By Albert B. Crenshaw
Washington Post Staff Writer
Friday, April 23, 2004; Page E03

The Senate yesterday rejected a Republican-led bid to force a vote on a bill that would create a national trust fund to compensate victims of asbestos-related illnesses, leaving the issue in limbo.

The motion to end debate won a slim 50-to-47 majority, short of the 60 votes needed. It leaves the measure's fate uncertain, though leaders from both parties agreed to continue to seek a compromise.

The vote was almost entirely along party lines. Sen. Zell Miller (Ga.) was the only Democrat voting in favor of cutting off debate; no Republicans opposed it.

The bill would create a fund that would pay out as much as $124 billion over 27 years, while barring victims from pursuing claims in court during that time. Some 8,400 companies face asbestos-related lawsuits; more than 70 firms have been driven into bankruptcy by claims.

Proponents of the bill, led by Judiciary Committee Chairman Orrin G. Hatch (R-Utah), argue that the current lawsuit-driven approach is hurting the nation's economy and diverting resources from the victims to personal-injury lawyers. Hatch said attorneys have already collected $20 billion in fees from asbestos judgments, and when defense costs are included, $60 billion.

Opponents, led by Sen. Patrick J. Leahy (D-Vt.), the Judiciary Committee's ranking minority member, argued that the fund would not be adequate to compensate victims fairly. The arrangement, they said, would constitute a bailout for insurance companies and big corporations, many of which in the past concealed the perils of asbestos from their workers.

Leahy said that awards specified in the bill are as low as $25,000 for some sufferers, an amount he called "a cruel joke."

However, he and other Democrats said their "no" votes yesterday were based on what they perceived as the bill's inadequacies, not on opposition to the concept of a trust fund.

On the Senate floor late yesterday Majority Leader Bill Frist (R-Tenn.) and Minority Leader Thomas A. Daschle (D-S.D.) agreed to meet next week to, as Frist put it, "provide an opportunity for negotiations which will determine whether a bipartisan solution can be reached. We will oversee a mediation process to determine whether we can resolve the remaining differences."

Daschle said he is "strongly committed" to working out a bill but conceded that "serious issues still divide us." He said the negotiations should focus on funding and other economic questions. "If we can make progress on this front I strongly believe we can resolve the others," he said.

Sen. Arlen Specter (R-Pa.) has been working with both sides over much of the past year trying to work out a compromise.

"I am convinced that Senate Democrats are united in their belief that an asbestos trust fund offers the best hope of resolving this problem," Daschle said in a letter to Frist on Wednesday.

Asbestos, a fibrous silicate mineral, was widely used in American industry before 1980, and remains legal in some applications today. The material's composition and heat resistance made it attractive in uses ranging from fireproofing to automobile brakes.

However, the tiny fibers, when inhaled, cause a range of ailments, including mesothelioma, a rare but aggressive and almost always fatal form of cancer.

Senators have been working on a nationwide solution to the problem for more than a year. Last year the Judiciary Committee managed to report a bill, but it left major disagreements unresolved. The bill on the floor yesterday was based on the Judiciary measure, but with a lower total payout.

Both bills are based on the same concept. They would establish categories of illness based on medical criteria. Victims in most groupings would be awarded compensation within a set range, but some claimants would be judged unimpaired and entitled only to medical monitoring. The bills would bar lawsuits and suspend some pending cases, though exactly which ones remained in dispute.

Both sides had agreed on the medical criteria, but not on the allowable compensation, the total size of the fund, or the fate of pending and future lawsuits if the fund were exhausted.