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October 12, 2004

Congress and tobacco: No to FDA jurisdiction

The corporate tax legislation that cleared the U.S. Senate yesterday and is on its way to the President for his signature contains a significant change in U.S. tobacco policy:

The tobacco provisions dramatically alter rules governing crop production. Since 1938 farmers had worked under a system of quotas that limited where and how much tobacco could be grown.

Those production quotas which could be rented, bought, sold or inherited were thrown out in return for a $10 billion buyout.

Several senators tried to attach the buyout to proposed Food and Drug Administration rules that would regulate tobacco manufacturing and marketing, but House leadership blocked the FDA provision.

"Our FDA provision would have made a real difference ... it would have saved lives," said Sen. Mike DeWine, Ohio Republican and a proponent of the new rules. Mr. DeWine called the buyout without the FDA package a "disgrace."

FDA jurisdiction over tobacco products has been a long-sought-after goal of anti-smoking groups which, since the Supreme Court's 2000 decision in FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, has necessarily involved a legislative strategy.

Much info on the farmers' buyout is available on the websites of the departments of agricultural economics at N.C. State, the University of Kentucky, and the University of Tennessee.

(Jeffrey Sparshott, "'Attack on tax shelters' passes," Washington Times, Oct. 12.)

Posted by Michael DeBow at 12:11 PM | TrackBack (1)




Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.