Clinton Expected to Snub Tobacco Deal

President Clinton today is expected to deliver a largely negative verdict on the $368.5-billion tobacco accord, concluding that it contains constructive elements but can’t meet its own ambitious goals for reducing youth smoking.

Administration officials confirmed that Clinton is likely to call for industry payments and penalties sufficient to raise cigarette prices up to $1.50 per pack to discourage smoking--more than double the price hike required to fund the deal as currently written.

Rather than deliver a point-by-point critique of the deal negotiated among tobacco companies, state attorneys general and anti-tobacco lawyers, administration officials said Clinton will outline general issues that must be addressed in legislation seeking to resolve the industry’s legal and regulatory problems.

Clinton’s refusal to endorse the deal--or furnish a specific blueprint to fix it--is expected to drain the sweeping proposal of what little momentum it may have left. It will certainly extinguish any hope of moving the deal, in amended form, through Congress before it adjourns in late October or early November.

And although efforts at a legislative fix are likely to resume next year, the spotlight now shifts back to the anti-tobacco mega-trials in states around the country that the deal was meant to head off.

Clinton is scheduled to give his long-awaited assessment at a mid-morning briefing in the White House Oval Office. Officials said prominent tobacco foes David A. Kessler, former commissioner of the Food and Drug Administration, and C. Everett Koop, former surgeon general, and Vice President Al Gore are expected to attend.

Clinton’s apparent refusal to embrace the deal is a victory for tobacco foes, many of whom have argued that the settlement is too favorable to the industry and must be strengthened. “The smoke signals from the administration are very encouraging,” said Sen. Edward M. Kennedy (D-Mass.) in a statement issued late Tuesday.

“Much stronger steps are needed to reduce teenage smoking,” he said. “The best and quickest way to achieve that goal is to raise the price of cigarettes by at least $1.50 a pack.”

Industry officials, reportedly briefed on Clinton’s decision, largely withheld comment Tuesday while awaiting his announcement. Asked at a Senate hearing Tuesday if the industry would bolt the deal if Clinton called for a price hike of up to $1.50, R.J. Reynolds lawyer D. Scott Wise said, “I don’t think it makes sense to predict disaster here.” Other industry representatives did not return phone calls.

When negotiators announced the tobacco deal June 20, it was widely hailed as a historic public health achievement. Along with huge payments to reimburse states for smoking-related health care costs, the deal contained an impressive array of anti-smoking measures, including protections against secondhand smoke, severe limitations on cigarette advertising and industry-financed anti-smoking ad campaigns and smoking-cessation programs costing $2 billion per year. The industry was to get permanent relief from massive lawsuits filed by states and private class-action lawyers.

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But tobacco foes--reasoning that anything providing stability to the industry must be bad for public health--quickly exposed a host of perceived flaws, including provisions limiting the authority of the Food and Drug Administration to regulate the nicotine content of tobacco products. And an administration task force led by White House domestic policy advisor Bruce Reed and Health and Human Services Secretary Donna Shalala, last week recommended that Clinton not endorse the deal.

Among other things, Clinton’s advisors concluded that the cigarette price hikes and anti-smoking programs contained in the deal would not achieve the stated goal of reducing smoking by underage youths at least 30% after five years and 60% in 10.

As written, the deal would require tobacco companies to raise cigarette prices about 62 cents per pack to fund the settlement payments. Penalties for failing to meet targets for reducing teen smoking could raise the price up to 8 cents more.

However, Clinton is expected to call for payments and penalties sufficient to boost cigarette prices $1.50 over the next 10 years if the smoking reduction targets are not met.

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The president is also expected to identify several other elements that must be included in comprehensive tobacco legislation, including full authority for the FDA to regulate nicotine, protection for tobacco farmers and their communities, and stronger document disclosure provisions than were written into the tobacco deal.

Clinton has been criticized by congressional Republicans for withholding his verdict so long that legislative action to implement the deal cannot be passed this year. The administration’s review originally was to be completed by late July, a deadline that was extended to mid-August and ultimately this month.

“We need the president to speak out and tell us precisely where he stands and whether he believes there should be an agreement, and an agreement this year,” said Sen. Orrin G. Hatch (R-Utah) last week in a speech to the Senate.

Clinton’s intention to forgo a point-by-point critique has caused further grumbling. Said Senate Commerce Chairman John McCain (R-Ariz) Tuesday at a hearing before the panel: “When the president of the United States does not give us” a specific proposal, “that’s not helpful, either.”

A White House source said the administration had learned from experience “that it doesn’t usually work to send up [completed legislation] on an issue as big as this . . . and ask them to pass it.”