Congress Asbestos Deal No Cinch: Analysts

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

Joe Lieber of Washington Analysis, a buy-side group, said in an investment note that it still remains cautious and, "While there appears to be a bipartisan deal in the works on asbestos litigation reform, we continue to believe that getting a deal passed by both Houses of Congress and signed into law remains an uphill battle."

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

That was because Sens. Jon Kyl, Ariz., Jeff Sessions, Ala., and Tom Coburn, Okla., objected to certain provisions. Sen. Arlen Specter, chairman of the Judiciary Committee, scheduled another meeting of Republicans for next Tuesday while staff discussions continue, sources said.

It was Sen. Specter, with Sen. Pat Leahy, D-Vt., ranking minority 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 was cautious about agreement because large insurers who would make most of the contributions to the trust fund are opposed.

While most defendant companies still support Sen. Specter's attempts to pass legislation, Mr. Lieber feels, "an increasing number are likewise declaring their opposition to the trust fund concept" and, "Labor, meanwhile, consistently has advocated a trust fund 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 on asbestos litigation reform, we continue to believe that getting a deal passed by both Houses of Congress and signed into law remains an uphill battle," he added.

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

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

Sen. Specter confirmed such a deal at a press conference yesterday afternoon. "I still do not have the final results until senators take a look at it, but I'm more than hopeful. I'm optimistic we'll have a bill which will get out of committee and beyond," Sen. Specter said.

At the same time, Sen. Leahy, a key negotiator on behalf of Democrats, said, "I think that we are very, very close to a bill that Sen. Specter and I will both support ... The question will be the number of people from both our parties who will be able to join us 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 direction it's been heading," he said. Sen. Cornyn, also a member of the Judiciary Committee, was named by Sen. Frist to serve as liaison between Sen. Frist and Sen. Specter.

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

The insurance industry has been lobbying, with the support of certain defendant companies, since December to kill a deal based on the fact that a settlement by the Halliburton Company settled the bulk 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 put their lobbying efforts behind a medical criteria bill; a Utah Republican, Rep. Chris Cannon, recently confirmed he is drafting such a bill and soliciting co-sponsors.

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Congress Asbestos Deal No Cinch: Analysts

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