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February 15 2006 – Senate says no to asbestos fund; $140 billion deal for victims fails

February 15 2006 – Senate says no to asbestos fund; $140 billion deal for victims fails

A bill that would relieve companies from mounting asbestos lawsuits was rejected by the Senate on Tuesday, effectively killing the legislation in a major 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 unlikely, and lobbyists involved said the measure appeared dead. 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 taxpayers' money in the future. Liberals complained 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 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.

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