April 02, 1998|By Jonathan Weisman | Jonathan Weisman,SUN NATIONAL STAFF
WASHINGTON -- A key Senate committee overwhelmingly approved landmark legislation last night to create the nation's first tobacco control policy, giving a powerful push to a bill that could radically change the smoking habits of the nation.
The commerce committee boldly stared down warnings from tobacco companies that they would challenge the bill in court as unconstitutional.
The panel's 19-1 vote provided momentum to a far-reaching measure that only weeks ago seemed moribund.
The bill would increase the cost of a pack of cigarettes by at least $1.10, restrict the advertising and marketing of tobacco products, pay for smoking-cessation and anti-tobacco education programs and punish tobacco companies if teen-age smoking is not reduced sharply enough.
"This is one of those rare occasions we have to craft legislation that will resonate and that will have a profound impact on our country and on our young people," said Sen. Olympia J. Snowe, a moderate Republican from Maine.
John McCain, the Arizona Republican who chairs the Commerce, Science and Transportation Committee, said he expected the full Senate to take up the legislation by late spring.
In the committee, the bill received the backing of tobacco foes and tobacco allies alike. Senate Majority Leader Trent Lott, who could ultimately decide the bill's fate, weighed in favorably. Only Missouri's John Ashcroft, a potential GOP presidential candidate in 2000, voted no.
"This gives the process real momentum," said Elena Kagan, a White House deputy domestic policy adviser who is working on the tobacco issue. "We expect that sense of momentum in the Senate will drive action in the House as well."
Committee members tiptoed down a perilous path, between senators who wanted to toughen the measure and those who asserted that the legislation is already too punitive.
The future of the tobacco bill still remains clouded by thorny issues that must be grappled with on the Senate floor, ranging from attorneys' fees to export restrictions. The Senate has yet to decide even how to spend the half-trillion-dollar windfall expected to be produced by new tobacco taxes over 25 years.
"It's appropriate we are beginning this process on April Fool's bTC
Day," said Sen. Wendell H. Ford, a Democrat from the tobacco state of Kentucky. "The more I look at this, the more I think we're fooling ourselves that we can reach a comprehensive settlement."
But supporters were buoyed by the vote. Although committee members laid out their differences, they were careful not to push any drastic changes to the bill that could derail its progress. "We can find a way to answer the calls of the public that we act," predicted Sen. Ted Stevens, the influential Alaska Republican.
The legislation would raise at least $516 billion over 25 years through a higher cigarette tax that would reach $1.10 by 2003. The tobacco industry put the price tag at $574 billion.
Through price increases and sweeping restrictions on advertising and marketing, proponents hope to reduce youth smoking by 60 percent over the next decade. The legislation puts teeth into that goal by threatening to levy penalties of up to $3.5 billion a year on companies that fail to meet reduction targets.
Those penalties have left tobacco companies fuming. The deal they reached with 40 state attorneys general in June -- including J. Joseph Curran Jr. of Maryland -- was far less severe. It envisioned payments of $368 billion, in exchange for immunity against class action lawsuits and punitive damages.
The current legislation would raise far more money and offer the tobacco companies far less legal protection. Instead of the immunity they sought, the companies would receive only a $6.5 billion annual cap on legal damages that might be levied against them.
A Morgan Stanley analysis provided by tobacco industry representatives concluded that the deal would bankrupt R. J. Reynolds Tobacco Co., the country's second-largest tobacco company, and gravely undermine the viability of other companies.
Price increases mandated in the bill would cut total sales by an estimated 57 percent over five years. But because the annual industry payments would not change with that shrinking volume, the tax per pack would rise to $1.77, according to David Adelman, a tobacco analyst at Morgan Stanley.
"They have left this carefully crafted, well-balanced compromise in tatters," fumed Scott Wise, a lawyer for RJR Nabisco who helped craft the original deal.
In a sharply worded letter to McCain, J. Phil Carlton, a tobacco industry lawyer, promised to tie up the legislation in court.
Indeed, some senators, even those who voted for the legislation in the committee, warned that the curbs on advertising and marketing are likely an unconstitutional infringement of free speech. Under the original deal, the companies had agreed to waive their constitutional rights.
Pub Date: 4/02/98
