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Senate rejects trust fund for asbestos victims

WASHINGTON—The Senate rejected Tuesday evening a delicately crafted bill to relieve companies from mounting asbestos lawsuits, effectively killing the legislation in a significant setback for the White House and the Senate's Republican leadership.

In a 58-41 vote, an alliance of liberals and fiscal conservatives defeated the legislation on a parliamentary maneuver. Senate Majority Leader Bill Frist, R-Tenn., reserved the right to bring the legislation back for another vote later this year, but that appeared highly unlikely, and lobbyists involved said the measure appeared dead. The House of Representatives never took it up.

The defeat leaves unresolved one of the country's most vexing legal problems—the explosion of lawsuits by asbestos victims and their families against companies that produced or used the carcinogenic fire retardant material. About 600,000 lawsuits are pending and as many as 75,000 new cases are filed annually.

The legislation would have created a $140 billion trust fund for victims, paid by companies and their insurers. Among those the fund would have helped compensate are asbestos victims who cannot collect any money now because the company at fault has declared bankruptcy or is out of business.

The wrangling over the measure revealed splits among corporations, unions and insurers, and opposition from consumer groups and trial lawyers.

Conservatives objected to the size of the fund and to the possibility that it could require an infusion of taxpayers' money sometime in the future. Liberals complained that the fund would inadequately compensate victims.

"We are not only plunging into the darkness with this trust fund ... we're putting at risk the lives and fortunes of families across America," said Sen. Richard Durbin of Illinois, the second ranking Democratic leader.

Sen. John Ensign, R-Nev., who was behind the procedural move that killed the measure, said he felt uncomfortable siding with trial lawyers, but said the fund may prove inadequate and require a federal bailout.

"If the problem ends up coming back to the taxpayers, it will happen at a time when the baby boomers are starting to retire," Ensign said. "The last thing we can afford to do is to enact a bill that potentially could have a major impact ...could have a drain on our government."

Sen. Arlen Specter, R-Pa., the chairman of the Judiciary Committee, implored members to keep the legislation alive. Specter was intensely involved in crafting the bill, single-handedly tweaking it until it won bipartisan support from his committee last year.

"We have a chance to establish public policy in the interest of Americans," he said. "Everybody agrees that it is horrible that people are dying of deadly diseases from exposure to asbestos and have no one to collect from."

The legislation has been a lobbying bonanza. According to the Political Money Line, a group that tracks lobbying and campaign spending, 25 lobbying firms reported receiving $8.25 million to lobby on the asbestos legislation for the first six months of 2005, the latest documents available.

In addition to lobbying, interested parties have spent money to target lawmakers with ads and media campaigns.

Interest groups divided in unusual lines for business-related legislation. Exxon Mobil Corp., for example, opposed it because it said its contribution to the fund would be too high. USG Corp., the largest maker of wallboard, lobbied for the bill, arguing that lawsuits have been a windfall for lawyers, not victims.

Advocates for the bill noted that lawsuits have forced 77 companies into bankruptcy.

Likewise, labor unions were divided. The AFL-CIO opposed it, but the United Auto Workers and the unions that represent painters and asbestos workers supported it.

Several Republicans argued that instead of setting up a trust fund, Congress should establish medical criteria for victims who pursue lawsuits to reduce the number of claims. But supporters of the trust fund said that would exclude victims whose employers are now bankrupt.

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(c) 2006, Knight Ridder/Tribune Information Services.

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