President Clinton consigned the landmark $368 billion tobacco deal to limbo yesterday, calling instead for legislation raising cigarette prices by up to $1.50 per pack and for harsher penalties on tobacco firms that market to teens.
"Reducing teen smoking has always been America's bottom line. It must be the industry's bottom line," Mr. Clinton said.
He also asked Congress to pass legislation that sets targets to cut teen smoking by 30 percent in five years, 50 percent in seven years and 60 percent in a decade. Penalties for missing those targets, including the $1.50 price hike, which would phase in over a decade, should not be capped or tax-deductible as a business expense, he said.
Under the negotiated deal, industry fines would have been capped at $2 billion.
Ending three months of divisive internal debate among administration officials, Clinton said he is not out to punish cigarette makers. "It is not about how much money we can extract from the tobacco industry. It's about fulfilling our duties as parents and responsible adults to protect our children," he said.
Papers accompanying the announcement cited estimates that a 10 percent increase in cigarette prices will lead to a 7 percent drop in youth smoking. Clinton also said the Food and Drug Administration should have full regulatory power over tobacco.