A Stitch in Haste

For those following Senator Arlen Specter's proposed $140 billion asbestos liability fund, factcheck.org has some important debunking of its critics, most notably former Representative (and fellow Republican) Dick Armey:

Armey calls the bill "a new threat to your pocketbook," which it isn't. And he suggests that the bill is a giveaway to trial lawyers, when the opposite is true.
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Specter, on the other hand, is ducking the question of whether he's proposing a new tax. His bill calls for "assessments" to provide the $140 billion, but the plain language of his bill, S. 852, makes clear that payments are compulsory. It gives the Department of Labor power to sue for collection, for one thing, and also provides penalties for non-payment. That qualifies as a "tax" in any ordinary sense of the word.

However, manufacturers and insurance companies are for the most part willing, if not eager, to pay these "assessments" for the simple reason that they will save money by doing so. The money would go to settle damage claims that could otherwise be much larger.
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So Specter's plan would impose a new "tax" -- but not on everyday listeners of talk radio.

Whatever. I have been a staunch supporter of the Specter proposal ever since he unveiled it (even before that, in fact), for one simple reason: economic reality demands it. Asbestos liability is not a case of the Politics of Pull, where the "big, greedy corporations" are manipulating politicians just to save a buck. The totality of all present and future asbestos injuries far exceeds the assets the companies have with which to compensate victims. In the absence of a government bailout (not acceptable to libertarians, of course), some form of rationing those assets is required. Otherwise the wrangling is not "victim versus tortfeasor" but rather "victim versus victim," and degenerates into a race to the courthouse and a battle of the trial attorneys. Everyone -- past, present and future -- who incurs damages proximately caused by asbestos is entitled to share in what compensation funds are available. But not enough funds are available to satisfy all claims completely, so this mass tort becomes a simple choice between "all for some" or "some for all."

That's not politics, that's metaphysics. The Specter proposal preserves what assets the asbestos manufacturers have left (many are already bankrupt) such that all remaining and future victims can recover some compensation when their injury manifests.

As with the Social Security crisis, the longer nothing is done about asbestos liability the worse the imbalance -- and the inequity -- grows. The Specter proposal may not be the utopian solution, but is wholly preferable to the status quo or a bona fide government bailout.