When a company pays an asbestos liability award, it produces it from its income. That means its taxable liability is reduced and the federal budget takes a hit. We have never calculated this before, but according to a RIMS study, we are now talking about seventy billion dollars in awards paid, and upwards of two to three hundred more coming due. If you look at the corporate rate of taxation, we’re talking about a hundred billion-dollar loss to the federal government if we do not make a change.

If all of those awards are not paid, or a significant number of them are reduced, then taxable income goes up. Therefore, this could be considered a budgetary piece of legislation. And under the special budget rules of the House and Senate, you do not need sixty votes, you need fifty-one to pass such legislation. I tried this earlier in the year and we did not quite get there. But we got the Congressional budget office analysts almost to the point of saying that liability reform—and by this I mean any liability reform—would be seen as a revenue raiser, and therefore could be considered under the budget rules.

If we got liability reform considered under a procedure in which fifty-one votes were needed in the Senate, instead of sixty, you would remove the trial lawyers from the equation and give the upper body the ability to function on behalf of the national will. But we didn’t get there. Instead, we kept interest alive and educated members by introducing the asbestos liability reform bill that came out of judiciary committee two Congresses ago.

Congressman Cannon of Utah introduced another bill and we are waiting. Right now our chairman, Jim Sensenbrenner from Wisconsin has said, “I would like to hold off House action until the Senate acts.” That is okay for now, because the House leadership could move a liability reform bill tomorrow, if it wanted to. It is really the Senate where we are looking. Speaker Hastert is extremely aware of the impact of this issue, so he will wait a respectful amount of time for the Senate, but then I see the House acting anyway.

I hope the kind of language we will use when we talk about asbestos liability reform will prevent the glaze that usually forms over people’s eyes. We should say, “If your IRA looks like my IRA right now, things are not looking so good. Restarting this economy is essential for our long-term economic health. We can argue about tax measures, pro and con, but certainly now that they have passed, we are sending quite a stimulus into the economy. So what’s the next big problem? The next big problem is that we’ve got six thousand stocks suppressed because of asbestos liability issues.”

Under Sarbanes-Oxley, when you now have to list all of those liabilities clearly on your balance sheet, because you do not want to hide anything, a la Enron, and an analyst looking at that sheet sees “asbestos lawsuit,” given what’s happened in the past, that stock is going to be downgraded profoundly. Now if this was to compensate people that actually had mesothilioma, this might be okay because those people are suffering. But we know the overwhelming part of awards go to people who have no symptoms, while those who actually have symptoms die before ever getting an adjudicated award. Half of the money paid is eaten up in court and lawyer fees. This is a horribly broken system that compensates attorneys, represents people who have no symptoms and suppresses the value of the stock market, therefore lowering our retirement expectations and planned aid.

If we reform the system, like the bill outlined here, where the people who are sick are at the head of the line, where an award is made quickly and where liability can be easily calculated so that an analyst now knows what the value of his stock should be, it can be seen as the second biggest way to help our economy out after tax payment. We would see how, if we could remove this cloud, maybe not from six thousand stocks but even from the top six hundred, what that would do to the market, to our IRAs and to our retirement expectations.

In the House, we will do our part. I have written a personal letter to every Republican member on this and have received a good response. If the House is a gun, the trigger is cocked on this issue. We are ready to roll.

Congressman Mark Kirk represents the 10th Congressional district of Illinois.