Source:Orange County Registernews,page 13
Contact:(letters@link.freedom.com)

POLITICS:Provision in the recent taxandbudget package would save
the industry $50 billion.
By DAVID HESS
KnightRidder Newspapers

WASHINGTONThe Senate voted Wednesday to undo a $50 billion
tobaccoindustry break that had been slipped into the taxcut bill
signed into law last month.

Voting 953 to repeal the provision barely after the ink had
dried,senators agreed to an amendment that unraveled what sponsor
Richard Durbin,DIll.,called"a sweetheart deal" for the industry.

But the repeal was nearly derailed by an amendment from Sen. Jeff
Sessions,RAla.,who triedand nearly succeededin limiting the fees that
can be collected by attorneys hired by the states to press damage claims
against the tobacco industry.

The Senate's vote on Durbin's amendment reflected unhappiness with the
tax break and disdain for the manner in which it was planted in the tax
bill by industry lobbyists, with a boost from House and Senate
leaders,without the knowledge of most members in either house.

Durbin accused the backers of the tax break of "playing old politics by old
rules."

A similar repealing provision in the House, sponsored by Rep.Nita
Lowey,DN.Y., faces formidable opposition from House leaders,who view it
as a violation of the taxandbudget agreement reached between
congressional Republicans and President Clinton in late July.

House Speaker Newt Ginrich,RGa.,has defended the tax break as fully
warranted and insisted that White House negotiators knew it was in the
final version of the tax bill.

Since then,however,Clinton has repudiated the tax break,giving heart to
Durbin and his allies who feel the administration's turnaround practically
assures the repeal.

Under a major settlement forged in June between the industry and 39 states
and Puerto Rico,the tobacco companies agreed to pay the states about $368
billion over 25 years to compensate them for Medicaid money they spend to
treat smoking victims.Part of the money also would be devoted to programs
that discourage smoking among young people.

When the taxandbudget package emerged for votes in the House and
Senate,it contained a provision permitting the tobacco companies to credit
the money paid under a new 15cent hike in federal tobacco taxes against
the $368 billion going to the states.That tax break was estimated to reduce
the industry's total liability by about $50 billion.

And it was incorporated in the tax bill without notice,hearings or
warning.