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To: Steven Durrington who wrote (1574)	3/30/1998 9:02:00 PM
From: Xpiderman	Read Replies (2) \| Respond to of 1770

McCain Offers Tobacco Industry Liability Cap Monday March 30 7:04 PM EST By Joanne Kenen WASHINGTON (Reuters) - A key Senator Monday proposed granting the tobacco industry a $6.5 billion limit on its legal liability each year, the final step in his bid to craft a bill that would cut youth smoking and transform the business of tobacco. As Senate Commerce Committee Chairman John McCain, an Arizona Republican, announced the last and most controversial section of his bill, the White House lauded it as an imperfect but good first step. The tobacco industry called it "fundamentally flawed" and threatened to fight it. McCain's team of negotiators had gone in circles for days on the vexing liability issue, but Monday settled on a proposal that would give the industry less protection than expected. The industry would have a $6.5 billion limit on how much it would have to pay in legal damages in any one year. But the McCain bill allows all kind of lawsuits, including class actions for past wrongdoing by the industry. In addition, the industry would lose its $6.5 billion ceiling if it missed youth smoking reduction goals by 20 percent. White House Chief of Staff Erskine Bowles said McCain's bill would "lay a strong foundation for further action, but also has room for real improvement." Former Food and Drug Administration chief David Kessler, and former U.S. Surgeon General C. Everett Koop, whose views are extremely influential in Congress, did not endorse the bill but in a statement called it a good start. "There are still some significant weaknesses," Kessler told Reuters by telephone. "But this is a very serious step forward." The White House and Kessler both said they wanted tougher "lookback" penalties if tobacco companies failed to meet youth smoking reduction goals. McCain limited them to $3.5 billion a year. McCain, a conservative Republican, has reached out to Republicans, Democrats, public health proponents and the attorneys general who got the process started with their negotiations with the industry last year. He said he is confident he will get bipartisan support when his committee takes up the bill Wednesday. "We believe that we have the overwhelming majority on both sides of the aisle," McCain told a packed news conference, flanked by prominent lawmakers from both parties on his panel. He also said he has the Senate Republican leadership's commitment to bring the bill to the full Senate. With its estimated $500 billion price tag over 25 years, the McCain bill is tougher than the $368.5 billion deal the tobacco industry negotiated with the states last June. Compared to the June deal, cigarette prices would rise higher and more steeply, by $1.10 over five years, the Food and Drug Administration would have broader authority to regulate tobacco and nicotine, the "lookback" penalties would be higher, and the tobacco companies would also have to observe a code of conduct for international markets. But it does not go as far as many public health groups want. Some anti-tobacco lawmakers hope to raise the cost per pack by $1.50 in as little as two or three years, to strengthen provisions on "second-hand" smoke, and to modify the liability sections. "We believe that the best single way of reducing teenage smoking is through a substantial price increase...There has to be a jolting effect," said Rhode Island Republican Sen. John Chafee, who with Iowa Democrat Tom Harkin co-authored another bill that introduced the idea of a yearly liability cap, and favors raising prices by $1.50 over two years. But the McCain bill goes much further than the industry had wanted. Tobacco lawyer Phil Carlton told reporters the bill would "jeopardize the financial viability of the tobacco industry, cause economic dislocation among those who do business with tobacco companies, impose astronomical price increases on consumers, create a black market and potentially lead to prohibition." "The industry cannot support the fundamentally flawed proposal by the Commerce Committee and cannot take the voluntary actions needed to ensure that such legislation could withstand any Constitutional challenges that lie ahead," he said, implying that the industry might not cooperate with the marketing and advertising restrictions and instead fight it out in court.