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 House Members to Propose $500 Billion Tobacco Plan (05-05-98)


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White House Would Support Bigger Cigarette Tax Hike

WASHINGTON (AllPolitics, May 15) -- President Bill Clinton would support an amendment to the present tobacco bill that would raise cigarette taxes to $1.50 a pack, 40 cents more than what the legislation now calls for, according to senior Senate Democrats.

"I think they will clearly accept $1.50 if we can get it done," said Senate Minority Leader Tom Daschle.

Daschle

The proposed tobacco tax increase, narrowly approved by a 10-9 vote by the Senate Finance Committee Thursday, has irked both tobacco-state Democrats and conservative Republicans. Critics contend the tax hike, an attempt to discourage teenage smoking, will hurt tobacco farmers and counters the tax-cutting efforts of the GOP.

In addition to a tax increase, tobacco legislation sponsored by Sen. John McCain (R-Ariz.) would give new powers to the Food and Drug Adminstration (FDA). It would also cost the tobacco industry an estimated $516 billion over 25 years in an effort to offset the public costs and health-toll smoking has had on the nation. The bill would provide tobacco companies with limits on, but not exemption from, liability in civil law suits.

McCain

Administration officials and aides to Sen. McCain agreed to strengthen the bill before it goes to the Senate floor next Monday. The cigarette companies' liability cap would be raised to $8 billion a year with stricter penalties for companies if teenage smoking does not drop as hoped.

Another change by the Senate Finance Committee would give a larger share of cigarette tax revenues to the states: 30 percent from 1999 to 2003, and 45 percent thereafter.

Despite staunch opposition to the bill, Daschle expects it to pass.

"I believe that we have 45 Democrats who are prepared to support a tobacco bill, and there are at least 15 Republicans," he said Thursday.

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