Tobacco Bill's Death Could Have A Budget Impact
Both parties may have to rethink some of their promises
By Gene Randall/CNN
WASHINGTON (June 18) -- The McCain tobacco bill would have meant an estimated $516 billion collected from big tobacco over the next quarter century. With the death of the legislation, what's the likely budget impact?
President Bill Clinton wanted about $10 billion in cigarette money for new domestic spending next year, and tens of billions over the next five years.
"Most of the federal money was designed to be spent directly on health care -- on medical research, on smoking cessation programs, on programs designed to deal with the consequences of the health problems directly related to smoking in this country," Clinton said Thursday.
Federally run programs, for instance, could have seen $25 billion for medical research and $400 million for smoking prevention.
States could have received $7.5 billion for expanded child care and $900 million to extend Medicaid health care coverage to needy children.
With billions few dollars available, it could be tougher for Clinton to convince Congress to provide what he wants for new programs. That's bad news for someone trying to show his is an activist second term.
But Bruce Reed, a top domestic policy adviser, denies the White House had counted too much on the controversial tobacco bill. "Most of our domestic initiatives were not paid for through the tobacco bill," Reed said. "Most of our child care is paid for from other sources and the lion's share of what we are trying to do on education and others issues is paid for in the balanced budget."
The administration, meanwhile, is focused on trying to turn the death of the McCain bill into a midterm election rallying cry.
"Now we're going to have to get used to the Republican party becoming the R.J. Reynolds Republican party," Vice President Al Gore said.
And former Congressional Budget Office Director Robert Reischauer says he sees a major GOP dilemma over how to deliver the tobacco bill's promised end to the marriage tax penalty.
"It's not a cheap thing to bring about, and the tobacco settlement would have provided some of the resources that were needed for that," Reischauer said.
The bottom line is with the death of the tobacco bill in the Senate, both parties may have to rethink some promises.