Capitol Hill

From Dec. 15-16, 2004, President Bush hosted a White House economic conference to discuss issues such as tax and regulatory burdens, effects of lawsuit abuse, high costs of health care and the importance of preparing U.S. workers for the jobs of the 21st century. On Feb. 2, 2005, he laid out his priorities in his State of the Union address.

Bush has set an ambitious agenda of proposals that will dominate dialogue on Capitol Hill for months. His plan to modify Social Security to allow some workers to put a percentage of payroll taxes into private investment accounts is expected to generate the most expensive lobbying battle in history. Corporate trade associations, the financial services and securities industries, Fortune 500 companies and conservative groups favor the president's plan. Opposition is led by the American Association of Retired Persons (AARP) and AFL-CIO.

Although NRCA has taken no position, Social Security certainly faces financial problems because sometime during the next decade an aging U.S. population will be taking more benefits out of the system than it is paying in taxes to fund it. The Social Security debate will be omnipresent even as Congress considers three more Bush priorities that NRCA supports: legal reform to stop lawsuit abuse, asbestos litigation reform and energy legislation.

Lawsuit abuse

According to the White House, the costs of litigation per person in the United States are far higher than in any other major industrialized nation in the world. Lawsuit costs have risen substantially during the past several decades, and a significant part of the costs from lawsuits goes to paying lawyers' fees and transaction costs—not to the injured parties. This litigation explosion is creating a logjam in the civil courts and threatening jobs.

According to the White House, small businesses spend, on average, about $150,000 per year on litigation expenses. The president is urging Congress to pass legislation that reduces the burden of frivolous lawsuits on the U.S. economy. Bush supports enactment of medical liability reform, class-action lawsuit reform and asbestos litigation reform to expedite resolutions and curb the costs of lawsuits.

On Jan. 5, Bush spoke about the need for tort reform to 1,000 doctors and business leaders gathered in Madison County, Ill. The American Tort Reform Association designated Madison County the nation's top "judicial hellhole" in 2004 for allowing lawsuits that would be thrown out in other districts. According to the Associated Press, more than 1,400 asbestos cases were filed in the county during the past two years, and there were 179 class-action lawsuits during that period, as well.

Senate Republican leaders will move quickly this Congress to call up bills to curb medical malpractice suits and shift more class-action lawsuits from state to federal courts. A third bill about asbestos litigation reform will not be ready to be taken to the Senate floor until later in the session.

The class-action bill is expected to pass first and be similar to one that almost passed the previous Congress. That bill proposed to shift class-action lawsuits with at least 100 plaintiffs to federal court if at least $5 million were at stake and less than two-thirds of the plaintiffs lived in the same state as the defendant. The purpose of this would be to curb trial lawyers from obtaining huge fees by filing class-action lawsuits in venues such as Madison County where juries have a reputation for awarding big settlements.

Energy legislation

Republican congressional leaders also are expected to begin action during the first months of this Congress to fulfill Bush's request for comprehensive energy legislation. NRCA is a member of the Alliance for Energy and Economic Growth, which lobbied for passage of an energy bill in the previous Congress that stalled in the Senate. A major sticking point was whether to open Alaska's Arctic National Wildlife Reserve (ANWR) for oil and gas leasing. But prospects for passage of energy legislation are much better now because most of the new senators elected in 2004 support drilling in ANWR.

Looking forward

NRCA members will benefit from Bush's proposals to curb lawsuit abuse. Currently, roofing contractors are being harassed by construction-defect litigation and manufacturers and contractors are targets of asbestos litigation. Bush's proposals dovetail with NRCA's issue agenda in the critical area of legal reform.

This also is true for comprehensive energy legislation that would stimulate domestic production of oil and gas. Such legislation likely will have tax incentives for the construction or retrofitting of more energy-efficient commercial buildings.

Craig S. Brightup is NRCA's vice president of government relations.