The Republican House leadership attached a controversial $9.6 billion tobacco farmers' relief bill to essential tax legislation yesterday, a step designed to quickly pass a long-stalled measure that is a high political priority in tobacco-growing states.
The bill would pay for the buyout of the crop quotas, which control how much tobacco farmers can raise, with existing excise tax revenue over five years. It would phase out the government-run quota system in effect since the 1930s.
The move was hailed yesterday by Rep. Ron Lewis (R-Ky.), who sponsored the bill and said the White House helped write it. "This is a way to finally get some relief to our hard-hit tobacco growers," Lewis said.
But the move was sharply criticized by tobacco-control advocates and legislators who have worked for several years to couple a grower buyout with legislation that would allow the Food and Drug Administration to regulate tobacco.
Bills with broad bipartisan support -- as well as the backing of the public health community and the nation's largest cigarette maker -- were introduced last month in the House and Senate to join the two issues. Yesterday's House move threatens to derail that effort.
Since the House leadership has decided that the tax bill must be voted up or down as a whole, without changes, members will not be able to debate or vote on the tobacco buyout. The Senate passed its version of the tax bill without the buyout.
Sen. Mike DeWine (R-Ohio), who co-sponsored the Senate version of the combined FDA-buyout bill, said through a spokeswoman that there would definitely be "pushback" from the Senate if the House passes a stand-alone buyout.
Sen. Tom Harkin (D-Iowa) said: "I oppose a tobacco quota buyout that denies Food and Drug Administration oversight of tobacco products. It would be especially wrong to finance a buyout with taxpayer dollars but not regulate tobacco companies in selling their dangerous products."
The tobacco buyout was added yesterday by House Ways and Means Committee Chairman Bill Thomas (R-Calif.) to a bill that repeals export tax subsidies that the World Trade Organization ruled were in violation of international trade rules. With U.S. businesses losing considerable money because of the sanctions allowed by the WTO, the bill is considered to be must-pass legislation.
As outlined in the bill introduced yesterday, the tobacco buyout would be financed with funds from the 39 cents-a-pack federal excise tax on cigarettes. The nation's largest cigarette maker, Philip Morris USA of the Altria Group Inc., has lobbied hard for a buyout that would be funded by the tobacco companies. But other tobacco companies, especially the R.J. Reynolds Tobacco Co., have opposed that position, and the House bill agreed with them.
The Bush administration's willingness to support a tobacco quota buyout represents something of a turnaround. On a campaign swing through Ohio last month, Bush said that he did not think a tobacco buyout was necessary. Those comments were roundly criticized by Republicans in tobacco-growing states.
The Democratic presidential candidate, Sen. John F. Kerry (Mass.), quickly gave his support to a tobacco buyout, but only if it were coupled with an FDA tobacco-regulation bill. Kerry campaign spokesman Anthony Coley said yesterday that Bush is still obstructing the buyout because he is against joining the bills.
"Farmers and their families need a president who will fight for them, not someone who likes to play election-year games and fails to do the work needed to make a buyout a reality," Coley said.
White House spokesman Trent Duffy said that the administration did not help write the House bill and that "we'll reserve comment on the proposal until we see the specifics."
American tobacco growers have been hit hard in recent years by competition from foreign tobacco and by declining cigarette consumption in the United States. U.S. tobacco is generally more expensive because of the quota system, which limits supply and requires growers to buy quota rights to grow their crop. Much of the buyout money would go to holders of the quota rights, which are bought and sold like a commodity.
Although the House leadership has strongly opposed FDA regulation of tobacco, Lewis said he and most other legislators from tobacco-growing states no longer fear giving the agency that authority.
"I could vote for an FDA regulation bill, and I think so could most of my colleagues from tobacco states," Lewis said. "Right now, I think that the FDA regulation stands in the way of getting the buyout passed, and so we should do the buyout now and FDA later."
But legislators who introduced FDA regulation legislation last month argued just the opposite. DeWine, Sen. Edward M. Kennedy (D-Mass.) and Reps. Thomas M. Davis III (R-Va.) and Henry A. Waxman (D-Calif.) said that neither the buyout measure nor the FDA regulation bill could pass on its own, but that both could pass together.
William V. Corr, executive director of the Campaign for Tobacco-Free Kids, called the House bill "a sweetheart deal for tobacco companies and a raw deal for public health, taxpayers and tobacco growers."