Tobacco buyout negotiations intense during last month

Although nothing official has been announced, behind-the-scenes negotiations about the tobacco buyout were intense during August.

We're now in the pivotal month, just two months away from the November elections.

A flurry of activity regarding the bill has kept the issue at the forefront, but it still has a ways to go.

During the Congressional recess, Philip Morris ran ads in Kentucky and Virginia addressed to growers and quota owners. The message was, if you want a buyout, you want to help us support Food and Drug Administration regulation of tobacco products.

R.J. Reynolds, along with 22 other tobacco manufacturers, sent a letter to Bill Thomas, (R-Calif.). Thomas, the chairman of the House Ways and Means Committee, included the tobacco buyout in the corporate tax bill. In the letter, the group expressed opposition to FDA regulation and funding the buyout through assessments. They didn't express opposition to the buyout, but to FDA and the funding scenario.

Throughout its history, the tobacco buyout issue has provided occasions for the strangest of bedfellows — groups that at one time were on the opposite end of the spectrum.

Eleven tobacco farmers and anti-smoking groups, including religious groups, ran newspaper and radio ads urging members of Congress to approve a bill tying a buyout to FDA regulation.

To casual observers, it might look strange. To growers, however, the association with no-tobacco groups is one of the reasons the buyout has made it this far.

The Campaign for Tobacco Free Kids funded ads in North Carolina.

The lobbying efforts set the issue up for an interesting conference. Thomas, who got the tobacco buyout bill in the corporate tax bill, will chair the conference committee. That fact, say insiders, is pretty significant.

Congress returned Sept. 7 to tackle two substantially different bills that contain a tobacco buyout.

The Senate version of the tobacco buyout is $8 and $4 on 2002, paid out over 10 years. It includes limits on post-buyout production and is paid for through user fees from companies. It would eliminate the remainder of Phase II funds.

The House version is $7 and $3 and paid out over five years. It has no post-buyout program or restrictions and is paid for through general revenues and would not result in elimination of Phase II funds.

The Senate bill has a $12 billion price, while the House version has a $9.6 billion price tag.

The interesting aspect about all of this is the buyout itself. It's caught in the middle of all the lobbying, which makes it difficult for farm-level policy makers to proceed. They have to be careful about taking sides.

The bill that the tobacco buyout is in has “umpteen” different issues that have to be reconciled.

In tobacco states such as Georgia and North Carolina, the issue has surfaced as a campaign issue in U.S. Senate races.

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