Congress Asbestos Deal No Cinch: Analysts

NU Online News Service, April 13, 4:29 p.m. EDT,Washington?A Washington analysts group said that, despitean apparent deal in Congress to set up a fund for asbestos injuryclaimants, passage of such a measure appears difficult.[@@]

Joe Lieber of Washington Analysis, a buy-side group, said in aninvestment note that it still remains cautious and, "While thereappears to be a bipartisan deal in the works on asbestos litigationreform, we continue to believe that getting a deal passed by bothHouses of Congress and signed into law remains an uphillbattle."

That was borne out by word last night that several SenateJudiciary Committee Republicans were balking at the deal, and itsintroduction was apparently being postponed until next week.

That was because Sens. Jon Kyl, Ariz., Jeff Sessions, Ala., andTom Coburn, Okla., objected to certain provisions. Sen. ArlenSpecter, chairman of the Judiciary Committee, scheduled anothermeeting of Republicans for next Tuesday while staff discussionscontinue, sources said.

It was Sen. Specter, with Sen. Pat Leahy, D-Vt., rankingminority member of the committee, and Sen. William Frist, R-Tenn.,Senate majority leader, who had indicated a deal was at hand.

In his overnight note to investors, Mr. Lieber said he wascautious about agreement because large insurers who would make mostof the contributions to the trust fund are opposed.

While most defendant companies still support Sen. Specter'sattempts to pass legislation, Mr. Lieber feels, "an increasingnumber are likewise declaring their opposition to the trust fundconcept" and, "Labor, meanwhile, consistently has advocated a trustfund larger than $140 billion, something the insurers and,increasingly, the defendant companies have resisted."

"While there appears to be a bipartisan deal in the works onasbestos litigation reform, we continue to believe that getting adeal passed by both Houses of Congress and signed into law remainsan uphill battle," he added.

"In our opinion, it will be very difficult to pass legislationwhen so much disagreement exists among the key parties," Mr. Lieberconcluded. "We always have believed that approval of asbestoslegislation will require the support of the insurance industry,defendant companies and organized labor. At this point that broadsupport is still lacking."

The bill, released late yesterday, calls for creation of a $140billion trust fund. Trustees will be given $40 billion in the firstfive years of the fund, with the authority to borrow another $20billion against future contributions.

Sen. Specter confirmed such a deal at a press conferenceyesterday afternoon. "I still do not have the final results untilsenators take a look at it, but I'm more than hopeful. I'moptimistic we'll have a bill which will get out of committee andbeyond," Sen. Specter said.

At the same time, Sen. Leahy, a key negotiator on behalf ofDemocrats, said, "I think that we are very, very close to a billthat Sen. Specter and I will both support ... The question will bethe number of people from both our parties who will be able to joinus in the legislation," said Leahy.

Support for Sen. Specter also was voiced by a key Republican,Texas Sen. John Cornyn. "I for one am pleased with the directionit's been heading," he said. Sen. Cornyn, also a member of theJudiciary Committee, was named by Sen. Frist to serve as liaisonbetween Sen. Frist and Sen. Specter.

Staff officials of the American Insurance Association JulieRochman and Dennis Kelly reiterated that they "cannot agree to anyparticular provision or proposal until we have seen the details andhow all of the pieces fit together. We certainly appreciate all ofthe time and energy that members on both sides of the aisle haveput into this effort, and remain committed to working with them toenact truly workable and meaningful reform."

The insurance industry has been lobbying, with the support ofcertain defendant companies, since December to kill a deal based onthe fact that a settlement by the Halliburton Company settled thebulk of claims and, that, based on that information, creation of a$140 billion trust fund would be excessive.

The insurance industry and defendant companies had recently puttheir lobbying efforts behind a medical criteria bill; a UtahRepublican, Rep. Chris Cannon, recently confirmed he is draftingsuch a bill and soliciting co-sponsors.