Castor's Role In Bill's Passage Rankles Cigar Industry

Source from:  By BILLY HOUSE The Tampa Tribune Aug 2, 2007 08/03/2007

Skip directly to the full story. More from this channel: Search for more information: Site Search Archives Keyword TBO.com Site Search | Tribune archive from 1990 WASHINGTON - For cigar manufacturers in Tampa and elsewhere, news had been bad enough that Congress wanted to expand children's health insurance with the help of higher cigar taxes. But on Wednesday, just hours before the U.S. House passed such a bill, 225-204, local industry officials absorbed another blow - the Cigar City's own congresswoman on national TV leading the Democratic push for the measure. "We will stand up for our children and the hard-working families of America and fight through all of these delaying tactics," said freshman Rep. Kathy Castor of Tampa, as she battled GOP efforts on the House floor to stall the measure. Back home, local cigar manufacturers were already angry about the bill's proposed cigar-tax increases. They have been predicting dire consequences for their operations in West Tampa, Ybor City and elsewhere in the state. But Castor's high-profile involvement as the Democratic floor leader of Wednesday's debate over attempted GOP procedural delays to the House bill - covered by C-Span - touched an already raw nerve. "I don't think that Congresswoman Castor still understands the devastating impact it would make on our industry," said Eric Newman, president of the J.C. Newman Cigar Co. and president of the Cigar Manufacturers Association of Tampa. "I think it is disappointing - because she represents the Cigar City," he said. The other Tampa Bay area representatives in the House - Gus Bilirakis of Palm Harbor, Ginny Brown-Waite of Brooksville, C.W. Bill Young of Indian Shores and Adam Putnam of Bartow - all Republicans, voted against the measure. Castor's support for reauthorizing and expanding the State Children's Health Insurance Program, known as S-CHIP, was certainly not a surprise. She has been one of its most vocal advocates in Congress. Still, Michael Cusano, president of Domrey Cigar Ltd. in Bradenton, said he couldn't believe that Castor would go so far as to help lead a floor battle on behalf of a bill that includes such a drastic tax hit on a home industry - regardless of how strongly she felt about the bill's overall purpose. "I think it's suicide for her," he said. Castor's chief of staff, Clay Phillips, responded that Castor has worked hard to represent the cigar interests of her district, even as she has been pushing for the expansion of child health insurance. It's just that those efforts haven't drawn as much public attention, Phillips said. He noted that the Senate version of the same bill, expected to pass later this week, would increase S-CHIP funding partly by raising the 5-cent-a-cigar tax to 53 percent of the manufacturing cost - with a cap of $10 per cigar. As of late Wednesday, efforts were under way by Democratic Sen. Bill Nelson, who, like Castor, supports expanding S-CHIP, to lower the cap to $3. By comparison, the House bill to increase S-CHIP funding that was passed Wednesday night raises the 5-cent-a-cigar tax to 33 percent, and sets the cap on a single cigar at no more than $1. Phillips noted that as recently as last week, the House bill's cigar tax had been set at 44.6 percent. Initially, it also had called for raising the 5-cent-a-cigar tax to the same 53 percent tax as the Senate bill and set the same $10 cap per cigar. "Kathy's working hard to balance the interests in her district, and she feels like she's done a good job in helping to move the tax increase from almost 60 percent to 30 percent, and the cap from $10 to $1," Phillips said. "But she also has got to do what's good for kids," he said. The House and Senate bills will eventually have to be reconciled into one version. Norman Sharp, president of the Cigar Manufacturers Association of America, said both bills carry significant tax hits. "But the House version is a lot more realistic, frankly, than the Senate version," he said. Reporter Billy House can be reached at (202) 662-7673 or bhouse@tampatrib.com. HIGHLIGHTS A comparison of health care bills: HOUSE •Expands health care coverage under the State Children's Health Insurance Program from 6.6 million mainly lower-income children currently enrolled to 11 million children. •The program now provides $5 billion a year in block grants to states for health insurance for children and, in some cases, adults who earn too much to qualify for Medicaid but cannot afford private insurance. The House bill would triple spending on it and average $15 billion a year over the next five years. •Raises federal taxes on cigarettes, cigars and other tobacco products. The tax on cigarettes, currently 39 cents a pack, would rise to 84 cents a pack. •Reduces planned payments to health maintenance organizations that offer private Medicare coverage by $157 billion over 10 years. •Increases planned payments to doctors who treat patients under traditional Medicare by $65 billion over 10 years. •Increases subsidies to low-income Medicare beneficiaries for health care and stand-alone prescription drug coverage by $50 billion over 10 years. SENATE •Expands the children's insurance program from 6.6 million enrollees to 9.8 million enrollees, increasing its cost from $5 billion to an average $12 billion a year. •Raises federal taxes on cigarettes, cigars and other tobacco products. The tax on cigarettes would rise to $1 a pack. A wire report Enditem