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Senate Leaders Narrow Differences on Asbestos

Reuters, Jun 25, 2004

By Susan Cornwell

WASHINGTON (Reuters) - U.S. Senate leaders have narrowed their differences over a proposed fund to compensate asbestos victims and are talking about a fund of between $131 billion and $141 billion, aides and others close to the talks said on Friday.

Senate Democratic Leader Tom Daschle of South Dakota proposed a fund of $141 billion, a Senate Democratic aide told Reuters. Sources close to the talks say Senate Republican Leader Bill Frist suggested a fund of about $131 billion, although Frist's staff has not confirmed that number.

The leaders are trying to agree on the outlines of an asbestos fund that could then be written into legislation.

"He (Daschle) did make the offer of $141 billion," the Senate Democratic aide said. He said there was also the possibility of including some $4 billion in assets from existing asbestos bankruptcy trust funds, bringing the total of pool of money for a national fund to $145 billion.

But an organized labor official said while Daschle's proposal was a step forward, it was not enough.

"It is a step forward in some key respects," said Peg Seminario, occupational health official with the AFL-CIO. "We still think this legislation will fall short of the mark ... We think the minimum that is needed is $149 billion."

Frist declined to comment on the details of his asbestos talks with Daschle. "We are going back and forth," he told reporters at a news conference on the Senate's agenda.

"We probably talked about it three times in the last week, but that's not unusual," Frist, who is from Tennessee, said.

Asbestos was widely used for fireproofing and insulation until the 1970s. Scientists say inhaled fibers are linked to cancer and other diseases. Companies have paid an estimated $70 billion on some 730,000 asbestos personal injury claims, according to the RAND Institute for Civil Justice.

Several senators have been working for over a year on legislation that would set up a compensation fund, to be financed by asbestos defendants and insurers, while ending the right of victims to sue in court.

Daschle and Frist said last month they would keep open the possibility of a deal on asbestos, after an effort by a senior appeals court judge to mediate among asbestos companies, insurers and labor representatives failed.

Labor representatives in those talks wanted $149 billion to cover claims stretching into the future, while businesses and insurers at that time were offering about $128 billion.

Frist told reporters that the hardest part was deciding how much money was needed to compensate victims adequately.

"If we can crack that piece, by working together at the leadership level, I think asbestos reform will become a reality. We still have a lot of work to do. It's very complicated," Frist said.

Shares of companies with outstanding asbestos liabilities rose between 2 and 10 percent Friday morning on the perception that progress was being made on the issue in Washington. But the stocks dropped back in early afternoon trading on the New York Stock Exchange.

Shares of building materials maker W.R. Grace & Co. were up 37 cents at $6.29, below an earlier year-high of $6.75. Energy services company McDermott International Inc. was up 25 cents to $10.12, below its session high of $10.79.

USG Corp., a building materials maker, was up 89 cents at $17.87, down from its early high of $18.50. Shares of insulation maker Owens-Illinois Inc. were up 31 cents to $16.81 after hitting a year-high of $17.40 earlier. Packaging products maker Crown Holdings Inc. was up 35 cents to $10.20, down from a year-high reached earlier in the session of $10.60. (Additional reporting by Janet McGurty)

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