Tobacco Buyout Faces Hurdles

Source from:  By JOHN WAGNER, Washington Correspondent 06/14/2004

Senate OK, Bush signature are iffy A key congressional panel is poised to sign off Monday on a $9.6 billion government buyout of tobacco farmers and quota holders. But whether the action proves to be a seminal moment -- or just another in a long series of frustrations for the ailing leaf industry -- remains far from certain. Lawmakers from North Carolina and other tobacco states have persuaded leaders of the House Ways and Means Committee to include a buyout in a larger corporate tax bill that the panel is scheduled to consider late Monday afternoon. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/reg-569484-330076.jpg] If all goes according to plan, the full House could pass the legislation by the end of next week. From there, however, the competing interests of farmers, tobacco companies, health advocates and anti-tax conservatives make it much harder to predict whether the bill will ultimately land on President Bush's desk with the buyout intact. "We're further along than we've ever been. That's a hopeful sign," said Rep. Bob Etheridge, a Lillington Democrat who spoke at a meeting Friday of flue-cured tobacco farmers in Raleigh. "But it's way too early to celebrate. There's an awful lot of hurdles we've still got to get over." Chief among those is the divisive issue of whether to give the Food and Drug Administration the power to regulate tobacco products. Unlike some previous efforts to end the Depression-era tobacco program, the version of the buyout that will be considered Monday does not grant the FDA new authority. In the past, that would have been a deal-breaker when the bill reached the Senate: Key lawmakers there have vowed that the only way a buyout will pass their chamber is if the legislation does include the new FDA authority sought by anti-smoking groups. Buyout advocates, however, say the dynamic could be different now because the buyout is just one provision in a much larger bill -- and will not be voted upon as stand-alone legislation. The House bill to which the buyout is attached originated as a way to resolve a trade dispute between the United States and the European Union. Now loaded with many unrelated provisions, the legislation is estimated to include more than $150 billion in tax breaks and spending. The Senate has already passed its version of the bill, without a buyout attached. As a result, the final form of the bill -- and whether it includes a tobacco buyout -- could be decided by a conference committee consisting of negotiators from both chambers. Both the full House and Senate would then have to approve the legislation again, without the opportunity for amendments. "Hopefully, the buyout provision can stand in the bill without FDA and pass," said Brian Nick, a spokesman for U.S. Sen. Elizabeth Dole, a North Carolina Republican who made a buyout a central campaign promise in 2002. But some of Dole's Senate colleagues clearly do not share that view. Filibuster possible Jim Manley, a spokesman for U.S. Sen. Ted Kennedy, a Massachusetts Democrat, would not rule out a filibuster to keep the tax bill from reaching the Senate floor if it includes a tobacco buyout without FDA regulation. "Senator Kennedy believes he cannot in good conscience allow the buyout to go forward without giving the FDA the authority to protect children from tobacco products," Manley said. "We're still exploring our legislative options. It remains to be seen what our strategy will be." The latest version of the buyout faces several other possible snags as well. The bill would pay quota owners $7 per pound that they were allowed to grow in 2002. Growers would receive $3 per pound. Of the total payments, experts say, about 40 percent would go to North Carolina's roughly 8,000 tobacco farmers and 80,000 quota holders. The buyout's cost would be paid by taking 10 cents of the current 39 cents-per-pack federal excise tax on cigarettes. The lost revenue would be offset by customs fees, lawmakers said. That is a big difference from some versions of the buyout, which called for cigarette companies to bear the cost. Some conservatives have already voiced concerns about the new version of the buyout, including Senate Finance Committee Chairman Charles Grassley, an Iowa Republican who shepherded the Senate's version of the tax bill through the chamber last month. President Bush's position on a buyout also remains something of a mystery. While campaigning in Ohio last month, Bush appeared to oppose farmers' efforts to secure a buyout, saying "they've got the quota system in place, the allotment system ... and I don't think that needs to be changed." A White House spokesperson has declined repeated requests to clarify Bush's position. Burr optimistic U.S. Rep. Richard Burr, a Winston-Salem Republican, said in an interview this week that based on "ongoing conversations" with White House officials, he is optimistic that Bush would sign the bill containing the buyout that will be considered Monday. Democrat Erskine Bowles, Burr's likely opponent in this year's U.S. Senate race in North Carolina, renewed his call for a buyout Friday during an appearance at a meeting of the Flue-Cured Tobacco Cooperative Stabilization Corp., the same group that Etheridge addressed. Meanwhile, a spokesman for U.S. Sen. John Kerry, the presumptive Democratic presidential nominee, said the new buyout proposal amounts to "election-year games." "Republicans know good and well that a buyout without FDA regulation of cigarette manufacturing doesn't have the votes to get through Congress," Kerry spokesman Anthony Coley said. "They should stop playing games with people's lives and work to build a consensus that gives farmers, quota owners and their families relief from the government's outdated quota system." Rep. Mike McIntyre, a Lumberton Democrat and chief buyout proponent, sounded more optimistic about the current bill's leading to a buyout. He likened the unfolding process to a football game. "We've been sitting on the bench, waiting our turn," he said. "Now we're off the bench, moving the ball forward. ... We may not know what happens until the fourth quarter." Enditem