The asbestos debate

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There are three questions the Senate should focus on as it considers the Fairness in Asbestos Injury Resolution Act: Will the proposed $140 billion asbestos trust fund actually cost $140 billion, or will its fine print eventually require it to pay out much more? Can the medical criteria be tightened to ensure that only people who have genuinely suffered harm from asbestos are compensated? And how can one minimize the chances of some future Congress putting taxpayers on the hook for likely overruns?

This bill should pass; Sen. Sen. Arlen Specter, Pennsylvania Republican, and Patrick Leahy, Vermont Democrat, are due accolades for getting this far on a longstanding problem that has befuddled everyone for decades. Many asbestos victims have suffered or died of mesothelioma or other illnesses while the courts and Washington struggled with a resolution. The victims and their families deserve to be made whole.

One good sign is the 98-1 Senate vote Tuesday to move forward, indicating broad agreement that the FAIR Act is acceptable as a starting point for the full Senate's debate. The other is trepidation from Senate Minority Leader Harry Reid: After making noises about a filibuster, Mr. Reid said the bill benefited "a few large companies" while supposedly leaving the little guy in the lurch. Really? Why, then, do insurance giants AllState and AIG oppose the bill? Why are many plaintiffs anxious to see it pass? In reality the big guys speak through Mr. Reid -- in this case, unscrupulous lawyers who stand to profit greatly from keeping asbestos cases in the courts. Under the FAIR Act, fees for lawyers top out at five percent of the award -- far less than they get in court.

Of course, there are good reasons to worry about the "little guy" -- just not the ones Mr. Reid suggests. If previous federal "trust fund" schemes are any indication, this fund could bleed billions of dollars only a few years from now and demand either a federal bailout or a return to the courts. The first is bad for the average taxpayer; the other is bad for most claimants. As for the first, the nonpartisan National Taxpayers Union opposes the trust fund on the grounds that a bust is likely. It calls the fund "a fiscal time bomb." The second would land claimants back in limbo in courts (to the great pleasure of asbestos lawyers, of course, who clog up the system with questionable cases).

The precedents show how daunting this month's debate will be. As we've reported previously, only one of the many smaller trust funds created over the years has been able to meet its obligations, according to Francine Rabinovitz, a trust-fund expert at the University of Southern California. Last year she told Sens. Jon Kyl, Arizona Republican, and Tom Coburn, Oklahoma Republican, that "none of the bankruptcy trusts created prior to 2002 have been able to pay over the life anywhere close to 50 percent of the liquidated value of qualifying claims." Claims against the Johns Manville bankruptcy fund -- one flawed effort to solve asbestos-injury claims -- outstripped resources by a factor of 20.

That begs some questions. Will this $140 billion fund "sunset" in three years like its conservative critics say it will? Even the Congressional Budget Office predicts it will bleed $6.5 billion a year by 2015.

What about the medical criteria? A group of conservative senators on the Judiciary Committee worried about the fund's solvency cited this among concerns when they sent the bill to the Senate floor last year. Sens. Jon Kyl, Arizona Republican, and Tom Coburn, Oklahoma Republican, said that they were "deeply concerned that this fund will run out of money and prove unable to pay all qualifying claimants."

This debate will play out fully in the Senate over the coming days. In the meantime, it's worth pointing out what the FAIR Act offers that nothing previously has: A light at the end of the tunnel for claimants. Under FAIR, compensation ranges from $25,000 for people who suffer breathing difficulties to as much as $1.1 million for victims of the deadly cancer mesothelioma. It has taken long enough to get this far. The Senate is close to leading the way out.