Gloomy Asbestos Study Criticized at US Senate HearingPublished by MAC on 2005-11-21
Gloomy Asbestos Study Criticized at US Senate Hearing
By Susan Cornwell
21st November 2005
WASHINGTON - A study that said a proposed $140 billion asbestos victims' compensation fund would quickly run out of money came in for criticism at a US Senate hearing Thursday.
An economist and a medical director who have worked on asbestos issues questioned the analysis by Bates White, a Washington economic consulting firm.
Several senators nonetheless said questions about the proposed fund's viability had to be resolved before the Senate takes up a bill to establish the compensation plan.
"If this isn't known before the New Year, I don't know how we can consider this bill on the floor in January," said Sen. Dianne Feinstein, a California Democrat who supported the fund when the Judiciary Committee approved the bill in May.
The Senate bill would end hundreds of thousands of asbestos injury lawsuits and create a trust of $140 billion financed by asbestos defendant companies and their insurers to compensate victims harmed by exposure to the fibrous mineral.
The Senate's leaders say the bill will be one of the first legislative issues before the chamber next year.
Asbestos, widely used for fireproofing and insulation until the 1970s, has been linked to cancer and other diseases. Injury claims have bankrupted dozens of US companies.
The analysis by Bates White released in September said the proposed fund would face claims of between $301 billion and $561 billion and go broke within three years.
In contrast, the Congressional Budget Office estimated in August the long-term costs of the fund at between $120 billion and $150 billion.
The bill provides for a return to the courts if the fund dries up. The Bates White study "grossly overestimated the population at risk from asbestos disease," Denise Martin, senior vice president at the National Economic Research Associates in New York told Thursday's hearing of the Judiciary Committee. Martin said the study had included many industries and occupations in which workers are likely to have had little or no exposure to asbestos, such as taxi drivers.
Laura Welch, medical director at the Center to Protect Workers Rights, said Bates White had assumed a barber who started work in 1970 had the same risk of asbestos-related cancer as a shipyard insulator during World War Two. "Clearly this is not the case," said Welch.
Charles Bates, chairman of Bates White, countered that the a large number of people who do not currently have valid court claims for asbestos-related injuries would file for compensation if the fund is established.
He said millions of people were alive who had worked in occupations covered by the proposed legislation, and "the act greatly increases the incentives to file" claims.
REUTERS NEWS SERVICE