House panel rejects 29cent cigarette tax Budget:
but elimination of ethanol subsidy survives a Ways and Means vote

By Robert Wells
The Associated Press

Washington A proposal to slap an extra 29centsapack tax on
cigarettes to help fund health insurance for poor children was defeated
by the House taxwriting committe Thursday night.

By a voice vote, the Ways and Means Committee rejected an amendment by
Rep.Nancy Johnson, RCon.,that would have raised $20 billion over five
years. Johnson had hoped the money could be directed at providing
insurance for 20 million children without health care.

She also said the the tax might deter young people from
smoking."Children are more apt to give up smoking as the price goes
up,"Johnson said.Her proposal was an amendment to a wide ranging bill to
provide a net $85 billion tax cut as part of the balancedbudget agreement.

Speaking against the propasal was Rep Jim Bunning,RKy.,who said such a
tax would be devastating to tobaccogrowing states.

"The job loss in these states would be considerable,close to 75,000
jobs,"Bunning said. He also appealed to his colleagues patriotism,saying
tobacco was the "lifeblood" of the early American Colonies.

Earlier, a proposal to eliminate the federal subsidy for ethanol
survived a strong challenge in the committee.

The $85 billion taxcut package proposed by Rep. Bill Archer,RTexas,the
committee, would eliminate the 54centpergallon subsidy on ethanol,an
alcohol fuel additive derived from corn.