Clinton to Include Tobacco Pact Money in Budget

In the budget he will release next month, President Clinton plans to spend $10 billion from the national settlement of legal claims against the tobacco industry.

The only trick: The settlement has not actually been settled.

By including the money in the budget even before tobacco legislation is crafted, the White House is taking a calculated risk that pressure will increase on the Republican-led Congress to pass the comprehensive multibillion-dollar package--or risk taking the political heat in the fall midterm elections if it does not.

“There’s a good prospect we will get a national tobacco settlement,” said Rahm Emanuel, Clinton’s senior advisor, “and, if not, there will be a lot of people with a lot of explaining to do to the American public.”

Yet even as they seek to turn up the heat on lawmakers, some White House aides acknowledge they have put more at stake for the president. With his budget now counting on the money, they believe, Clinton must make the tobacco issue a high priority for the upcoming congressional session.

The fiscal 1999 budget the administration will send Congress in early February assumes that the federal government will collect $10 billion from whatever legislation ultimately is passed, whether it be in the form of excise taxes or “voluntary payments” from cigarette manufacturers. The administration’s budget will outline how the money should be spent--mostly to tobacco-related initiatives previously envisioned by negotiators.

The rest of the money would go to other Clinton priorities that he would define as public health improvements, however, aides declined to detail the beneficiaries or scope of this spending until it is formally announced in the budget.