Fairness in Asbestos Injury Resolution Act of 2005

FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT OF 2005

BREAK IN TRANSRIPT

Mr. DURBIN. Mr. President, first, let me acknowledge the obvious. A lot of work has gone into this bill. Senator Specter, Senator Leahy, and members of the Judiciary Committee, including Senator Hatch, have spent hours, days, weeks, and months preparing this bill. It is a bill that should have taken a long time because it is a bill that says something very basic and fundamental and, in many ways, revolutionary: It says we can no longer trust the court system in America. It says the court system is inadequate in America to compensate victims. That is a charge not made lightly, I am sure, by the sponsor of this legislation. It is one we should not take lightly on the floor of the Senate because we have established over the course of this Nation's history some things which are generally accepted by most Americans.

It is true that Congress and legislatures write the law. The President and executive branch enforce it. And when it comes to making decisions of how that law applies to our lives, we trust the courts. The decision has been made by those who are pushing this bill that we can no longer trust the courts. The decision has been made that we have to replace our court system with something else. If we are going to step away from a time-honored institution and tradition in America to create an alternative, it is a daunting task.

Those of us who have been critical of this legislation are going to hold the sponsors to some very fundamental questions. The first: Can you provide the same level of fairness and compensation in your new system that the courts of America provide today? The answer can be found in responses from victims groups around the country. The victims of asbestos have been writing to Members of Congress saying: Don't pass this legislation. The compensation you will give to the victims and their families is inadequate and unpredictable. Those families have come to see me. They have heartbreaking stories--stories of young men and young women whose lives were snuffed out because of exposure to asbestos. In not a single case have I ever met somebody who said: I guess I knew I had it coming to me; I decided to expose myself to asbestos. I never ran into a person like that or heard a story like that.

The victims of asbestos are as surprised by the diagnosis as they can be. It is no surprise to us when we consider this insidious disease. These flaky fibers which are breathed into the lungs can sit there like a timebomb for decades. Do you recall the movie actor named Steve McQueen? He died from mesothelioma. He was exposed to asbestos at some point in his life, which later exploded into a fatal lung disease. Earlier this week on the floor, I talked about my former colleague, Bruce Vento, of Minnesota, a Congressman from St. Paul. He was a picture of health and was in the gym every morning, and then he didn't feel well. He went to the doctor, and after a chest x-ray, they said: You were somehow in your life exposed to asbestos. Now you have mesothelioma and just months to live.

Those stories are repeated over and over again about men who worked in asbestos mines who got off scot-free and never developed a problem, but their wives at home, who shook out their work clothes before putting them into the washer, breathed in the fibers and contracted asbestosis and mesothelioma and died. It is insidious.

I could spend more than an hour telling you that, since 1934, the companies which have been creating asbestos products have known how dangerous this product is. I could, and maybe I will at some point, go through the extensive evidence of deception and cover-up by these companies so that their employees did not understand the serious dangers they were exposed to in the workplace, and the dangers that many of them took home in their work clothes. These victims and their families come to visit me--lovely young women from the Chicago suburbs with beautiful children, and they show pictures of families whose husbands were lost in their early forties to mesothelioma.

This bill says that compensation for victims of asbestos is capped at $1.1 million. If you happen to be a mesothelioma victim, that's only $1.1 million for medical bills, lost wages, and to raise children. That is a figure which might have sounded pretty large to start with, but it begins to be very modest when you look at individual victims and their families. That is why the victims have come to us and said: Don't replace the court system in America with this approach. It is not fair to the victims.

Others have come to us as well and said that the way you put the money into the trust fund, which is supposed to pay the victims, is a mystery. We have repeatedly asked the chairman of the Judiciary Committee who is the sponsor of the legislation, to provide us with the documentation. Please show us how $140 billion will adequately compensate the victims of asbestos exposure over the 50-year life span of this bill. We are still waiting for the information. So we are going to replace the court system with a trust fund. We are going to say that $140 billion will be enough for 50 years, without any evidence of how that number was arrived at or whether that number will really meet the needs of the victims. I will speak in a few moments about those experts who have analyzed this bill and found that the numbers underlying the assumptions are totally wrong.

Another group that comes to us to discuss this bill are those being asked to pay into the trust fund that will be created by this bill. The argument has been made on the floor, thank goodness, that the taxpayers won't have to pay into this. These will be businesses and insurance companies which will put money in the trust fund so they don't have to pay out asbestos claims any longer in court. Well, it turns out that some businesses will do quite well. Some of them are going to receive a windfall in terms of what they have put into this fund as opposed to what they might pay in court.

U.S. Gypsum is a company that has a large legal exposure for asbestos. Because of corporate reports they made public in the last couple of weeks, we now know that, in order for the company to pay out all the existing claims filed against USG by victims of asbestos, they estimate it will cost them in the range of $4 billion. This chart is an excerpt of an article from BusinessWeek dated January 27, 2006, which says, USG is willing to cough up $4 billion to settle victims' claims. That is $4 billion of asbestos exposure for this one corporation. So if they didn't pay that amount in court settlements, and instead came into this bill, what would they pay into this trust fund? That figure is $900 million, according to USG's own corporate report.

This is a windfall. They have to be smiling and praying this bill is going to pass because if it does, the company is off the hook for over $3 billion of legal liability that they even admit to in court. And who will make up the difference? Who is going to make up the $3.1 billion this company should be paying the victims? Other companies. Companies that may never have had many lawsuits filed against them because of asbestos, and companies that have never paid out a penny in terms of asbestos claims, even if they were sued. These smaller companies will be expected to pay millions and millions of dollars into this trust fund when larger companies are walking away with a windfall.

So we asked again to the sponsor of this legislation: If you cannot tell us how you arrived at the figure of $140 billion, can you at least give us the names of the companies and how much they are expected to contribute into this trust fund? And we are still waiting.

The chairman spoke yesterday about how he was going to subpoena these records. I hope they will be produced during the course of this debate. I hope we will have a list of all the businesses with----

Mr. SPECTER. Mr. President, will the Senator from Illinois yield for a question?

Mr. DURBIN. I will be happy to yield.

Mr. SPECTER. Is the Senator from Illinois aware of the fact that the Judiciary Committee, on which he serves, issued a subpoena and has the names of the companies that are going to be contributing to the trust fund.

Mr. DURBIN. I know the chairman made that statement yesterday, and I am hoping he will share that information.

Mr. SPECTER. Mr. President, I am advised by staff, since I posed the question, in a note to the effect that Senator Durbin's staff did come to look at the list. Is the Senator from Illinois aware of that?

Mr. DURBIN. May I respond to the chairman by stating that I understand this information on the list has been characterized as confidential information before the committee and cannot be shared publicly.

Mr. SPECTER. The pending question--and I will be glad to answer his--is, Does the Senator from Illinois know that his staff came to look at the list?

Mr. DURBIN. I am aware of the fact they reviewed it, but I am also aware of the fact this has not been made public as part of this conversation and part of this record.

Mr. SPECTER. Mr. President, with all due respect, the issue isn't whether it has been made public, the issue is whether it is in existence, and the issue beyond being in existence is whether it is available to Members who have to vote on the bill. So when the Senator from Illinois asserts that you don't know who is making contributions, it is simply not so.

The issue of confidentiality is true. It has been raised by the companies because they are concerned that if it is disclosed how much they have contributed or are proposing to contribute that they may be targets for more litigation.

I don't wish to interrupt the Senator from Illinois further. I simply wish to make the point that he is wrong when he says we don't know who is going to contribute the money, and his own staffer has taken a look at the list.

Mr. DURBIN. Let me respond, if I may. Why is this cloaked in secrecy? Why is this a secret conversation? How can we have confidence that the $140 billion figure has any validity? How can we have confidence that the businesses that will be called on are going to be able to contribute to this fund if this is cloaked in secrecy and confidentiality? Most of these lawsuits are open, public record. It is hard for me to imagine that a business is going to be sued because someone has identified them as a potential contributor to this trust fund.

Nevertheless, if we are expected to replace the court system in America with this new trust fund system, how can we do it with any confidence if all the information is not on the table? Why the secrecy? What are we concealing? What we are concealing, frankly, is the most controversial elements of this bill: a question of whether $140 billion will actually pay the victims--and I doubt that it will--a question of whether companies are going to be asked to pay into this trust fund who shouldn't be asked to pay into the trust fund and, subsequently, may be forced into bankruptcy, closing their doors because of it. These are questions of great moment. To say a staff person can have access to secret files in an office hardly gives any comfort in the midst of a public debate about an issue of this magnitude.

Mr. SPECTER. Mr. President, will the Senator from Illinois yield further?

Mr. DURBIN. I will yield for a question.

Mr. SPECTER. Is the Senator from Illinois aware, putting it in the form of a question, that he has made a shift in positions, first asserting that we don't know who is going to contribute the money, then finding out that we do know who is going to contribute the money, that, in fact, his staffer has looked at that list, and he is now raising a different issue as to what is the need for secrecy?

That is not the point about which I raised the question. When he talks about litigation, there are many confidential matters in litigation which remain confidential on a showing of cause. So my question to the Senator from Illinois is, does he realize that he has shifted his position from objecting to the status where nobody knows who is contributing, changing to why the reason for the secrecy?

Mr. DURBIN. I say to the Senator from Pennsylvania----

Mr. SPECTER. As a couple of experienced trial lawyers and debaters, or at least he is an experienced trial lawyer and debater.

Mr. DURBIN. As the Senator from Pennsylvania is as well. In response, unless and until we put this information out to be reviewed in a comprehensive and honest way, I don't believe we can stand before the American people and say this is a good replacement for the courts of America.

Let me tell the Senator what happened. A member of my staff was invited to the Senator's office to view the secret list. He was warned ahead of time not to take any notes, not to make any copies, and not to disclose the nature and substance of the secret list because they were treated as committee confidential. My staffer went to view the list and reported to me the information wasn't very helpful in answering the most basic questions about the companies, their liability, and, of course, the impact on each company and whether they can survive the contributions to the trust fund.

Under the committee confidential rule the chairman has imposed on all staff members reviewing this list, I am not sure I can say much more about this secret list on the floor, but I will say this is a highly unusual process to have secret lists, secret information, and confidentiality, when we are literally talking about people's lives and health. I don't think the Senator can come forward and meet his burden of proof, to go back to the language of trial lawyers, that we should replace the court system in America based on secret lists kept in his office. That strikes me as a far cry from the kind of public debate which we should invite for this bill.

Mr. SPECTER. Mr. President, will the Senator yield further for a question?

Mr. DURBIN. I have been more than happy to yield, and I will continue to yield.

Mr. SPECTER. How can the Senator call it a secret list when it is available for his inspection?

Mr. DURBIN. I say to the Senator, when he makes it available for the inspection of all Members and the American people, it is no longer a secret list. Mr. President, is the Senator prepared to do that? That is my question, without yielding the floor to the Senator.

Mr. SPECTER. I will review the matter with the view to see if we can make it public. I am open to any modification which is reasonable. I am not bound by any protocol, and I will go back to the providers of the list to see if it can be made available. But when the Senator from Illinois asserts that it is secret, he is simply wrong. It is not secret. He can look at it. I think he raises a good point when he says that nobody can make a copy of it.

Offhand, on horseback, on one foot, I think staffers should be able to make a copy of it. Take the copy and show it to the Senator. I think that is reasonable, with the agreement of the staffer and the Senator that if we decide to retain the confidentiality, they will respect that. I trust Senator Durbin and I trust his staff to honor confidentiality if we stick with it.

As I say, I will review that as well. But Senator Durbin has to make a decision. I am sure Senator Durbin has an open mind on this question. Now that I reflect on it, I am not so sure he does have an open mind on this question, and he doesn't have to have an open mind on this question. I think he raises a good point when he says we ought to know who contributes the money. I raised hell to get the information and finally had to raise a subpoena to get the information. We have it so that it is available for those who have to make a decision.

When he carries the point further that he would like to see it made public, if I can accommodate that, I will.

Mr. DURBIN. I was happy to yield again to the Senator, whom I respect very much. I tell him, for the record, on May 25 of last year, we sent a letter to him about Goldman Sachs, asking that we have some information about the $140 billion figure, how it was arrived at, and how it will be paid for. So this is not the first time this issue has come up.

It is curious to me that we are writing a bill that is going to change the laws of all the States of America, and if we are going to close those courtrooms across America. Yet the Senator from Pennsylvania had to issue a subpoena to obtain a list of the names of the companies that are going to contribute to the trust fund. This is a very strange process.

Usually, legislation emanates from within Congress and affects the outside world. It appears that the secret list at issue emanated from the outside and whoever created it wasn't anxious to share it. So if there is skepticism by those of us critical of the bill, I think there is good reason.

We never received a reply to our May letter of last year. It is an indication to me that this whole process has been very unusual and very different from any process I have seen.

Somewhere, someone has come up with a number as to how much we need to compensate these victims, and someone has come up with a source on how that number will be arrived at, and the chairman had to go to the lengths of subpoenaing the information that was the basis for this bill that will affect hundreds of thousands of Americans and their lives.

Mr. SPECTER. Mr. President, will the Senator will yield further?

Mr. DURBIN. I will be happy to yield.

Mr. SPECTER. When he says I haven't responded to his letter, I have responded to his letter by getting him the information. The Senator from Illinois is diligent, resourceful, and raises lots of questions. I would challenge him to say I haven't responded to all of them.

Mr. DURBIN. I say to the chairman, he is the most responsive Member I can think of, and I thank him for his service and friendship. I have shared with him my concerns on this issue, and he has gone so far as to issue a subpoena.

The point I wanted to make to the chairman is raising this issue was not sua sponte. I started asking this question long ago as to why we couldn't get the most fundamental----

Mr. SPECTER. Parliamentary inquiry: Does sua sponte apply to this discussion? I withdraw the parliamentary inquiry.

When the Senator from Illinois says the chairman had to issue a subpoena, I consider it a compliment. I have had to deal with stakeholders on all sides who have been recalcitrant. We haven't--I, we, Senator Leahy and I--haven't left any stone unturned. If people who want this bill and are obligated to provide money won't give the information I want, if they are for the bill and they are for the position I am sponsoring, I am going to get tough about it. I am going to get a subpoena so that Senator Durbin knows what is going on, and I think the American people, through their elected representatives, will know what is going on.

Does the Senator want me to yield? If I can get wider distribution, I will.

Mr. DURBIN. Let me reclaim my time but also say to the chairman, parenthetically, what we engaged in--yielding back and forth--draws perilously close to debate on the Senate floor, which we try to avoid at any cost. I will do my best to always yield to meaningful questions and comments as those made by the chairman of the Senate Judiciary Committee. But I want to return to my comments.

This is a curious situation, where the chairman of the committee who wrote the bill had to issue a subpoena to get the information about what the bill meant. Now that is a curious situation. It leads one to believe that someone else, other than this committee, is writing the bill. Who could that possibly be? Who has enough interest in this matter to want to move forward with passing this bill outside of Capitol Hill? I gave one example earlier of one corporation which stands to gain $3.1 billion if this bill passes. Those are companies very interested in this bill.

There has been a lot of talk on the floor about the lobbying effort on behalf of this legislation. It has been huge.

(Ms. MURKOWSKI assumed the Chair.)

Mr. SPECTER. Madam President, will the Senator from Illinois yield for a question?

Mr. DURBIN. After I finish my sentence, I will yield. I concede this bill is a clash of special-interest titans on both sides. I think proponents of the bill have invested a lot more in its passage than those who oppose it. Maybe we will never know the true figures, but the interesting thing is that the first bill of this Senate session is not a bill to address the Medicare prescription drug crisis, it is not a bill to provide affordable, accessible health care to Americans, it is not a bill to deal with the energy crisis and the heating bills that are killing us in the Midwest and the Northeast, it is not a bill to deal with pension security for workers who are losing a lifetime of pension investment to a merger or a bankruptcy or corporate sleight of hand. It is a bill that is brought by lobby groups and special interests that have invested tens of millions of dollars trying to force this issue and bring this matter before us on the Senate floor.

Mr. SPECTER. Madam President, parliamentary inquiry: Has the Senator from Illinois finished that sentence?

Mr. DURBIN. I just finished. That was a period.

Mr. SPECTER. There are a lot of semicolons in that sentence, then.

Mr. DURBIN. I am not yielding the floor unless the Senator wishes to ask a question. Then I will be happy to yield.

Mr. SPECTER. There is a lot of competition for the floor. There are three of us on the floor. A lot of competition for it.

When the Senator from Illinois talks about special interest groups, there are others involved in this legislation and they are the victims. They are thousands, tens of thousands of victims who are suffering deadly diseases. Those are the people about whom this Senator is concerned.

Yesterday I put into the RECORD an article from the front page of the Hill about $3 million being spent by lobbyists to defeat this bill. Today the New York Times has a detailed story about how much money is being spent to defeat this bill.

It is true there are some who want this bill--the manufacturers and some insurance companies. But the people who really want this bill are the victims.

I take just a little umbrage at one sentence, one statement made by the Senator from Illinois when he says that because I have to subpoena material, it raises a question about who is writing the bill, that somebody else is writing the bill.

Let me assure you, Madam President, and anybody who may be watching on C-SPAN--if we had anybody, we lost them a long time ago--no special interest has written this bill. It is a non sequitur. I have to respond in some way to sua sponte. It is a non sequitur to say that because it was necessary to subpoena information that somebody else wrote the bill.

Mr. DURBIN. Without yielding the floor, would the Senator please tell us what Government agency he subpoenaed for the information to produce the secret list?

Mr. SPECTER. I will be glad to respond. I didn't subpoena any governmental agency. We subpoenaed the companies who were obligated to provide the money.

Mr. DURBIN. Without yielding the floor, would the Senator please state for the RECORD the names of the nongovernment agencies, private companies he had to subpoena to understand the underlying basis for this trust fund and how $140 billion was arrived at?

Mr. SPECTER. I didn't have to subpoena anybody to understand the underlying basis for this bill. This is my bill. I understood it when I thought it through and when I wrote it. Will I provide the names of those who are to be contributors? I do not have them at my disposal, and I certainly don't have them in my mind. But the staffer from the Senator from Illinois has already seen them and I would be glad to personally take the Senator from Illinois to look at the list.

Mr. DURBIN. Madam President, if this were a courtroom I would say the witness is not responsive. I asked the Senator a very direct question: Who did you send the subpoena to if it wasn't a government agency? And the answer, he knows, is: A private company. The obvious question is: Why are private companies writing a bill we have on the floor of the Senate today? They are writing that bill because they have a deep, personal interest in this bill. They are going to do quite well, thank you. Some companies are going to end up, as a result of this legislation, walking away from their legal liabilities in court for asbestos injury and asbestos death. These are the companies that want to see us close down the court system for these victims and create something else because they are the winners.

I hope the Senator from Pennsylvania--I don't want to create any umbrage, or raise any questions about his integrity. I am not. But I hope he will at a later point in the day come to the floor and disclose the names of the private companies that created the secret list that suggests there may be thousands of corporations across America that will have to contribute to this trust fund.

I wish to go to the most basic questions about the $140 billion. Where did we come up with $140 billion? How can we suggest that over the next 50 years or more that will be enough? It is important that it is enough. Yesterday my friend, the Senator from Pennsylvania, addressed this issue. He came to the floor and this is what Senator Specter said about this $140 billion figure:

The figure of $140 billion was worked out by Senator Frist and Senator Daschle about a year and half ago. It is a figure which rose from that which was originally put in the trust fund to that figure where CBO has given us the assurance that the range of cost will be somewhere between $120 billion and $135 billion. Under one contingency, it could go to $150 billion, but that is unlikely.

Senator Specter went on to say something else, and I think is a very important statement. It is a long sentence, but bear with me:

We have within the structure of the bill a provision that the administrator can make a reevaluation going through certain preconditions so that if it looks like we're going to exceed the $140 billion, we can make modifications in the medical standards and criteria to stay within the $140 billion.

End of quote from the Senate floor. A statement by the chairman of the Judiciary committee yesterday stating there will be modifications in medical standards and criteria. Make no mistake what that means. It means less money for victims. It means if this fund runs out of money, the victims will receive even less. So the winners will be winning more, the losers losing more. And the victims will be the ultimate all-time losers in this situation.

I think it was an honest answer. I believe Chairman Specter was very candid in what he said. He could have said that if we exceed $140 billion in claims, that we would return all the cases to the tort system and the court system. But he knows if he said that, it would be hard to explain how we get into this trust fund for a few years, close the courthouse door, cut off all the pending lawsuits, and then declare the trust fund doesn't work. He didn't say that.

He could have said the Federal taxpayers will have to step in at that point and take care of the victims. But he knew that would cause a problem, not just on his side of the aisle but across the Senate. A Federal bailout is not viewed very positively when our Federal budget is facing the deepest deficits in the history of the United States.

So he said, and I admire his candor, we will just reduce the amounts we pay the victims. That is how we will make $140 billion work. That is a very candid and straightforward, but harrowing answer.

To say to people, if you were in the midst of a lawsuit, if you have worked around asbestos and have asbestosis and you are limited in your activities and maybe in the span of your life, and you filed a lawsuit against the company that exposed you to this asbestos, and you worked--and I know this because I used to do this for a living--worked for years to get that case into court with great sacrifices and frustrations and motions and continuances, and you are finally there--when this bill passes, if you don't have your case before a jury, you are finished. Close the door. Take your file home. You get to start all over.

Then what happens? You go into this trust fund, which on balance will probably pay you less, and you hope and pray there will be enough money there to pay you. If there is not, Senator Specter has said we will cut back your pay and your compensation for being injured by asbestos until we can hit this magic $140 billion number. That is the reality of this bill.

I think it is fair to ask, Is the $140 billion figure accurate? I have been through this on the Senate Judiciary Committee for several years. Senator ORRIN HATCH offered a version of this bill. He began by saying all we need is $90 billion over 50 years. Then we got into a committee debate and markups, and the figure moved up to $154 billion during the course of committee process. At that time the CBO, the Congressional Budget Office, estimated it would cost between $124 and $136 billion for anticipated claims.

Since this virtual endorsement of the trust fund bill from 3 years ago, the Congressional Budget Office has progressively but unquestionably expressed greater and greater reservations about that number, about the viability of the trust fund and whether the figure we are talking about today is an honest figure to compensate victims.

Let me share this report from the Congressional Budget Office. I will read it:

There is a significant likelihood that the fund's revenues would fall short of the amount needed to pay valid claims, as well as debt-service and administrative costs. There is also some likelihood that the fund's revenues would be sufficient to meet those needs. The final outcome cannot be predicted with great certainty. Without a substantial increase in the resources available to the fund, there is no way to guarantee the fund will not either revert to the court system or require additional funding.

That is an honest answer. When we ask this official organization of Congress that is supposed to assess whether $140 billion is enough, their honest answer is, we can't say either way, but we certainly can't give you a guarantee that $140 billion is all that will be needed.

The Congressional Budget Office went on to say, in analyzing the bill before us:

CBO expects the value of valid claims likely to be submitted to the fund over the next 50 years could be between $120 and $150 billion, not including possible financing (debt services) costs.

Remember those words. Because it turns out the money from companies will not come into the trust fund fast enough to pay the massive influx of claims right at the start, the trust fund is going to have to borrow that money. And in borrowing money, the trust fund has to pay interest and finance costs. And all of the lamentations on the floor here about attorney's fees notwithstanding, at the end of the day, we will find that substantial amounts of money in the trust fund will be paid in interest costs, from the borrowing to try to keep this fund afloat as legitimate asbestos victims ask for their fair compensation.

That is a reality. It is a reality that suggests the $140 billion figure cannot be substantiated. If this were an idea of Senator Daschle and Senator Frist a year and a half ago, as much as I respect both of them, and I respect them very much, I don't know that either one of them is actuaries, nor do I know that they have the expertise to come up with a magic figure to predict the cost of this trust fund over a 50-year lifespan.

Let's take some of these concerns directly.

The CBO states that the expected $120-$150 billion in qualified asbestos injury claims on the trust fund ``does not include possible financing costs and administrative expenses. The interest cost of this borrowing [they say] would add significantly to the long-term costs faced by the fund. .....''

What are the financing costs? We are talking about debt service, money the Federal Government has to expend in order to either lend on its own to the new trust fund or go to private capital markets. The debt service costs could reach $50 billion or more.

We would find, then, that more than a third of the money going into the trust fund would be used to pay out in interest costs, not in victim compensation. Why? Because the secret and maybe soon public list of contributions by companies and insurance companies indicates not enough will be coming into the fund to match all of the injured victims across America who are going to be turning to this new fund, which, at the same time, closes down the court system for hundreds of thousands of American citizens.

Here is more of the CBO's analysis:

Because expenses would exceed revenues in many of the early years of the fund's operations, the administrator would need to borrow funds to make up the shortfall. The interest cost of this borrowing would add significantly to the long-term costs faced by the fund and contributes to the possibility that the fund might become insolvent.

Is it worth the gamble? Is it worth the gamble for us to pass a fund to close down the court system, to tell people who have worked for months and years to bring their case to a judge or a jury that they are now out of the system, then close the courtroom doors? Is it worth the gamble to them and their families that our calculations are right? Should we replace the court system on the possibility that we have guessed right about $140 billion, that in fact it would not become insolvent? Or should we shrug our shoulders and say, well, if we guessed wrong, what is the worst thing that could happen? According to the author of this bill, the victims will receive less money.

So when the chairman of the Judiciary Committee suggests that the chorus of voices of victims is what brings us to the floor today, I would say to him I am sure there are some who are in that chorus, but it might not be much more than a small quartet. The larger choir of victims across America has told us about their opposition to this bill. I could read that list of victims, unions, and other groups into the record. They are telling us this is the wrong thing to do. It is unjust to close the courthouse door to thousands of people across America and to say to them: Trust us, we have an idea for a trust fund. It has never been tried before, we are not quite sure of the figure, the contributors to the trust fund are on the secret list which may become public, but trust us. It is well worth your life and your health.

There is a group called Bates White which testified before the Senate Judiciary Committee, a group that has represented businesses and various organizations.

In September 2005, this economic consulting firm issued a report about this bill. I don't know why they conducted this report, but I have read it and attended a Judiciary Committee hearing where Dr. Charles Bates of that firm testified. According to the author, the report examined the viability of the fund. They focused on two primary categories of claimants who posed the greatest threat to the fund's financial viability.

First, they conclude that the bill would create entitlements for many individuals with lung and other cancers who were not compensated in the historical tort environment. The Bates White report states this entitlement likely will result in at least a tenfold increase in the number of other cancer victims relative to the cases being brought in our courts today.

Here is why. Based on epidemiological studies between 2000 and 2055, some 3.5 million people in the eligible population covered by this bill will develop lung or other cancers, not including mesothelioma. Asbestos is only one of the myriad of significant risk factors that may be causally related to lung and ``other'' cancers. But S. 852 would compensate all cancer claimants who have minimal pleural or lung changes based on subjective x-ray readings.

According to this study, the filing rates for the trust fund are also expected to increase substantially over the historical rates in the tort system due to the relative ease of the filing which is to be created by this trust fund bill. Thus, according to Bates White, the bill would compensate for a dramatically larger number of patients.

Second, the Bates White report concludes that the bill is going to revive what they call ``dormant claims,'' which are asbestos injury lawsuits that have been settled with most but not all defendants. The bill allows some claimants who filed their lawsuits prior to 2000 to be eligible for payment in the trust fund if those claims have not been fully resolved. Thousands of such cases currently remain on court dockets.

This incremental entitlement for the differential between the amounts collected in such suits in settlement or judgments, and the amount awardable from the fund, they estimate, could total up to $26 billion. And if these victims seek to recover the difference, that would add significantly to the cost of the trust fund.

Let me say at the outset that I think the court system as well as the trust fund should be generous to victims. As I said earlier, I don't know of a single victim of asbestos exposure who knowingly and willingly exposed themselves. Many of them were duped by deception of corporate officers who insisted there was no danger involved.

I am not questioning the decision in the bill to extend such payments, but I do join Bates White in questioning whether the programs set forth in the bill can be paid for. What Bates White has said is, if you look at the bill as it is written, and the people who will be compensated, it is going to cost dramatically more than earlier estimates.

Based on these two factors and using very conservative economic assumptions, the Bates White study concludes the bill would create entitlement claims valued between $301 billion and $561 billion.

The bill's trust fund is capped at $140 billion. This study says the amount of payouts could be more than double, or as much as three times, or even more than that in actual payouts. That is how far we could have missed the mark when it comes to this economic analysis underlying this bill.

What this study found raises serious questions about the solvency of this fund: Saying to the thousands of victims, Close up your court case, stop working with your attorney, stop going to the courthouse, we are going to take care of you, and then we don't. We come up with a $140 billion trust fund that is inadequate to the needs of these victims.

I also want to point out that Bates White updated their study yesterday. The economists at this firm announced this week that they found a $90 billion error in the Congressional Budget Office's analysis of this same bill.

This is a serious issue. It should be serious enough to take this bill off the calendar. If the CBO's estimate is wrong by $90 billion, we have to stop where we are. We shouldn't go forward. Bates White's new analysis demonstrates this oversight.

According to the numbers the Congressional Budget Office presents in its own report, CBO asserts that 1.5 million individuals will receive compensation for nonmalignant conditions, meaning they have bilateral pleural disease and 5 or more years of exposure. Under this bill, these victims are entitled to medical monitoring.

Yet, national cancer incidence rates establish that more than 200,000 of these claimants among the 1.5 million will eventually develop lung or other cancers.

This means, if we take the CBO numbers as the baseline, there could be an additional 200,000 claimants who will qualify for lung and other cancer claims, which are paid out much higher levels of compensation in this bill. Yet the Congressional Budget Office's current estimate takes into consideration only 28,000 people in this category.

So, the new information from Bates White presents a real concern that the Congressional Budget Office may have missed at least 170,000 potential victims who weren't considered in the CBO's earlier analysis.

The Congressional Budget Office relied on an arbitrary standard assumption that only 15 percent of the population will ever file for the higher claim. These additional claimants represent more than $90 billion in additional costs to the fund.

CBO's estimate currently assumes that 85 percent of qualifying claimants who took the trouble to sign up for medical monitoring under this bill would not file the paperwork to collect their entitlement if they ever developed a more serious illness down the road. This is not a credible scenario.

After all, isn't the purpose of medical monitoring to provide early detection of these and other diseases, which means that more people rather than fewer would have the opportunity to learn about such illnesses?

As late as yesterday, there are new, fundamental questions being raised about whether this trust fund at $140 billion gives us an honest figure to work with. If it is not an honest figure, it means as the years progress, we are going to have to reduce payments to victims.

To suggest this is a victims bill is to overlook the obvious: the starting point of the bill is so flawed. Let me show you some charts about how this will be funded because I think they are a good indication of the problem that the fund faces in convincing a majority of the Senate to support this bill.

This is a chart which addresses the timing of this bill, comparing when the liabilities will arise for claims coming into the fund, versus when the revenues from the companies will come into the trust fund. As you can see, the red line shows liabilities which are very high in the earlier years, but you will notice the low green line is never adequate to meet the needs of liability. From the outset, the fund is falling behind. Simply stated, it is not collecting enough money to compensate victims.

One of the arguments being made is we have to replace the court system because it takes so long; there are delays. What is going to happen when this fund doesn't have enough money and hundreds of thousands of Americans who are sick and dying come for compensation?

At best, we will borrow money, adding more cost to the fund dramatically, or we will tell them to wait in line until we have received enough trust fund revenue to pay them. Or, I suppose, as the chairman said yesterday, we will just say we can pay them now, but we will have to pay them less than what we promised in this bill. That appears to be the range of options based on the way we are dealing with this issue.

Take a look at this chart which shows that liabilities will greatly exceed the assets of the trust fund from the very start, and the excess--the red line--continues to build over the years. This is a 50-year period of time. You can see even with the revenue coming in that it never matches the liabilities they anticipate. This chart doesn't even include the new information from the Bates White study, which could mean there is even a greater amount of shortfall in this trust fund.

Let's talk about interest costs for a moment. The fund borrows in its early years because, obviously, all the corporations on the secret list can't come up with all the money they are supposed to produce initially. Some of them will take a period of time. In fact, some of them have told us to forget it, that this bill will end up bankrupting them. So those companies will disappear.

But in the meantime, there are still needy victims and people who would otherwise go to courts for compensation. The fund starts to borrow in its first years to meet the shortfall but realizes barely half the value of future revenue, and the other half has to be used to pay interest.

Senator Hatch was here a few moments ago speaking about attorney's fees and how that is taking money away from victims. Some would argue that without an attorney, many victims would never have their day in court or a chance to succeed in court. What we have here is the fact that we will be paying into this trust fund and almost half of the revenues will be spent on interest and administration. Out of the $140 billion in the trust fund--which may not be enough--almost half of it is going to go to pay creditors, financial institutions, banks, maybe foreign governments. I don't know who will lend money to this trust fund. We will pay out interest to them, and we will have less to pay to the victims.

This was really supposed to be an upfront, no-fault system to help victims with $140 billion compensation over 50 years. It turns out that the real steady winners are creditors of the fund. According to one analysis, as little as 52 percent of the trust fund could be used to pay the claimants and 48 percent for interest, which is almost half of the amount of money during the life of this fund.

Some suggest that we are doing a great favor by creating this trust fund. Well, it is a great favor for sure to credit institutions but to the victims, it is not. As more money is paid out in interest, less is available for the victims.

What the Senator who authored this bill said yesterday is, We will just cut the compensation. That is the way we will make up the difference. For every dollar of interest paid, we pay one dollar less to someone who is dying of mesothelioma. That is how this is being conducted.

The sponsors have put a lot of time in this bill, and it was a Herculean task to try to address something 50 years in the future. I concede to all of that. But shouldn't the people who are pushing for a change have the burden of proving that change is an improvement over status quo? Shouldn't that be the starting point of a debate?

If you want to change the current system, shouldn't you have the burden of establishing that your change is a good one, and that $140 billion is the right figure, rather than to say that Senator Daschle and Senator Frist thought it was a good figure? Shouldn't you have the burden of showing that the input of money into the trust fund from the secret list of corporations and insurance companies is going to be adequate to meet the payouts of the victims? Shouldn't you have the responsibility of showing that $140 billion is going to go to the victims rather than to creditors and financial institutions and interest and administrative costs?

Isn't that the starting point? I think it is. Once they have met that burden of proof, then we can say: All right, we will compare the court system to your trust fund and decide which is the better way to go. But they have not met that burden of proof. They have asked us to accept on faith that this trust fund is going to treat victims fairly on a timely basis. I think many people are concerned about that.

There will be enormous amounts of claims that are expected to flood into this trust fund on day one, and by that time all the cases in court will be shut down if they are not at the jury stage. Let me repeat that important fact. If the litigants are not presenting any evidence in court, all of those cases will be shut down, according to this bill.

You know those victims are going to turn around and say: My husband is dying. My husband has limited activity and can't work. Where do I go now?

They will be told: Come to the trust fund. Come to this $140 billion trust fund.

We can expect a flood of applications in the early stages if this trust fund is created. Will the Department of Labor be able to create this new office and new bureaucracy to manage this flood of claims?

For those of you who have any doubts about the efficiency of government and its ability to respond to millions of people in need, I would suggest the following words: the Medicare prescription drug bill. You know what I mean.

This system which was created 2 years ago by the Senate and the House and signed by the President was supposed to compensate some 40 million Medicare recipients for their prescription drugs. Ask any Senator in this Chamber what they have heard back home. This is a disaster. They had 2 years to be ready. And, unfortunately, this system is fatally flawed. One critic said it is an unsalvageable fiasco and lives are at stake. Senior citizens now wonder if they can get their prescription drugs filled, and for some of those it is critical for them to just keep going on a day-to-day basis.

Now they are being told in this bill to trust us again.

We are going to create a Federal trust fund where hundreds of thousands of claims may come in initially and ask that they be compensated on a timely basis, and they will be told by the Federal Government, trust us, we will give you the money right away.

That is cold comfort for someone who has been sitting for a year or two with medical records and lawyers getting ready to present their case in court. But if they aren't among the fortunate few who have brought their case to a jury or to a judge, presented their evidence, and ended up with a verdict or settlement, then, unfortunately, everything they have done is for naught. They are tossed out of the system.

These victims deserve better than empty promises in this bill. They and the Senate deserve solid information about how this bill will work and remain solvent throughout the entire lifetime. Without such information, the Senate should reject this bill.

The PRESIDING OFFICER. The time for the recess has arrived.

Mr. DURBIN. Madam President, I yield the floor.

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