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Gingrich Reverses Tobacco Stand Speaker Now Favors Repealing $50 Billion Tax Credit For Firms

House Speaker Newt Gingrich, R-Ga., Sunday backed repeal of a $50 billion tax credit for tobacco companies that he and Senate Majority Leader Trent Lott, R-Miss., pushed to include in this summer’s budget deal with President Clinton.

“I would certainly encourage my colleagues to vote to take it out,” Gingrich said on ABC’s “This Week.” “It’s clear that people want to take the provision out. … I am very comfortable voting to take it out.”

Last week, Lott voted with an overwhelming 95 to 3 Senate majority to scuttle the credit, which was intended to reduce the cost of a $368.5 billion national settlement of lawsuits brought against tobacco companies by state attorneys general. The tax break would allow the companies to deduct the amount of revenue to be raised by a 15-cent increase in cigarette taxes from the cost of the settlement. The agreement itself, however, appears to be in serious trouble on Capitol Hill, which also must sign off on it.

Lawmakers are likely to ask House negotiators to accept the Senate provision when House-Senate bargainers meet to resolve differences on the underlying legislation, which would fund the Labor, Health and Human Services and Education departments for the year beginning Oct. 1.

In addition, Rep. Marge Roukema, R-N.J., is leading an effort to have a direct vote in the House on repealing the tax credit. The controversy over the provision is “feeding the cynicism of the American public,” she said in an interview. “It’s diminishing our achievements.”

While calling for the tax credit to be repealed, Gingrich stressed it was included with the clear approval of White House officials. “The Clinton administration understood that provision, approved that provision,” he said. “It was out in the open, people knew about it.”

On the ABC broadcast, Gingrich also backed politically sensitive efforts to allow congressional salaries to go up to keep pace with inflation for the first time since 1993.

“There should be a cost-of-living (increase) for members of Congress and for (federal) judges,” whose pay is linked to lawmakers’ salaries, he said. “It has to be done out in the open, in public, and people have to see the vote if it’s going to happen.”

House leaders are considering a plan to use a routine parliamentary procedure to block an attempt in the House to exempt lawmakers from the automatic 2.8 percent cost-of-living raise they are entitled to by law.

The increase, which the Senate voted in July to cancel, would raise the pay for a rank-and-file lawmaker to $137,340 from $133,600 and the speaker’s pay to $176,302 from $171,500. If the House does not cancel the pay increase, a conference committee will settle the issue.

The speaker also called on Attorney General Janet Reno to appoint an independent counsel to investigate allegations that Vice President Al Gore’s fund-raising activities in the last campaign violated federal campaign-finance laws.

“I see no excuse for avoiding the appointment of an independent counsel because the assertions of potential violation of law are so clear and decisive,” he said.


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