The Congressional Budget Office again indicted that the proposed asbestos reform trust fund would be inadequate. In a letter to Senator Spector it commented as follows:
"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. There is also some elihood that the fund’s revenues would be sufficient to meet those needs. The final outcome cannot be predicted with great certainty.
"CBO projects that the proposed fund would be presented with valid claims worth between $120 billion and $150 billion, excluding certain potential costs or savings that CBO could not estimate; total costs would be higher because the fund must also cover administrative expenses and any financing costs. The revenues collected under the bill would be, at most, about $140 billion, but could be significantly less. If the value of valid claims was significantly more than $130 billion, the fund’s revenues would probably be inadequate to pay all claims.
"CBO could not estimate any costs or savings that might result from several features or consequences of the legislation. A number of those features could add to the cost of the legislation. In particular, CBO’s estimate does not include potential claims by individuals with older, so-called dormant, asbestos claims pending in the court system, who might seek additional compensation from the fund. It also does not encompass: possible claims by family members of workers who were exposed to asbestos; the costs of any exceptional medical claims that could be made under the bill; the potential costs for residents of other areas of the country who might be deemed eligible to receive the same special treatment given to the residents of Libby, Montana, under the legislation; and the impact on costs of allowing CT scans to serve as documentation of pleural abnormalities. On the other hand, CBO’s estimate does not reflect the possibility that medical studies required by the legislation might preclude individuals with ce tain diseases from obtaining compensation from the fund.
See the full test in PDF format:
December 19, 2005
Response to Questions About CBO's Estimates of Revenues and Spending Under the Asbestos Trust Fund (S. 852), September 2005
Bates White Executive Summary- Financial Analysis of S 852
Bates White Analysis of the FAIR Act
Public Citizen Urges Congress to Heed GAO Warning:
Asbestos Trust Fund Could Hurt Victims, Cost Taxpayers
Bleak Assessment of Existing Federal Compensation Programs Casts Further Doubt on Viability of Sen. Specter’s Asbestos Corporate Bailout