Possibility of a New Asbestos Bill

Wall Street Journal -- Word is that Senate Republicans will soon attempt to revive their bid to solve the asbestos litigation mess. But before they agree to create a new asbestos trust fund, we think someone should remind them of the other times the government has gotten into this fool's game. Like everyone except the trial bar and Tom Daschle, we'd like nothing more than to contain the insanity that has become the asbestos tort blob. More than 100,000 new asbestos claims were filed in 2003 -- the most in a single year. 100,000! Some 70 companies have already been pushed into bankruptcy from such claims, and the truly sick aren't getting compensation because the courts are clogged, and because settlement money is funneled to trial lawyers and to the 90% of plaintiffs who aren't ill and may never be. That said, Judiciary Chairman Orrin Hatch's attempt to solve this with a "trust fund" has been a bust. In a bid for Democratic votes, Mr. Hatch abandoned the legal reform principles that would have made a trust fund worthwhile -- such as strong medical criteria and a promise to end the lawsuits. His final product was such a giveaway to unions and lawyers that other Republicans and some of the business community (which would pay for the fund) bailed out. Senate Majority Leader Bill Frist has now called everyone back to the table, but the political demands are only growing. One of the few good parts of the Hatch fund was that it was to be administered by a special court and thus relatively immune to political pressure. Organized labor hated that idea and wants Mr. Frist to have the Department of Labor run the trust. The unions' goal is to keep the fund in the political realm, where they can squeeze more money from it down the road. They know this strategy works because they've done it before. In 1978, Congress established the Black Lung Disability Trust Fund for miners with that coal-dust affliction. The Labor Department was charged with overseeing payouts to disabled miners financed by an excise tax on coal-mining companies. So much for good intentions: Fund designers dramatically underestimated black-lung claims and by 1981 -- a scant three years later -- Congress had already voted to double the size of the tax. Even then, the fund couldn't keep up and today it is more than $8 billion in debt. The excise tax no longer covers even the interest on the fund's debt. (One harbinger of the asbestos mess to come: Unions are already objecting that the latest offer of a $114 billion trust fund isn't large enough.) This financial mess comes courtesy of the unions, which used their political power to loosen the black lung fund's purse strings along the way. Among Bill Clinton's flurry of last-minute regulations in January 2001 were new rules making it easier for miners to claim from the fund -- in particular by limiting the amount of evidence that coal companies could marshal against claims. The Bush Administration inherited such a wreck that it is now advocating a bailout that would extend the excise tax -- due to end in 2014 -- in perpetuity, while also having taxpayers swallow a portion of the $8 billion bailout. Need more proof? The Labor Department also runs the Energy Employees Occupational Illness Compensation Program, which pays workers exposed to radiation in federal facilities. Designed in 2000, the fund's payout estimates over 10 years were from $2 billion to $4 billion. A mere 2.5 years into the program, it has already run through $800 million. And Congress is busy with proposals to further loosen the standards. As economically damaging as the asbestos blob has been, the one thing that would make it worse would be to turn it over to the government. The lesson of history is that what Congress creates it can easily change and almost certainly will. A simpler solution is to go after the root of the asbestos problem -- the courts. Tort reform, of the sort Oklahoma Senator Don Nickles proposed last year, would not only help fix this mess, but do it without saddling taxpayers with the cost of the biggest legal scandal in modern times.