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If the tobacco settlement becomes law_ taxpayers could be the big


									                                                                        -12-                                                                      AUG 1 2 1897
                                                         BUSINESS WEEK / AUGUST 25. 1997

     News: Analysis & Commentary                                                                                                 S3113y

     If the tobacco settlement becomes                                                            «

     law, taxpayers could be the big losers                                                           •'   « * & •
                                                                                                                               £ — . J.              >**•'
                                                                                                                                                     « •

                                                                                                                                             *i              «*i

               he best place to glimpse the fu-      anced-budget agreement signed into
               ture of the proposed $368.5 bil-      law on Aug. 5, the companies got a
               lion tobacco settlement could be      $50 billion windfall. That's the amount
               Pascagoula. Miss. That's where        new cigarette taxes will raise, and                             «i|
               years of legal battles paid off for   the budget agreement says tobacco
     tobacco's adversaries on July 15: $170          can deduct that amount from what
     million was deposited in Pascagouia's           it will owe if the settlement becomes
     SouthTrust Bank, the first installment in       law. That provision followed a 6-                                            II
     Mississippi's $3 billion settlement with        month period in which tobacco com-
     the industry.                                   panies gave nearly $2 million in
          Now the question is: What should            unregulated "soft money" to national
     Mississippi, the first state to settle with      political parties, according to Common
     the tobacco industry do with the money?
     FATAL FLAW. The answer will echo
      around the nation, if Congress adopts
      the global tobacco settlement reached
                                                      Cause. About $1.6 million went to Re-
                                                      publicans. Philip Morris Cos. led the
                                                      pack, giving $794,500—$673,700 of it to
                                                                                                           J". 2 3

                                                                                                 for the nation's
      by 40 state attorneys general and the               Worse, critics say as much as one-     health. Mississippi
      tobacco industry on June 20. The agree-         third of the money in the settlement       Attorney General
      ment will likely undergo extensive re-          won't come from the tobacco industry at    Michael Moore,
      vision. But using the present settlement        all: Some $140 billion could come out of   the prime mover
      as a framework, a growing chorus of             the pockets of U. S. taxpayers. That's     behind the deal,
      critics is starting to follow the money—        because the agreement says all pay-        has called it "the
      and they're finding a fatal flaw. Thanks        ments "shall be deemed ordinary and        most historic pub-
      to vague wording in the settlement,             necessary business expenses"—meaning       lic-health achieve-
      much of the money could be misspent,            they are tax deductible. So the industry   ment in histo-
      they say, doing little to meet the deal's       will get a tax break equal to about one-   ry." Moore later
      supposed goals: to improve public health        third of what it pays, or roughly $140     broke ranks to
      and compensate tobacco victims. Now             billion. 'This settlement represents the   settle—but it's
       those critics are worrying that what           biggest single subsidy of the tobacco      not clear he will achieve much for
       first looked like a landmark public-health     industry ever," says Stanton A. Giants,    public health. 'There are those
       achievement could become a public-pol-         a professor in the cardiology depart-       who say the whole purpose of the
       icy nightmare.                                  ment at the University of California at   suit was to repay the Mississippi
          Already, tobacco has quietly won an          San Francisco.                            taxpayer." says State Senator
       extremely lucrative prize: In the bal-             The pact is being sold as a victory     Dick Hall, chairman of the Mis-

       FOLLOW THE MONEY                                                             $25 BILLION                       $4 BILLION
       Tobacco's $368.5 billion pre imseii sottk-miMit vum tlte             PUBLIC HEALTH                        A YEAR FOR
                                                                            TRUST FUND                           TOBACCO VICTIMS
       states is to be distributed t" wet mis. stau* coffers ami                                                 Details of how victims will
                                                                               Decisions about how this
       such things as antismokintf '"impawns and research, in                  will be used for tobacco-         be compensated and what
       varying amounts from year < year. But it s not clear the                related research have not yet     the money can be used for
       settlement's goals will be met.                                         been made                         are still unclear
                                                                   -13-                                                  AUG 1 2 1987

 ID y a i n i d                                                                                                     AUGUST 21--. i r J 9 /

                                                      sissippi Senate appropriations             and additional money for other tobacco-
                                                      committee.                                 control programs. But Robin Hobart.
                                                          The issue is so politicized that       co-director of Americans for Nonsmok-
                                                      Hall cant even move the money              ers' Rights in Berkeley, Calif., says it's
                                                      from Pascagoula to Jackson, the            not enough. "The $200 million we now
                                                      state capitaL "The attorney gen-           spend for tobacco control is just a drop
                                                      eral is from Pascagoula, and the           in the bucket."
                                                      lead attorney, Dickie Scruggs, is              The ads contemplated in the settle-
                                                      from Pascagoula, and I guess they          ment may also be vulnerable to an in-
                                                       just wanted it down there," he            dustry attack In Massachusetts, which
                                                         says. When the money reaches            has an ad program like California's, the
                                                           Jackson, he fears that 'It will       industry has lobbied to cut funds for
                                                            be a feeding frenzy." And as         the ads and has even threatened to sue
                                                              Mississippi goes, so may go        the state for defamation, says Gregory
 m-                                        m                   the nation.
                                                                Tobacco isn't winning every
                                                                                                 Connolly, who oversees the Massachu-
                                                                                                  setts Tobacco Control Program. "If you
                                                       battle. On Aug. 6, a Florida court        think the industry is going to sit back

 ifl             •   :
                         i ^
                                                      ordered the release of key industry
                                                        documents. But the industry's loss-
                                                         es are few and far between. Even
                                                                                                 and let opponents run aggressive anti-
                                                                                                  smoking ads without fighting back,
                                                                                                 you're crazy."
                                                          the deal's defenders are con-           MAJOft m o u r n . The settlement does
                                      /w                   cerned tobacco is winning too
                                                            much. "A lot of issues still
                                                                                                  have its defenders, of course. One is at-
                                                                                                  torney John P. Coale, who represents
                                                             haven't been settled. This is        smokers in 26 state class actions. He
                                                              all very murky," says William       notes that the deal could overwhelm the
                               * •
                                                               D. Novelli, president of the       U.S. tort system. Tort payouts now total
                                                                National Center for Ibbacco-      about $3 billion annually, he says. The
    ..• Hiti •                                             Free Kids, who helped negotiate        settlement could dump $5 billion into the
                                                    the deal He believes the deal's prob-         system—dwarfing all other cases. Coale,
                                                     lems will ultimately be solved.              a lead negotiator in the agreement,
                                                          State officials even disagree about     doesn't know how the money will be
                                                       whether their share should be used         divvied up. But he's confident it will go to
                                                        for public health. Some, such as          "the things that everyone agrees on... in
                                                         New York Attorney General Den-           the end the country gets helped."
                                                         nis Vacco, argue that states should          But not everyone agrees. A major
                                                          be able to use their awards on          problem with the agreement is that
                                                          anything they like. Others, such        Congress has control over how much
                                                as Minnesota Attorney General Hubert              the tobacco industry should pay. And
                                                H. Humphrey III, a critic, believe the            Congress has proved remarkably inef-
                                                money must be "used for the public                fective at taking any punitive action
                                                health and notfixingpotholes," says his           against the industry. Besides, congres-
                                                spokeswoman. Holly Ziemer.                         sional paralysis was precisely what the
                                                   There are other controversies. The              agreement was supposed to surmount.
                                                       settlement allocates about $1 bil-          That's why the state attorneys general
                                                       lion, for example, to antismoking           took matters into their own hands. Now
                                                      efforts. But the funding may not             that their deal has moved to Congress,
                                                      be effective, critics say. According to      tobacco has already won a $50 billion
                                                     one proposal, much of it "would go            prize in the congressional halls and
                                                     to pharmaceutical companies and the           cloakrooms it knows so well. That little
                                                    medical industry" for free chest X-            victory is a warning sign that, settle-
                                                   rays and free nicotine patches for              ment or no, the tobacco industry wont
                                                   smokers who want to quit, says                  fade quietly away.
                                                  William Godshall, executive director                By Paul Raeburn in New York, with
                                                  of SmokeFree Pennsylvania.                       John Carey and Susan Garland in
                                                     The agreement provides for $500                Washington. Amy Barrett in Philadel-
                                                 million for an antismoking ad campaign            phia, and Mike France in New York

      $1 BILLION                        •SHOO   MILLION                  S-'H) MILLION                  I I P TO $15 BILLION
A YEAR FOR TOBACCO                   A YEAR FOR FEDERAL            A YEAR FOR                    THE GRAND TOTAL
CESSATION PROGRAMS                   HEALTH AGENCIES               ANnSMOKlNG ADS                States would get the balance
Could be gobbled up by the   Unclear how this money                Far too little to establish   of the annual payments and
pharmaceutical industry with would be spent and who                effective programs like those be free to use the money for
little ultimate effect on    would make the actual                 now operating in California   anything from public health
smoking rates                spending decisions                    and Massachusetts             to potholes

                                                                                       *        r •
                                                                                                                      AW        \imi

 Economic Viewpoint

                                       W            hen tobacco executives, state attor-
                                                    neys general, and public-health ad-
                                                    vocates announced their 25-year
                                       deal on June 20, it seemed an extraordinary
                                       coup. The industry gave up a $368.5 billion
                                                                                                The $5 billion annual cap on claims, com-
                                                                                            bined with a $1 million ceiling on individual
                                                                                            suits, means as few as 5,000 claimants a year
                                                                                            could collect. Several arcane provisions would
                                                                                            discourage litigation. For example, a special
                                       pot for victim compensation and antismoking          panel of three federal judges would have to
                                       education. It got a cap on liability and a delay     approve access to documents that the indus-
                                       in nicotine regulation. Tobacco stocks rallied.      try claims are privileged. Litigation would
                                           But the settlement is backfiring on the in-      have to pass through the eye of this needle.
                                       dustry, as well it should. Private deals such as*    The deal also bans most class actions.
                                       this are a bad way to set regulatory policy.         SACKED TENETS. As the antitobacco side took
                                       The costs of smoking-related illness were $38        a closer look at the details, one supporter af-
                                       billion in 1995 alone, while the deal covers         ter another has defected. Apart from its de-
                                       only about $8 billion a year, adjusted for in-       tails, the deal was dubious all along on two
                                       flation, according to recent Senate testimony        key grounds of process. The parties got to-
                                       by Jeffrey E. Harris, a physician and econo-         gether, in secret negotiations, to settle a ma-
                                       mist at Massachusetts General Hospital and           jor issue of public-health policy. Congress, a
                                       Massachusetts Institute of Technology. To-           bystander, was supposed to sign on the dotted
BAD ODOR:                              bacco came to the table only because tort lit-
                                       igation against tobacco was at last making
                                                                                            line. This was not exactly what the framers of
                                                                                            the Constitution had in mind, nor is it the role
The parties                             headway. It was the litigation that uncov-
                                        ered the most damaging documents on what
                                                                                            Congress fancies for itself. The deal mocks
                                                                                            one of the sacred tenets of law and economic
met in secret                           the industry knew and what it concealed.
                                        Courtroom sympathy is shifting dramatically
                                                                                            theory, which holds that private parties, on
                                                                                             their own, will reach efficient bargains. In
to settle a                             to plaintiffs. Only last week, a Florida trial
                                       judge ruled that the industry's favorite de-
                                                                                             this case, the absent party was the public,
                                                                                             and the deal reached precludes the future
major issue of                          fense—that the public was well aware of the
                                        hazards of smoking—could not be used in
                                                                                             use of the common law for future redress.
                                                                                                 Second, it is bizarre to design a product-li-
public-health                           that state's Medicaid reimbursement suit.
                                            The more headway made by litigation, the
                                                                                             ability cap for one industry. The Supreme
                                                                                             Court recently threw out the proposed mass
policy-not                              less reason antismoking advocates have to
                                        settle. After all, the industry exists to sell
                                                                                             settlement of asbestos claims, on the grounds
                                                                                             that one group of negotiator could not prop-
                                                                                             erly abrogate the rights of those not at the
quite what the                          cigarettes. The more insulated the industry is
                                        from litigation and regulation, the more to-         table. And if the tobacco industry, of all in-
                                        bacco it will sell. The industry has a long          dustries, gets a cap on product liability, why
framersofthe                            history of turning "constraints" to its advan-       shouldn't more deserving groups, such as auto
                                        tage. Package warnings, hailed as a public-          makers or toy manufacturers, get one, too?
Constitution                            health advance in the 1960s, became the basis            Others in the business community are in a
                                        for defeating lawsuits. The ban on TV ads            quandary. Should they support their tobacco
had in mind                              spurred a generation of tobacco-sponsored
                                         events and product-placement strategies.
                                                                                             brethren, hoping the pact will set a precedent
                                                                                             for similar product-liability agreements? Or
                                         Ptn, DREAM. The deal, of course, requires           should they shun this deal because its obvious
                                         ratification by Congress, since only Congress       failings are giving anticorporate Naderism a
                                         can delay or hobble the Food & Drug Ad-             boost? Business would be wise to treat Big
                                         ministration's efforts to gain authority to reg-    Tobacco like, well... like a cancer.
                                         ulate tobacco as a drug, and only Congress              This deal is billed as the best trade-off ob-
                                         can change the product-liability rules. The          tainable, but a regulated industry should not
                                         industry thought state attorneys general and         be given a veto over the acceptable terms
                                         public-health advocates would troop to Capitol       of regulation. Many of the public-health pro-
                                         Hill to bless the deal—a pipe dream. The             visions of the deal that step up antismoking
                                         proposal smoked out much tougher opposi-             campaigns and restrict tobacco marketing are
                                         tion by former Republican health appointees          admirable. They should be enacted—and pri-
                                         C. Everett Koop and David A. Kessler, as             vate antitobacco litigation should continue. In
 Robert Kuttner ts co-editor of The
 American Prospect ana autnor of The     well as new demands from mainstream health           a few years, we can revisit a settlement with
 End of tn$$ez-Fatre                     organizations and the Administration.                a deservedly weaker tobacco industry.

                                                                 -15-                                             AUG 1 2 1997

                                                     BUSINESS WEEK                        MONDAY AUGUST 18/ 25. 1997

  Letter From North rarolina
                                                                                             foreign growers can't match the quality
EDITED BY SANDRA DALLAS             \w£-u                                                    of the bright leaf grown in North Car-
                                                                                             olina or the rich burley from the Vir-
                                                                                             ginia and Kentucky foothills, he says.
                                                                                                There's also concern about what the
                                                                                             agreement will do to the complex price-
TOBACCO COUNTRY FACES                                                                        support system that keeps auction
                                                                                             prices high. Under one of two surviving
                                                                                             New Deal-era agriculture-support pro-
LIFE AFTER TOBACCO                                                                           grams (the other is for peanuts), fann-
                                                                                             ers are allotted a certain number of
                                                                                             acres, usually 50, for tobacco. The al-
                                                                                            lotments, which are enforced by the fed-
                                                                                            eral government, can be rented. The
                                                                                            program started in 1938, when tobacco
                                                                                            was a penny a pound, partly to squelch
                                                                                            any attempts by cigarette makers to
                                                                                            snatch up foreclosed farms and monop-
                                                                        r"-                 olize tobacco growing, Last year, tobac-
                                                                                            co was $1.92 per pound. "The tobacco
                                                                                            program tends to preserve small farms,"
                                                                                            says Blake Brown, a professor of agri-
                                                                                            cultural economics at North Carolina
                                                                                            State University in Raleigh.
                                                                                               But if the support program becomes
                                                                                           a victim of political fights expected over
                                                                                           the proposed tobacco deal* prices could
                                                                                           drop by as much as 50c, driving many
                                                                                           of those small farmers out of business.
                                                                                           As a large farmer, Griffin probably could
                                                                                           hang on, though his income would drop.
                                                                                           BOO WASTE. Griffin's greatest uncer-
                                                                                           tainty, however, is what would happen if
                                                                                           the settlement becomes a first step in
                                                                                           banning tobacco outright. The Tbbacco
                                                                                           Belt's sandy, loamy soil, along with the

T       he breeze that blows in from the
        stand of loblolly pines is hot, so
        there's no relief from the blazing
Carolina sun. Steve Griffin bends over
                                             LOOKING FOR ANSWERS
                                             The proposed $368 billion deal
                                             may change, says farmer Griffin,
                                                                                           hot humid climate, is perfect for grow-
                                                                                           ing tobacco. But it can't grow much
                                                                                           else. There's cotton, but North Carolina
                                                                                           farmers who have switched find that
one of the chest-high tobacco plants         "but in any event, it's bad for us.           their quality cant compete with cotton
stretching in straight rows in his dry       The question is just how bad"                 from Texas, the country's biggest grow-
field. He looks at the flowering top,                                                      er. And while Griffin plants 100 acres of
touches a silky green leaf. "NahV' he        than all hia other products combined—         cotton—the same acreage as tobacco—
says, "too early. Maybe next week, if        cotton, peanuts, oats, com, soybeans,         he makes only a traction as much from
we get some rain."                           timber, and wheat. "The deal may              iU Another possibility is livestock, es-
   It's a critical time for Griffin's 100-   change, but in any event, it's bad for ua.    pecially hogs. Since 1990, hog farms
acre tobacco crop. Spring was cool and       The question is just how bad" he says.        have made their mark on the North
wet on his 1,025-acre family farm in            Cigarette manufacture* have a cush-        Carolina landscape. But hog waste has
this Big Swamp community six miles           ion in robust demand overseas, notably
north of the small town of Washington,       in Europe and Southeast Asia, which
on the eastern edge of North Caroli-         counters flat domestic consumption. And
na's tobacco belt Then suddenly, sum-        promising new markets are opening up
mer's heat steamed in. Tobacco is a          in Russia, China, and Vietnam as smok-
hardy plant that can take climatic ex-       ers switch from heavy-tasting local
tremes. But these days, it's the political   brands to America's milder cigarettes.
winds that threaten North Carolina's         So tobacco companies are churning out
tobacco crop. Growers have battled anti-     more cigarettes than ever before.
smoking forces for decades, but now,            But that's little comfort for. growers
with the proposed S368 billion settle*       such as Griffin. They face strong com-
 ment between state attorneys general        petition from farmers in BnuriC Zim-
 and cigarette makers, they're asking        babwe, and China. Griffin fumes that if
 themselves if this is the end for them.     the tobacco deal kills U.S. demand by
     What's at stake for Griffin, 44, is     making cigarettes too expensive, U.S.
 two-thirds of his $750,000 annual gross     cigarette makers, left with only overseas     ftmsif
 income. In a good year, his 100-acre to-    smokers, will shift wholesale to buying       h**.m .«a-.1
 bacco quota brings in $500,000, more        foreign tobaccos. It won't matter that
            PAGE A16 / FRIDAY. AUGUST 15,1997 *                                                                          gfrc IPogftmgton gimeg

BRUCE BARTLETT                                                                          WILLIAM RUSHER

W                                               Back home explaining the 'dream deal'
              ith Congress in recess,
              representatives and sen-
              ators of both parties have
              fanned out across the
country singing the praises of the
tax and budget package signed into                                                                                                                                          have actually heard some usually
law by President Clinton last week.                                                                                                                                         sensible conservatives advocating
However, they are likely to find                                                                                                                                            that course. But the last time they
average Americans far less enthu-                                                                                                                                           tried that it was a public relations
siastic about the deal that House                                                                                                                                           disaster, and it would be again.
Budget Committee Chairman John                                                                                                                                                   Instead, the Republican con-
Kasich called "a dream come true."                                                                                                                                          gressional leaders labored long and
In fact, the more they explain the                                                                                                                                          hard, and finally won agreement
details of the legislation to their con-                                                                                                                                    on some extremely important mea-
stituents, the more likely members                                                                                                                                          sures. There will be spending cuts
 of Congress are tofindsupport for                                                                                                                                           totaling S263 billion, albeit mostly
 their efforts evaporating.                                                                                                                                                  in the "out years." Beginning much
     lb start, the tax cut is minuscule                                                                                                                                      sooner, there will be some major tax
 and targeted so most Americans                                                                                                                                              cuts, totaling $152 billion over five
 will see no reduction in their taxes                                                                                                                                        years. Among these will be a lower
 at all. Virtually all of the tax relief                                                                                                                                     capital gains tax and a $500 per
 is aimed at children, in the form of                                                                                                                                        child tax credit for families with
 a S500 credit and tax cuts for edu-                                                                                                                                         school-age children — the latter
 cation expenses. Together, these                                                                                                                                            targeted directly at the middle class
 provisions accountfor82 percent of                                                                                                                                          by the Republicans, even though
 the total tax cut. Thus, anyone with-                                                                                                                                       the Democrats managed to extend
 out children under the age of 17 or                                                                                                                                         it downward. Finally, the Republi-
 in college is basically out of luck.                                                                                                                                        cans imposed at least the concept of
      But even if you have children of                                                                                                                                       the desirability of balancing the
 the right age, you may still miss                                                                                                                                           budget, which will henceforth be a
 out. That is because there are                                                                                                                                              truism in congressional debates.
 income limits on the availability of                                                                                                                                            Not a single one of these things—
 the child credit and education pro-                                                                                                                                         not the spending cuts, not the tax
 visions. Couplesfilingjointly lose                                                                                                                                          cuts, not a balanced budget, not
 the child credit at an income of                                                                                                                                            even last year's welfare reform —      -
  SI 10,000, single heads of house-                                                                                                                                           would have been accomplished if
  holds lose the credit at S75,000, and                                                                                                                                       the Democrats had controlled Con-
  couples filing separately lose the                                                                                                                                          gress: They had 40 yean, and blew
  credit at SS5,00Q. Income limits for                                                                                                                                        them all. These are Republican
  the education incentives are even
  lower, with eligibility phasing out at
  an income of just $40,000.
                                                   Offsetting all of mis will be high-
                                                er taxesforairline tickets, for smok-
                                                ers and for many businesses.
                                                                                          Overcoming the odds                                                                 goals, and only their wide popular-
                                                                                                                                                                              ity dragged President Clinton and
                                                                                                                                                                              most congressional Democrats,
                                                                                                                                                                              kicking and screaming, to the point

       Ironically, with all the talk of tax     Indeed, much of the cigarette tax                      ount me among those who
  cuts, the effect of tmpoauig phase-           increase will fall on people with                      consider the budget deal as,   We have a Democratic of supporting them.
  outs is to raise marginal tax rates for       incomes too low to qualify for the                     on balance, a good thing.                                                  Not surprisingly, public approval
  many taxpayers. The child credit is           child credit And the higher taxes on                     I am under no illusions      president, and the                      of Congress has promptly risen to
  reduced by $50 for each $1,000 of             airline tickets will fall dispropor- about the phoniness of large parts               country will keep on                    the highest levels in many years,
  income above the cap. This is equiv-          tionately on those flying in economy of it. Most of the big spending cuts                                                     and it is widely conceded that the
  alent to a marginal tax rate increase
  of 5 percent on the range of income
                                                class or on discount airlines.                are "backloaded" to take place in
                                                    Finally, Congress was forced to future years when President Clin-
                                                                                                                                      paying the pricefor                     Republicans have probably nailed
                                                                                                                                                                              down continued control of both
  between $75,000 and $85,000fora               add more than $100 billion in new ton and many of the present mem-                    thatfact until and                       Houses in the 1998 elections. True.
   single parent with one child. More
   children, and thus a larger credit,
                                                 spending to the budget in order to bers of Congress have left town,
                                                 buy Bill Clinton's signature on the and can be overturned by whomev-                 unless he is replaced by Mr. Clinton's approval rating is also
                                                                                                                                                                               sky-high, but that is because he
   increase the amount of income sub-            tax cut. The spending increases i er is running the countrymen. The                  a Republican,                            signed on to the above-mentioned
  ject to the higher de facto tax rate.          include $24 billion for a new health assumptions about the economy's                                                          Republican objectives. And
       *Ib be sure, the capital gains tax cut    insurance program for children and future performance (and hence                                                              remember that the GOP will never
   to 20 percent will help some taxpay-          $15.5 billion in additional welfare about tax revenues) are ludicrous-                                                        face Bill Clinton in another election;
   ers. However, most middle-income              benefits. As a consequence, the fed- ly optimistic; thefirstdownturn will               We have a Democratic president, his popularity is simply irrelevant.
   taxpayers with capital have it main-          eral budget deficit next year actu- invalidate them, and with them the               and the country will keep on paying save to the extent that he can trans-
   ly tied up in their homes or retire-          ally will be higher than it would best hope of actually balancing the                the price for that fact until and fer it to Al Gore.
   ment accounts like 401 (k) plans.             have been without the budget deal. budget in 2002.                                   unless he is replaced by a Republi-         Sure, the budget deal leaves
   They probably were not going to pay              Meanwhile, the balanced budget in            Worst of all, Mr. Clinton man-       can. Not a single dime can be spent much to be desired. And the Repub-
   taxes on the sale of their bouse any-         the year 2002 that everyone is so teen aged to shoehorn into the budget              or cut, not a single tax can be raised licans must continue to hold the
   way, and most retirement accounts             on celebrating is critically dependent large new expenditures for educa-             or lowered, without his consent — Democrats' feet to thefire,calling
   are already tax-free. So they will ben-       on $97 billion in spending cuts that do tion and various other pet projects          unless Congress overrides his veto, for more cuts in both spending and
   efit very littlefromthis provision.           not take eflfect until matyear. Tfet politi- of his, and to dizninish (though by     which is usually out of the question. taxes next year, and the year after
        Individual retirement accounts           cians continue to wonder why voters no means eliminate) the impact of                   Faced with this disagreeable fact, that But pending the election of a
    were also expanded, but as in the             have become cynical and apathetic.           last year's welfare reform bill.        many conservatives simply aban- Republican president, this is a
    case of the child credit there is an                                                          But as Sheridan Whiteside said       don rationality. They talk about major step forward.
    income test that will prevent many                                                         in'The Man Who Came to Dinner**        "forcing'' Mr. Clinton to do this or
    taxpayers from taking advantage of              Bruce Bartlctt is a senior fellow when he belched loudly at the din-              that, when they have no such power.
    it. Estate and gift taxes are reduced         with the National Center for Policy ner table and the woman next to                  Congress can. to be sure, shut down        William A. Rusher is a national'
    but at such a slow rate it will barely       Analysis and a contributing writer him looked horrified, "What did you                the government again unless the ly syndicated columnist.
    compensateforinflation.                      for The Washington Times.                     expect, madam—chimes?"                  president agrees to its terms, and I

                                                                                                                                                                                                    Tl 16941429
                                                                               us Pi TooAy

President right to protect people from smokers
   The comments by Sen. Frank Lauten-              Recently I went to Miami International
berg, D-N.J., supporting President Clinton      Airport to pick up a friend. For more than
in taking the first step to make buildings      half an hour 1 searched for my friend at
smoke-free, including entranceways, are         exits from the terminal. The air outside
right on target ("Smoke has no boundary/'       the building was polluted with smoke.
Opposing View, Debate, Aug. 8).                     Smokers should not be allowed near the
   USA TODAY says making some outdoor             entrances. Little glass cubicles should be
areas smoke-free is not justified ("New         built where they can wait to be met
smoking bans reach beyond science, fair-           Families eating out should not be forced
 ness," Our View). To the contrary, it is       to deal with smokers. Smokers should go
very justified.                                 outside and confine their lethal activity to
   For instance, if one sells at a stadium or   themselves. They should not inflict them-
 has season tickets to a sports event, in-      selves on their families, people with whom
 doors or outdoors, it is annoying and un-      they work, people who enjoy the same
 healthy to be near smokers. Serious medi-      sport or outdoor activity, and certainly not
 cal and possibly Iife4hreatening problems      children.
 can result                                         Children must be taught the dangers of
   If you play golf with others who are         smoking and not see it as an enjoyable ao
 smokers, serious medical problems can re-       tivity.
 suit Just because you are outdoors doesn't                        Rita Zemlocak, president
 mean you are not exposed to secondhand         Group Against Smoker's Pollution (GASP)
 smoke and are out of harm's way.                                                Miami, Fla.

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