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
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
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 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. …