As most of you know, Senator Daschle has made a proposal to Senator Frist to create a $145 billion trust fund.  We have learned that Senator Daschle made this proposal in response to demands from several members of his Caucus, who have asked him to take the lead in dealing with Frist on this issue.  As of today, Frist has not responded to the offer and there are indications that the insurers and other factions within the business community are not going to support the Daschle proposal.  The AFL-CIO has responded publicly that it will not support any fund that does not contain at least $149 billion in funding.

As of this moment, Daschle’s proposal is only a verbal offer with several of the following principles, from which Daschle has indicated he will not back down:

• $141 billion from defendants and insurers, plus $4 billion from the bankruptcies.  As the Daschle proposal does not allow completed bankruptcies to be a part of the Fund, this principle increases the front-end burden on the defendants by $4 billion.

• $42 billion in up-front funding to be paid in the first 3 – 5 years.  Of course, we agree with the AFL-CIO that this fund needs $42 billion in the first 3 years, not 5.

• most of the current claimants will be able to proceed with their claim in court until the Fund is fully operational and all statute of limitations are tolled during the life of the Fund

• the Daschle proposal incorporates the values at the level proposed by the AFL-CIO in early May, with mesothelioma victims receiving $1.1 million and FELA and Jones Act workers will retain their workers compensation rights under those acts.  Also, claimants will be able to prove their occupational exposure by sworn affidavit.

• the Fund would sunset immediately if it becomes insolvent and claimants can return to the tort system, with venue either in Federal court or the state court where the injury occurred or the victim resides.

I will be sure to keep you apprised of developments.  The Senate is in recess for the July 4th holiday.  Please contact your Senators as they spend time in the state to express your opposition to any Fund that does not fully and swiftly compensate the victims of asbestos exposure.

Sincerely,

Linda Lipsen

Senior Vice President for Public Affairs, ATLA

*** POSTED JULY 1, 2004 ***