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Compromise may be near
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August 26, 1996: 3:40 p.m. ET
Tobacco companies, government may be near plan to limit industry liability
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NEW YORK (CNNfn) - The assault on tobacco shifted into high gear Monday as the federal government began circulating a sweeping legislative proposal that would limit the liability of the tobacco industry.
The plan would grant cigarette manufacturers immunity from liability suits for the next 15 years. It would also remove the threat that tobacco would be regulated by the Food and Drug Administration.
Although plans to examine how to deal with the effects of smoking on the health of Americans are nothing new, this one may have a better chance, according to a story in Monday's Wall Street Journal. The main reason for that is new Senate Majority Leader Trent Lott has agreed to broker it. Lott could be very effective since he has ties to both the industry and lawyers representing the plaintiffs in tobacco suits.
The proposal has reportedly been working its way around Capitol Hill for about a month. But its chances for success improved as the FDA began preparing rules to bring tobacco under its control. Those rules were issued Friday.
While plans still have to be worked out, the latest plan calls for the tobacco companies to pay $6 billion in 1997. The payments would grow to $10 billion in the fourth year and continue over the next 11 years.
A total of 95 percent of the money, to be administered by an official appointed by President Clinton, would go to the states in the form of grants. Those grants would allow states to recover the cost of treating the tobacco-related illnesses of their citizens and to compensate smokers who have fallen ill.
In exchange for the contributions, most of the lawsuits that have been filed against tobacco companies would be dropped. Also, many of the lawsuits already filed would be capped.
Word of a possible plan first surfaced in March. Tobacco industry executives then began to express their willingness to work toward a legislative solution to the ongoing fight between the federal and state governments and tobacco.
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