Butting out

The Senate Appropriations Committee had a particlarly productive session last Friday, delivering much-needed disaster aid with one hand and a well-deserved spanking to the White House with the other.

By a unanimous vote, the committee approved $1.9 billion in emergency spending to rebuild storm-wracked Honduras and Nicaragua, to help American farmers and ranchers survive the Asian economic turmoil and to ease Jordan’s transition following the death of King Hussein. And it told the Clinton administration to keep its hands off the $246 billion settlement between the 50 states and the tobacco industry.

Usually, the practice of attaching unrelated amendments to legislation is maddening, but in this case it was called for and timely. The Clinton administration has been asserting for two years it may have a claim upon any money the states wheedled out of Big Tobacco.

The argument goes like this: The federal government pays about 60 percent of Medicaid costs; Medicaid law protects the federal government’s interest by making the states responsible for pursuing third parties; when the states settled their claims, they settled the federal government’s claim as well. Therefore, the federal government is entitled to a cut to recover its costs for treating tobacco-related illness.

The committee’s action takes the form of a waiver from the Medicaid law and with good reasons. The first, and most obvious, is that the federal government had its shot at Big Tobacco and missed. The collapse of the McCain tobacco bill in the Senate last summer was disappointing but hardly shocking. Much of the blame falls upon tobacco-friendly Republican senators, but a goodly portion must be reserved for Senate Democrats and the administration. There were troubling signs for weeks that an anti-smoking bill was being transformed into a tax bill and those signs were ignored. As the minority party, Democrats have an obligation to count heads and to compromise. Stubbornness and over-reaching had as much to do with the defeat of McCain as did Joe Camel’s soft-money contributions.

The second reason is that the settlements — four states for $40 billion, followed by 46 states for $206 billion — were reached without the help of the federal government and the state attorneys general carefully crafted their cases to avoid the Medicaid issue. The cases were built upon realistic assessments of damage done and on violations of state laws — consumer protection, antitrust, unjust enrichment, deceptive trade practices. Further, they sought to recover only state health-care costs. The Clinton administration simply got out-lawyered.

If the committee’s waiver stands — and astute congressional head-counters predict it will — two issues remain. President Clinton’s budget proposal assumed that the federal government would receive $18.9 billion from the tobacco settlements during the next five years. As a matter of law, Congress must either cut spending or raises taxes to offset the loss.

And, as a matter of principle, the states must spend the money wisely and devote a significant portion to programs to reduce smoking, especially among the young. The waiver does not place any conditions upon the states, yet the Centers for Disease Control estimates that it will take a minimum of 25 percent of each state’s proceeds to mount a comprehensive tobacco-prevention effort. Congress could add an amendment to that effect. Or, Congress could trust the states to do what’s right. It’s worked so far.