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Democrats Ponder Tobacco Strategy

Senate Democrats know what they want — Food and Drug Administration regulation of tobacco products — but they’re not yet sure how to get it.

Now that the House, acting a week and a half ago, has passed an international corporate-tax bill that included a federal buyout for tobacco growers, Senate Democrats find themselves in a tricky spot. They’re trying to figure out how to marry FDA regulation of tobacco with the farmer-buyout provision either before, during or after House-Senate negotiations on the tax measure.

Meanwhile, Senate Democratic leaders also appear to be proceeding cautiously, because they do not want to hurt the Senate election chances of Democrat Erskine Bowles in tobacco-rich North Carolina.

Senate Democrats, along with a handful of Republicans, have long demanded that any relief for struggling tobacco growers must move in tandem with a measure that gives the FDA the authority to regulate cigarettes, cigars and smokeless tobacco products. But negotiations on a measure to do just that broke down last year.

The House’s decision to move the tobacco buyout as part of the tax bill has given new energy to the FDA effort, however.

“We’re going to have to work out the tobacco provision in advance,” said Sen. Max Baucus (Mont.), the ranking member on the Finance Committee and a likely Democratic tax-bill negotiator.

But Senate Majority Leader Bill Frist (R-Tenn.) said Friday that he would rather see the issue “dealt with in conference.”

Democrats have a number of choices to make, including whether to push for the buyout and FDA provisions as separate legislation or to press for their inclusion on the international tax bill.

Senate Republicans, including tobacco state lawmakers such as Majority Whip Mitch McConnell (Ky.), have essentially resigned themselves to the notion that FDA regulation must move with a buyout to help struggling tobacco farmers.

“I’m open to any approach that works. Our prime interest is in getting the buyout,” said McConnell. “I can’t handicap for you how this is going to play out. My crystal ball is a little hazy.”

But that doesn’t mean Republicans will necessarily be working to help Democrats make FDA regulation of tobacco a reality.

“I don’t think you can go to conference with preconceived notions of, ‘This goes in and this goes out,’” said Sen. Don Nickles (R-Okla.), a Finance panel member who could be named a conferee.

Meanwhile, House Republicans have generally resisted the notion of adding FDA regulation to the tax bill.

As of last week, Democrats remained divided over how to use their influence in the Senate and over what guarantees they should seek from Frist before allowing a conference committee on the tax bill to move forward. The fear, one senior Senate Democratic aide noted, is that Democrats could miscalculate and lose the opportunity to enact FDA regulation of tobacco.

The tax bill “shouldn’t be used as a vehicle for only one part of it,” said Sen. Byron Dorgan (D-N.D.). “And if it’s going to weigh this bill down, then they should take [the buyout] out.”

Democrats could use procedural tactics to add FDA regulation to the international-tax bill before it is sent to conference with the House, assuming there are enough votes in the Senate to prevail. However, there would be no guarantee that the FDA regulation provisions would stay in the final conference report, which is not amendable. For that, they would need the cooperation of their GOP counterparts.

“Before we preclude amending it, we need to have an agreement on conference,” said Senate Minority Leader Tom Daschle (D-S.D.) last week.

Sen. Mike DeWine (R-Ohio), a fervent advocate of FDA regulation of tobacco, appeared to agree with Daschle’s assessment and has joined many Democrats in pushing to resolve the issue before appointing a conference committee on the international-tax bill.

“We have to figure out an endgame on FDA before allowing the buyout” to move on the international corporate-tax bill, said DeWine.

Despite the support of DeWine and a handful of other Republicans, the situation threatens to make Democrats appear as if they are holding up a must-pass measure designed to put an end to European Union tariffs on U.S. goods.

These tariffs, which are set at 8 percent now and will go up 1 point for every month the bill languishes, were imposed after the World Trade Organization ruled a U.S. export tax break an illegal trade subsidy. The tax bill would repeal the illegal export subsidy and implement an across-the-board tax break for manufacturers.

“It’s a very heavily loaded bill,” said Senate Minority Whip Harry Reid (D-Nev.). “With all the problems we’ve had with [House-Senate] conferences, it’s a difficult conference to craft.”

Democrats must also factor in how whatever they decide to do will be viewed in North Carolina, where Bowles is battling Republican Rep. Richard Burr for the seat of retiring Democratic Sen. John Edwards. Though Bowles is not opposed to FDA regulation, if Senate Democrats are perceived as having blocked the tobacco buyout from passing, it could hurt Bowles in November.

Democratic Senatorial Campaign Committee Chairman Jon Corzine (N.J.) acknowledged that party leaders were weighing the impact of their stance on the tobacco issue as it relates to the North Carolina Senate race.

“There are always discussions about that, but you want to do the right thing too,” said Corzine.