Tobacco Farmer Buyout Closer to Reality

Republican leaders are considering sending tobacco farmer buyout (search) legislation to the House floor as part of an unrelated tax bill in hopes of enticing Southern lawmakers to vote for the package.

The tobacco buyout would pay farmers to leave a Depression-era government program that sets price and production controls on U.S. leaf. Estimates of a buyout range as high as $10 billion over several years.

A farmer buyout is a high priority of lawmakers from tobacco states such as Georgia, Kentucky, North Carolina and Tennessee.

Rep. Jack Kingston, R-Ga., an advocate for the buyout, said Tuesday as many as 10 Democrats and 25 Republicans who oppose the tax bill might vote for it if the bill included the tobacco provision. His claim could not be verified.

"I think this is the best opportunity politically we've had," said Kingston, who unsuccessfully tried to get a $7 billion farmer buyout attached to a spending bill last year.

Several GOP aides, speaking on condition of anonymity, stressed that no decision has been made on whether to send the bill to the floor as part of a measure that would repeal a tax break for U.S. exporters. More than a half-dozen people spoke on condition of anonymity, noting that private discussions continue.

The tax break has been ruled an illegal export subsidy by the World Trade Organization (search), leading to the imposition of penalty tariffs on some American exports. The penalty started at 5 percent in March and is scheduled to increase 1 percentage point each month until it hits 17 percent next year.

While the notion of combining the tobacco and tax bills has sparked interest among senior Republicans, they also are concerned it might prompt objections among moderates. Unlike other tobacco legislation introduced in the House and the Senate in recent weeks, the approach in this case would not give the Food and Drug Administration (search) the authority to regulate tobacco.

The Senate passed its version of the tax bill last month. It did not include the tobacco farmer buyout.

The cost of the buyout could raise concerns among Republicans worried about increasing the deficit.

Anti-smoking groups also are critical. Campaign for Tobacco-free Kids (search) President Matthew Myers called the current push in the House a "back-room deal to protect the tobacco industry while deliberately avoiding any action that would reduce the death toll from tobacco use."

The tobacco industry would benefit from a buyout, because leaf prices would no longer be kept artificially high.

Calls to the White House seeking comment on the House effort were not returned Tuesday.

Last month, on the campaign trail in Ohio, Bush said he did not think the tobacco program needed to be altered. Democratic presidential hopeful Sen. John Kerry (search) of Massachusetts has supported the buyout since 1998, according to his campaign.

Farmers have been demanding a buyout for several years. Declining cigarette sales and increasing imports of foreign tobacco have drastically reduced the amount of tobacco that farmers can sell each year under the tightly controlled program.