(The following story by James P. Miller appeared on the Chicago Tribune website on February 15.)
CHICAGO –A controversial bill that would have created a $140 billion asbestos compensation fund failed a cliffhanger vote in the Senate Tuesday evening, dealing a heavy blow to backers’ hopes for passage of the measure this year.
The high-stakes legislation, which could save Chicago-based USG Corp. more than $3 billion if it becomes law, has drawn extensive lobbying efforts from both sides. Illinois Democrat Dick Durbin, who opposes the measure, characterized the showdown vote as an “Armageddon of special interests.”
In order to turn back a procedural challenge, supporters of the fiercely divisive measure needed 60 votes; they received 58.
The bipartisan bill had been designed to create an industry-financed fund that would resolve asbestos victims’ claims out of court. Backers said the plan could put an end to decades of asbestos litigation, which has clogged courts nationwide, driven scores of companies into bankruptcy and left many asbestos victims with no compensation.
Asbestos was used for decades, in a variety of applications, for its fire-resistant and insulation properties. Over time, however, it became apparent that some workers and others exposed to the fibrous material were developing a particularly deadly form of cancer, as well as lung problems, 20 or even 30 years after their exposure.
Companies that had used asbestos paid billions of dollars to settle health claims, but as the number of claimants soared in the 1980s and 1990s, many defendants, including USG, opted to file for bankruptcy protection.
The legislation would call for asbestos defendants and their insurers to contribute billions to a fund, which, over the coming decades, would pay out an estimated $140 billion in claims.
The measure had the backing of high-profile lawmakers, such as co-sponsors Arlen Specter (R-Pa.) and Patrick Leahy (D-Vt.), but it also drew fire from critics across the political spectrum.
Opponents of the plan, including insurance industry interests, trial lawyers and some small businesses, had condemned the measure on a variety of grounds.
Many asserted that the fund’s backers have grossly underestimated the cost of resolving the claims and that the measure might leave taxpayers on the hook for huge payments to claimants in future years. Others noted that the bill, which would oblige claimants to go through the settlement system, would deprive individual claimants of their day in court.
And some, including Democrat Frank Lautenberg of New Jersey, called the agreement too favorable to companies that allegedly knew about but concealed the health damage asbestos could cause.
Tuesday’s vote wasn’t actually on the merits of the bill, which would have required a simple majority for passage. Instead, the Senate voted on a “point of order” brought by Nevada Republican John Ensign, who contended the proposal would violate budget rules.
Supporters denied the fund would violate any rule or make the government liable. But to clear the procedural hurdle and let the bill go forward to possible amendments and an up-or-down vote later this week, supporters needed 60 votes.
“If this point of order is sustained, this bill will die,” Specter told the Senate in a heated defense of the bill. While he was willing to see the bill amended to address opponents’ concerns, he said, it should receive a full debate and “ought not to go down the drain on a technicality.”
Following the vote, however, Specter issued a statement saying, “We have just begun to fight.”
The original vote was a razor-thin 59-40, with one lawmaker absent. But after the poll of the senators was completed, Senate Majority Leader Bill Frist (R-Tenn.) switched his vote to overturn the point of order, making the final tally 58-41.
The switch, Frist said, could at least theoretically allow the Senate to reconsider the motion in the future, when the one absent Senate member, Democrat Daniel Inouye of Hawaii, has returned.
Specter said Inouye would have been the 60th vote that would have kept the legislation moving forward. “He went home because his wife was sick,” Specter said. “We will have him on the motion to reconsider, and we may change another vote or two so we may win this one yet.”
Tuesday’s vote was probably unwelcome news for USG, the building-products maker that is preparing to leave bankruptcy protection and that in late January reached a deal to settle all current and future asbestos-liability claims.
USG’s agreement is structured so that the company’s liability would be capped at about $900 million if asbestos-settlement legislation clears both the Senate and the House this session. If the bill fails, as it appears to have done, then USG’s liability will total approximately $3.95 billion.
A USG spokesman reached Tuesday night said the company continues to support the asbestos-settlement legislation, and added, “We applaud Sen. Specter for his herculean efforts to see that this bill gets an up-or-down vote in the full Senate.”