Once upon a time, the Republican Party stood for fiscal
responsibility and limited government. That fantasy world
disappeared long ago.
A House-Senate conference committee in the Republican-ruled
Congress is considering legislation to hand billions to tobacco
producers and extend Food and Drug Administration rules to
cigarettes. Republican President George W. Bush seems prepared to
accept anything that passes.
More spending and regulation together: The GOP, no less than the
Democrats, is the party of big government, in case you haven’t
noticed.
Tobacco allotments began in the 1930s. Like most of the farm
programs, tobacco subsidies make no sense, other than as yet
another creative mechanism to loot taxpayers.
When the Great Depression hit, everyone looked for a “free
lunch,” a deep pocket to pick. That meant using government to
transfer wealth from one’s neighbors. Farmers came up with a
complex system of loans, support payments, marketing orders,
conservation controls, and even cash not to produce.
To prop up tobacco prices, farmers were issued allotments to
limit supply. Allotments were then sold and bequeathed to
non-farmers. Today many tobacco growers pay city-folk for the
privilege of farming.
A mixture of foreign imports and government attacks on smoking
have reduced demand for domestic tobacco. Which has driven down the
value of allotments. Tobacco growers and friends want a
bail-out.
Under today’s GOP, no special interest goes without generous
aid. So the House approved a five-year, $10 billion boondoggle deal
to buy out allotment holders.
After being criticized for its untoward generosity toward
tobacco growers, the House passed a separate measure barring use of
government funds for the pay-off. “Some call it a buyout; I call it
a sellout of the American taxpayers,” observed Rep. Chris Van
Hollen (D-Md.).
But congressmen haven’t given up passing out financial goodies
for political gain. Now they just hope to stick cigarette companies
and smokers with the bill. If there’s anything at which legislators
excel, it is giving away other people’s money.
THE SENATE-APPROVED PACKAGE is even sweeter: as much as $13 billion
over the coming decade. Along with the cash payment are provisions
turning the tobacco industry over to the FDA’s tender regulatory
mercies. There would be more controls over cigarette advertising
and ingredients; the agency could ban flavored smokes and vending
machines.
Both the House and Senate measures were attached to a corporate
tax bill and now are being negotiated in conference committee.
The legislation represents congressional log-rolling at its
worst. Liberal members say: who cares about wasting more money on
those who grow a deadly crop since we can extend Uncle Sam’s
regulatory reach? “The bill will save lives,” opines Sen. Edward
Kennedy (D-Mass.).
Self-professed conservatives say: who cares about expanding
paternalistic government since we can put billions of dollars into
the hands of grateful constituents? About 90 percent of payments
would go the Southeast, increasingly a Republican stronghold.
Admits Senate Majority Whip Mitch McConnell (R-Ky.): “I think
FDA regulation is a very steep price to pay for a buyout. But if
that’s the only way to get my growers relief, this senator will
vote to pay it.”
But why do growers deserve relief at taxpayer expense?
Farm subsidies never made sense. People deserve help because
they are poor, not because they grow tobacco, wheat, or sugar.
Even if a vast array of inefficient and contradictory programs
—paying farmers to grow and then not to grow crops — made sense
during the Great Depression, their time has long gone. Certainly
enough taxpayer money has changed hands. Americans shouldn’t have
to toss another wad to a few farmers.
Especially ones who produce tobacco. Larry Wooten, president of
the North Carolina Farm Bureau, expects to collect $165,000 from
the buy-out: “If you erase the value of the quotas, which was the
scenario we’d been facing, there will be bankruptcies and havoc.”
So what?
If the industry is evil and deserves to be sued and regulated,
why only the cigarette makers and sellers? Why shouldn’t tobacco
growers be sued and regulated rather than subsidized?
Especially since most of the allotment owners, 326,000 in all,
don’t grow anything. Instead, they rent out their quotas to 90,000
active farmers.
AS WITH MOST FARM PROGRAMS, the buyout favors big producers, the
very people who least need help. Just ten percent of allotment
owners would receive more than two-thirds of the cash. More than
400 of them would collect at least $1 million.
“I’ve waited and sweated for this moment for a very long time,”
said John William Carter III, a North Carolina tobacco farmer who
expected to collect more than $1 million. It’s like winning the
lottery, only one financed by the taxpayers.
Then there are the non-farmers. Homemaker Susan O’Leary, from
Exeter New Hampshire, expects to collect $119,000 for a quota from
her father’s farm. She admitted to having “a bit of a guilty
feeling whenever I receive income from the quota,” but, she added,
“I could certainly use the money with a child starting college this
year.”
Most farmers are willing to accept the deal as offered. But a
few want even more: pay the cash and then transfer the allotments
to active growers. Even most tobacco-friendly legislators — about
100 of 435 congressmen — realize that this greedy money grab won’t
pass.
As always, Congress wants it every way. It wants to find new
sources of revenue, and the cigarette makers represent a tempting
source of funds to redistribute.
The administration, which has yet to find a special interest
boondoggle that it opposes, flip-flopped to support the buyout.
Even worse, the Bush administration is pursuing a Clinton-era $280
billion lawsuit against the industry for fraud and various other
alleged offenses.
The states collected a similar amount through the 1998 legal
settlement, and, contrary to their promises, used most of their
ill-gotten gains to fund general revenue shortfalls. Only two
percent of their spending this year will go for tobacco
prevention.
CONGRESSMEN SIMULTANEOUSLY WANT to win political support from
health advocates by dumping on cigarette makers. Despite the
administration’s professed anti-regulatory stance, Health and Human
Services Secretary Tommy Thompson supports expanding the FDA’s
power.
But everyone most wants to collect votes by underwriting
farmers, even those who produce the tobacco used to make the
cigarettes Congress wants to regulate.
No surprise, growers are clamoring for the money: “We
drastically need the buyout, and that’s all we care about,” says
Daniel Nelson, president of the Forsyth County (North Carolina)
Growers Association. Another North Carolina farmer, Jimmy Crews,
declared “If I feel like somebody is going to help me on this
buyout, he’s going to get my vote.”
“My growers are in dire straits and they need help,” complains
Sen. Jim Bunning (R-Ky). So? Lots of Americans are in distress. Why
are tobacco farmers — actually, allotment holders — entitled to
seize their neighbors’ hard-earned wealth?
