Postal Accountability and Enhancement Act

POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT

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Mr. DURBIN. Mr. President, I hope to restate the unanimous consent request which was agreed to accurately. It is my understanding that at 4:45 we will have a vote on the motion to table the pending amendment by Senator Cornyn of Texas, and that the time be equally divided between now and then, which would be 60 minutes, 30 minutes to each side; that I am controlling the 30 minutes in opposition to the motion to table. I will yield from that amount 15 minutes to Senator Cornyn to speak during the same period. He can use that time, even if I don't have to give him the floor at the moment.

We have to understand what we are considering. I am sure people who are watching this debate wonder why we take so much time going into quorum calls and talking among ourselves trying to come to some agreement about what we are going to do.

That is the way the Senate operates. We operate by unanimous consent. Everyone has to agree. Think about that--100 different Senators coming to an agreement. However, we have managed, at least to the point of bringing this to a vote.

The vote is important because the bill before the Senate right now is a bill about asbestos. Everyone knows asbestos is a lethal substance which, if inhaled, can kill you. It can cause your lungs to stop functioning, you can start to suffocate, and you can develop something like lung cancer called mesothelioma and die. People all across America, since we started using asbestos in products, have been exposed to it. Some are fortunate and they do not get sick. Others, with very minor exposure inhaling these asbestos fibers, have set off little timebombs in their lungs, and they never know when they will detonate. Victims can go for 10, 20, 30, 40 years after exposure and nothing happens; then something terrible happens. How do they know it is asbestos that causes it? Some of these conditions are only related to asbestos. Mesothelioma is one of them.

People who have been exposed to asbestos over the years have gone to court and said: The companies that exposed me to products that harmed me should be held accountable. Some courts and some juries have said, yes, they should pay; others have said, no, they should not pay. But what is the nature of our system of justice? You go to a court for your day in court, you tell them how you were injured, and you let a judge or jury of your neighbors and peers decide your fate. It happens every day across America in thousands and thousands of courtrooms.

Now comes this bill, Senate bill 852, which wants to change the way people across America will be able to recover for their injuries from asbestos. The first thing it does is to eliminate your option to go to court. As an American, you could be injured from exposure to some toxic chemical and go to court, have your day in court, and let the court decide. But if you have been exposed to this substance, to asbestos, if this law is passed, you will no longer be able to go to court.

What happens to you? This bill creates a brand new approach--replacing the courtrooms of America with a trust fund created by this bill, administered by an agency which does not exist at this moment, which will handle hundreds of thousands of people who have been exposed to asbestos.

Some Members come to the floor skeptical that we can change a judicial system in America and eliminate access to court to hundreds of thousands of people and get it right. If we do not get it right, the losers are not going to be embarrassed Senators; the losers are going to be victims across America, people whose lives have been changed and in some cases ended because of asbestos.

I don't know of a single person in America who said: Listen, I know asbestos will kill me; let me take a whiff of it. Not one. Virtually all the victims and families I have run into were unsuspecting people--workers on the job; a mechanic putting in an asbestos brake lining; somebody trying to put in a heating duct in a home and using an asbestos substance; asbestos shingles on your roof; asbestos tile on the floor--grinding it, cutting it, powder flying in every direction. Who knew? Who had any idea what was going on? So these victims, innocent victims, are the ones who will be affected by this bill.

It is a large bill, a bill of 393 pages. It should be because it is changing the basic system of justice in America. But this morning, this bill has become a dead letter. We are no longer considering that bill. We have a new bill. We were handed this bill this morning. It is 392 pages. It includes some 40 significant changes to the bill we had on our desks when we came to work this morning. We knew it was coming, we knew there would be a change, but these changes are significant.

Many Members believe that before we start enacting laws that are going to impact millions of victims across America, before we close down the courtrooms of America and say to people, what you used to assume was your right as an American citizen is no longer your right, we ought to be careful and we ought to take the time to get it right.

Some of the things that have been filed with this bill reflect the fact that even those preparing it really do not have it quite clear in their minds how it is going to work.

One of the amendments filed this morning, amendment 2747 by the chairman of the Judiciary Committee--I am certain this was inadvertent--inadvertently included the following on lines 7 through 9:

(Note: I recognize that this may not be the most adequate indicator of insurance matching liabilities--however, it is a political reality that must be addressed.)

Does that sound like a sentence out of a law? I am sure it is not. It is a sentence from a staffer who, in preparing this language, notified someone that they were not sure what they were writing would achieve the goal they want to achieve. That happens all the time. I expect my staff to be candid with me when they are preparing a law. But it tells something. By inadvertently including this staff note with this amendment, it is clear that the people writing this bill are not sure what is in it. They are not sure what the impact will be.

What is driving this debate? Why are we so hellbent on passing this legislation at this moment? There are many good reasons, and there are many real reasons. One of the real reasons is that for many of the major corporations in America, this bill is a windfall.

This morning, Senator Bennett, a Republican from Utah, brought a chart to the Chamber and showed 10 of the major corporations in America, corporations that could be taken to court today because people were exposed to their products and have asbestos disease. He calculated how much they would pay into this trust fund under this bill against what they have said they would have to pay if they went to court. Those 10 corporations will save, with this bill, $20 billion. Do you think they want to see this bill passed? Why, of course they do. They have an economic interest in it. But the obvious question is: If they do not pay the $20 billion to victims, who will? Other companies?

Senator Bennett brought to the Senate another chart of companies that have never been sued for asbestos, never been held liable. Those companies will end up paying into this fund even though they never, ever have been sued successfully.

There is a basic unfairness here. There is a transfer of wealth in this bill from some of the largest corporations in America and a burden to smaller companies, not to mention that at the heart of this issue are hundreds of thousands, perhaps millions, of asbestos victims.

Now comes Senator Cornyn of Texas. He says: Consider another approach. Consider an approach that will look to what the States are currently doing to deal with this. Are there ways to change asbestos lawsuits so that victims get more, so that people are treated fairly, so that those who are trying to rip off the system on either side are not advantaged? And he turns to State laws. There have been several State laws, including Texas, Florida, and Ohio.

He says in his amendment: Let's establish medical criteria so that if you want to go to court, we know you are truly sick. Perhaps you cannot go shopping around for the friendliest court in your State or the Nation. He goes through a variety of different scenarios. All of them are worthy of debate.

The good thing about Senator Cornyn's amendment is it is based on the fundamental American right to have your day in court. Senator Cornyn is trying to achieve a procedural change in the courts of America which will not extinguish a basic American right to have your day in court.

I believe he filed the amendment early this afternoon, maybe late this morning. I am not certain. And now the other side is saying: That is it, we do not want to talk about that amendment anymore, let's get rid of it. They want to table that amendment.

As it is currently written, I could not support the amendment by the Senator from Texas, but I will stand with him to keep this amendment on the floor so we can try to find a bipartisan solution which does not have such great damage to our judicial system and to the people who rely on it. There will have to be significant changes in the Cornyn amendment before I would support it. But he has said to me that he is willing to sit down on a bipartisan basis in good faith to work out those differences, and he tells me there is significant support on the Republican side of the aisle for that effort.

Wouldn't that be the best outcome--an outcome that is bipartisan, one which tries to work out differences between both sides, keeping in mind the innocent victims, tries to make this system a little fairer, not basically abandoning our judicial system, which this new bill, new version of the bill we have been handed, would do? That is a sensible approach.

I am going to support the efforts of Senator Cornyn at this moment to resist a motion to table, with the understanding that before I will make any commitment to vote on his final amendment, we will have to sit down and try to work out our differences. It is not too much to ask.

Do you know how long this program is supposed to affect America? For 50 years. Is it worth a few hours, maybe even a day, to get it right? I believe it is.

I yield the floor.

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Mr. DURBIN. Mr. President, I am glad we have finally come to this portion of the argument because it reinforces a lot of things that have been said on this Senate floor over the last several days. It really comes down to a very basic question, the question as to whether this bill has been carefully crafted, whether it contains enough money in the trust fund to compensate the hundreds of thousands of asbestos victims who will have to count on it.

I have raised this issue repeatedly as to the $140 billion figure. There are reliable estimates of the actual cost over a 50-year period of time that almost double the amount of this trust fund, some even higher.

Senator Kent Conrad on our side of the aisle is well respected as the ranking member of the Senate Budget Committee. His background as the head of taxes in his State of North Dakota, his own personal education and experience give him extraordinary credibility when it comes to issues of cost and issues involving accounting. He has made a convincing case to our caucus and to those who are listening on both sides of the aisle that the $140 billion that is part of this trust fund is not nearly adequate to the task.

Of course, if it isn't, what choices do we have? Senator Specter suggested on the floor the other day that if $140 billion wasn't enough to pay the victims, then we will pay the victims less. Today when I asked him a similar question, he said there are other options. You can say to these victims, if you have taken away their lawsuit that they worked on for a year or two, they have to stop their case in court. Then put them into this new trust fund system, and then the trust fund system fails them at some later date and doesn't pay them all they are entitled to, you can say to these victims: You can go back and start over in court now.

That is cold comfort to a family that is doing its best to take care of medical bills and lost wages and burial expenses for someone they love.

They have made a point over and over that under no circumstances will the Federal Government step in and make up the difference. I guess that verbal assurance is good, but we know there is always that possibility at some later date if this program doesn't work, if it fails, that someone will say we can't go back to the companies and ask them to put more money in the trust fund; we can't turn the victims loose; the right, compassionate thing to do is for the Federal taxpayers to step in.

It is not a farfetched argument, and it is one we have to consider as a possibility.

Now a Republican Senator steps forward, Senator Ensign of Nevada, raising a valid point of order, a point which goes to the heart of the funding of this bill and how it will pay out any benefits that might accrue in the future.

I would like to note some of the points that have been made during the course of this debate that I think are worthy of repetition and, for those following the debate for the first time, worthy of note.

The Congressional Budget Office has warned us of the significant likelihood that this asbestos trust fund will fail.

In a letter to the chairman, who spoke just before me, they wrote:

The proposed trust fund might or might not have adequate resources to pay all valid claims. There is a significant likelihood that the fund's revenues would fall short of the amount needed to pay valid claims, debt service, and administrative costs.

So we are saying to hundreds of thousands of victims and their families: Trust us, we have created a trust fund, and with that trust fund, we will take care of your needs in the future. There is enough money, the proponents of this legislation say, but the Congressional Budget Office, looking at the victims, their injuries, and the compensation promised in this bill, came to a different conclusion. They concluded:

There is a significant likelihood that the fund's revenues would fall short of the amount needed to pay valid claims. .....

As Senator Specter said on the floor the other day, one of the options, then, is to pay the victims less.

One of the reasons we need to take a look at this trust fund shortfall is when we look at the elements that are behind it, the claims and administrative expenses are likely to exceed contributions to the asbestos trust fund. The upfront claims will far exceed contributions.

Understand, people who are told they have to leave the courthouse and can no longer pursue a claim in court will have to turn to this trust fund. There is no place else to go. They will come in large numbers, but the amount that is being contributed to the fund by businesses is not going to match the demand. At the outset, claims will far exceed contributions, so the trust fund will have to borrow substantial amounts of money.

How much? The trust fund is supposed to be $140 billion. There are estimates that the interest and administrative costs may reach $52 billion, more than a third.

Small adjustments in amount and timing of assumptions quickly bankrupt the trust fund. If you guess wrong how many people are sick and how often they will file their claims and in what numbers, the estimates of the solvency of the trust fund could fail. It is unrealistic to assume that the trust fund will ever terminate.

The reasons for likely trust fund shortfalls: The Congressional Budget Office didn't count dormant claims that may surface once this trust fund is created, exceptional medical claims, or claims of family members of workers exposed to asbestos.

CBO's estimate of the number of future cancer claims is likely to be too low, according to consulting firms that have taken a look at their formulation.

The CBO's estimate of the percent of nonmalignant claims that will receive a cash award is likely to be very conservative.

Take a look at this chart. This chart tells the story. The red part of the graph is trouble. The red part of the graph reflects the liability, the amount that should be paid out that cannot be covered by the revenues coming into the trust fund.

So we make a promise to people. We say to them: Give up your claim in court, come to this trust fund and trust us. Yet when we project the needs of these victims against the revenues coming into the trust fund, we see a dramatic shortfall.

The fund stops paying claims in 2009. Claims filed in 2009 and all later years will not be paid. Too many claims, not enough revenue into the fund.

Let me indicate what this shortfall can mean. Mr. President, $150 billion--remember, this trust fund is funded at $140 billion--to fall short $150 billion is a substantial miscalculation. In present value terms, it means we would have to put $50 billion into the fund today to cover the $150 billion shortfall over the 30-year life of collections and 50-year life of disbursements under this trust fund. So this is a significant shortfall.

Keep in mind that we are saying to people: You cannot continue to go to court to be compensated; you have to turn to a trust fund with a hole in the pocket.

Let me tell you how badly others have miscalculated the number of asbestos cases that can be filed.

I remember Johns Manville, a big company, based in Colorado. They were one of the first firms hit because they sold a lot of asbestos products. When they went bankrupt, they tried to create a separate fund to pay off all the victims of Johns Manville products, their workers, and others. They set aside money, and in order to set aside a proper amount they had to speculate and give some calculation about how many people would be making claims for asbestos injuries.

The original range of claims went from 50,000 to 200,000. That is what they said they would ultimately have to cover. The claims received through the summer of last year were almost 700,000. They had estimated a high of 200,000. Almost 700,000.

The recent estimate of the total number that could be paid is 2.1 million. So how can those who have written this bill say with any degree of reasonable certainty that we know how many people were exposed to asbestos at some point in their lives and will later come and make a claim? Because for many people, they will live a long time with asbestos fibers in their lungs, ticking timebombs that could go off 10, 20, 30, 40 or 50 years after exposure. There could be anyone on the Senate floor today harboring in their lungs asbestos fibers. Those fibers may or may not cause a problem. We just don't know because for years no one paid close attention.

Many people were told it is safe. Expose yourself to asbestos, it can't be a problem. Some were misled. Some operated out of ignorance. But the fact remains. Johns Manville, in calculating its liability for its own trust fund, blew it. Instead of 200,000, it was 2.1 million.

(Mr. COBURN assumed the Chair.)

Mr. DURBIN. This is not the only case of miscalculation. For coal miners, we created a program called black lung. I know it pretty well because I have met a lot of coal miners suffering from it in my home State of Illinois. Exposure to coal dust, inhalation of coal dust causes lung problems, so we tried to set up a separate fund for these miners to take care of it. We estimated it was going to cost us about $3 billion to compensate all these coal miners. Our actual black lung payments through 2004 are $41 billion.

So if some of us come to this floor skeptical of this trust fund, skeptical of this $140 billion, and wonder if we can say to victims in good conscience, we are going to stop your going into court and force you into a trust fund which will pay you, when we know full well how many times we failed in estimating how much these trust funds need to have banked away, I think that really goes to the heart of this whole issue.

Also, a critical element here is why we are on this bill today. People who are following this Senate debate maybe tune in to watch C-SPAN, follow the debate in other places, and some will say to them: What is the Senate talking about today? They may report: Well, it is about asbestos.

Sure, it is an important issue. But my guess is most families across America would probably step back and say: I sure wish they would talk about the cost of health insurance for families, businesses, and individuals or maybe the cost of this heating bill I have in my hand, where the cost of heating this home has doubled since last year or maybe they ought to talk once in a while about this Medicare prescription Part D Program which has become a mess for seniors across America. Why aren't they talking about pension security when our neighbors next door worked a lifetime at that plant, and then the plant went into bankruptcy and dumped the pension, and now this man and his wife, who thought they had done everything right in life, don't have retiree benefits and don't have health benefits? Why aren't they talking about those things?

No, the Senate is engaged in a debate on the asbestos bill which I have characterized as a clash of the special interest titans--huge companies on both sides, for and against asbestos; insurance companies for and against this bill; trial lawyers opposing the bill; others supporting the bill; labor unions by and large opposing the bill with two or three exceptions. Why are we on this bill today? Because what drives this debate is what is at stake. What is at stake is not just recovery for hundreds of thousands of asbestos victims but a lot of money.

Earlier today, a Republican Senator, Mr. Bennett of Utah, came to the Chamber with two charts which I thought really told the story. I don't have those charts, but I have summaries here. What Senator Bennett pointed out is that for about 10 of the largest companies affected by this bill, this bill is a windfall. It is a windfall in this respect: They estimated how much each of these companies would have been required to pay out to asbestos victims if they went through the regular court process, and then they estimated how much the same companies would pay into the trust fund we are talking about today. And the difference is startling. For these 10 companies, the difference is $20 billion. In other words, if they paid the claims of victims in court, they would have paid $20 billion more than the amount they paid into the trust fund.

One of the companies which has been publicized recently is U.S. Gypsum. The reason people talk about it is they recently did a public filing, and here is what they said. They said: If we are held liable in court for all the asbestos claims we think could be filed against us, we believe we would pay out something in the range of $4 billion. But if this bill passes, we will be required to pay into the trust fund $797 million.

What a dramatic difference. So for this company, the passage of this bill is worth more than $3 billion. That is the reason we are here.

We are here because so many of these corporations know that if this bill passes, their exposure to liability is reduced dramatically. The obvious question is, If they don't pay the $20 billion to victims, who will make up the difference? And that is the point made by Senator Bennett earlier in the day. He gave the names of eight or nine other companies, much smaller, some of which have paid small amounts to asbestos victims in court cases in settlements, some which have paid none. In each case, these companies had to step up and pay substantial amounts of money, ranging from $75 million to $578 million.

So here is one of the largest companies, U.S. Gypsum, with the largest exposure--$4 billion--paying about $800 million into the fund.

And then you take a look at a company named Foster Wheeler, a pretty well-known company. They will pay out $80 million in their experience in asbestos over the next 10 years. That is their estimate, I should say, $80 million. And they are asked to pay $578 million into the fund? Where is the fairness in that, that these companies with little or no exposure have to pay so much money while companies with so much exposure pay dramatically less? That is the fundamental unfairness in what we are discussing in the Senate here this evening.

I might also add, many of us are struggling to try to absorb this bill because this morning, as we had expected, the chairman filed a new version of the bill. We had been debating this for months, maybe years, and this morning comes a new version which, according to the chairman, makes 47 significant changes in the first bill we were handed.

Think about that for a moment. When you consider how many lives and how many families are dependent on our doing the right thing in the passage of this legislation, we are rushing to pass a trust fund that will take these families and individuals out of the courthouse into a trust fund.

The Presiding Officer is a medical doctor from the State of Oklahoma. We may not see eye to eye on a lot of things, but I listened as he speculated on what the exposure might be on this trust fund. He has made some statements as to whether something should be covered or should not be covered. But what he said, at least in the course of the Judiciary Committee hearing, is that there is some real uncertainty about how many people will be filing claims and what those claims will be worth.

That is what troubles me. I think there is more we can do to make this system more fair. First don't abandon America's court system. Don't abandon our system of justice. Don't conclude that 200 years of a court system in America is not proof positive that it is a valuable part of our American heritage and a valuable part of America's life. Start with our court system.

If there are abuses, and I will concede there are abuses, let's deal with them. I will tell you point blank, based on my legal education of long ago, if you want to recover for injury in court, you must have injuries or damages. Simple exposure to asbestos, which could include all of us, is not enough. You have to show some injuries or damages before you recover. That is why, in our State of Illinois, we set up what we call the pleural registry, and that says if you have been exposed but you are not sick, no symptoms, come in and sign up. If you don't contract an illness or something that is fatal, then you will have escaped any problem related to asbestos. If you do, you can come through the court system and you will not be held back by any statute of limitations.

Some have argued about where lawsuits should be brought. That is a valid issue. We should debate it. Some have argued about what attorney's fees should be. That is a valid issue. But there have been some misstatements on the floor about attorney's fees, and I wish to clarify them. Some have said on the floor that 58 percent of all the money generated in these asbestos verdicts and settlements goes to lawyers. Technically, that is true, but look more closely: 31 percent is legal fees claimed by the victims' attorneys; 28 percent or 27 percent is from defense attorneys.

I practiced law for a number of years, and it was not uncommon for a person of modest means to come in my office and say: I have been injured, I need to file a lawsuit. And you would say to them: I know you can't put up thousands of dollars to pay for all the time I have to put in as a lawyer to get ready to go to court, argue the case, do everything lawyers do, so I will take it on a contingent fee basis. If you win, I win. If you lose, I lose.

For many people, that is the only way they can come to a courtroom. They can't put up $10,000, $20,000, $30,000 to pay for a team of lawyers to prepare a case. They just don't have it. So contingent fee cases are all across America.

If you file a case in Workers' Compensation in Illinois, you may pay, I guess--it has been a few years since I have done it--around 20 percent in attorney's fees. An ordinary case for personal injury might be a third. That is usually what the lawyer's fees are when it is a contingent fee basis. To say that asbestos victims are paying 31 percent in attorney's fees doesn't suggest to me that there is a built-in scandal here; it suggests that is fairly ordinary and routine in the legal practice.

It is interesting to note that for every dollar paid out, the defense--companies that are hiring defense attorneys--is receiving 28 cents on the dollar. That is an indication to me, with 30 cents and 28 cents, the victims' attorneys and the defense attorneys are comparable amounts. But having said that, if there is a discussion about how to make those attorney's fees more fair, I am willing to sit down and work on it.

I also believe we ought to look at the States that have already stepped forward and said: We are not going to abandon our courts, we are not going to abandon our system of justice, we will make changes so it works better--States such as Florida, Texas, Ohio. They give us good guidance. Senator Cornyn of Texas gave us an amendment--and may come back with another version of it soon--which addresses that particular approach. I would feel a lot more confident in making certain that our court system worked a little better than abandoning our court system to set up a trust fund that is not paid for.

I hope my colleagues in the Senate on both sides of the aisle will seriously consider the point of order raised today by my Republican colleague, Senator Ensign of Nevada. It is a valid point of order. It goes to the issue as to whether $140 billion is adequate, whether the payout of this money is consistent with the budget rules of the Senate.

I yield the floor.

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