McCain Prepares To Unveil Tobacco Settlement Proposal
WASHINGTON (AllPolitics, March 26) -- The Senate Commerce Committee is close to releasing its first draft of national tobacco legislation, which is likely to include a $1.10-a-pack rise in the price of cigarettes.
Committee chairman John McCain (R-Ariz.) hopes to unveil his proposal for a comprehensive tobacco settlement Thursday afternoon, according to his spokeswoman.
The McCain proposal will be reviewed by Congress as it considers whether to enact legislation granting limited immunity to the industry in exchange for hundreds of billions of dollars and marketing concessions over 25 years.
The Senate leadership is looking to McCain to take the lead on tobacco legislation, and McCain has been consulting with the White House, state attorneys general and members of the health community to hammer out a rough outline of a bill. The only tobacco legislation the full Senate will vote on is the one the Commerce Committee writes.
A White House official close to the negotiations on the proposed settlement told CNN, "These are critical days" in the negotiations.
A $368.5 billion proposal was hammered out last June by cigarette makers, 40 state attorneys general, and class-action lawyers.
The official said the main sticking point is whether the Food and Drug Administration will have regulatory authority over tobacco, which is supported by the White House, former FDA Administrator David Kessler and former Surgeon General C. Everett Koop.
A source close to McCain said the final details of his bill are still being worked out, but that it is likely to include a $1.10-a-pack increase in the price of cigarettes over five years.
The industry has said it would support such an increase, but only if that hike were applied at the retail level. Such an increase levied on the manufacturer could translate into a $2.40 per pack increase at retail level, and raise the cost of the settlement by almost $280 billion, according to J. Phil Carlton, an industry spokesman.
In a letter to Bruce Reed, assistant to the president for domestic policy, Carlton warned that "the industry will not be able to participate in any resolution that is too expensive financially or leaves the industry without the civil liability protections that were an essential part of the proposed resolution."
A spokeswoman for McCain said the industry should judge the McCain bill "on its own merits" and wait until it is unveiled before deciding whether to support it.
Congress and the White House expect to spend some of the money from a tobacco settlement on social programs. That has not pleased several people who had helped negotiate the original settlement, including Koop. They want money from the settlement to be restricted to tobacco-related issues, such as lowering the rate of teen smoking.
A source close to the original tobacco negotiations said politicians have to realize that the tobacco industry is not a "bottomless pit." Many of the tobacco companies could claim bankruptcy to protect themselves if the cost of the settlement were deemed excessive, he said.
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