Tough Tobacco Bill Sails Through Senate Committee

WASHINGTON —  A historic measure to impose sweeping new costs and regulations on the tobacco industry won overwhelming approval Wednesday in the Senate Commerce Committee.

Underscoring their lack of sympathy for the rogue industry, committee members voted 19 to 1 for the tough measure, which would go much further than last year’s proposed settlement of lawsuits filed by 40 state attorneys general against the cigarette manufacturers.

The Commerce Committee bill, the first to move through the congressional mill, would raise the price of cigarettes by $1.10 a pack over the next five years, bringing the average price to more than $3 a pack. It would require the Food and Drug Administration to regulate tobacco as a drug.

In return for these punitive steps, the committee gave the industry only a little of what it wanted most: protection from future lawsuits. The bill would cap the industry’s legal damages at $6.5 billion a year.

Watching the committee’s every action was a small battalion of lobbyists. Just outside the committee room, plaintiffs’ lawyers and tobacco and business lobbyists made calls on cell phones and fretted over last-minute deals being worked out by senators.

The measure proved so repugnant to the tobacco industry that its lawyers said they would prefer to resume the hand-to-hand combat of fighting lawsuits rather than submit to its regulations and payments.

On a generally upbeat day in the stock market, tobacco stocks were down. Philip Morris took the biggest hit, dropping nearly 5% (down 1 3/4 to 39 15/16.) RJR Nabisco Holdings fell another 5/16 after a substantial slide in previous days.

The public health community, by contrast, was exultant.

“The tobacco industry stands to lose more than we do if they refuse to come back to the table,” said Matt Myers, general counsel for the National Center for Tobacco-Free Kids. “If they want their concerns seriously considered, they need to stop crying and come back and realize [that] they have to do more than they’ve done.”

The only senator voting against the legislation was Sen. John Ashcroft (R-Mo.), who supports the principle of capping damages in product liability cases but objected to the cap on the tobacco industry’s liability because Congress has refused to grant other industries such a cap.

The bill would cap the amount that industry would have to pay in legal damages at $6.5 billion a year. Any damages accrued but not paid in one year would be paid in subsequent years.

Those lawmakers who supported the bill said they did so because they are resolved to stop children from getting hooked on cigarettes. They heeded the request of Committee Chairman John McCain (R-Ariz.) to save their battles over the most controversial provisions for the Senate floor.

“There is no doubt this is only the first round,” McCain said. “But without our completing the first round, there would be no second round.”

The chairman said that Senate Majority Leader Trent Lott (R-Miss.) has promised floor debate on the bill before Memorial Day.

Among the issues that McCain pushed his colleagues to put off until the floor debate was how to spend the $516 billion that would be raised by the bill through the increase in tobacco prices, whether to limit fees to plaintiffs’ attorneys in tobacco lawsuits and whether to cap damages in lawsuits involving products other than tobacco.

Sen. Ron Wyden (D-Ore.), a strong advocate of making the measure even tougher on the tobacco companies, praised the bill’s provisions to regulate tobacco--provisions that he said were unimaginable as recently as four years ago.

“This bill is real progress for public health and the children of America,” Wyden said, echoing the sentiments of many lawmakers.

Other members were far more pessimistic about the eventual fate of the comprehensive legislation. They warned that in trying to win the blessing of the White House and satisfy the diverse interests of the members of the committee, lawmakers had created a complex bill that would be tied up in court for years and might force some of the companies into bankruptcy.

“The committee did not say no to the White House, [it] did not say no to a stream of payments that bear no relation to the demand for tobacco,” said Sen. Slade Gorton (R-Wash.). “By saying no to almost nothing, they guaranteed that the [tobacco] companies would say, ‘We can’t’ settle.’ ”

“Well, we’ve got our pound of flesh . . . but there will not be effective legislation in this field until the president and the tobacco companies sit down and reach an agreement,” Gorton said.

Tellingly, the most heated debate of the day was over whether to add provisions specifying that some of the money should go to miners who contract black-lung disease. Committee members rapidly compiled a list of about 10 “must-have” spending items, including early childhood development funds, research at the National Institutes of Health and veterans’ benefits.

“I really fear we could spend all day on this because everyone here has a different priority,” McCain said. “The reality is this money will be divided when there is a final negotiation between the White House and leaders of Congress.”

Anti-tobacco plaintiffs’ attorneys agreed that in the drive to generate revenue to spend on favorite programs, the committee may be saddling the industry with more than is realistic. Ultimately, Congress will have to moderate its demands to keep the industry viable, said Dick Scruggs, one of the lead plaintiffs’ attorneys.

Scruggs called the tobacco industry the goose whose golden eggs are the huge amounts of money that would be raised by the additional $1.10-a-pack cost of cigarettes. “And the government isn’t going to kill the goose,” Scruggs said.

Overall, the committee held the line on the bill that McCain negotiated behind closed doors over the last two weeks. It rejected amendments proposed by public health advocates to raise the price of tobacco even more, to eliminate the $6.5-billion cap on damages and to toughen the penalties on companies if young people’s smoking rates do not fall to specified targets.

One issue left unresolved by the bill was a section devoted to limits on international marketing of tobacco. That section is slated to be worked out in the next week.