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Lawsuit Reform a Bush Priority

President Seeks to Limit Class-Action, Malpractice Cases

By Jonathan Weisman
Washington Post Staff Writer
Thursday, December 16, 2004; Page A06

President Bush yesterday demanded congressional action on legislation to rein in class-action, asbestos and medical malpractice lawsuits, telling a White House economic conference he would make changing the civil tort system a "priority issue."

Bush used the first day of the two-day economic gathering to focus on "the class-action meat grinder" and malpractice suits that "are driving really fine, competent people out of the practice of medicine." A series of bills limiting suits in civil cases have been held up in the Senate, mainly by Democrats but also by a handful of Republicans.

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"I am here to . . . make it clear as I possibly can that I intend to take a legislative package to Congress which says we expect the House and the Senate to pass meaningful liability reform on asbestos, on class action and medical liability," Bush said.

The economic conference was called to highlight Bush's domestic agenda, which includes revising the Social Security and tax systems. One panel addressed the growing complexity of the tax code, laying out the administration's case for simplifying the code; cutting taxes on dividends, capital gains and business investment; and making Bush's first-term tax cuts permanent.

The president appeared at only one of yesterday's four panels, on "lawsuit abuse," underscoring his interest in changing a system the administration says is costing the economy more than $250 billion a year. Bush said that "defensive medicine" -- the use of unnecessary tests to avoid malpractice claims -- alone costs the federal government $27 billion annually.

Even with Republican gains in the House and Senate, the president will face a fight. The White House is likely to secure the 60 votes necessary to beat a filibuster on a bill shifting class-action lawsuits from state courts to federal courts. That would be "a step, but a small step" toward scaling back mass suits filed on behalf of thousands of plaintiffs, said George L. Priest, a Yale University professor of law and economics who is serving on the panel.

But Senate Republican leaders were unable to muster even a 50-vote majority on three bills to limit medical malpractice suits, and they appear far from a deal to end the proliferation of suits on behalf of those exposed to asbestos.

The Association of Trial Lawyers of America has been holding meetings with its members to raise millions of dollars for a nationwide campaign against the president's initiatives. Participants at a meeting this week in the Washington area were told that ATLA wants to raise $8 million immediately and more over time, in part for a national television, radio and print advertising campaign.

Consumer and environmental groups charged yesterday that Bush was using tort legislation to reward his financial backers and compensate for an absence of effective policies to combat rising health care costs and sluggish job gains. ATLA said that the number of civil trials dropped 47 percent between 1992 and 2001, and that the median payout for tort cases dropped 56 percent over that period.

"Give us a break, Mr. President," chided Todd A. Smith, the association's president. "Giving your friends in the insurance, drug, tobacco, chemical and other industries another windfall at the expense of American families is not an economic recovery plan."

On the economy, panelists painted a generally rosy picture of growth, the job market and the investment climate, and they focused on policies to sustain growth over the long term.

"Thank God the election is over; I have never seen so much economic misinformation," said Mary C. Farrell, managing director of UBS Wealth Management in New York. "We have a wonderful economy."

The discussion of tax-code changes was striking for what was absent. Gone were the expansive ideas that dominated Republican tax debates in the 1990s -- scrapping the entire tax code, for example, and replacing it with a single flat income tax rate or a national sales tax.

Instead, participants advocated incremental tax changes to spur savings and investment and make permanent earlier tax cuts, including the abolition of the estate tax.

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