Asbestos Bill Faces Uphill Battle
The “Fairness in Asbestos Injury Resolution Act” (S. 852) continues to face widespread opposition as it makes its way to the Senate floor. With a divided business community, trial lawyers, asbestos victims groups and many others voicing their problems with the bill, Senate staffers say the chamber may not take it up before the July 4 recess, and maybe not until September, Law.com reports. These groups have also threatened a number of court challenges if the bill becomes law as it stands. A common concern of the various stakeholders is the funding of the $140 million Asbestos Injury Claims Resolution Fund, which the bill would create. While insurers would be responsible for most of the funding, the proposed trust fund also anticipates using more than $7 billion in assets held by bankruptcy trusts for asbestos claimants. The bill requires money in the trusts to be turned over to the fund 90 days after enactment. Prof. Walter Taggart of Villanova University School of Law says taking bankruptcy trust assets also presents a constitutional problem. Read the full article at www.law.com (subscription required).
Democratic senators emerged from a meeting today with business and labor leaders pledging to work with Republican chairmen in developing pension legislation, CongressDaily reported. During the meeting, business and labor officials were mostly united in their opposition to the administration’s plan for fixing the pension system, according to meeting participants, the newswire reported. That proposal called for companies that sponsor traditional pension plans to increase their contributions. Labor fears that a sudden mandated increase of payments to pension plans might prompt companies to drop their retirement plans altogether. Meeting participants agreed that a bill (H.R. 2830) introduced by House Education and the Workforce Committee Chairman John Boehner (R–Ohio) is an improvement over the president’s plan, although it still goes too far in requiring companies to boost pension contributions. The House is planning to include its bill as part of a legislative package that includes an overhaul of Social Security.
Health, Education, Labor and Pensions ranking member Edward Kennedy (D–Mass.) criticized the “yield curve” formula included in the president’s plan and, in a modified form, Boehner’s bill. That plan would set a new interest rate that companies would use to calculate their pension contributions, based on the ages of employees and estimated time before their retirement. Democrats want to tighten funding requirements for companies but prefer to do that in a “gradual, fair way,” a Democratic staffer said. Democrats also embraced proposals to give additional pension breaks to troubled airline and steel industries. Any bill Congress adopts should “provide targeted solutions to unique airline and steel industry pressures,” according to a list of principles circulated this morning that Democrats agreed should be part of pension overhaul.
New Study Claims Business Bankruptcies Much Higher Than Reported
A study released yesterday alleges that official government statistics vastly undercount business bankruptcies. The study—by Profs. Elizabeth Warren of Harvard and Robert Lawless of the University of Nevada, Las Vegas—estimates that 19.5 percent of filings are at least partly business-related, versus the 2.3 percent rate given by the Administrative Office of the U.S. Courts. Nearly 300,000 small business cases are miscounted as a result. Funded by the Ewing Marion Kauffman Foundation, the researchers claim the new findings present a skewed picture of entrepreneurship in the United States as well as the potential impact the new bankruptcy law will have on small business development. The article, “The Myth of the Disappearing Business Bankruptcy,” will appear in the California Law Review, and is available at the Ewing Marion Kauffman Foundation’s web site.
A summary of the findings appears on USA Today’s web site.