TOBACCO: Tax Cuts Incorporated Into McCain Bill

      "The Senate on Wednesday wedded tax cuts to anti-smoking legislation with the expectation that the unlikely marriage will eventually break an impasse over the issue," the Houston Chronicle reports. The cuts include a measure by Sen. Phil Gramm (R-TX) to eliminate the "marriage penalty" in the tax code for couples earning less than $50,000 and a provision introduced by Sen. William Roth (R-DE) that allows the self-employed to deduct their health insurance costs beginning Jan. 1. By a 50-48 vote, Republicans defeated a Democratic effort to kill the Gramm amendment, "then formally approved [it] on a voice vote." An alternative Democratic proposal which would have narrowed the eligibility requirements for the tax cut fell 55-43. The cost of the Gramm amendment, "$46 billion over 10 years ... will be paid for by a portion of the revenue raised from the tobacco tax increase" (Roth, 6/11).

Washington Reax
      The Gramm measure was criticized by Democrats and anti-smoking groups who lamented the fact that money was going to be taken from anti-smoking initiatives to fund the tax cut. Sen. John Kerry (D-MA) said, "All of a sudden, the question has to be asked: 'Where is the money to stop kids from smoking'?" (Rodrigue, Dallas Morning News, 6/11). Nonetheless, "White House Press Secretary Mike McCurry said the Republican proposal on the marriage tax was acceptable" (Lipman, Austin American-Statesman, 6/11).

House Opposition
      FNC's Kirtz reported House Republicans are calling the McCain bill "dead on arrival if it eventually gets out of the Senate and to the House, and they're working on an alternative: a stripped-down tobacco bill that wouldn't raise the price of cigarettes by one cent" ("Special Report," 6/10). House Speaker Newt Gingrich (R-GA) said, "I can't imagine why the Republican conference would pass a $600 billion increase in the size of government. It is antithetical to everything we believe in" (American-Statesman, 6/11). The Dallas Morning News reports that at least on the Senate side, the bill now seems closer to passage than ever before. The only issues left to resolve for the leadership are assistance for tobacco-dependent farmers and caps on the earnings that lawyers may reap from the deal. Senate Minority Leader Tom Daschle (D-SD), however, questioned the certainty of passage: "Anybody that would declare victory today would be a fool" (6/11).

Players' Club
      Separate profiles today examine the roles of two key Republicans in the tobacco dogfight: Sen. Gramm and Senate Majority Leader Trent Lott (R-MS). The Washington Times reports that some conservative Republicans "are wondering why" Gramm has helped push the McCain bill along. According to "[s]ome senators and aides," Gramm's marriage penalty amendment "single-handedly revived the tobacco bill" (Roman, 6/11). The New York Times reports that Lott, too, has become one of the critical figures in the debate. His future actions, however, are largely unknown since Lott "has kept his ultimate intentions to himself. Even his closest aides refuse to guess whether he will push the bill to completion" (Mitchell, 6/11).

Polls Stiffen GOP Resolve
      The Washington Times reports that with new public opinion data emerging, the GOP has grown "increasingly confident that the issue does not have the broad political appeal they once feared it had." Not only are voters uninterested in the outcome, but in a recent Republican poll, only 20% of voters said they were interested in cutting teen smoking by raising cigarette prices, while 70% believed the legislation was merely a means to raise revenue. Mike Collins, press secretary for the RNC, said, "The polls show that people are beginning to see right through the promise that you're going to keep kids from smoking by hiking the tax on cigarettes." Thus, the Washington Times reports, GOP senators have been more likely to try to attach their own amendments, such as Gramm's, or to oppose the bill outright (Lambro, 6/11). CNN's John King reported that GOP pollster Linda Divall argues "in a confidential new memo to GOP leaders, 'The power of the teen smoking issue can be completely overwhelmed if Republicans label the legislation a giant tax increase designed to fund new spending programs'" ("Inside Politics," 6/10).

Sen. DeWine Takes A Hit
      Anti-smoking groups openly criticized Sen. Mike DeWine (R-OH) yesterday for his votes supporting the tax-cutting amendments. The Campaign for Tobacco-Free Kids said DeWine's votes were disappointing given his anti-tobacco stance, in that the new measures divert funds from efforts to reduce teen smoking. Matthew Myers, Campaign spokesperson, said, "You can't be serious about reducing tobacco use among children and still vote to divert the funds necessary to carry out that task" (Barton, Cincinnati Enquirer, 6/11).