- The Washington Times - Tuesday, October 5, 2004

House lawmakers yesterday killed a Senate proposal to give the Food and Drug Administration authority over the manufacture and marketing of tobacco.

The House action complicates a vote planned for this week on a broad bill that includes measures to cut corporate taxes, end a trade fight with the European Union and pay tobacco farmers to end a system of production quotas established in 1938.

The tobacco legislation was a late addition to the corporate tax bill, but has become the most volatile component of a package worth roughly $130 billion in tax breaks to U.S.-based companies. The breaks are offset by closing loopholes and would not add to the deficit, lawmakers said.

The bill was a reaction to a World Trade Organization ruling that said export subsidies for some U.S. products are illegal. The ruling allowed the European Union to place sanctions on American goods, pricing some clothing, jewelry, toys, timber, food and other products out of the 25-nation market.

Despite the WTO decision and the squeeze from Europe, lawmakers had been unable to move a bill that replaced $50 billion in subsidies with a comparable corporate tax break until it was sweetened with a series of narrowly targeted provisions, including help for bow and arrow makers, dog tracks, makers of tackle boxes, aircraft leases and a proposed $10 billion tobacco buyout.

Senators had tied the tobacco buyout to FDA authority but the House included only the buyout in its version of the bill. Yesterday during a House-Senate conference to reconcile the measures, House lawmakers repeatedly shot down Senate proposals to fatten the bill and to reattach FDA authority.

House negotiators defeated the FDA proposal 8-3 after senators had voted 15-8 to include it.

“This is not the time, this is not the bill and this is not the vehicle to regulate tobacco with the FDA,” said Rep. Joe L. Barton, Texas Republican.

The House decision jeopardizes final passage of the bill in the Senate, where the link between the buyout and the FDA authority to control tobacco manufacturing and marketing was popular. Senators favoring the new rules said the measure is crucial for public health.

House and Senate lawmakers hoped to vote on a final version of the bill this week — and end the punishing EU sanctions — but a quick Senate vote is now less certain.

“There’s a lot we have to finish. We’ve got a full plate and these issues make it a lot more complicated,” said Sen. Edward M. Kennedy, Massachusetts Democrat, referring to homeland security and intelligence reform bills.

Mr. Kennedy and Sen. Mike DeWine, Ohio Republican, sponsored the tobacco legislation in the Senate and have promised to defend the FDA provisions or strip away the buyout.

The buyout would provide about $7 billion in new funds to farmers and quota owners, many of whom are absentee landlords. The quotas, which can be inherited or purchased, support tobacco prices by limiting production.

But the system is outdated and farmers want to end it while protecting investments they made in the quota allotments.

Rep. Bill Thomas, California Republican and chairman of the House-Senate conference, had hoped for votes before both chambers break for recess at the end of the week.

Quick resolution is urgent to end the rapidly accumulating EU sanctions, which increased to 12 percent at the beginning of the month, and protect U.S. jobs, he said.

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