Congress considering significant federal tax increase on cigarettes

Charles Babington

WASHINGTON &#8212 Congress is taking new whacks at the cigarette industry, banning tobacco sales in Senate buildings and – more importantly – seeking a significant federal tax increase on cigarettes.

The industry, once a lobbying behemoth, is quietly working against the tax bill. But it lacks the clout it once wielded.

Several key lawmakers said they have had no recent contacts with tobacco lobbyists. And both houses have signaled a willingness to raise the cigarette tax if other provisions of a children’s health bill can be resolved.

“I think the industry has tried to do things more quietly, largely because they obviously know how popular a tobacco tax is,” said Ron Pollack, executive director of Families USA. The health advocacy group supports a proposed $35 billion increase in the State Children’s Health Insurance Program, which a higher cigarette tax would finance.

House and Senate negotiators are trying to craft a veto-proof version of the bill. President Bush says he would veto it because it calls for a 61 cents-per-pack increase in the federal excise tax on cigarettes, taking it to $1.

The House came within about a dozen votes of overriding Bush’s veto of a similar bill last month. The bill’s supporters are offering to change program eligibility rules in hopes of picking up enough Republicans to make the revised bill veto-proof. The proposed cigarette tax increase is not at issue.

Philip Morris USA, the nation’s largest cigarette maker, sponsors a Web site, mailings and a toll-free number urging people to ask Congress to sustain Bush’s veto. “Taxing smokers is unfair,” the materials say, adding that taxes increased 73 times since 2000.

“We are sharing our position with legislators,” Philip Morris spokesman Bill Phelps said in an interview. The company also has encouraged tobacco growers and retailers to get involved, he said.

But tobacco’s critics say health concerns have deeply eroded the industry’s influence in Congress.

“The country and elected officials have really made a turn,” said Bill Corr, executive director of the Campaign for Tobacco-Free Kids. Cigarette companies, he said, “don’t have the opportunity to go in and push members as much.”