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Letter to the Honorable Kent Conrad 1 (September 2005)

handle is hein.congrec/cbo9280 and id is 1 raw text is: September 1, 2005 Honorable Kent Conrad Ranking Member Committee on the Budget United States Senate Washington, DC 20510 Dear Senator: CBO's cost estimate for S. 852, the Fairness in Asbestos Injury Resolution Act of 2005, is enclosed with this letter. Over the 2006-2015 period, CBO estimates direct spending would increase by nearly $70 billion to pay asbestos claimants and administrative costs. We estimate revenues would increase by about $63 billion over the same period; and on balance, we estimate that enactment of the bill would increase projected budget deficits by about $6.5 billion over the next 10 years. Your letter of July 19, 2005, asked CBO to address some specific concerns about the legislation-particularly with regard to the uncertainty associated with assumptions about claims for payment under the bill. Responses to those concerns follow. What is the risk that amounts in the U.S. Treasury outside of the Asbestos Trust Fund would be used to pay asbestos claimants? S. 852 would authorize the Asbestos Fund Administrator to collect and borrow funds to pay valid claims and expenses. The bill would limit the amount of borrowing and would require the fund to use its resources to repay borrowed funds and interest costs. Under the provisions of section 405, the fund would have to stop accepting new claims if its current and future resources become inadequate to fulfill all existing and anticipated obligations, including its debt obligations. As stated in our August 25 cost estimate, as long as the fund's Administrator does not borrow from the U.S. Treasury beyond the means of the fund to repay such borrowing, the government's general funds would not be used to pay claims. Furthermore, section 406 states that the legislation would not obligate the federal government to pay any part of an award under the bill if amounts in the Asbestos Fund are inadequate.

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