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Lott Backs Off On $50 Billion Tobacco Tax Break Senate Majority Leader, Who Initiated The Deal, Joins 95-3 Vote Against It

Thu., Sept. 11, 1997

Senate Majority Leader Trent Lott, who arranged for a $50 billion tax break for cigarette makers in last month’s budget package, reversed himself Wednesday and voted with a whopping Senate majority to kill it.

Lott, R-Miss., didn’t offer any explanation for the switch. One of his spokesmen, Richard Ball, said he couldn’t comment on the matter.

The overwhelming 95-3 Senate vote to kill the tax break was expected to bolster efforts to eliminate it in the House, where Rep. Nita Lowey, D-N.Y., is sponsoring a similar measure.

The only three Senate votes to retain the tax break were cast by Sens. Jesse Helms and Lauch Faircloth, both North Carolina Republicans, and Mitch McConnell, R-Ky. Their two states are the leading tobacco-growing states.

House Speaker Newt Gingrich, who also supported the tax break earlier this summer, hasn’t announced whether he supports its repeal, said his press secretary Christina Martin.

But Martin was quick to add: “The speaker’s one and only objective is to protect America’s children, and he has no interest in protecting tobacco companies or trial lawyers.”

The White House also indicated this week that President Clinton wants to ax the $50 billion windfall.

Sen. Richard Durbin, D-Ill., who sponsored the legislation to eliminate the tobacco windfall, said the Senate’s overwhelming repeal “sends a clear message to the tobacco companies - don’t try this kind of deception and back-room deal in the future.”

The windfall would have allowed tobacco companies to credit $50 billion in taxes from new excise taxes on cigarettes against what they would pay in the proposed $368.5 billion settlement of anti-smoking lawsuits. That settlement is now pending in Congress.

The Senate voted Wednesday to cap attorneys’ fees that states would pay under the national tobacco settlement. The cap would be set at $250 per hour or $5 million per state, though the Senate voted to exempt previously negotiated contracts from the cap.

Pressure has been building on lawmakers to eliminate the $50 billion tax break for cigarette makers since details about its origin became public last month.

The provision was tucked quietly into the balanced budget legislation passed by Congress in late July and signed by President Clinton last month. However, it became known as a “legislative orphan” because no lawmaker was willing to claim it. It was included without any debate, and many lawmakers say, without their knowledge.

In a news conference after the repeal was passed, Durbin called the 11th-hour insertion of the provision into the tax bill “an example of old-school politics that’s not acceptable any more.”

Sen. Susan M. Collins, R-Maine, co-sponsor of the Durbin amendment, called inclusion of the $50 billion windfall “a back-door, last-minute tax break that was really a late-night deal negotiated in secret with no public debate.”

Collins said the Senate vote to repeal the tax break indicates lawmakers are looking “more skeptically than ever before” at cigarette makers.


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