CBO Says Asbestos Bill Might Not Cover Full Cost of Claims

By Seth Stern, CQ Staff
CQ TODAY
Aug. 26, 2005 - 12:03 p.m.

A Congressional Budget Office cost estimate of legislation that would create an asbestos trust fund shows a wide range of uncertainty about the program's costs and was unlikely to allay concerns about the bill expressed by Republican senators.

The CBO estimate, released Friday, said the trust fund that would be established by the bill (S 852) would collect a maximum of $140 billion in revenues in contributions from companies facing suits for asbestos exposure and their insurers and would face claims of between $120 billion and $150 billion.

"Consequently, the fund may have sufficient resources to pay all asbestos claims over the next 50 years, but depending on claim rates, borrowing, and other factors, its resources may be insufficient to pay all such claims," the report concluded.

It noted that "a more precise forecast of the fund's performance over the next five decades is not possible because there is little basis for predicting the volume of claims, the number that would approved, or the pace of approvals."

Such uncertainty is unlikely to calm the fears of conservatives on the Senate Judiciary Committee who voted to approve the legislation in May but warned they still had problems with the way it is structured and are concerned the taxpayer could get stuck with the final tab.

The bill's chief backers, Judiciary Chairman Arlen Specter, R-Pa., and ranking Democrat Patrick J. Leahy of Vermont, released a joint statement Friday that said, "even in the range of that uncertainty . . . our legislation with $140 billion is reasonable and realistically calculated to cover the claims."

Specter and Leahy continued negotiations with committee members prior to the August recess and said they remain committed to bringing the bill to the floor in the fall.
Source: CQ Today