Congress Wrestles With Divvying Up Any Tobacco Windfall

The Senate plunged into a heated debate over tobacco control this week, taking up a $516 billion piece of legislation with profound implications for the US cigarette industry, tobacco farmers, and the American laissez-faire culture of smoking.

The historic bill marks a rare political moment in which the strength of public opinion - in this case against cigarettemakers - is pushing Congress to defy one of the country's oldest and most powerful special interests: the tobacco lobby.

It also represents a sweeping new regulatory experiment, comparable to the auto safety laws of the 1960s, in which the government would take on an aggressively activist role in an attempt to dramatically curb a growing social ill: smoking among teenagers.

"The country is in the process of this massive, multi-front search for a new status quo [on smoking]," says Christopher Foreman, an expert in the politics of health and safety at the Brookings Institution in Washington.

Yet uncertainty remained high this week over a vote on the bill, the "National Tobacco Policy and Youth Smoking Reduction Act" introduced by Sen. John McCain (R) of Arizona. Senators wrangled with a long string of amendments, including sensitive measures on subsidies for tobacco farmers, cigarette price increases, and liability for tobacco firms.

Moreover, even if the bill passes in the Senate and goes to the House, a political free-for-all awaits over exactly how - and to what effect - the country would spend an estimated $65 billion in new revenues generated over five years from higher prices on tobacco products.

A wide range of opinions exist - from Republican lawmakers in the House and Senate who seek to use the monies for tax relief, to a White House proposal to put some $7 billion toward child-care block grants to assist low-income families.

However, analysts predict that antismoking advocacy groups backed by the public would likely prevail in earmarking the bulk of the funds for programs to mitigate and prevent the harmful and costly effects of tobacco use.

The McCain bill essentially does this, channeling the funds over five years into these four broad categories:

* Public health and education programs to help people quit smoking and discourage youths from starting (22 percent or $14.3 billon).

* Health research, including on how to best prevent and treat smoking addiction (22 percent or $14.3 billion).

* State governments (40 percent or $26 billion total, with half discretionary and half to be allocated among a "menu" of child and health-related priorities decided by the National Governors' Association).

* Farmer and farming community assistance (16 percent or $10.4 billion).

Under the bill, the funds would come from annual tobacco industry payments, the cost of which would be passed on to consumers in the form of an incremental, $1.10 increase by 2003 in the price of a package of cigarettes. Tobacco firms would make the payments according to their market share; the dominant companies are Phillip Morris, with a total of nearly half the domestic market, followed by R.J. Reynolds (24 percent) and Brown & Williamson (16 percent).

Additional penalties of up to $4 billion would be imposed on the industry to the extent that targets for reducing underaged youth smoking are not met. In addition, individual companies would pay $1,000 for every youth above the target level who smokes their brands. The most popular among teenagers are now Marlboro (60 percent), Camel (13 percent) and Newport (12 percent).

The goal of the legislation is to slash youth smoking by 60 percent over ten years. Today, some 3 million American children and teens smoke, reflecting a sharp, 26 percent increase in high school-aged smokers between 1991 and 1995, according to the Centers for Disease Control and Prevention (CDC) in.

Experts voiced optimism that the goal is attainable, given the combination of an unprecedented cigarette price hike, stronger FDA regulations, and the large investment in comprehensive anti-smoking measures outlined by the McCain bill.

"[This combination] is our best shot at turning the problem of teen smoking around," says Michael Eriksen, of the office of smoking and health at the CDC in Atlanta.

"The [McCain] legislation contains an effective, comprehensive approach," agrees Bill Novelli, president of the Washington-based Campaign for Tobacco-Free Kids. The group organized a Capitol Hill rally backed by President Clinton of more than 1,000 youths in support of the bill on Wednesday.

For the first time, the bill would provide the funds necessary to expand nationwide the type of highly aggressive, grass-roots anti-smoking campaign pioneered by California and Massachusetts, which in the 1990s achieved significant rates of decline in tobacco use that are double and in some cases triple the national average, Mr. Eriksen says.

CURRENTLY, few states can afford the paid media campaigns and community activism that Eriksen says are vital if localities are to successfully combat the pervasive influence of tobacco advertising and other pressures that encourage youths to smoke.

The McCain bill would allocate funds to the states based upon the size of their smoking-related Medicaid and other health-care costs. New York State would receive the largest share (12.8 percent), followed by California (8.6 percent), Texas (5.9 percent), and Florida (4.7 percent), Pennsylvania (4.4 percent) and Illinois (3.9 percent).

"What is currently in the McCain bill would be very good for states," says Steve Lewis, a policy associate at the National Conference of State Legislatures in Washington.