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Spokane, Washington  Est. May 19, 1883

Tobacco Deal May Collapse Clinton Under Pressure To Let Deadline Pass

Lauran Neergaard Associated Press

The tobacco deal, lauded as an historic truce just two months ago, now appears to be in serious trouble. Supporters say President Clinton can save it but only if he acts within weeks.

Clinton returns from vacation this week to finalize his decision, and Congress has made it clear that the controversial deal is unlikely to pass this year unless he jumpstarts it quickly.

But Clinton, whose own aides still are fighting over the deal, is under growing pressure to let the deadline pass from critics who say Congress could make a serious mistake by acting in haste.

“My advice would be for Congress to take its time to get this job done right rather than get it done right now,” said Sen. Kent Conrad, D-N.D., chosen to lead Senate Democrats on the issue.

“This has lots of implications for health in this country, it sets precedents for other industries and for the rights of people who’ve been injured,” Conrad said in an interview.

The rising threat of delay poses a quandary for cigarette makers: how to handle their next big lawsuit, set to go to trial in Texas on Sept. 29.

A Texas judge has ordered top tobacco executives into court Monday to answer whether they intend to settle or go to trial, a decision the companies privately say is tough.

They just settled similar lawsuits in Mississippi and Florida, paying those states the billions of dollars they would get anyway if Congress ever passes a national tobacco deal. But with the federal truce stalled, Wall Street experts expect the companies to gamble on winning in Texas.

“There have been some very, very preliminary contacts there” about settling, is all the industry’s chief negotiator, J. Phil Carlton, will say.

But if Congress doesn’t act on the federal settlement this year, it could unravel, Carlton warned. “I think the president of the United States wants to do this thing,” said Carlton, who held 11th-hour meetings with top White House aides last week to press his point.

The proposed national tobacco deal, if ratified by Congress, would settle 40 state tobacco lawsuits by setting new federal policy. Tobacco companies would pay $368.5 billion over 25 years, strictly curb advertising and pay up to $2 billion a year in fines if youth smoking doesn’t drop. In return, they won legal protections and limits on how much the government could regulate nicotine.

But critics say Big Tobacco won too much, and the price tag is emerging as a particular concern: Sources say at least two Republican committee chairmen have joined Democrats in discussing whether cigarette prices should be forced to rise by over $1 a pack to slash teen smoking, instead of the 62-cent increase the deal is expected to cause.

The Clinton administration already has said it will add $50 billion to the deal to compensate for a rebate the tobacco companies won when Congress voted to let them deduct the new 15-cent cigarette tax from any settlement. Clinton also will demand stricter nicotine control and higher youth smoking fines.

But congressional leaders said this week they have no desire to tackle such a complex issue in the two months left in this year’s session, and will try only if Clinton quickly provides a clear outline of a deal that he would sign.

Tobacco companies say if they are forced to wait until next year, the deal will collapse. Why? Minnesota’s lawsuit begins in January, and it is the one the industry most fears.

Industry attorneys are holding daily conference calls to discuss concessions that would persuade Clinton to jumpstart the deal, but say they’ll make no final decisions until the White House tips the industry to the president’s final demands.

“There has been absolutely no agreement to change anything,” Carlton said.

The wait-and-see game is proving tough for the nation’s largest public health organizations who want the deal stiffened but also fear delay could prove a lost opportunity.

“There is a real sense of urgency … and there is concern that if it’s not accomplished this year, it could slip through our fingers,” said Matt Myers of the Campaign for Tobacco-Free Kids.