DATE: Friday, August 8, 1997                TAG: 9708070008

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   53 lines

TOBACCO-TAX DEAL A SORRY SURRENDER CIGARETTE-INDUSTRY LOBBYIST MANAGED A LAST-MINUTE DEAL THAT SPOTLIGHTS THE DRAMATIC IMPACT OF BIG MONEY ON POLITICS.

The U.S. Senate is in its August recess, thus shutting down for the time being its hearings into foreign money flowing into political campaigns.

To date, the hearings have failed to prove, as promised at the outset, a direct attempt by the communist government of China to influence American government policies through campaign donations. When they return in September, the senators should narrow their search for influence-peddling to more-productive grounds: their own hallways.

Few recent examples of the steamroller impact of runaway campaign donations are more telling than the little twist the tobacco industry managed to have inserted into the bipartisan budget agreement that President Clinton signed Tuesday.

The budget calls for a cigarette-tax increase of 10 cents per pack in the year 2000, and another 5 cents in 2002. The revenues - an estimated $50 billion over 25 years - are to help pay for a children's health-care initiative.

In the final hours of the negotiations, a provision was added that would allow the major tobacco companies to deduct any money raised by this tax from the $368 billion they have promised to pay over the next 25 years to settle tobacco litigation in 40 states.

In short: The tobacco companies have managed to shift a significant part of their ``fine'' away from their stockholders' pocketbooks and put the burden on smokers in particular and the rest of the taxpaying public in general - at the expense of a children's health program.

Sen. Richard Durbin, D-Ill., who fought unsuccessfully to kill this little side-deal, said the Senate had just given the tobacco companies ``a $50 billion windfall.''

The tobacco industry's spokesman on the settlement plan had ``no immediate comment,'' the Associated Press reported.

``This is a clear indication that the tobacco lobby is strong, it's powerful,'' said Sen. Edward M. Kennedy, D-Mass. The provision, he said, was slipped into the budget bill at the last minute, ``behind closed doors.''

The tobacco industry ``cannot stand the light of day,'' Kennedy said.

The same might be said for Congress, should this agreement be allowed to stand. Durbin admitted that the tobacco lobbyists succeeded because the deal came late in the game, when most senators ``want to go home'' for their traditional August vacation. Kennedy and Durbin have promised to fight it once again when the tobacco settlement comes before the Senate.

Let us hope that Durbin, Kennedy and others find the votes to erase this embarrassment. And as both houses of Congress struggle with campaign-finance reform, let's hope they realize that it is not just the relative trickle of foreign funding that is poisoning the political well.

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