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Battle Lines Drawn Over Tobacco Settlement


Industry says it's 'not bluffing'

WASHINGTON (AllPolitics, April 12) -- Congressional and White House officials said Sunday that last week's decision by five major tobacco companies not to participate in drafting a comprehensive tobacco settlement won't stop the process from moving ahead.

"I believe the Congress of the United States will move forward on this issue. And I believe the American people expect us to," Sen. John McCain, R-Ariz., an architect of a tobacco bill now making its way through the Senate, said Sunday on CBS's "Face The Nation."

"(President Bill Clinton) believes that we can get comprehensive legislation this year, with or without (tobacco companies)," said Health and Human Services Secretary Donna Shalala on NBC's "Meet The Press."

But some leading tobacco officials took to the talk show circuit to reiterate that they will actively fight any bill that goes substantially beyond the agreement they reached last June with the attorneys general of 40 states.

"The process in Washington has gotten completely out of control. It's gone from what once was a noble purpose of reducing youth smoking ... to a process now that has only to do with big taxes, big government and 'Big Brother,'" Phil Carlton, a lead lawyer for the industry, said on ABC's "This Week."

Asked if the tobacco industry's decision to pull out of the process was a bluff designed to cajole a more favorable settlement out of Congress, Carlton said, "Absolutely not."

"We're not bluffing," he said.

McCain: Senate to take up bill in May

Under McCain's proposal, tobacco companies would have to pay $516 billion to the government over the next 25 years. The price of cigarettes would rise by $1.10 a pack over the next five years, and the industry would face additional financial penalties if reductions in youth smoking did not meet established targets.

Also, the Food and Drug Administration would be given additional power to regulate tobacco sales, and tobacco advertising would be strictly limited.

The bill passed the Senate Commerce Committee, chaired by McCain, by a vote of 19-1. He said Sunday that he expects Senate Majority Leader Trent Lott to move the bill to the floor of the Senate by the end of May.

Tobacco execs vow court fight

But even supporters of the legislation concede that if the tobacco industry doesn't agree to voluntarily accept some of these restrictions, the government may not constitutionally be able to impose them -- a point made by tobacco spokesmen on Sunday.

"If this bill ... contains constitutional restriction on our rights to communicate with adults, we'll challenge that in the courts," Steven Parrish, senior vice president of Philip Morris, said on "Face The Nation."

"If this bill penalizes tobacco companies because the incidence of youth smoking doesn't go down enough when it's not our fault, we'll challenge that, because that's unconstitutional," Parrish said.

Nicholas Brookes, the chief executive officer of Brown & Williamson Tobacco Co., said the McCain's bill would be a "suicide note" for his company.

"We've had to say that the process is so far off the rails now that we just can't sign away our constitutional rights so easily," Brookes told CNN's "Late Edition."

"How can half-a-trillion dollars in new taxes on the 99 percent of adults who smoke really help youth smoking? It's really just a money grab. This is politics, money and 'Big Brother,'" he said.

Waxman: Bankruptcy claims overwrought

Tobacco companies maintain that the financial penalties in the McCain bill would put some of them out of business. But one persistent critic of the industry, Rep. Henry Waxman, D-Calif., said Sunday he thinks the industry is overdramatizing the peril it faces.

"They're not worried about going bankrupt. They're worried about not being as prosperous as they always have been in the past," Waxman said.

"We've got to stop them, and we don't need their permission to pass legislation. We don't have to give them something in order to release the kids that they're holding hostage."

McCain said that economic models from the Treasury Department show that tobacco companies would not be forced into bankruptcy.

"There is a certain credibility gap as far as the tobacco companies and the American people are concerned," he said.

Shalala: White House summit not necessary

Asked if the companies would be willing to participate in a White House-initiated summit designed to hash out differences on a tobacco bill, Parrish told "Meet The Press" he thought they would, though he added, "I wonder if it's not too late for that."

However, Shalala said the White House view is that "at this moment, we don't need a summit."

"What we do need is to keep up the progress ... that Sen. McCain has made with his own bill and the beginning of progress in the House," she said.

In Other News

Sunday April 12, 1998

Battle Lines Drawn Over Tobacco Settlement
Kasich Throws Hat Near 2000 Ring -- Sort Of

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