TOBACCO SETTLEMENT FUND BATTLE

Congressional grab for money imperils opportunity for legislative accord

WASHINGTON - Efforts in Congress to curb teen smoking are being endangered
by a fight over how the government should spend the billions of dollars that
any new federal tobacco law would exact from the cigarette companies.

Some lawmakers want the money to pay for tax cuts, boost the Medicare system
or pay down the national debt. President Clinton wants to spend it for child
care tax credits, more teachers and school construction.

The money fight is being exploited by the cigarette makers, which are
claiming in a nationwide advertising campaign that they would be unfairly
taxed by the pending legislation to pay for new government spending. One
recent tobacco industry ad bears the headline, "Big Taxes, Big Government,
There they go again . . ."

Longtime smoking foe Rep. Henry Waxman, D-Los Angeles, called the tug of war
over tobacco dollars "an unseemly fight over money" that has threatened to
distract Congress from its goal of curbing underage smoking.

Rep. John Linder, R-Ga., who favors a narrow teen smoking bill rather than
the sweeping legislation moving through the Senate, said the money fight "is
just another form of greed." He predicted the Senate bill "doesn't have a
prayer of passing the House" because there's no public support for it.

Fearing that money fights could extinguish chances for enacting anti-smoking
legislation, Rep. James Hansen, R-Utah, and Rep. Martin Meehan, D-Mass.,
introduced legislation that would spread the tobacco money around to some of
the causes being pushed by their colleagues.

The Hansen-Meehan bill - designed to raise about $500 billion over 25 years
from the tobacco industry - would earmark 55 percent to pay down the
national debt, about 35 percent to settle state lawsuits against cigarette
makers and about 10 percent for anti-smoking programs.

Hansen, who along with Meehan co-chairs a House tobacco task force, said
they were besieged by people wanting a share of any tobacco money. The
supplicants included coal miners, asbestos victims, emphysema patients and
those wanting money for Medicare and Medicaid.

"When anybody sees a pot of money, they all throw their line in hoping to
reel one in," Hansen said.

The Senate bill sponsored by Sen. John McCain, R-Ariz. - which would force
tobacco companies to cough up $516 billion over 25 years - is silent on the
issue of how to spend the money. "We didn't want to have a fight in the
(Senate Commerce, Science and Transportation) committee," McCain said.

McCain said he wants the money to reimburse states for costs of treating
sick smokers, as well as pay for anti-smoking programs, fund federal tobacco
research and help veterans, many of whom got free cigarettes in their
military rations.

But McCain said congressional Republicans won't allow tobacco dollars to pay
for any new spending programs, such as the Clinton administration's proposal
to spend $65 billion for child care tax credits and early childhood
education, more teachers and new school construction.

Clinton insists he won't let tobacco legislation die in a dispute with
Republicans over how to spend money from an increased cigarette tax. "I
would never stand in the way of a tobacco bill that actually reduced
childhood smoking because they disagreed with me about how to invest the
money," he said last week.

Meanwhile, health advocacy groups have their own ideas on how the money
should be spent.

Bill Novelli, president of the Campaign for Tobacco-Free Kids, a coalition
of major health groups and anti-smoking advocates, said he hopes $3.5
billion would be spent for anti-smoking measures, to help the Food and Drug
Administration regulate tobacco and to fund research on tobacco addiction.

John Garrison of the American Lung Association said the money fight has
obscured the real reason for a cigarette price increase: to make smoking too
expensive for minors.

©1998 San Francisco Examiner

Checked-by: Melodi Cornett