VOLUME No: 75 Issue No:4

Washington, D.C. - July 29, 2005

House Clears Comprehensive Energy Bill and Senate Poised to Vote Today

The House voted late this week to adopt the conference report on H.R. 6, the 1,700-page energy bill that has been pushed by President Bush since 2001, his first year in office. The Senate began a late night debate on the bill and is expected to clear if by the end of the week, before they recess for the month of August.

The Administration and supporters of the legislation say that the measure will help stabilize gasoline, fuel oil, electricity and other energy prices in the long run by spurring new production in the United States and greater conservation and energy efficiency.

Opponents argue the bill ignores pressing energy problems, such as fuel efficiency and global warming, and does nothing to reduce the country’s dependence on foreign oil and environmentally harmful fossil fuels. The authors of H.R. 6 concede that the bill will not substantially cut petroleum imports. Critics argue that an emphasis on energy efficiency and conservation measures would reduce the demand for oil imports.

According to the Department of Energy, the U.S. currently uses almost 21 million barrels of oil per day, two-thirds going toward motor fuels. Nearly 60 percent of the oil comes from outside the U.S.

In the House, the measure was able to pass when additional Democrats agreed to support the bill when a provision was dropped that would have shielded manufacturers of the fuel additive methyl tertiary butyl ether (MTBE) from most product lawsuits associated with groundwater contamination.

The comprehensive bill is anticipated to cost at least $85 billion. H.R. 6 deals with every aspect of energy, including nuclear, oil, gas, coal and renewable energy and includes:

• $14.6 billion in tax incentives;
• Research and development authorizations;
• Streamlined federal permitting and other regulatory changes intended to aid domestic production;
• Month extension to daylight-saving time to promote energy conservation;
• Incentives for alternative-fuel vehicles
• Support for stronger efficiency standards for some appliances and other products;
• Requirements for the Department of Interior and other Federal agencies to better coordinate oil and gas leasing on federal lands;
• Increased security for nuclear plants;
• One year extension of the Federal liability protection for damage from catastrophic accidents;
  $500 million in insurance for new plants against losses due to delays in the Nuclear Regulatory Commission’s permitting process;
• Overhauled regulations governing mergers and acquisitions in the electricity industry, repealing of the 1935 Public Utilities Holding Company Act, giving utilities more discretion in diversifying their holdings;
• Requirement that Energy Department and other Federal agencies review the national security implications of Chinese acquisitions of U.S.-owned energy assets.

House Passes Liability Overhaul Again, but Diagnosis Shaky for Senate

By a vote of 230-194, the House passed H.R. 5, Representative Gingrey’s (R-GA) bill on Medical Liability Caps. This legislation is intended to improve patient access to health care services and provide improved medical care by reducing the liability burden on the health care delivery system. This is the ninth time the House has passed medical liability overhaul legislation, and despite strong support by the President, the bill is almost certain to die in the Senate.

H.R. 5 places a cap on non-economic damages, such as those for pain and suffering, at $250,000, and limits punitive damages to two times the economic damages or $250,000, whichever was greater. The bill also limits a plaintiff’s attorney contingency fees bases on a percentage of damages awarded.

Supporters of the bill argue that high damage awards are driving up health care costs. They also say malpractice premiums are increasing to the point that doctors are being forced out of the practice of medicine, limiting access to care, especially in specialties such as obstetrics.

The opponents argue that capping non-economic awards harms patients and unfairly penalizes women and children, whose earning potential would be calculated at a lower rate when figuring economic damages. They say that increased malpractice premiums result from insurance companies’ efforts to recoup investment losses, not because of litigation.

Some lawmakers are frustrated by a provision that provides an extra measure of protection for drug and medical-device makers. The bill imposes the same $250,000 cap on non-economic damages against drug and medical-device companies, but the drug and device makers would also be shielded from most punitive damages for suits involving products approved by the Food and Drug Administration (FDA).

Groups Advocate for Tough Punishment in Tobacco Case

Last week, the Federal judge presiding over the Department of Justice’s case against the cigarette industry agreed to let several public interest groups intervene and ague for tougher punishment against the companies. This unusual move comes six weeks after the presentation of both the Government’s and the Industry’s case.

The Department of Justice had reduced its proposed penalty against the cigarette industry from $130 billion to $10 billion, sparking fierce opposition from groups such as the American Cancer Society, American Heart Association, and the American Lung Association to argue that the Government was not protecting the interests of the public.

The groups will argue that cigarette companies should be forced to pay more for smoking-cessation programs. No new evidence will be allowed, however.