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Does the government have an obligation to give to families of terrorist victims?
Congress is giving $4 billion to the families of the September 11 victims. Unlike the tens of billions in federal rebuilding assistance to state and municipal governments, and the $1.25 billion anted up privately by Americans in an outpouring of charity after the September attacks, and the hundreds of millions more paid by airlines and other employers to their stricken employees, the Sept. 11 Victim Compensation Fund reroutes your and my tax dollars to individuals. Yet the recipients themselves seem unhappy with it-nearly 1,000 of them crowded into a New York armory in January to "demand" more than the fund provides. What gives here? Yes, we feel for the victims and survivors, but should the federal government be giving money to individuals?
Historically, federal payments to individuals have had one of two rationales. The first is compassion-think of food stamps and of federal disaster relief. But compassionate relief typically insures for calamities not covered by private insurance because of "market failure": the post bombing bailouts of affected industries purported to be of this nature. That rational doesn't hold here-life insurance was widely available to the Sept 11 victims.
Nor is this a war on poverty. Surviving families will get $1.65 million on average from the government fund. The rich get more than the poor: a bond trader's family could be eligible for $4 million, while a dishwasher's survivors might get $300,000. If the payment is a compassionate one, isn't each lost life worth an equal amount of compassion? Should the Coast Guard spend more to rescue passengers on yachts than lost fishermen? Finally, if the terrorist victims deserve massive federal charity, what of victims of the Kenya and Tanzania embassy bombings? Of the 1993 World Trade Center bombing? Of the Unabomber? Have we just created an open-ended federal entitlement?
A second rational for federal transfers to individuals is liability. If an FBI agent wrongfully shoots John Doe, Washington is liable (to the extent that it has made itself liable) to Doe's survivors. But in the Sept. 11 attack, the government's negligence is ambiguous. Were the border guards to blame, for instance? Nope, a majority of the terrorist were here legally. Maybe Congress felt our foreign policy was to blame, it arguably weakened our ability to detect and repel al Qaeda. But our foreign policy hasn't been repudiated, and in any case it is quite a leap from lifting sovereign immunity in cases of FBI shootings to lifting it in cases involving foreign policy. Wrongheaded political choices justify electoral upsets, not tort liability.
Besides, if the program is intended to be based on tort law Congress did a lot of contradictory mixing and matching. It's tort in that the rich do get more than the poor--a brain surgeon will get more than a trash collector if you happen to run him over negligently. But under the fund rules, decedents' pension and insurance proceeds are deducted from federal payments. Because of this, many survivor families will get nothing for the simple reason that their breadwinners made the mistake of carefully planning their estates. Our rules of tort law reject such deductions on the sensible grounds that wrongdoers should not benefit from their victims' foresight.
In fact the plan is perhaps best seen as a messy way to wriggle out of America's tort mess. After the 1993 WTC bombing, which killed a much smaller group of people, interminable litigation targeted the blameless. Today, in post breast implant, post asbestos America, airlines, developers and engineers would all have sought bankruptcy protection had they been sued for Sept. 11 damages. The havoc wreaked on our infrastructure by these bankruptcy filings would have overjoyed Osama. So Congress capped airline liability and offered cash to those who forgo courtroom antics. Payment under the fund is immediate. Victims, it is hoped, will take the money and seek closure.
Avoiding the tort chaos is a laudable aim. But Congress' plan makes no sense from any philosophical perspective. It opens a Pandora's box for future claims for calamities. Politicized cases make bad law.
As a long time subscriber to Forbes magazine, I highly recommend it to you. Forbes.com requires registration, but like the magazine; is packed with interesting articles on new products, companies, entrepreneurs, and economic trends at home and abroad. Forbes questioned the accounting practices of Enron in mid-2001. The March issue that contained this article shows you several companies that have the same early warning symptoms.
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