Detour on Tobacco Settlement
The Washington Post
Monday, August 30, 1999; Page A18
EARLIER THIS year, Congress waived the federal claim to a
share of the money the states won in last year's settlement of
their lawsuits against tobacco companies. The claim was
waived in part on the strength of an assurance by the governors
that they were "committed to spending a significant portion of the
settlement funds on smoking cessation programs, health care,
education and programs benefiting children," uses to which the
administration had proposed that the federal share be dedicated.
Now, however, comes a report from anti-smoking groups that "a
large majority of states have not yet fulfilled their commitment to
use a significant portion of the . . . funds to reduce tobacco use."
The report, by the Campaign for Tobacco-Free Kids and the
American Heart Association, concludes that "if current trends
continue, the only winners will be the tobacco companies, which
will be able to conduct business as usual. The losers will be . . .
children, who will continue to fall prey to tobacco industry
marketing, and the . . . taxpayers, who will continue to bear the
unnecessary [health care] costs" associated with smoking.
The report found that only six states, including Maryland, "have
made substantial new commitments this year to fund tobacco
prevention and cessation." Others, including Virginia, have
committed to spend less than the minimum amount
recommended by the Centers for Disease Control or are using
at least the first installments for other purposes, or haven't
decided -- the case in the District. It's still possible that a fair
amount of the money eventually will find its way into cessation
programs, the report said, but at this moment most of the arrows
point the other way.
The amounts are anything but trifling. The settlement called for
more than $200 billion to be paid over a number of years. The
states sought the money in part as compensation for past
Medicaid expenditures to treat smoking-related disease. That's
how the federal claim arose; the feds pay more than half of
The president's budget assumed the federal government would
receive a part of the settlement, but the administration said it
would be content if states would agree themselves to spend part
of the money for certain purposes -- basically the same ones
listed by the governors' association in last winter's resolution
resisting "federal seizure" of any of the funds.
But the Senate voted to waive the federal claim without
conditions, the House ultimately agreed and the president,
himself a former governor, made only a minor fuss before
agreeing as well.
The state lawsuits were supposed to be part of an effort not so
much to recoup lost funds as to curb the use of tobacco,
particularly among young people. Various cessation programs,
including ad campaigns, along with tobacco-tax increases,
which force higher prices, have proved to be effective in this
regard. The settlement also will force some price increases.
The rest is what many states have thus far left out, even as the
state accomplishment is used as a reason not to take further
federal action against the industry. It will be the ultimate irony if,
in the end, the great state victory over the industry turns out to
have scant effect on smoking patterns because in too many
cases the proceeds were used instead to defray the normal
costs of government.