House Votes Down $10B Tobacco Buyout

The House voted Tuesday to prohibit a nearly $10 billion government payout to tobacco (search) farmers for giving up a federal quota program just a month after the same lawmakers approved it.

Saying cigarette makers, not taxpayers, should pay for any buyout, conservative Republicans and anti-tobacco Democrats combined forces to upset a carefully orchestrated effort by GOP leaders and the White House to have the government pick up the cost.

The measure blocking the farmer buyout was included as an amendment to an agriculture spending bill (search). Supporters said it was in reaction to Republican leaders including a $9.6 billion payout to tobacco farmers in a corporate tax bill passed by the House last month.

House leaders put the buyout in the tax bill in part to win the votes of Southern lawmakers.

"I thought it was outrageous," Rep. Chris Van Hollen, D-Md., (search) said of the buyout.

It would pay farmers, using existing taxpayer dollars, to leave the Depression-era federal system that sets price and production controls on U.S. leaf.

Farmers have been seeking the buyout for several years. They have experienced steep cuts in the amount of tobacco they can sell under the federal program due to declining cigarette sales and increasing imports of cheaper tobacco.

Van Hollen sponsored Tuesday's amendment with Rep. Jeff Flake, R-Ariz (search). Both said they would not object to a tobacco farmer buyout if it was funded by cigarette makers.

"I just don't want the taxpayers on the hook," Flake said.

A buyout funded by the tobacco companies has been introduced in the Senate. Tobacco companies would benefit from a farmer buyout, because U.S. leaf prices would drop if the federal program was ended and replaced with a free market.

The Senate has not yet taken up the agriculture spending bill, but Flake and Van Hollen predicted their amendment would win support in that chamber.

The Senate version of the tax bill does not include a buyout for tobacco farmers. Several senators have said they would support a buyout only if it was linked to Food and Drug Administration regulation of tobacco products.

Rep. Ed Whitfield, R-Ky (search)., a buyout supporter, said House Republicans who generally oppose FDA regulation might have to get used to the idea to secure a buyout.

"It just makes it more likely, if there's going to be a buyout, there's going to be additional regulation going along with it," Whitfield said of Tuesday's vote.

The amendment to the agriculture spending bill passed by voice vote. Whitfield said opponents of the measure did not seek a recorded vote for fear of the result.

"Our concern was it would have lost by a rather large margin," he said.