BP agrees to create $20 billion fund for spill victims

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WASHINGTON (AP) — BP has agreed to finance a $20 billion fund to pay the claims of people whose jobs and way of life have been damaged by the devastating oil spill in the Gulf of Mexico, senior administration officials said Wednesday.

The independent fund will be led by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks, the officials told The Associated Press. President Barack Obama was to announce the deal in a Rose Garden statement later Wednesday after wrapping up a meeting with BP executives at the White House.

The officials familiar with the details spoke to the AP on condition of anonymity before the announcement. BP spokesman Toby Odone declined to comment on the fund.

The meeting took place a day after Obama’s first and, some say disappointing, Oval Office address to the nation Tuesday night when he laid out what his administration has done and will do to overcome the country’s worst environmental crisis.

Obama’s high-stakes address to the nation was yet another attempt by the president not only to confront the Gulf tragedy but also to ward off a robust political challenge from opposition Republicans who are poised to diminish or even undo the his Democratic majorities in Congress this November.

WATCH SEN. KAY BAILEY HUTCHINSON REACT TO NEWS OF THE FUND:
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The outcome of the elections could have a profound affect on Obama’s legislative agenda in the final two years of his term.

Millions upon millions of gallons (liters) of polluting crude oil continue to spew into the Gulf nearly two months after the British-based company’s Deep Horizon drilling platform exploded, killing 11 workers and setting in motion an environmental and economic catastrophe.

Several big questions regarding the fund remain unanswered, including when BP would start processing claims and paying people out of the fund; who and what would exactly be covered under the plan; how the White House and BP came up with a figure of $20 billion; and whether other involved companies will be required to chip in.

At $20 billion, the size of the fund is the same that was recommended by congressional Democrats.

Responding to critics who said Obama was too moderate in the Oval Office speech, a forum saved by president’s for national crises, senior adviser David Axelrod said Wednesday that Americans “were not asking him to get angry. They were asking him to get results.”

BP chief executive Tony Hayward and other company officials arrived at the White House at midmorning.

At about the same time, BP announced it had begun early Wednesday burning oil siphoned from the ruptured well as part of its plans to more than triple the amount of crude it can stop from reaching the sea.

In Obama’s 18-minute speech Tuesday night , he promised not only relentless pressure on BP but also pressed Congress to quickly pass a law that would put the United States on an environmentally friendly course toward energy independence.

“You have to stick to your knitting,” Axelrod said of Obama’s use of the speech to press yet again for one of his signature legislative goals.

It remains to be seen on the political front whether Obama overcame the sense among a majority of Americans that he is powerless to stem the leak and late to muster the country’s full arsenal against the ever-increasing environmental disaster.

The president acknowledged there would be more damage before the spill is contained. He said the country could be tied up with the oil and its aftermath for months or years.

“We will make BP pay for the damage their company has caused,” Obama declared.

That said, Obama refused to set aside his vision for the country’s energy future.

“Countries like China are investing in clean-energy jobs and industries that should be right here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil,” he said. “The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now.”

Obama has been scrambling to show he is doing everything he can to stop the massive environmental and financial damage from the oil leak. But the government doesn’t have the technology to stop a spill at a depth of one-mile (1.6 kilometers), forcing Obama to rely on BP to fix it.

Even so, Obama said: “We will fight this spill with everything we’ve got for as long it takes.”

The president’s address capped a two-day inspection tour of the stricken Gulf of Mexico region, and was lent new urgency as scientists announced the spill could be worse than previously thought.

On Tuesday, a government panel of scientists said the oil spill was leaking between 1.47 million gallons (5.56 million liters) and 2.52 million gallons (9.54 million liters) a day — an increase over previous estimates that put the maximum size of the spill at 2.2 million gallons (8.33 million liters) per day.

As of Tuesday, the maximum amount of oil that has gushed out of the well since the April 20 explosion is 116 million gallons (439 million liters), according to the estimates by scientists advising the federal government.

Copyright 2010 The Associated Press.