CLINTON TO ENDORSE MCCAIN TOBACCO BILL

BIRMINGHAM, ENGLAND --U.S. President Bill Clinton will endorse Sen. John
McCain's tobacco bill at a White House ceremony on Wednesday and say he'll
sign the bill if comes to his desk largely unchanged, White House press
secretary Mike McCurry said. This will be the first time Clinton has
endorsed specific tobacco legislation. By doing so, the president will be
putting his prestige behind a specific bill in a bid to build momentum for
passage of anti-smoking legislation this year.

In September, Clinton asked Congress to give him legislation that would
raise the price of a pack of cigarettes, allow the government to regulate
nicotine, restrict tobacco advertising and marketing to minors, and help
tobacco farmers.

McCain's bill, which evolved out of a settlement reached last June between
tobacco companies and 40 state attorneys general to recover tobacco-related
health costs, now meets the president's criteria, McCurry said.

Clinton will endorse the McCain bill surrounded by a retinue of children
and standing beside Matt Myers, general counsel of the Campaign for
Tobacco-Free Kids, said deputy press secretary Joe Lockhart.

"There is still a lot of legislative road to travel," said Lockhart. "But
if the bill arrives on his desk the way it looks right now, the president
will say he will sign it."

Speaker Newt Gingrich and other Republican leaders of the House of
Representatives denounced the McCain bill. They say it reflects the
big-government, pro-tax-spend policies of liberal Democrats, and say
legislation won't get through their chamber.

The Senate bill breakthrough came this week during meetings between
Clinton's chief of staff Erskine Bowles and Bruce Reed, his domestic policy
adviser, and McCain, the Arizona Republican who has taken the lead on the
measure.

Just days before the Senate starts debating the measure Monday, they agreed
in principle on strengthening a number of provisions in the bill to address
some of the president's concerns including the cost of liability, McCurry
said.

The revised measure would increase caps on liability for cigarette makers
to $8 billion a year from $6.5 billion; set tougher provisions for
companies if teen smoking rates don't decline by set levels; and fine
individual companies if market surveys show teens are disproportionately
smoking their brands, McCurry said.

The Washington Post reported the agreement earlier yesterday.

The tobacco industry opposed McCain's original measure, saying it would
drive them out of business. Tobacco companies are certain to fight any
efforts to toughen penalties on the industry.

McCain's bill would raise the federal cigarette tax by $1.50 a pack, give
the federal government authority to regulate nicotine, and restrict the
advertising and marketing of tobacco. The measure would also impose an
annual liability cap for the industry -- offering less legal protection
than the industry won in last year's $368.5 billion national tobacco
settlement. Senate Democratic leader Tom Daschle of South Dakota predicted
yesterday that the Senate next week would pass it by an overwhelming majority.

Sen. Trent Lott of Mississippi, majority leader of the
Republican-controlled Senate, says he isn't as sure. "I think though, that
in the end there is at least a 50-50 chance something will pass the Senate
(and) an increase in the price of cigarettes will be part of it," he said
in remarks taped for CNBC's "Tim Russert" show.

While the House declined to come up with an election-year bill to combat
smoking, the Senate accepted a challenge by the White House and various
public advocacy groups to move on a measure of its own. In various votes,
the Senate has demonstrated a willingness to turn the screws on the tobacco
industry, long one of the most powerful lobbies on Capitol Hill.

On March 31, the Senate, on a vote of 79-19, approved a non-binding
resolution putting it on record against giving the industry any immunity
from liability.

The next day, on a 19-1 vote, the Senate Commerce Committee approved
McCain's anti-smoking bill. This week the Senate Finance Committee raised
the proposed $1.10-a-pack federal tax increase in McCain's bill to $1.50 a
pack and sent the bill to the full Senate on a 13-6 vote.

With the tobacco industry saying the measure would drive many cigarette
makers out of business, several senators will seek to soften it. Senate
Assistant Republican Leader Don Nickles of Oklahoma has said he will seek
to scale-back the McCain bill, now estimated to cost the industry $516
billion over 25 years.

Sen. Orrin Hatch has paired with Sen. Dianne Feinstein, a California
Democrat, on a measure worth roughly $425 billion.

House Republicans may be forced to rethink their position, Daschle said.
"If we generate the kind of momentum that I think exists here, I think it
will be very difficult for the House leadership to ignore" the legislation,
he said.

Checked-by: Mike Gogulski