Talks on Capitol Hill to Regulate Tobacco Industry Break Down

Talks in Congress to regulate the tobacco industry (search) broke down Wednesday along partisan lines, making it highly unlikely that new restrictions would be imposed on the cigarette industry anytime soon.

Lawmakers had been close to passing legislation that not only would have ended unpopular tobacco subsidies, but also would have allowed government control over tobacco products for the first time.

But Democrats said late Wednesday that regulations that would have handed the Food and Drug Administration (search) oversight of cigarettes were not strong enough.

"Unfortunately, the proposed legislation which Republicans put forth today falls far short of the strong FDA authority which is needed to effectively do the job," said Sen. Edward Kennedy, D-Mass., the leading Democrat on the health committee. "A weak bill is worse than no bill at all because it would give the public a false impression that their health was being protected."

The House and Senate had been close to voting on bills that would have ended Depression-era tobacco farm subsidies that lawmakers have described as archaic and harmful to the farming communities in several states that grow tobacco.

Farming quotas -- which dictate how much tobacco a farmer can grow and the subsidies given in return -- have been slashed by 50 percent over the last several years due to the decline in demand for cigarettes and foreign competition on the international market.

Paid for by a five-year annual assessment on manufacturers that import tobacco, the buyout would pay for both farmers leaving the tobacco business and those choosing to continue growing the crop on their own.

"The tobacco support system is "outmoded and not practical anymore," Rep. Mike McIntyre, R-D-N.C., told, explaining that the government began controlling the production of tobacco farming in the 1930s to ensure stable payments to farmers for their crops.

"You can imagine what would happen if your income were cut in half," said Rep. Mike McIntyre, D-N.C., whose district has been devastated by the declining tobacco industry. "And they still don’t know if it can be cut further."

McIntyre joined Rep. Ernie Fletcher, R-Ky., Rep. Virgil Goode, R-Va., and Rep. Bob Etheridge, D-N.C., in introducing a bill last month to end the subsidies with a $15.7 billion buyout.

While the House had not planned to include FDA legislation in the bill, Sens. Judd Gregg (search), R-N.H., the chairman of the Senate health panel considering the legislation, and Mike DeWine, R-Ohio, had agreed to marry the FDA authority to a bill proposed by Sen. Mitch McConnell, R-Ky., that would have allowed a $13 billion buyout.

Calling the FDA proposal a "bitter pill for this senator to swallow," McConnell said in a recent floor speech that support from the senators and the health community behind FDA regulation would be necessary to end the subsidies once and for all.

"That is simply a reality which we confront today," he said, noting that linking the two measures together would create "a formidable coalition here in the Senate across an ideological divide to move us in the direction of achieving both these goals."

House aides had said that similar FDA legislation would likely have remained in final legislation written when negotiators from both chambers met in conference. That way, the bill would have had a better chance of passing in the House, but would also have satisfied lawmakers who wish to see greater regulation of tobacco products.

But when Senate Democrats saw Gregg's final proposal, they said that the provision that allowed only Congress to ban cigarettes was so vaguely written it could have prevented the FDA from requiring changes to make cigarettes safer.

"The vague language was a loophole that could prevent FDA from taking any steps to reduce the harm caused by tobacco," said Matthew Myers, president of the Campaign for Tobacco-Free Kids.

"We’re not willing to support FDA regulations that are too weak," said Allison Dobson, spokeswoman for Sen. Tom Harkin, D-Iowa, before the final legislation was offered. "I think there are a lot of senators who feel strongly that this shouldn’t be a sham."

Mark Berlind, a lawyer for Philip Morris parent company Altria, rejected the criticisms. He said health groups wanted the FDA to be able to ban tobacco products, something that was in a previous bill sponsored by Kennedy.

"We're disappointed that these talks broke down over a last-minute insistence that FDA be able to ban all cigarettes for adults," Berlind said.

Jacob Sullum, editor of Reason magazine, added that the public health lobby is "never satisfied." He said that he thinks the latest attempt to regulate tobacco is just another boondoggle for government.

"This is more than [the public health lobby] dreamed of years ago, but they are still not happy," Sullum said, referring to the 1998 tobacco settlement with the states in which the cigarette makers were forced to pay hundreds of billions of dollars for state programs as well as comply with new marketing and promotion standards.

Other areas of disagreement include how far states should be able to go in setting their own restrictions on the industry and whether tobacco companies can be sued for failing to adequately warn people about smoking hazards.

This latest effort by lawmakers to regulate the tobacco industry was the most serious in years. Whereas a buyout of tobacco-growers was an unpopular suggestion five years ago, it had recently been embraced by farmers and lawmakers alike as the only solution to their ongoing financial woes.

Philip Morris USA, the nation's largest cigarette maker and a major campaign contributor, had also recently reversed its previous position and endorsed FDA regulation, even though would be getting hit twice in the pocketbook -- once for the buyout, another with the oversight fees.

Smaller companies like R.J. Reynolds Tobacco Holdings, Inc., say they will be financially ruined by both the buyout and the oversight measures.

Smaller cigarette makers will likely be squeezed by the new rules, said Sullum, who added, "The cost will be passed on to consumers."

But lawmakers say the move was necessary to help the ailing farming community as well as provide regulations aimed to protect the public health.

The FDA asserted authority over cigarettes in 1996, but the Supreme Court later ruled that only Congress can give the FDA that power.

The Associated Press contributed to this report.