Tobacco Wars Head to Final Battlefield Hearings This Week Offer Preview of Future Fight in Congress over Tobacco Settlement

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Congressional hearings this week have made clear that the tobacco deal negotiated last spring between the states and the Big Four cigarette companies will be one of the most controversial issues Congress takes up next year.

While the deal was negotiated at the state level, many of its provisions require new federal legislation. President Clinton has already asked for changes. Now, federal lawmakers must tackle an unusually complex combination of issues in several bills in what is shaping up as a many-sided struggle - and they will have to do so in a highly charged election-year atmosphere.

Should Congress reach a consensus - by no means certain - it will set far-reaching policies with long-term economic, legal, and social consequences. The process will involve interest groups that the political parties count among their major contributors: tobacco companies in the case of Republicans and trial lawyers on the Democratic side. The end result could vary significantly from the package negotiated by state attorneys general and Big Tobacco. Many on Capitol Hill, for example, want cigarettemakers to pay more. In an early dispute, the federal government and the states are arguing over the huge pot of funds tobacco firms have agreed to pay as part of the proposed settlement. "These settlements are not windfalls for the states - they have done the work and taken the risks and deserve to reap the rewards," argues Rep. Michael Bilirakis (R) of Florida, who chaired some of this week's House hearings into various aspects of the settlement. The deal was reached in June after some 40 states filed lawsuits against cigarette manufacturers. It requires tobacco companies to pay the states $369 billion over 25 years - about $100 billion more than the nation's annual defense budget. The state-federal dispute over divvying up the money began Nov. 3, when the Health Care and Financing Administration (HCFA) wrote to all 50 states declaring that federal law requires Washington to get half the payments. The states howled in protest. "Medicaid recovery was only a small piece of our case," says Gov. Lawton Chiles (D) of Florida. "The bulk of the money we won in the settlement is paying the state back for the fraud, deception, and racketeering that the tobacco companies perpetrated on the people of Florida." Resolving the dispute is Congress's job HCFA administrator Nancy-Ann Min DeParle took a conciliatory tack at this week's hearings, echoing Mr. Clinton's request that Congress resolve the issue. Representative Bilirakis has introduced a bill that would let states keep the payments. As part of the settlement, the states have already agreed to use some of the money to support federal antismoking programs. But money is just one concern confronting lawmakers here. The hearings also looked at the issue of reducing teen smoking, which Clinton calls his "overriding goal" in any final package. …