Protect Us, Please

Senate Democrats split in early November over a deal that would limit punitive damage claims in cases of terrorism. At issue was a deal on so-called “emergency government terrorism insurance,” specifically, a bill before the Senate Banking committee that seeks to set the terms for corporate liability and government aid to companies facing terrorist-related insurance claims.

Generally speaking, the administration and the GOP want to block punitive damage-claims related to September 11 or future terrorist acts. They argue that private building operators, for example, shouldn’t be sued for punitive damages, just because they fail to protect people from unforeseen terrorist strikes. The government has already set caps on airline liability. The current bill extends the same principle.

“The one thing we must not allow is the taxpayer to be on the hook for all kinds of outrageous damages that people can claim,” Lawrence Lindsey, the White House economic advisor told the Wall St. Journal (11/5/01.)

Some Senate Banking Committee Democrats introduced their own “co-insurance” proposals last week — government and private insurers would split liablity 90/10 — quite a nifty “sharing” plan. Others, led by Majority leader Tom Daschle of South Dakota are leery, fearing that the new measure is a “backdoor step” toward broader limits on lawsuits against companies.

Under the GOP bill, plaintiffs could not pursue punitive damages even if there was willful misconduct. Remember, this administration has a longstanding campaign commitment to tort reform — changing the law to limit consumers’ rights to sue private industry for selling harmful products or in other ways knowingly doing wrong.

The terrorism-insurance dispute gives both parties the chance to perform for their constituents. Democrats defend the rights of injured plaintiffs and the profits of their lawyers (big DNC campaign contributors). Republicans ward off the greedy plaintiff on behalf of beleaguered corporations and pose as the taxpayer’s best friend.

What no one’s noticing is that a House committee last week approved the 15-year extension of an accident insurance law that protects no one but the nuclear power industry — at taxpayer expense. The extension of that piece of legislation, the Price-Anderson Act, passed through committee on Halloween on a voice vote, sans debate. Its supporters are pushing for the full House to vote on the matter this week — under suspension of normal floor rules, which means minimal debate and no amendments at all.

The Price-Anderson Act is what makes nuclear power possible. At the beginning of the nuclear age, utility companies wouldn’t go near the nuclear power business, because they knew no insurance company would accept responsibility for an accident.

The nuclear lobby arranged for Congress to pass what became the Price-Anderson Act of 1957. It was to be a temporary, 10-year measure “to encourage the private development of nuclear power” its supporters testified. Forty-five years later, Price-Anderson is facing a 2002 expiration date, which is enough to send shock waves through the nuclear power industry.

Price-Anderson is why your home insurance policy says, “This policy does not cover loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination.” (Go ahead, check. It’s there in black and white.) You can’t get protection from a nuclear accident, but the nuclear industry can.

Price-Anderson limits liability for a nuclear accident, no matter how many people are killed or injured and how many billions are lost. It sets a ceiling on the damages that can be recovered by victims from insurers and makes the federal government pick up a good portion of the tab.

(As of 1988, nuclear utilities — as a group — are required to purchase $200 million worth of insurance and together to fund a $9 billion pool for larger accident claims. Upwards of $9 billion, the bill commits federal funds.)

September 11 has shown us just how far $9 billion goes; Congress’ inadequate emergency package stands at $40 billion. A leaked 1982 Sandia National Laboratories study quantified the cost of a catastrophic nuclear power accident in the U.S. as $313 billion then, or about $600 billion today, excluding the costs of associated cancers and early deaths. The 1986 Chernobyl nuclear accident has cost Ukraine, Belarus and southern Russia an estimated $350 billion.

This fall’s events have also showed us just how vulnerable the nation is to an attack on nuclear facilities. At last count there are 103 plants licensed to operate in the United States, in addition to various spent fuel sites, and the country has stepped up security at nuclear facilities after September 11 and again last week.

Every day another state sends its National Guard troops to do plant-patrol. Nuclear terrorism is “a far more likely” threat than previously thought, the head of the Vienna based International Atomic Energy Agency warned on Thursday.

If Mr. Lindsay, or Senator Daschle for that matter, was truly worried about liabilty, eliminating Price Anderson would be a good place to start. It would go a long way towards solving the protection problem too, because without Price-Anderson, nuclear plants would be uninsurable and every one would shut up tight.

© 2001 workingforchange.com

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