[JURIST] US senators late Tuesday failed to overcome an objection effectively killing a bill designed to avoid costly asbestos litigation by creating a special fund to compensate asbestos victims [JURIST news archive]. The objection, raised by Senator John Ensign (R-NV) [official website] and supported by fiscal conservatives [FreedomWorks press release], invoked a budgetary rule barring legislation that would up US government spending by more $5 billion in any of four decades after 2016. Senator Arlen Specter, a co-sponsor of the bill, insisted that the rule did not apply because the monies supporting the fund would come from private companies and would simply be funneled through the government, but Senator Majority Leader Bill Frist said he would withdraw the bill for the current session if those supporting an exception to the budget rule could not muster 60 votes. The vote for an exception was 58-41 [Senate roll call] with 1 senator abstaining.

The Fairness in Asbestos Injury Resolution Act [PDF text; bill summary] was opposed by insurance companies [Insurancenewsnet report] that argued it would not effectively end litigation, trial lawyers who saw it as a bailout depriving clients of their right to sue for damages [ATLA resources], and by smaller sized companies that said they were being asked to shoulder too much of the fund's financial burden [NYT report]. The Congressional Budget Office [official website; asbestos legislation resources] advised senators Monday night in a letter [PDF] that the fund would not add to the federal deficit, but it had concluded in a previous study [PDF] that it was underfinanced and could be forced to borrow money. Bloomberg has more.