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Congress Takes Up Historic Tobacco Bill

Momentum for tough deal - including $1.50 per-pack tax - builds as debate begins today.

After almost a year of nonstop politicking, negotiating, and teeth-gnashing on Capitol Hill, the Senate today is set to take up a multibillion-dollar bill to regulate tobacco. If passed, the legislation stands to forever alter an industry that has significant political power and roots dating back to Colonial America.

The two basic issues at stake are how much the industry should pay and how much protection, if any, it should get from future lawsuits.

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Right now, so many interests are involved, it's tough to predict the final outcome. But supporters of a get-tough approach - including a hefty $1.50-per-pack tax and strict industry regulation - are increasingly confident they'll prevail. Indeed, late last week antitobacco forces got a boost when an amendment passed securing the $1.50 tax.

"I think we've got a significant majority," says minority leader Tom Daschle (D) of South Dakota. "I don't think [opponents] believe they've got the votes."

Even if it passes the Senate, however, the bill faces tough slogging in the House, where the GOP leadership is fashioning its own more-limited approach. Should House leaders stand strong, the two plans might collide in House-Senate conference and reach an impasse, thus nixing the deal.

History of a deal

The process began last June, when tobacco companies and state attorneys general reached a deal calling for the companies to pay $369 billion over 25 years to reimburse states for smoking-related Medicaid costs and pay for programs to discourage teen smoking.

The companies, in return, were to get immunity from class-action lawsuits. The deal also provided for the Food and Drug Administration (FDA) to regulate tobacco and for voluntary restrictions on tobacco ads. But it requires congressional action before it can move forward.

The bill senators take up today, sponsored by Sen. John McCain (R) of Arizona, significantly changes the agreement - in ways the tobacco industry vehemently opposes. It increases the FDA's control of tobacco products and does away with immunity, replacing it with an $8 billion annual cap on industry liability.

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Opponents have a host of criticisms. Some say the McCain bill's restrictions on tobacco ads are unconstitutional unless the firms agree to them. The companies say the deal will bankrupt them. Senate conservatives argue it is simply a money grab to expand government. Many warn it will create a black market in cigarettes. And some, like Sen. Carol Moseley-Braun (D) of Illinois, protest that the taxes will be paid mostly by low-income smokers.

Public-health advocates, meanwhile, oppose liability caps, arguing tobacco firms should get no protection from paying for damage cigarettes have caused to society.

What to do with all the cash?

Just as contentious is the question of what to do with the money the bill would raise. Supporters want to send $25 billion to the states over five years and spend $10 billion on medical research and $10 billion on antismoking efforts. Another $10 billion would go to help tobacco farmers switch to other crops. Others want to use it for tax cuts or to shore up Medicare.

Sen. Orrin Hatch (R) of Utah insists the Senate is making a mistake if it passes a bill the industry will fight in court. "You're going to go one of two ways: Pile on [against the companies] or get something done to get the tobacco companies back so we don't have 10 years of litigation," he says.

He and Sen. Dianne Feinstein (D) of California will introduce an amendment that returns to the original June agreement.

But it appears most Democrats and 15 to 20 Republicans are likely to support the McCain bill.

House leaders, meanwhile, are trying to devise a more-limited bill to attack teen smoking. But it's not clear that Republicans can agree among themselves on a plan.

Still, Mississippi Attorney General Michael Moore, one of the lead negotiators in last June's deal, says he's just glad a bill is finally moving forward.

"This has been a frustrating roller-coaster ride," he says. "But it looks good at this point. It looks like we're gonna get it done."

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