|
Bates White finds $90 billion dollar mistake
in Congressional Budget Office’s cost estimate of FAIR Act
WASHINGTON, D.C., February 6, 2006—Bates White has found
a $90 billion error in the Congressional Budget Office’s
(CBO) analysis of the cost of the Fairness in Asbestos Injury
Resolution Act (FAIR) Act of 2005. This critical error made by
CBO should make Senators reconsider their support of this legislation.
Bates White demonstrates that the figures CBO presents in its
own report lead to more than 200,000 claimants who will qualify
for lung and other cancer claims (Level VI and Level VII). These
claimants represent more than $90 billion in additional costs.
Specifically, CBO asserts that 1.5 million individuals will receive
compensation for non-malignant conditions, meaning they have bilateral
pleural disease and five or more years of exposure. National cancer
incidence rates establish that more than 200,000 of these claimants
eventually will develop lung or other cancers. Yet, CBO estimates
that out of 200,000 eligible individuals only 28,000 (14 percent)
will file Level VI and Level VII claims.
"CBO is asking Senators to believe that 86 percent of qualifying
claimants who took the trouble to sign up for medical monitoring
will not file the necessary paper work to collect their $200,000
to $800,000 entitlement. This is not credible. After all, the
purpose of medical monitoring is to provide early detection of
these and other diseases," said Dr. Charles E. Bates, President
and Senior Partner, and co-author of the Bates White report. Dr.
Bates also states that "accounting for the additional cancer
costs for claimants already included in the CBO forecast shows
the CBO ‘cost’ estimate should be more than $210 billion,
even without the other costs that CBO erroneously excludes."
Bates White’s analysis also illustrates that the CBO “cost”
estimate excludes several key expenditure categories that increase
the cost of the FAIR Act by more than $50 billion. CBO acknowledges
these costs exist, but excludes them from its estimate. Combining
the excluded expenditure categories with the additional cancer
costs shows that the CBO “cost” estimate should be
more than $260 billion. The statutory funding level of the national
Trust is $140 billion. This shortfall means the Fund would be
bankrupted and forced to sunset two to three years after its enactment.
Click here to download
Bates White’s response to the CBO letter.
Click here to access Bates
White’s testimony on the FAIR Act.
About Bates White
Bates White is a national economic consulting firm of more than 150 professionals.
Established in 1999, Bates White offers consulting services in economics,
finance,
and business analytics. Bates White has offices in Washington, D.C., and San
Diego, Calif.
www.bateswhite.com
|
