The Senate's Tobacco Wad

Editorial
Copyright 1998 Dow Jones & Co., Inc.
Wall Street Journal (May 20, 1998)


As he rose to begin debate on his anti-smoking legislation, Senator John McCain began by announcing: "The lying stops today." On the Senate floor? In truth, demon tobacco has given Washington an almost unprecedented, open-ended opportunity to torture an industry without moral qualm. What's more, with the effort operating inside the modern political sanctum sanctorum of saving "the kids," any normal standards of legislative efficacy are out the window. Amid this moral din, we'd like to make one contrary point about Congress and its tobacco legislation: They're in it for the money.

Just as the tobacco companies market cigarettes to fatten their bottom lines, Washington will use cigarettes to fatten its bottom line. Economically, this is a very elastic product. The McCain bill would represent one of the largest tax increases in memory. It raises at least $102 billion over the next five years, with a third of the price hikes on cigarettes paid by people earning under $15,000 a year. Congress gave up a lot of policy ground to President Clinton last year to cut taxes by $100 billion in the "historic" budget agreement. The McCain bill would take all of that revenue back and create 17 new government panels, boards, task forces and trusts to dole it out. This is progress?

Yes, reducing teen smoking is a worthy goal. So worthy that just this once we'll enact unconstitutional restrictions on advertising. Studies, not to mention 10,000 years of parental experience, show that teenagers are far more influenced by peer pressure than brand-name reinforcing advertising. Canada has recently discovered that raising per-pack prices too high can proliferate a black market of bootleg suppliers. Canada, like Sweden, recently had to lower its punitive cigarette taxes.

Placing on cigarette manufacturers the burden of somehow reducing the consumption of a legal product means, we guess, that all the rest of us are absolved of any responsibility. Off-loading the guilt matters here, too, because a Polling Company survey found that less than 30% of us believe the bill will discourage youth smoking. This subject has come up before. Dr. Louis Sullivan, the then Secretary of Health and Human Services, lamented in 1990 "that we as parents, as educators, as health officials and legislators still do not take the problem of smoking among our children as seriously as we should."

The McCain bill fashions all sorts of parental surrogates. It vests tremendous power with, of all agencies, the Occupational Safety and Health Administration. A smoking ban would be imposed on the areas around entrances to almost all buildings. When President Clinton tried this last year around federal buildings, the uproar forced him to retreat and let each agency set its own policy. Now, chasing nicotine addicts down icy streets will become the country's only legalized hate crime.

Wait till business owners get to experience this provision: The McCain bill allows any private individual or entity to bring an action in U.S. District Court to enforce the restrictions on secondhand smoke. If a violation isn't corrected in 60 days, the courts can impose civil penalties and even direct that those penalties "be used for projects which further the policies" of the bill. The courts can award attorney and expert witness fees, but only for the benefit of successful plaintiffs, not successful defendants. This "half-English" rule is a Republican effort to create lawsuit abuse.

The "public-interest" network is already tapping into this bonanza to make sure none of its members will ever have to get a real job. The National Organization for Women has received $459,779 in federal grants from 1994 to 1997 to discourage women from smoking. It's unclear what expertise NOW brings to this fight, but the group promised to wage a campaign that "links the women's equality movement and the tobacco control industry."

In a more honest political process, someone would at least stand up and propose a complete nationalization of the tobacco industry. But we guess it would offend the Beltway's moral sensibilities if it was capturing 100% of the cash flow from a vice. So we get the McCain bill. We hope as the debate proceeds that at least a few Senators will surface the more egregious hidden agendas, and maybe one of them could put in a word for the Constitution. If in the end the Senate votes through the McCain bill, the Republicans can forget the moral high ground on taxes, because they will have just jumped off of it.

The Senate's Tobacco Wad

As he rose to begin debate on his anti-smoking legislation, Senator John McCain began by announcing: "The lying stops today." On the Senate floor? In truth, demon tobacco has given Washington an almost unprecedented, open-ended opportunity to torture an industry without moral qualm. What's more, with the effort operating inside the modern political sanctum sanctorum of saving "the kids," any normal standards of legislative efficacy are out the window. Amid this moral din, we'd like to make one contrary point about Congress and its tobacco legislation: They're in it for the money.

Just as the tobacco companies market cigarettes to fatten their bottom lines, Washington will use cigarettes to fatten its bottom line. Economically, this is a very elastic product. The McCain bill would represent one of the largest tax increases in memory. It raises at least $102 billion over the next five years, with a third of the price hikes on cigarettes paid by people earning under $15,000 a year. Congress gave up a lot of policy ground to President Clinton last year to cut taxes by $100 billion in the "historic" budget agreement. The McCain bill would take all of that revenue back and create 17 new government panels, boards, task forces and trusts to dole it out. This is progress?

Yes, reducing teen smoking is a worthy goal. So worthy that just this once we'll enact unconstitutional restrictions on advertising. Studies, not to mention 10,000 years of parental experience, show that teenagers are far more influenced by peer pressure than brand-name reinforcing advertising. Canada has recently discovered that raising per-pack prices too high can proliferate a black market of bootleg suppliers. Canada, like Sweden, recently had to lower its punitive cigarette taxes.

Placing on cigarette manufacturers the burden of somehow reducing the consumption of a legal product means, we guess, that all the rest of us are absolved of any responsibility. Off-loading the guilt matters here, too, because a Polling Company survey found that less than 30% of us believe the bill will discourage youth smoking. This subject has come up before. Dr. Louis Sullivan, the then Secretary of Health and Human Services, lamented in 1990 "that we as parents, as educators, as health officials and legislators still do not take the problem of smoking among our children as seriously as we should."

The McCain bill fashions all sorts of parental surrogates. It vests tremendous power with, of all agencies, the Occupational Safety and Health Administration. A smoking ban would be imposed on the areas around entrances to almost all buildings. When President Clinton tried this last year around federal buildings, the uproar forced him to retreat and let each agency set its own policy. Now, chasing nicotine addicts down icy streets will become the country's only legalized hate crime.

Wait till business owners get to experience this provision: The McCain bill allows any private individual or entity to bring an action in U.S. District Court to enforce the restrictions on secondhand smoke. If a violation isn't corrected in 60 days, the courts can impose civil penalties and even direct that those penalties "be used for projects which further the policies" of the bill. The courts can award attorney and expert witness fees, but only for the benefit of successful plaintiffs, not successful defendants. This "half-English" rule is a Republican effort to create lawsuit abuse.

The "public-interest" network is already tapping into this bonanza to make sure none of its members will ever have to get a real job. The National Organization for Women has received $459,779 in federal grants from 1994 to 1997 to discourage women from smoking. It's unclear what expertise NOW brings to this fight, but the group promised to wage a campaign that "links the women's equality movement and the tobacco control industry."

In a more honest political process, someone would at least stand up and propose a complete nationalization of the tobacco industry. But we guess it would offend the Beltway's moral sensibilities if it was capturing 100% of the cash flow from a vice. So we get the McCain bill. We hope as the debate proceeds that at least a few Senators will surface the more egregious hidden agendas, and maybe one of them could put in a word for the Constitution. If in the end the Senate votes through the McCain bill, the Republicans can forget the moral high ground on taxes, because they will have just jumped off of it.

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