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A 9/11 Bonanza for Trial Lawyers


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The Senate will soon vote on legislation that would establish a new government-run health-care program with insufficient oversight controls, create a bonanza for trial lawyers, cost a minimum of $11.6 billion, and be funded primarily through a significant tax hike on U.S.-based companies.

Of course, that’s not how the 9/11 Health and Compensation Act is being sold.

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On a surface level, the bill — which passed the House in September, over the resistance of most Republicans — may appear relatively uncontroversial: How could anyone oppose giving medical and financial benefits to the heroic first responders who suffered injury or illness while saving lives or cleaning up debris at Ground Zero? Unfortunately, the issues at stake aren’t nearly that simple.

After 9/11, Congress rolled out a bevy of initiatives designed to address the health maladies of emergency workers affected by the World Trade Center attacks. The largest such initiative, run by the National Institute of Occupational Safety and Health (NIOSH), has allocated $475 million to the relevant medical-care providers. There’s just one problem: Nobody — not even NIOSH director John Howard — can account for how all the grant money has been spent. The program is bedeviled by hopelessly inadequate supervision, which has led to rampant waste and, quite possibly, serious fraud.

Rather than tackle these deficiencies and implement robust safeguards against the misuse of federal funds, the 9/11 Health and Compensation Act would effectively put the program on steroids — without clarifying its previous expenditures or correcting its severe administrative flaws. The opportunities for abuse would mushroom. We’re not opposed to a reasonable funding increase for the NIOSH scheme, provided its structural defects are fixed. But we are opposed to a new health-care entitlement that would lack proper accountability mechanisms and unleash a torrent of wasteful spending.

Consider: The “World Trade Center Health Program” outlined in the 9/11 bill would distort provider incentives by reimbursing New York hospitals at an average rate well above the Medicare payment level. This would greatly encourage the provision of unnecessary or frivolous treatments. Moreover, services would be delivered without regard to beneficiary income; in other words, middle-class taxpayers would be subsidizing wealthy recipients. The total pool of recipients would include not just 9/11 workers, but also residents of Lower Manhattan who could demonstrate that the terrorist attacks had a deleterious impact on some aspect of their health. Determining the precise geographic-eligibility requirements for “local residents” could prove a thorny endeavor.

That brings us to the Victim Compensation Fund (VCF), which closed up shop way back in 2003, after awarding roughly $7 billion to the 9/11 families. This legislation would revive the VCF and dramatically loosen its eligibility guidelines. Ground Zero workers and local residents — even those deemed ineligible for compensation by the original VCF — would be permitted to file claims through December 2031 (!). Meanwhile, trial lawyers would be able to garner a disproportionate share of windfall settlements.

Democrats are advertising the bill with a $7.4 billion price tag, but that’s just the ten-year cost. Its total cost, including money allotted past 2020, would be (at a minimum) $11.6 billion. The funding source would be a hefty corporate-tax increase, which Republicans have rightly slammed. Supporters insist the legislation would merely plug tax “loopholes,” but its effect would nevertheless be a substantial tax hike on American companies at a time of 9.8 percent unemployment, lackluster economic growth, and a European debt crisis.

Listening to Democrats such as Chuck Schumer and Kirsten Gillibrand, the New York Senate duo, one might get the impression that Washington has heretofore neglected the 9/11 workers. That seems wildly unfair. In addition to launching the VCF ($7 billion), the NIOSH program ($475 million), and other health-care initiatives, Congress also established the $1 billion World Trade Center Captive Insurance Company (CIC). Last month, more than 95 percent of the 10,000-plus 9/11 workers who sued New York City several years ago finally agreed to accept a settlement worth between $625 million and $712.5 million. That money will come from the CIC.

Again, we would favor a sensible bill narrowly tailored to assist the Ground Zero responders who developed an injury or illness while courageously risking their lives. But the 9/11 Health and Compensation Act is deeply flawed, and Senate Republicans should hold out for something better.



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