SENATE STARTS DEBATE ON MONUMENTAL BID TO REIN IN BIG TOBACCO

WASHINGTON - The Senate today begins considering a bill to impose
unprecedented restrictions on the tobacco industry, one of the most
ambitious pieces of legislation it has attempted in decades.

The bill proposes to reach across the nation to curtail smoking in most
workplaces and public buildings, strip many city streets of cigarette
billboards, eliminate cigarette vending machines, pay for substantial new
medical research and fund an unprecedented campaign to de-glamorize
smoking, especially among teenagers.

Seldom has Congress moved so quickly to work such monumental change on a
major industry and to affect the behavior of so many Americans.

"It is a large thing, one of the biggest actions in a bill Congress will
have ever tried to deal with," Senate Majority Leader Trent Lott, R-Miss.,
said in an interview broadcast Saturday on CNBC.

The National Tobacco Policy and Youth Smoking Reduction Act, which could be
voted on by the end of the week, would impose the largest price increase
ever on cigarettes and broad restrictions on a $50 billion industry once
considered politically invincible. Its goal is to reduce tobacco's toll on
the nation's health and to change the culture of smoking by stopping
teenagers from taking that first enticing puff.

That the Senate is on the verge of considering such change has amazed
political observers familiar with the many ways complicated legislation can
find a fatal end in Washington. In this case, the driving force has been an
unwavering public disdain for the tobacco industry and growing insistence
on some kind of change.

Added to that is the tantalizing prospect of hundreds of billions of
dollars in new government revenue from the proposed price increases. "The
thing that's driving this now is the hunger for money," said anti-smoking
activist Michael Pertschuk.

Issue Goes To House This Summer

Most analysts predict that major legislation will emerge from a tumultuous
week of debate. How forcefully the Senate acts will determine in part the
prospects for similar legislation in the House, which will take up the
issue this summer. If it survives there, the final law would be written
after negotiations among the House, Senate and White House.

The Senate "will do something dramatic, maybe incrementally dramatic, but .
. . enough so (a senator) can go home and say, "I struck a blow against the
industry,' " said Alan Simpson, a former Republican senator from Wyoming
who directs the Institute of Politics at Harvard University's Kennedy
School of Government.

"Who dares vote against it?" veteran lobbyist Tom Korologos asked. "I think
the thing passes 80 to 20."

Even some opponents seemed resigned to that outcome. "I don't think the
votes are there to sustain a filibuster," was the assessment last week by
Sen. Mitch McConnell, R-Ky., who represents about 60,000 tobacco farmers
and said he's "not likely to vote" for the bill.

Many believe the Senate measure will set the ceiling for stringent
anti-smoking legislation. House Speaker Newt Gingrich, R-Ga., and other top
Republicans have assaulted the measure as a liberal attempt to raise taxes
and expand government, under the guise of curbing teenage smoking. But so
far, the House GOP has put forward no alternative.

The reshaping of the tobacco industry ranks with Congress's major
regulatory undertakings - on a scale with the auto safety laws of the
1960s, the 1990 Clean Air Act and the Telecommunications Act of 1996. But
unlike those bills, its rise has been breathtakingly fast. It took more
than a decade of deadlock, for instance, before Congress approved the 1990
clean air revisions, and then only after the Bush administration and
bipartisan Senate leaders crafted a painstaking compromise to put it on the
Senate floor.

Settlement Plan Was Impetus

The impetus for a comprehensive tobacco bill came from an unlikely source -
a $368.5 billion settlement of lawsuits reached just 11 months ago in talks
among the tobacco industry, health advocates, state attorneys general and
private trial lawyers. Their deal, which reached into areas such as federal
regulation of tobacco, required congressional approval. But instead of
ratifying the deal, as the negotiators had hoped, Congress seized it as a
framework, then moved far afield.

Lawmakers had starkly different visions of a national policy. Bills were
drafted and fought over. At times, the whole deal was declared dead, only
to rise again, usually with billions added to the price tag for the tobacco
industry.

Finally, with Sen. John McCain, R-Ariz., taking the lead, a measure was
whipped together in 10 days of frenzied negotiations and approved, to
everyone's amazement, by a 19 to 1 vote last month of the Senate Commerce
Committee.

`Break the Hold'

It is an audacious exercise for the Senate, where Big Tobacco has wielded
clout for decades. And the upcoming debate over a bill that the industry is
spending millions to kill underscores the precipitous fall of tobacco's
fortunes in Washington.

"It is the first time that Congress is poised to break the hold the
industry has had over the nation," said former Food and Drug Administration
Commissioner David Kessler. "It is a very important moment in public-health
history."

The tobacco industry sees the legislation as historic in another sense: an
unconstitutional incursion to regulate and tax an unpopular industry out of
existence. "This has gone far beyond trying to address" the issue of
teenage smoking, said Bruce Josten, a vice president of the U.S. Chamber of
Commerce. "If tobacco is considered politically incorrect, who's next?"

As it stands now, the McCain bill would:

- -- Impose a fee of $1.10 per pack over five years on cigarette makers,
which they must pass on to consumers - the biggest government-imposed
increase ever. Federal taxes are now 24 cents a pack, set to rise to 39
cents in 2002.

- -- Give the FDA broad authority over tobacco products, including
controversial marketing restrictions that would ban tobacco billboards
within 1,000 feet of schools and eliminate cartoon characters and color in
cigarette ads.

- -- Settle multibillion-dollar lawsuits by more than 40 states and
localities against the industry and limit the payment of industry damages
in lawsuits to $6.5 billion a year.

- -- Impose huge penalties, known as "look-backs," on tobacco companies that
fail to achieve targeted reductions in youth smoking.

- -- Curtail smoking in many workplaces, public buildings and fast-food
restaurants to limit the effects of secondhand smoke.