Uncle Sam Should Ask the Tobacco Industry to Pay Up
Memo to President Clinton: How to win the war on tobacco, balance the budget, and save Medicare all in one. That's right, it can be done. But denying Uncle Sam his fair share of any further tobacco litigation proceeds is hardly the right approach.
What I'm referring to, of course, is the reported $250 billion war chest being assembled by the tobacco industry to settle an array of lawsuits seeking to hold cigarette makers accountable for smoking-related illnesses. The many suits of this kind - brought by states and municipalities seeking to recoup funds spent on medical care and by individual smokers and their families through class-actions - gained momentum last summer when a Florida court found the manufacturers of Lucky Strikes liable in the illness case of a lifetime smoker. Six months later, with the tobacco industry increasingly jittery over the prospect of facing untold damage awards, talk has turned to further settlements like that of the Liggett Group. Yet, the federal taxpayer isn't going to be at the bargaining table, at least not as a plaintiff.
The Clinton administration, unlike 22 states and scores of municipalities around the country, has chosen not to seek compensation for government money spent on smoking-related medical care. From a budgetary perspective, this can only be described as a missed opportunity of epic proportion. Consider the numbers: The federal share of Medicare costs roughly $10 billion a year for treatment related to smoking. Over the next six years, that's an estimated $60 billion that Uncle Sam might reasonably ask the tobacco industry to pay up. It's also nearly 50 percent more than the $42 billion that currently separates the latest Democratic and Republican Medicare plans.
The administration is not indifferent to the tobacco issue. It took the lead last summer when it courageously proposed sweeping new regulations on the sale and advertising of cigarettes to minors. But those measures, the first of which went into effect last month, don't hit the tobacco industry where it really counts - in the pocketbook. Nor do they compensate the American people for the egregious damage done by cigarette makers, namely the budget-busting cost of treating those who suffer from smoking's ill effects.
The administration should order the Justice Department to file suit against the tobacco industry, seeking compensation for federal money spent on smoking-related care. Such a move would be instrumental not only in preserving the financially threatened Medicare system but also in ensuring that we achieve a balanced budget sooner.
* Alex Abrams, who is currently a contributing editor to George Magazine On-line, is co-author of "Late Bloomers: Coming of Age in Today's America, The Right Place at the Wrong Time."