News Coverage
The Cost of Asbestos
Congress must create a trust fund adequate for a wave of health claims
Published April 13, 2004
In Weedsport, workers at the W.R. Grace Zonolite Co. factory unloaded railroad cars filled with vermiculite from 1963 through 1989. They were not aware that the material was contaminated with asbestos.
At locations throughout Upstate New York in the 1990s, employees of AAR Contractor Inc. removed asbestos from schools, homes and churches without proper training or equipment.
In both cases, workers and their families may have been exposed to dangerous levels of asbestos, a brittle, fibrous, fire-retardant material that can cause disabling and sometimes fatal diseases. The harmful effects can take one, two or more decades to develop after exposure.
More than 1.5 million people are expected to file medical and legal claims over the next 30 years as a result of the widespread use and mishandling of asbestos. The staggering load of lawsuits is already clogging up courts and causing long delays in victims or survivors receiving any payments.
Congress is preparing to enact legislation that would create an entirely new system for victims to be compensated for their exposure. But it appears that what was once a carefully crafted deal between sick workers and asbestos companies could deteriorate into an inadequate solution.
The Senate Judiciary Committee last year endorsed legislation that would move all current and future asbestos-related claims out of the courts and into a separate, quasi-judicial tribunal. Claims would be paid through a $153 billion trust fund, maintained by annual assessments paid by asbestos companies and their insurers.
But then the insurance companies met with Senate Majority Leader Bill Frist, R-Tenn., and suddenly a new version of the "Fairness in Asbestos Injury Resolution Act" (S. 2290) appeared. This version would provide a trust fund of $124 billion and move all claims into a bureaucracy within the Labor Department.
Frist has scheduled his bill for a vote as early as next week, prompting talks on a possible middle course between the two versions. New York's senators, Charles Schumer and Hillary Rodham Clinton, are watching those talks to see if an acceptable compromise can be reached.
But those talks must produce a trust fund adequate to provide compensation to sick workers and their survivors. The industry must pay its fair share.
Douglas Holtz-Eakin, a former Syracuse University economics professor who now directs the Congressional Budget Office, says estimating the total money needed to settle future claims is tricky business. Some senators are concerned that taxpayers may have to bail out an inadequate trust fund in future decades.
All the while, 30 million pounds of asbestos are still being processed annually in the United States. That means workers and their families being exposed today could develop lung diseases in the decades to come.
The federal legislation must ban the substance once and for all.