
to asbestos get colorectal cancer or get throat cancer or get prostate 
cancer.
  If somehow anybody who had any exposure to asbestos is not going to 
be able to come into the fund and demand

[[Page 1351]]

that the fund pay them for cancer which they may have been genetically 
predisposed to, whether or not they have been exposed to asbestos, we 
have done something that is dangerous and the fund may not be able to 
survive.
  The Congressional Budget Office says this fund, as rewritten, will 
survive. But I believe it could be tightened up to make it better. I 
believe that the fund has a chance to be viable throughout its entire 
life and fulfill its promise because we have done a better job in 
recent years in dealing with exposure to asbestos.
  There has been a sea of change in what has happened. In earlier days, 
the companies did not warn the people who would be using their product 
about how dangerous it was. Even after they knew it was dangerous, they 
didn't warn them. Now everybody is warned. For 30 years, maybe 35 
years, there has been exceedingly great care utilized when asbestos is 
about. You see people with masks on and all of that.
  I think it is logical to assume that we will continue to see a 
decline in the claims and also this bill will take out the unjustified 
claims. Claims of people who have not been given any disability or 
sickness, even though they have been exposed and they get sick, they 
will be paid. If they don't get sick, they won't be paid.
  That will reduce a lot of the claims. It will come down to people 
with legitimate illness. If a person comes in with that most grievous 
disease, mesothelioma, which is generally a fatal disease, this would 
entitle them to claim $1.1 million dollars, be able to have half of it 
paid in 30 days and the other half in 6 months.
  Today, they do not know what they will get, and most of the claimants 
are deceased before money is recovered.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    Amendment No. 2747, As Modified

  Mr. FRIST. Mr. President, I ask unanimous consent that amendment No. 
2747 be modified with the change at the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2747), as modified, is as follows:

       On the appropriate page, insert the following and number 
     accordingly:
       Guidelines.--In determining which defendant participants 
     may receive inequity adjustments the Administrator shall give 
     preference in the following order:
       (A) Defendant participants that have significant insurance 
     coverage applicable to asbestos claims, such that on the date 
     of enactment, 80 percent or more of their available primary 
     insurance limits for asbestos claims remains available.
       (B) Defendant participants where, pursuant to the guidance 
     set forth in section 404(a)(2)(E), 75% of its prior asbestos 
     expenditures were caused by or arose from premise liability 
     claims.
       (C) Defendant participants who can demonstrate that their 
     prior asbestos expenditures is inflated due to an unusually 
     large, anomalous verdict and that such verdict has caused the 
     defendant to be in a higher tier.
       (D) Any other factor deemed reasonable by the Administrator 
     to have caused a serious inequity.

     In determining whether a company has significant insurance 
     coverage applicable to asbestos claims, such that on the date 
     of enactment, 80% or more of their available primary 
     insurance limits for asbestos claims remains available, the 
     Administrator shall inquire and duly consider:
       (1) The defendant participant's expected future liability 
     in the tort system and accordingly the adequacy of insurance 
     available measured against future liability.
       (2) Whether the insurance coverage is uncontested, or based 
     on a final judgment or settlement.

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