Gulf Oil Disaster Prompts Bill to Raise Damage Cap

The existing $75 million cap on offshore liability payments would be lifted under a bill responding to the Deepwater Horizon oil spill in the Gulf of Mexico.

Sens. Robert Menendez (D-N.J.), Frank Lautenberg (D-N.J.) and Bill Nelson (D-Fla.) jointly announced the legislation.

"A $75 million cap would not even touch the economic devastation that has already occurred," Nelson said.

Senators could not come to an agreement over whether to accept BP's assurances that it will pay any and all legitimate claims associated with the spill.

"I tend to take people at their word until they take some action that contradicts their word," the committee chairman, Jeff Bingaman (D-N.M.), said after a hearing on the issue. "So far BP has been sticking with their position that they are going to pay all legitimate claims."

Associate Attorney General Thomas Perrelli testified that "our mandate is to make sure that we recover every dime that the United States government spends for the removal of oil and the damages caused by this catastrophe," Perrelli said.
In response, Sen. Bernie Sanders (D-Vt.) said, "What BP said doesn't mean much...You must be the last person in America who trust and believes what BP says."

Sanders argued that legislation is the only way to ensure that BP, and all other polluters, would be held responsible for any and all damages incurred.

Further testimony from administration officials confirmed that existing emergency funds are being quickly depleted and the ultimate cost of the spill remains unknown.

"The scale of this response is burning through [emergency] funds," said Craig Bennett, director of the National Pollution Fund Center. "While the responsible party has been reimbursing the parent fund, not the emergency fund, we may exhaust funds in the emergency fund as early as June 5."

The constitutionality of a retroactive bill was a major issue raised both in the hearing and on the Senate floor. Perrelli and Congressional Research Service attorney Robert Meltz both testified that though past legislation has allowed Congress to retroactively punish polluters, a constitutional challenge is possible.

"I would imagine that given the broadness of many constitutional issues -- it might very well be worth their while to consider a challenge," Meltz said. "It is a little hard to predict how many years that full litigation would take."

Menendez and his supporters are not swayed by the argument, however.

"I'd rather pursue something that has the basis of legal precedent and can be sustained than let them off the hook at 75 million," Menendez said.