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Tobacco Lobbying Is Smoking Hot

Industry associations rally forces to derail plan for higher taxes to finance health care

IN Dean Rouse's vision, green ribbons will soon be tied to lampposts and front doors, cars and lapels all over tobacco country.

They've sprung up in eastern North Carolina, where Mr. Rouse's family has been growing tobacco for more than 100 years. They're in Virginia, too, and in the halls of Congress, hanging from the offices of members who represent tobacco interests.

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The green stands for tobacco money and jobs, Rouse explains, and his group, Friends of Tobacco, has just launched its ribbon campaign to foster solidarity. As the administration talks of paying for health-care reform in part by hiking the 24-cent-a-pack federal tax on cigarettes fourfold or fivefold, the tobacco industry is fighting back.

``My family depends on tobacco for a living,'' Rouse says. ``If the administration increases the tax on tobacco by as much as 50 cents or more, it will have a devastating effect on North Carolina and the South. We say we're being unfairly targeted.''

In defending themselves against the higher tax, tobacco growers and cigarette manufacturers dance around the link between smoking and health problems - the administration's easy rationale for increasing the tax. Instead, they focus on fairness and jobs.

The Tobacco Institute, the lobbying and public relations outfit representing most tobacco manufacturers, is disseminating an analysis done by the accounting firm Price Waterhouse in November 1992. It concludes that doubling the tax would cost 114,117 jobs among farmers, manufacturers, wholesalers, suppliers, and retailers. Raising the tax by $1, the study says, would cost 338,028 jobs.

The loss in jobs would hurt all other sectors of the economy and cause a net loss of government revenues, the Tobacco Institute says.

Tobacco interests also argue that they're already paying more than their fair share in taxes. Since 1982, when the tax stood at 8 cents a pack, the federal tax has tripled. When state and local taxes are factored in, smokers are already paying $13 billion a year more in taxes than other Americans, says John Lenzi, manager of media affairs at Philip-Morris, the nation's largest cigarette manufacturer.

``It's ironic, since the president campaigned on tax fairness for lower- and middle-income Americans,'' Mr. Lenzi says.

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Many pro-tobacco people also display a libertarian resentment against a government that would try to influence behavior through taxes. Tobacco is a legal commodity, and virtually every adult is aware of the risks of smoking, they argue. Thus, they suggest, the federal government would be engaging in ``social engineering'' by trying to tax them out of their habit.

The Coalition on Smoking OR Health - comprised of the American Heart Association, the American Lung Association, and the American Cancer Society - enters the fray with its own ammunition. A $2-a-pack increase would save 2 million lives, and a $1-a-pack increase would save 1 million lives, the coalition says.

It also cites a poll conducted by the Boston firm Marttila & Kiley showing that a majority of American voters in every region of the country and of every age and income level support a $2-a-pack tax increase.

The tobacco industry counters with a human-interest spin. Industry representatives stress that it is small family farms that grow tobacco, not large conglomerates.

A newspaper ad by the Raleigh, N.C.-based Tobacco Growers' Information Committee, Inc., shows a farmer leaning forlornly against his truck, looking out over a field. ``Putting 14,000 farmers out of work ... won't solve the health-care crisis,'' the headline reads.

That figure of 14,000 was based on a 50-cent-a-pack tax hike, says Lisa Eddington, managing director of the committee. And as talk of a bigger hike has developed, the committee has worked to keep the 50,000 people on its mailing list informed through its newsletter and by telephone. Since Sept. 21, a committee phone bank has been contacting farmers and other pro-tobacco people and encouraging them to write, call, and visit their members of Congress.

Rouse has already made several trips to Washington. He says he and his companions first visit members from tobacco states, then as many others as will see them.

``We want people to relate the personal side of tobacco,'' Rouse says. So far, only one member's office has refused to grant his group an audience, he says.

Workers from at least one cigarette company have launched grass-roots actions of their own.

In May, employees from R.J. Reynolds in Winston-Salem, N.C., took vacation time and rented 36 buses to come to Washington to lobby. Maura Payne Ellis, a spokeswoman at Reynolds, speaks of a ``core group'' of employee volunteers who staff tables at the entrances to the company's facilities and encourage people to stop and write a letter to their congressman or the White House.

The Tobacco Institute and the large tobacco manufacturers have staff lobbyists, but are not willing to discuss their activities. Another facet of their activity, however, has been evident in the press: ads touting the industry's good-citizen efforts to keep children from smoking. One ad sponsored by R.J. Reynolds features actor Danny Glover, who urges ``everyone'' to support age-restriction laws. Another ad from the Tobacco Institute invites readers to send away for a pamphlet called ``Tobacco: Helping Youth Say No.''

Some people fighting for tobacco interests say privately they know they face an uphill battle, and that with public opinion increasingly against smoking, theirs is a hard argument to make.

Rep. Charlie Rose (D) of North Carolina, the leader of Congress's informal tobacco caucus, got in trouble with constituents recently for saying he would settle for just a doubling of the excise tax. Some industry groups that might be expected to fight for tobacco farmers and taxpayers indicated privately that they were not going to expend extraordinary amounts of effort to fight the higher tobacco tax.

Tobacco farmers face other challenges to their livelihood besides the excise tax and the decline in smoking in this country. Cigarette manufacturers have increased their use of cheaper foreign tobacco, and even though tobacco farmers won a provision in the recent budget bill requiring manufacturers to use 75 percent domestic tobacco, they know the firms can get around the rule by transferring production abroad.

Rouse calls it ``a squabble within the family.'' He also rejects the idea of converting to other crops, which can't come near tobacco profits. According to the tobacco growers' committee, an acre of tobacco brings in gross revenues of $3,200 per acre, while the next most lucrative crop, cotton, grosses just $320 per acre by comparison.

Still, a bill in Congress would require that 2.5 percent of the revenue from the increased tobacco tax go to tobacco farmers to help with conversion.

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