IN 1982 there was a big fight over the tobacco price support program. Tobacco-state members of Congress bought their way out of trouble with a promise. They said they had fixed the program so it would never again be a burden on the taxpayers. If any costs were incurred, the farmers would pay.
Of course it hasn't worked. How can a farmer who needs help pay for the help he needs? The program needs to be fixed again, but in neither house were tobacco members foolhardy enough to want to bring a separate bill to the floor this year. So they have gone back-door.
One of the deficit-reducing ideas before Congress now is to keep the cigarette tax at 16 cents a pack next year; it is supposed to revert to 8 cents. Tobacco-state members would normally be expected to resist this -- in the Senate at great length. Instead the tobacco senators, led by North Carolina's Jesse Helms, have offered to behave on the tax, now before the Finance Committee -- provided the committee will slide into its deficit-reduction plans a tobacco bill that, until this week, most of its members had never seen. As an added inducement, some truly exquisite accounting has been done. The bill is a bailout -- the Treasury would have to write off up to $1.2 billion -- but it would be treated as a savings of more than $300 million over the next three years. That is because in theory it would reduce future costs. You write a check and, instead of declining, your bank balance grows. Who can resist that?
The tobacco problem is the same as the problem with other support programs. The support price is higher than the world price, so U.S. tobacco companies are buying increasing amounts abroad. The unbought domestic tobacco then goes to the government. The 1982 proposal was to assess tobacco farmers to pay any losses the government might incur on the surplus, but the surplus is so great the farmers can't cover it. The new plan is to have the tobacco companies buy up almost all the existing surplus. They would pay cut rates; the government would take the loss. The slate would be clean as to the past. The support levels then would be reduced in hopes of keeping it clean in the future. The lower support levels would mean lower future prices; that would be the companies' compensation.
An ingenious idea, economically sound, politically deft. The majority leader supported it; among other things, it saves him a floor fight. Senators love accommodation. By the second day they were arguing not about whether the plan should be adopted but about which committee should be given credit for the "savings," Finance or Agriculture. You see, if the Agriculture Committee is credited, it will have fewer cuts to make in other farm programs. . . .
There is, of course a more fundamental question: why in the first place the government should be in the business of supporting a product that is a leading cause of disease and premature death and major contributor to the burdensome national medical bill. But who has time for that?