TOBACCO BILL FIGHT RAGES ON

WASHINGTON -- The Senate wrestled inconclusively yesterday with a plan to
cut tax breaks for tobacco companies that advertise to children as
President Clinton and Majority Leader Trent Lott sparred at a distance over
a bill to curtail teen-age smoking.

In a sequence as muddled as the lengthy debate on the tobacco bill itself,
lawmakers tentatively adopted the advertising proposal by Sen. Jack Reed,
D-R.I., by voice vote after an attempt to kill it failed on a tie. Moments
later, though, Sen. John McCain, R-Ariz., chief architect of the tobacco
measure, served notice he will call for a revote, likely to occur today.

The skirmishing came as Clinton sought to spur the GOP-controlled Senate to
action and Lott suggested revising the measure to bring it more into line
with the agreement that major tobacco companies reached with the state
attorneys general to settle lawsuits.

"Every day the Senate delays plays into the hands of the tobacco industry,
which wants desperately to kill this bill," Clinton said at the White House
as the Senate began its fourth week of debating the bill.

Appearing before a group of presidential scholars, he added: "I don't see
how any senator can now stand in the way of a bill that fights drugs, cuts
taxes and protects people from a habit that kills."

But Lott, R-Miss., offered a different assessment of the measure during his
weekly news conference at the Capitol. "There are big problems in it," he
said, adding that the measure has mushroomed in size far beyond what is
necessary to attack teen smoking.

Lott said he was holding out hope for a slimmed-down bill that was more in
keeping with the settlement the tobacco companies reached with state
attorneys general more than a year ago, including some sort of limits on
lawsuit liability for Big Tobacco.

Lott also spoke by telephone with White House chief of staff Erskine
Bowles, but there was no indication whether they were exploring possible
grounds for a compromise.

On the Senate floor, Reed battled for passage of his amendment to deny
tobacco companies regular tax deductions for advertising, promotion and
marketing expenses unless they obey FDA rules designed to curb sales
pitches to underage smokers.

"If they market to kids, then they lose their tax deductions," he said. The
Rhode Island Democrat brandished a direct mail advertising brochure that
one cigarette maker has distributed to smokers touting the Kool brand.

The company built a mailing list from attendees at a rock concert it had
staged several months earlier, Reed said.

In rebuttal, Sen. Slade Gorton, R-Wash., said it was unconstitutional to
condition "a privilege available to everyone else in the United States on
its abandonment if its First Amendment rights ... We can and we should
limit advertising of cigarettes," he said, but that can only be done "with
the agreement of those who are asked to give up their rights to
advertisement."

The tobacco industry, which agreed to certain restrictions in a settlement
with the states, has walked away from the Senate legislation, saying it is
too onerous.

The FDA issued regulations to limit cigarette advertising in 1996, but the
implementation of some of them has been blocked pending the outcome of a
court challenge.

Checked-by: Mike Gogulski