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Fiscal Time-Bomb Still Ticking in Senate's Asbestos Reform Bill, Taxpayer Group Warns
For Immediate Release February 8, 2006
(Washington, DC) - The latest arguments from supporters of the Senate's asbestos reform bill (S. 852) only amplify, rather than address, concerns over a major fiscal meltdown if the legislation is enacted, an expert with the 350,000-member National Taxpayers Union (NTU) warned today at a Capitol Hill briefing. No new information brought to light since publication of NTU's study of S. 852 six weeks ago has changed this grim prognosis for taxpayers.
"In their desperate campaign to save S. 852, proponents of the so-called FAIR Act have highlighted once again the dangerous margin of doubt over the legislation's fiscal impact," said NTU Policy Analyst Jeff Dircksen, who also recently authored the study, Gordian Knot: How the Senate's Asbestos "Reform" Bill Entangles Taxpayers. "Simply repeating cost estimates which, according to the Congressional Budget Office, 'cannot be predicted with great certainty,' does not put to rest the prospect of hundreds of billions of dollars in taxpayer liabilities."
Dircksen noted that in recent days the sponsors of S. 852, led by Senator Arlen Specter (R-PA), have been citing this very same Congressional Budget Office (CBO) estimate as if it were a guarantee that the trust fund created by the legislation would be fully solvent over its decades-long lifespan. Yet just days ago, one economic research firm (Bates White) asserted that CBO dramatically undercounted the number of likely claims in the higher-compensated disease categories. "This latest analysis is just another in a long list of 'maybes' concerning the fiscal impact of the legislation," Dircksen remarked. "Taxpayers deserve a better answer."
Lately proponents of the bill have argued that if the trust fund goes broke, victims can always go back to the courts, a notion Dircksen called "ridiculous on its face. This entire legislation was written because supporters think the courts can't handle asbestos claims. Does anyone seriously believe that supporters of the bill will simply dump victims back into that very same court system if the trust fund goes bust? Lawmakers will look to someone for the additional money to keep the fund afloat -- and the first 'someone' they'll find is the American taxpayer."
To illustrate his point Dircksen cited a Government Accountability Office study from November that examined four existing federal programs whose elements bear a resemblance to those in the asbestos legislation. This report warned that "the federal role in all four programs has expanded significantly over time" and that "policymakers must carefully consider the cost and precedent-setting implications of establishing any new federal compensation programs ..."
"S. 852 would create one of the most vaguely-defined and fiscally-volatile entitlements in recent history, and the more information supporters provide, the more ambiguous the picture seems to become," Dircksen concluded. "Without stricter medical criteria written into the legislation itself, taxpayers will be trapped in a trust fund solvency guessing game for years."
NTU was founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Note: NTU Policy Paper 118, Gordian Knot: How the Senate's Asbestos "Reform" Bill Entangles Taxpayers, is available online at www.ntu.org.