House votes to repeal $50 billion tobacco credit

WASHINGTON (Reuter) The House voted Wednesday to repeal a contentious
provision of a new tax law that would have let tobacco companies slice $50
billion off any payments ordered under a proposed national tobacco settlement.

The Senate last week voted 953 to kill the tobacco credit, making its
elimination virtually certain.

As part of its sweeping balanced budget and tax legislation last summer,
Congress voted to raise tobacco taxes and use the money for children's
health care.

But a single sentence inserted into the bill at the last minute gave the
industry a $50 billion credit the amount that could be raised by the new
tax against the $368.5 billion tobacco settlement, should Congress enact
it.

``This vote will say to the American people that we stand for their health
and their childrens' health and the taxpayers should not be required to pay
to bail out the tobacco industry,'' said New Jersey Republican Rep. Marge
Roukema.

The repeal was approved by the House on a voice vote during debate on a
$279 billion annual spending bill for labor, health and education programs.

The original tobacco settlement proposal between cigarette firms and state
attorneys general has languished in Congress but President Clinton
Wednesday urged lawmakers to work on a tougher, revised settlement plan
next year.

Clinton called for Congress to pass broad legislation to cut teenage
smoking and proposed raising cigarette prices by up to $1.50 a pack if the
industry fails to meet set youth smoking targets.

Although little noticed at the time, the tax credit provision became a
lightning rod over the past month for public skepticism about the tobacco
industry and its influence in Congress.

``Congress should be passing laws to protect the health of all Americans,
it should not be lining the pockets of the tobacco industry,'' said New
York Republican Rep. Nita Lowey.