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September 11 Victim Compensation

March 7, 2002 at 12:00 AM EST
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RAY SUAREZ: For more on today’s announcement, we are joined by Kenneth Feinberg, special master of the September 11th Victim Compensation Fund. Welcome back. Maybe you can run down the major points in how you’ve changed in this final document eligibility and compensation.

KENNETH FEINBERG: Eligibility — we’ve expanded eligibility to permit individuals who were not documenting their illnesses or their injuries until 72 hours rather than 24 hours after September 11 or beyond that in some cases. We will make them eligible nevertheless, especially firefighters and policemen in New York who claimed that they waited and waited before they reported their injuries because they were fighting the horror of September 11. On compensation, we’ve doubled the amount of non-economic loss paid to all spouses and dependents of victims from $50,000 to $100,000 for everybody.

We have minimized the offsets that we have to reduce the award by, the Social Security, Workers’ Compensation, 401(k) pension plans, we’ve minimized those offsets to allow the families to keep more of what we compute. We have made it very clear that, with the rarest of exceptions, every single individual who is eligible will get at least $250,000 and the average award will be about $1,850,000 so on eligibility and computation we have listened to what the families have said and we have tried to meet some of their most important and pressing concerns.

RAY SUAREZ: From the get-go, you said that one of your main concerns was to sort of push down the payments so that more of the money got spread into middle-income wage earners, low-income wage earners. Given the state of the compensation formula today, can you say that you’ve done that?

KENNETH FEINBERG: I think we will do that. I think that’s what we will do. Now there will be, there will be high-end income-earners who died on September 11 whose families will be able to demonstrate clearly to me that they’re entitled to high-end compensation, $4 million, $5 million, $6 million. We’ll pay it if it’s demonstrated that this is what these victims earned, and we will. But that’s the, but the burden will be on those people to demonstrate that. And our goal in this program will be to treat everybody fairly and to try and, from bottom to top, have a gap that is less than might otherwise be the case.

RAY SUAREZ: Just before Christmas you announced the interim rule. You gave a thorough and spirited defense of the way you came up with it, including on this program. Now a couple of months have passed. Why did you make the changes that you made?

KENNETH FEINBERG: I spent almost daily, Mr. Suarez, over the last ten weeks traveling all around the country meeting with the families. That’s where I received the best input — not from elected officials or charitable heads of charities. The families themselves cornered me all over the United States, from Boston to Sacramento, and explained to me what they did like and what they didn’t like about the program. We have tried — and the Attorney General has led the way in supporting this program. Without the Attorney General’s support it just wouldn’t have happened. We have tried to meet the most pressing concerns of the families to make them believe at least that the program is designed to promote fairness and equity.

RAY SUAREZ: One of the quick reactions that came out today after your announcement came from some of the families’ groups. And they said that they felt that the non-economic compensation, that flat baseline payment of a quarter of a million dollars in all cases, started too low — that this was something they had really hoped would be addressed in the rule changes and wasn’t.

KENNETH FEINBERG: Well, we did change and doubled the amount of non-economic loss, pain and suffering, emotional distress of the dependents who survived the death of the victim.

RAY SUAREZ: The amount that gets added to the $250,000.

KENNETH FEINBERG: That’s right. We didn’t change the $250,000 for the death of the victim on non-economic but we did double for every dependent of that victim — spouse, children — we doubled from $50,000 to $100,000. Some families may have said we should have gone further by raising the $250,000 as well. That I didn’t think was warranted.

RAY SUAREZ: For those who say that they’re still considering suing the Department of Justice because of the formula that’s been working out. What would you say to them today, if they were sitting with us here at the table?

KENNETH FEINBERG: I would say you have every right to sue anybody you want in America. If you want to sue the Department of Justice go ahead. I would urge you to spend your time more wisely. Don’t sue the Department of Justice; don’t sue the airlines; don’t sue the World Trade Center; don’t sue the Pentagon — and litigate and litigate and litigate for five, six, seven years. Instead, sit down, figure out what the program means to you in the way of compensation, under today’s final rule you can even come in and meet with me and get an idea of what you’re going to get before you decide whether to elect to come into the program. That’s a new part of this rule. And let’s get some closure here.

I think the, one of the biggest advantages of this program is the speed at which you will have an award computed and a check from the U.S. Treasury cut and move on. It’s very, very difficult if you litigate to forget — not that you ever will forget — September 11. But the constant reminder for years if you litigate can be avoided here. Within 120 days you will receive a check from the United States Treasury for your award — and I believe that would be and my advice would be that is much wiser the course to follow.

RAY SUAREZ: One leader of a families’ group notes that the FAA in cases of death involving the airlines starts with the rule of thumb figure of $2.75 million for the loss of an adult in an air accident. And that by coming up with an award scheme that averages about $1.8 (million), there’s almost a million dollars difference between what the federal government in another instance gives in this kind of compensation. So it’s a loss from the beginning of the conversation.

KENNETH FEINBERG: You put that $1.8 million in the bank in 120 days and wait seven years, which is how long you’d have to wait to get your $2.7 million, if you won the litigation after seven years, and at the end of seven years give your lawyer 40 percent in the contingency fee for getting you the $2.7 million. Wait for an appeal where the dice will be rolled again. Maybe you’ll succeed on appeal, maybe you won’t or take $1.8 million today, bank it and wait for seven years, I think that any economist will tell you that in terms of risk, certainty and result, you’d be better off under my program without having to demonstrate liability, prove fault or wait and wait and wait. I don’t even think it’s close.

RAY SUAREZ: The number of presumed victims of the September 11 attacks is dropping. Is this changing the amount that the federal government will eventually have to pay out?

KENNETH FEINBERG: Oh, it’s changing the amount. The federal government, however, there’s no cap on what the federal government has to pay. This is — this money comes out of the general treasury. You are right though. Fortunately, very fortunately, the number of dead on September 11 continues to drop as we get final figures. The number of seriously injured continues to drop. The more I look at this program and look at the claims and the quality of the claims, it becomes more and more apparent that either on September 11 victims got out of those buildings or planes or they did not. There are not a great amount of serious physical injuries, mostly burn victims, but I think on balance fortunately the total number under this program of dead or seriously physically injured will be less than 4,000 total.

RAY SUAREZ: And have you already gotten, quickly, a lot of applications from families who are willing to take what you’re offering?

KENNETH FEINBERG: Oh, yes. We had even before the final regulations came out, people are waiting for these final regulations — we already had about 400 applications. I suspect now in the next few weeks, I hope that we’ll get a great many more. I’m concerned about some of these families who are having trouble even getting out of bed and functioning. We’ve got to find a way, I think, to reach out in letter and support groups and newspaper advertisements and try and reach some of these family s who are grief stricken and who may not even know about this program.

RAY SUAREZ: Kenneth Feinberg, thanks for joining us.

KENNETH FEINBERG: Thank you very, very much.