CIGARETTE FIRMS HIT GOP TOBACCO BILL

Measure also criticized by White House

WASHINGTON -- Cigarette makers warned Monday that compromise tobacco
legislation proposed by Senate Republicans is unconstitutional and would
bankrupt them. But the White House and key Democratic lawmakers demanded
even tougher sanctions.

The fierce reaction to the nearly 400-page measure unveiled Monday by Sen.
John McCain, R-Ariz., chairman of the Senate Commerce Committee, showed the
difficulties Congress faces as it tries to radically change how cigarettes
are marketed and sold in the United States.

Lawmakers originally intended to implement a proposed settlement reached
last June between the tobacco firms and 40 states that had sued them to
recover the costs of treating sick smokers. But several bills introduced in
recent weeks go well beyond that $368.5 billion deal.

McCain outlined his legislation after holding hearings over several months
and brokering a week of negotiations that included lawmakers from both
parties, the Clinton administration and public health advocates.

McCain's measure would cost tobacco companies $506 billion over a
quarter-century. It would raise the price of cigarettes by $1.10 a pack
over five years, with revenue going into a "national tobacco settlement
trust fund." The legislation would impose new advertising restrictions on
cigarette makers, empower the government to regulate tobacco and penalize
the industry up to $80 billion if youth smoking failed to decline by 60
percent in a decade.

"The bill we're agreed upon is tough medicine for a tough problem," McCain said.

But some Democrats and public-health leaders said it wasn't tough enough.
Erskine Bowles, the White House chief of staff, praised McCain for working
hard on a complex issue. But he said that for President Clinton to support
it, the measure must have stiffer penalties if the teen smoking rate
doesn't fall enough.

Others offered sharper criticism. Former Surgeon General C. Everett Koop
branded it a sellout to the tobacco industry, and the American Lung
Association also rejected it.Sen. Kent Conrad of North Dakota it for
capping punitive damages from lawsuits against the industry at $6.5 billion
a year and for limiting to $3.5 billion the annual penalties that would be
imposed if the rate of youth smoking declined too slowly.

Despite the criticism, McCain vowed to hold a Commerce Committee vote on
his bill this week and said the panel would vote overwhelmingly to sent it
to the full Senate.

Four of the country's major cigarette makers -- Philip Morris Inc., R.J.
Reynolds Tobacco Co., Brown & Williamson Tobacco Corp. and Lorillard
Tobacco Co. -- and a leading smokeless tobacco producer, United States
Tobacco Co., opposed McCain's bill in a joint statement.

"The administration and some in Congress are more concerned with exacting
some sort of vengeance upon the tobacco industry than in enacting a
rational comprehensive solution on tobacco issues," the firms said. The
tobacco companies said two key provisions of the McCain bill -- advertising
restrictions and penalties for excessive youth smoking -- are
unconstitutional and can only be imposed with the industry's consent.

Copyright ) 1998 The Sacramento Bee