Asbestos Legislation Denies LA Funds, Particles Could Be Cause of "Katrina Cough"

By Christopher Tidmore, Political Columnist
January 23, 2006  

In the last few decades, nearly 123,158 tons of asbestos has been shipped into Orleans Parish, some only blocks from where school children play. Twenty-six tons arrived in the 200 block of Camp Street just days prior to Hurricane Katrina, an area surrounded by neighborhoods and restaurants frequented by many.

Post-storm rehabilitations of homes, the related large scale demolitions, or even ubiquitous roofing jobs currently underway on Orleans Parish houses are and will expose thousands of people to asbestos in ways unprecedented in urban American history.

Despite these dangers, a new bill now before Congress would prevent someone who gets cancer due to asbestos exposure post-Katrina from getting relief from the Asbestos Trust Fund.

The proposed Senate Bill 852 would create the federal Asbestos Trust Fund. Its purpose ostensibly is to compensate asbestos victims by creating a trust fund financed by the corporations who were enriched by the production and sale of asbestos. Post -Katrina however, provisions have been added to the legislation that would specifically exclude any victims of asbestos-related diseases caused by exposure due to Katrina damage in Louisiana.

Asbestos exposure is a real problem in post-Katrina Louisiana, according to Cheron Brylski, Director of the Louisiana Women's Health Access Project.

As she explained to The Louisiana Weekly, "As home and property owners are rushing to demolish, gut and rehabilitate hurricane-damaged properties, they may be exposing themselves to asbestos."

This week, at a Faubourg Marigny neighborhood meeting, the subject of asbestos exposure came up in a discussion with the federal officials, who demonstrated the proper suits, masks and gloves to use. While Brylski is hopeful that all neighborhoods are getting this message, she worries they have not, and the newly exposed would not be able to access the new federal trust fund to help pay future medical expenses.

"The federal Environmental Protection Agency has posted directives on their website about how to deal with asbestos in post-Katrina New Orleans. Older homes and buildings, which are the majority of our stock, more than likely contain asbestos, which has been linked to terminal illnesses. Ironically, after 9-11, thousands of people who either worked at or lived near the site reported ailments such as 'trade center cough', just like New Orleanians are reporting the 'Katrina cough'.

"What does bother me," Brylski pointed out, "is that Congress will be voting on a bill, S 852, probably by the first week of February, which will compensate asbestos victims, but exclude any victims of asbestos-related diseases caused by exposure due to Katrina damage in Louisiana."

In Louisiana, it is known that 123,158 tons asbestos-laden ore were sent to three locations in New Orleans between 1948 and 1993. (See attached graphics for proximity to neighborhoods, churches, schools, and businesses.) These plants typically "popped" or exfoliated the ore to produce vermiculite attic insulation and other products. This process produced a massive amount of asbestos-contaminated dust, very high workplace exposures, and significant airborne asbestos in the surrounding neighborhoods. The federal government (is currently conducting contamination assessments at the 28 largest factories that processed the ore, including the Zonolite Company site in New Orleans.

The Bill

Senator Orrin Hatch (R-UT) sponsored the original Asbestos Trust Fund bill in early 2003 when it made its first appearance in the Senate as S.1125, the FAIR Act (Fairness in Asbestos Injury Resolution). S.1125 died a well-deserved death at the end of the 108th Congress only to be resurrected as S.852 in the 109th Congress.

S.852, sponsored by Senator Arlen Specter (R-PA) was passed by the Senate Judiciary Committee last May. Since, the bill has encountered many problems and has not yet reached the Senate floor. Senator Frist, however, has said that S.852 will be one of the first items the Senate will address when it returns in January following the Alito nomination.

Democrats are likely to filibuster the motion to proceed to the bill, which means the GOP will need to muster 60 votes to get this bill to the floor. For Republican members, like David Vitter, this is a tough ask as they will have to vote against their leadership to get the bill to the floor.

In essence, companies with asbestos liability would be shielded from further asbestos lawsuits by paying into a government administered $140 billion trust fund that would screen claimants through established medical criteria. Victims would be awarded compensation based on the severity of their illness. The Bill would not cover victims of environmental and neighborhood exposure will be left out entirely, the predominant form in post-Katrina New Orleans.

Criticism of the legislation comes from many angles. On the medical side, physicians groups including the AMA and the American Thoracic Society argue that the medical criteria in the bill are overly strict. With the exception of the United Auto Workers, Labor Unions have taken a nearly united stand against the legislation. Like Victims Groups, they contend that the bill is under funded. (Labor spokesmen also present a unique defense of cigarette users. Most smokers are excluded from the bill regardless of their diagnosis. For instance a smoker with mesothelioma might not be compensated even though asbestos is the only known cause of mesothelioma).

It is on budgetary grounds that the bill's opponents have gained some unlikely allies-Conservative Deficit Hawks and small business groups. With deficits mounting from the Iraq war, the hurricanes, and large yearly increases in general appropriations, several GOP Senators have begun to pay greater attention to present and future deficit spending.

When the Judiciary Committee passed S. 852 last May, a number of leading conservative Republicans (namely Senators Kyl, Cornyn, DeWine, Coburn, Grassley, Sessions, & Brownback) included language in the committee's report that they hoped the bill's budget issues would be resolved before it reached the floor for consideration.

Their concerns came from a Congressional Budget Office study that found that if events progress as the sponsors claim, the legislation's funding could be insufficient. Even though it used very conservative assumptions and relied on data provided by supporters of the bill, CBO found that S. 852 would increase the federal deficit by $6.5 billion just in the first ten years. That's without counting debt service costs, which witnesses have testified could be in the tens of billions of dollars. Taxpayers would have to take up the tab.

A study commissioned by The American Legislative Exchange Council (ALEC), an association of conservative state lawmakers, further found that the bill's fiscal provisions would create entitlements valued at $300 billion leaving a $160 billion shortfall above the $140 billion statutory funding level. As a result of this shortfall, the Trust fund would sunset within three years of inception with a debt of more than $45 billion. Under less conservative scenarios, the total price tag could reach $600 billion.

Adding to the conservative critics, the Government Accountability Office (formerly known as the General Accounting Office) pointed out in a recent report on Trust Fund legislation (http://www.gao.gov/new.items/d06230.pdf ) that these types of funds often do not work, and usually colossally underestimate the number of claimants. For instance, the Black Lung program---instituted in the late 60s on behalf of coal miners, was originally supposed to cost $3 billion has now surpassed $41 billion in payments and costs about $55 million per year to operate.

Moreover, opponents of S. 852 have been bolstered by the fact that the business community is not speaking with one voice on this issue. The strongest proponents of this legislation are large corporations like Halliburton, Honeywell, & W.R. Grace who have billions of dollars in asbestos liabilities---not small and mid-sized businesses.

Several small business advocates have argued that medium sized companies who smaller asbestos liabilities are concerned that they are going to be forced to pay disproportionately into the fund. Many are calling it a "tax" that could bankrupt them. They maintain that the legislation lacks transparency. Even the bill's supporters cannot say for sure who will pay into the trust fund and how much. Advocates have repeatedly stated that the number of participating companies will be between 8,000 and 10,000. However, the CBO could document only 1,700 companies. This further calls into question the funding of the bill.

Opponents further add that most of these companies managed their liabilities wisely and bought insurance to protect them from asbestos liability. S.852 would make them pay anyway and then make asbestos insurance unavailable.

Additional Concerns...The "Libby" Problem

Along with the budget issues outlined above, the "Libby problem" is another potent issue with the potential to derail the entire bill.

A number of Senators, particularly Republicans Lindsey Graham and John Cornyn & Democrat Diane Feinstein, have expressed concern about provisions in the bill related to residents of Libby, MT. In the town, W.R. Grace operated one of the largest vermiculite (contains asbestos) mines in the world. Today, because of ambient asbestos exposure, nearly half the town now has some type of asbestos related disease and hundreds of former residents have died from asbestos related diseases. ABC's "Nightline" devoted two of its final shows with Ted Koppel to covering the Libby story.

From 1948 to 1993, more than 5.8 million tons of asbestos-contaminated ore from Libby, MT, was shipped to 236 different addresses in 39 states. The federal government has launched a special health investigation into the site and surrounding communities of the 28 largest facilities. The government acknowledges that the nearby residents are at greater risk for asbestos-related diseases.

S852 sets out stringent medical criteria that victims must meet in order to be compensated. In the case of Libby residents however, the only criteria to be met is that the victim lived in Libby, MT in order to receive $400,000 from the trust fund.

No opponent of the bill has suggested that Libby residents deserve any less. However, many Senators have expressed concern that Libby residents are receiving special treatment when there are places in their states that received enormous amount of vermiculite/asbestos and victims of either workplace or environmental exposure near these places will likely be excluded from compensation. Particularly, those exposed in New Orleans.