In a new analysis of the $140 billion asbestos trust fund scheme included in S. 852 which was reported out of the Senate Judiciary Committee, the Congressional Budget Office continues to raise doubts over whether the trust fund created by the measure will have sufficient funds to pay expected claims.
According to the CBO, “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.”
In addition, the CBO assumes, “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.” To date, neither CBO nor any other analyst has publicly documented where the money would come from to sustain the trust fund or if there would be enough.
While the CBO includes a critique of the recent Bates White study, which found that claims against the trust fund could exceed $300 billion, the agency admitted that massive uncertainties continue to plague the legislation.
Among CBO’s findings:
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.
CBO’s estimate 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.
Thomas O’Brien, chairman of the Coalition for Asbestos Reform stated, said the CBO analysis confirms his group’s concerns about the bill.
“The uncertainties outlined in this report show that this proposed legislation is based on speculation and guesswork and is not ready for consideration by the full Senate. There is no way anyone can know what the overall impact of this legislation will be. One thing we do know, however, is that it is a $140 billion tax primarily levied on small and medium sized businesses, including those in our coalition, and that it will not solve the problem. In fact, it will make things worse,” O’Brien contended.
The CBO report comes on the heels of yet another federal agency, the General Accounting Office (GAO), releasing a study demonstrating that historically, federal compensation programs invariably exceed initial estimates in terms of length of activity, number of claims, and ultimately, cost, he pointed oiut.
O’Brien’s coalition is a group of smaller and medium sized businesses and their insurance companies opposed to the trust fund mandated by the bill.
Source: Coalition for Asbestos Reform
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