SENATE REJECTS $1.50-A-PACK INCREASE IN CIGARETTE TAX

WASHINGTON -- The Senate rejected a bid Wednesday to raise cigarette taxes
by $1.50 a pack in the first bellwether vote on legislation to put sweeping
new government controls on the tobacco industry.

The 58-40 vote against the $1.50 tax hike left intact a $1.10 increase
favored by Sen. John McCain, R-Ariz., author of the tobacco bill.

Senators met into the evening as they debated another key proposal that
would strip the $516 billion measure of all liability limits for cigarette
companies. A vote on that amendment was expected today.

On the third day of contentious debate in the Senate, President Clinton
urged lawmakers to pass the measure to protect 3,000 teenagers who begin
smoking each day.

"Today, we stand on the verge of passing legislation that will do far more
than anything we have ever done to stop the scourge of youth smoking,"
Clinton said.

One of the country's most famous teen athletes, figure skater Tara
Lipinski, joined Clinton and 700 other youths on the South Lawn of the
White House.

"Mr. President, in the fight to protect kids from tobacco and save lives,
our team is going to win," Lipinski said.

In the Senate, conservatives led by Republican John Ashcroft of Missouri
spent four hours trying to stem the tobacco bill's momentum.

"This is a massive tax increase, this is a massive expansion of government,
this is an affront to the effort of families to provide for themselves,"
Ashcroft said.

But a group of mainly Democratic senators tried in vain to set an even
higher tax than McCain's levy of $1.10 a pack, already 41/2 times larger
than the current federal excise tax of 24 cents.

Democratic Sen. Edward Kennedy of Massachusetts noted that those opposing
the higher tax increase -- on the grounds that relatively poor people pay
most cigarette taxes -- were the same senators who resisted his successful
effort last year to increase the minimum wage.

"How elitist and arrogant it is for those voices on the other side to cry
these crocodile tears about working families!" Kennedy thundered.

Forty-five of the Senate's 55 Republicans voted against the $1.50 tax hike,
along with 13 of the 45 Democrats, including Sen. Dianne Feinstein of
California. Feinstein said the steeper tax increase would fuel a black
market in cigarettes. California already loses as much as $50 million a
year in revenue through illegal sales with a state excise tax of 37 cents a
pack, she said.

McCain said the attacks on his bill from both ends of the political
spectrum -- from senators opposed to any tax increases and those who want
even higher taxes and other anti-tobacco penalties -- show that the measure
is well-positioned.

McCain, chairman of the Senate Commerce Committee, continued to express
confidence that the Senate will approve his legislation, though he was less
certain it will do so by the end of the week.

"You can't get through a minefield without setting off some explosions,"
McCain said. "This is a very large, very controversial bill. The watchword
is patience."

The McCain legislation requires the tobacco companies to pay the government
$516 billion over 25 years, much of which would come from the $1.10-a-pack
tax increase. The cigarette makers would have to make additional payments
- -- up to $4 billion a year -- if youth smoking rates fail to decline
rapidly enough.

Copyright ) 1998 The Sacramento Bee

Checked-by: jwjohnson@netmagic.net (Joel W. Johnson)