Clinton Proposes Changes To Tobacco Pact

House joins Senate to kill $50 billion tobacco tax break

WASHINGTON (AllPolitics, Sep. 17) -- President Bill Clinton today announced provisions he wants Congress to include in federal tobacco legislation that he says build on the proposed $368.5 billion national settlement with tobacco companies. (416K wav sound)

As the president was laying out his tobacco agenda, the House unanimously agreed by voice vote to rescind a $50 billion tax break for the tobacco industry. The Senate had acted on the amendment earlier.

The measures outlined by the president are primarily designed to reduce the numbers of people who start smoking at a young age. "Today I want to challenge Congress to build on this historic opportunity by passing sweeping tobacco legislation that has one goal in mind: the dramatic reduction of teen smoking," Clinton said.

Specifically, Clinton wants to give the Food and Drug Administration clear authority to regulate tobacco, hold the tobacco industry accountable for its marketing, protect tobacco farmers from lost income and stiffen the penalties now laid out in the deal if teen smoking reduction goals are not met.

Clinton's move comes after a three-month review of the settlement, which the White House sees as flawed and the president says he cannot endorse in its present form. (384K wav sound)

"To me, this is not about money. It is not about how much money we can extract from the tobacco industry. It is about fulfilling our duties as parents and responsible adults to protect our children and to build the future of this country," Clinton said.

Penalties for the industry

"Reducing teen smoking has always been America's bottom line. It must be the industry's bottom line," Clinton said.

To that end, a hefty hike in cigarette prices, as much as $1.50 per pack, was proposed by the president as a penalty to the tobacco industry if goals on the reduction of teen smoking are not met.

"These penalties should be non-tax deductible, uncapped and escalating to give the tobacco industry the strongest possible incentive to stop targeting children as new customers," the president continued.

The administration's plan sets specific targets, with the onus on the industry to meet the numbers: reductions of 30 percent in five years, 50 percent in seven years and 60 percent in 10 years. If triggered, those penalties could add up to a per-pack price increase of $1.50 over a 10-year period.

No tax break

As Clinton was calling on the House in his speech to follow the Senate's lead and repeal a $50 billion tobacco industry tax break included in the balanced-budget deal, the House approved the motion without dissent.

Some health-care activists charged that the credit was inserted into the balanced budget and tax agreement without scrutiny or debate, and feared that the tobacco industry would use the windfall to pay their fines.

Rep. Marge Roukema of New Jersey, a Republican, said during the brief debate, "This vote will say to the American people that we stand for their health and their children's health and that the taxpayer should not be required to pay and bail out the tobacco industry. We must correct the wrong that was done in that budget deal and package."

The only rancorous note came from Texas Democrat LLoyd Doggett who accused Republicans of engineering the tax break because of campaign finance pressures. "This provision did not appear in the bill through divine intervention," Doggett said.

"It occurred because of the involvement and the corruption of our political system," he said. "Not one minute, not one second was devoted on the floor of this House or the United States Senate to debate this provision. It was wrong, it's the very kind of thing that the people of America are caused to be most cynical about this institution."

Clinton's other proposed changes

Clinton argued that the FDA must have full authority over the regulation of tobacco products, a move that has always been fought by the tobacco industry. "The FDA's jurisdiction over tobacco products must be as strong and effective as its authority over drugs," Clinton said.

Congress should also set tougher restrictions on advertising and access to cigarettes by teens than the settlement between the industry and the attorneys general, the president said.

Other health issues aside from teen smoking must also be addressed, the president said. Clinton said other goals should be the reduction of second-hand smoke, new smoking prevention and stop-smoking programs and funding for medical research.

Acknowledging the potential hardship these proposed changes could cause "honest, hard-working" tobacco farmers, Clinton added that "any legislation must protect these farmers, their families and their communities from loss of income."

Gore's in charge

The president has assigned Vice President Al Gore the task of building bipartisan support for the administration's proposed federal tobacco legislation.

Senate Minority Leader Tom Daschle (D-S.D.) said the president is on the right track to focus on tougher restrictions on youth access to tobacco and advertising aimed at young people.

While Clinton praised the work of state attorneys general in working out the settlement, some of them voiced frustration with how long it has taken the White House to react.

Mississippi Attorney General Michael Moore said, "What we are most concerned about is that during the last 90 days since we have been waiting for action from the White House, 267,000 kids have started smoking in this country... Every day we delay, 3,000 kids start smoking, and 1,000 of them are going to die."

Daschle expects some delay in a proposal, now that Clinton is weighing on the negotiations. However, Daschle said the president's role could in some ways enhance the possibility an agreement will be passed.

In Other News:

Wednesday Sept. 17, 1997

• It's Tamraz' Turn
• Tobacco Money Shifts To Republicans
• Clinton Proposes Change To Tobacco Pact
• Senior FBI Official To Head Justice Probe

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