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Congress Can Benefit From the Lessons of ‘Ken Almighty’

In the movie “Bruce Almighty,” Jim Carrey gets to play God. In the real world, nobody gets to play God. But we do actually have a close approximation, by the grace of Congress. His name is Kenneth R. Feinberg. [IMGCAP(1)]

Unlike Carrey’s self-centered, boorish and selfish Bruce, Feinberg is smart, sensitive, public-spirited and conscientious. Carrey/Bruce handed back the power of God after a week or so. Feinberg will hand back his power June 15, 2004. Carrey learned lessons from his conceit, after his well-intentioned acts caused inadvertent pandemonium. We will see if Congress can benefit as readily from the lessons Feinberg has learned (and the upheaval that has emerged as a consequence of his role).

So who is Ken Feinberg? He is the special master of the September 11 Victims Compensation Fund established almost as an afterthought 10 days after the terrorist attacks. The fund was included as a part of legislation to rescue the airline industry, which was reeling after the attacks, the shutdown of the aviation system and the longer-term chill in travel caused by the 9/11 attacks.

The airlines faced the prospect of thousands of lawsuits from victims of the terrorist attacks and their families, which potentially could bankrupt them. So Congress responded with a plan of no-fault victim compensation to pay the families of those killed and injured if they waive their right to sue for damages. In return, the families would get expedited action (within 120 days, whereas lawsuits take years) and would be relieved of any burden of proof of who was to blame for their loss.

The law, shaped by Congress in less than 24 hours and passed at 4 a.m. on Sept. 21, 2001, called for the attorney general to appoint a special master who would administer the program, set up guidelines, rules and formulas for payment, and determine who would make the cut to receive compensation. The special master’s decisions would be final and unappealable (that, of course, is where the God analogy comes in).

As of a week or two ago, the special master had dealt with 1,400 of the 3,000 or so deaths from the 9/11 attacks, and 2,450 cases in all (the rest are injuries). All claims for reparation have to be in by Dec. 22 of this year, and Feinberg has been tirelessly publicizing the program and the deadline to make sure that no one misses it through ignorance. Some no doubt have failed to file because they have not come to grips with the death of a loved one in a senseless, tragic and unexpected way. Some have delayed because they are affluent enough that they can wait. A few insist on suing. There will likely be a flood of claims filed in December.

There was significant criticism of the victim compensation law from the get-go. Many wondered why the victims of 9/11 were more “worthy” than the victims of the first World Trade Center bombing, or of terrorism in Oklahoma City, or the bombing of our embassies in Kenya and Tanzania, or at Khobar Towers, or of the USS Cole. All were indeed tragic victims of horrible terrorist acts. But it is also true that 9/11 was of a wholly different magnitude — akin only to Pearl Harbor. And more significantly, the act in this case was focused as much on providing a balance in the need to compensate victims and families without crippling the U.S. economy or driving the airline industry out of business.

But let’s face it. Now that the precedent has been set, it will be virtually impossible for Congress to make this a unique act. Any future terrorist act against Americans, small or large, even if it does not pose the same kinds of problems for an industry like the airlines, will result in relentless pressure to treat its victims and their families fairly — i.e., like the 9/11 ones. So what Congress should do now is prepare for extensive hearings soon after June 15, 2004, to review this process, and then quickly announce findings to prepare for the next time and all future times.

The root of the problem is the “Bruce Almighty” phenomenon. Acting quickly, Congress basically chose the same process for compensating victims that the tort system does for individuals: come up with an actuarial formula for the future economic value of each life lost or damaged by the incident. Juries, to be sure, do this every day. But they do it with massive imperfections. No matter the sophistication, no one can predict individual earnings over a lifetime for someone with more than a few years of earnings potential left. Had the terrorist attack hit San Jose, Calif., in 1999 and left behind a slew of victims who had been working for dot-coms, the formulas for their future earnings, based on their stock options and current pay, would have been vastly over the mark; do the same formula in 2001, and they probably would have been way understated.

The problem is more emotional than that, however. Feinberg has developed the most sophisticated measures one can compile — but in the end, to distraught families, the formulas seem to value the lives of their loved ones, not simply their earnings potential. And they cannot help but make comparisons with others. How can one justify giving the family of a brave firefighter who lost his life while going up the stairs at the World Trade Center, when everybody else was trying to go down, $4 million less than the accountant whose job was to find tax breaks for Enron? The formulas for the future earnings of these two individuals could be spot on, but to the family of the firefighter, it becomes a terrible slap.

A second problem is that the act understandably subtracted from the payments to victims the insurance, Social Security and workers compensation proceeds they and their families got. Thus, if a bond trader killed in the attack had $6 million coming but had $5 million in insurance, his family would get $1 million; a comparable earner with no insurance would get the full $6 million. Fair — but the fact is, it penalizes people who were responsible enough to get insurance and paid the premiums, relative to those who did not plan as adequately.

Of course, there are no ironclad answers to these dilemmas. And this is not a new problem. After the War of 1812, I am told, there was a plan to compensate victims of the British who ran roughshod and rampant over the American countryside and cities. Congress chose an absolutely impeccable person to figure out the methods of compensation. He was rewarded with near-universal vilification for his efforts.

Despite the emotions and the problems, Feinberg will likely avoid any vilification. In fact, from everything I have seen and heard (including long, sometimes philosophical conversations with him) he deserves the nation’s effusive thanks for taking on this difficult task and doing as well as anybody could given the constraints of the law. (We should also thank John Ashcroft for appointing him.) His reward beyond that should be a reconsideration of the approach that would make his job unnecessary in the future.

To me, it is compelling that the principle for the future should be a generous but fixed payment for the families of all deceased victims of such terrorist acts, somewhere in the range of the average that will be paid out in this process ($1.5 million to $1.8 million). The right to sue under different circumstances could be adjusted, depending on the events, and perhaps the amount could be lowered while allowing some kind of swift arbitration of claims instead of a mass courtroom circus.

That may be difficult to swallow, but it clearly is better than what we did two years ago, and beats any process that creates a version or variation of “Bruce Almighty.”

Norman Ornstein is a resident scholar at the American Enterprise Institute.

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