WASHINGTON—The federal government, taking on the role of insurer of last resort, will offer families of people killed in the Sept. 11 terrorist attacks an average of $1.6 million in tax-free compensation, the program's administrator said Thursday.
Payments will depend on the age and income of the person who died. Families who lost workers who were younger or at higher income levels will receive more, but each claimant will receive at least $300,000. Life insurance and pension benefits will be subtracted from the total awarded.
However, Feinberg said, "whatever we do is of small comfort" to those who lost a loved one in the attacks. He promised a fast, fair and reliable system for offering money to survivors' families, as well as those who were physically injured.
The program could cost the government as much as $6 billion, which Feinberg called "an unprecedented display of taxpayer generosity" on behalf of the victims.
Thursday's announcement triggered the complex process of compensating families of the thousands who died when hijackers crashed jetliners into the World Trade Center and Pentagon. In addition, many private charities are struggling with the issue of who benefits from donations that have been pouring in since the attacks.
Congress created the Victims Compensation Fund as a fast-track alternative to slow, costly lawsuits against the airlines. Under the law, one claim can be filed on behalf of each victim of the Sept. 11 attacks. This includes people who died in the four airplane crashes--two jetliners into the twin towers, one into the Pentagon and one into a Pennsylvania field--as well as those killed as a result of the collisions.
Lawmakers had two goals in mind, which conflict in some instances.
They wanted to compensate victims just as though they were filing a court claim against the airlines. Under this system, however, families who lose a high earner can obtain awards of more than $10 million.
Lawmakers also wanted to provide speedy compensation to the "neediest victims and their families," said Sen. Patrick Leahy (D-Vt.), a sponsor of the program, referring to the service workers and other employees in the World Trade Center who died with little in the way of assets or life insurance.
Feinberg said he would try to meet both goals. He said all the victims, even those at the lowest income levels, would receive at least $300,000.
However, Feinberg said he tried to "narrow the gap" between the richest and poorest families. "It is our view that, absent extraordinary circumstances, awards in excess of $3 million, tax-free, will rarely be appropriate."
In New York, some families said they were pleased and surprised by the proposed compensation.
But some survivors and aviation lawyers expressed disappointment and questioned the limits on recoveries for high-income families.
"Some families will get nothing at all. I personally will get nothing," said Steven Push, a Great Falls, Va., resident whose wife, Lisa Raines, was aboard the plane that hit the Pentagon.
Raines was a lobbyist for the Genzyme Corp., a biotech firm in Boston. "She had high income, and she also had life insurance and other benefits that will completely exceed my recovery," said Push, who has become a spokesman for families of Sept. 11 victims.
Money received by the family from life insurance or a pension will be subtracted from the government compensation.
Lee Kriendler, a New York aviation lawyer, said the proposed payments of $1 million to $2 million may sound ample, "but they are a small fraction of what we have been recovering in recent cases. This is extremely disappointing."
Kriendler represented families of victims of the Pan Am crash in Lockerbie, Scotland, in 1988, and the TWA crash off Long Island in 1996.
Because lawmakers also limited the liability of the airlines, most survivors will have little choice but to opt for the government fund, legal experts say. They can sue or file for compensation from the government fund, but they cannot do both.
But money received from charities will not be subtracted from the government payments, Feinberg said.
Feinberg said the families of non-Americans and undocumented immigrants are entitled to compensation on the same basis as U.S. citizens. Same-sex partners can also apply for compensation.
On Friday, the Justice Department will begin accepting applications for compensation.
Feinberg promised to act quickly on processing them. "In 120 days, we plan to get these checks out to the eligible claimants," he said.
David G. Savage is a staff writer for the Los Angeles Times, a Tribune newspaper.