White House Eyes Fines on Teen Smoking

WASHINGTON —  The White House is reiterating that it wants heavier fines imposed on cigarette makers if teen smoking doesn’t decline by percentages specified in the proposed nationwide tobacco settlement.

“We intend to strengthen the penalties to make sure that the tobacco industry is held accountable for reducing teen smoking, but we haven’t come to any conclusion on the best approach,” said Bruce Reed, President Clinton’s domestic policy advisor.

Reed had said last week that the teen-smoking penalties in the settlement were insufficient. But he said Friday that there has been no agreement with the industry on altering the teen-smoking provisions.

The proposed settlement would fine the industry up to $2 billion a year if teen smoking doesn’t drop by a certain amount, but it lets the fines be tax-deductible. Sources have said the discussion centers on removing or reducing the tax break.

In its Saturday editions, the New York Times quoted Reed as saying the administration is also looking at several options to increase the penalties, including hiking the fine for every percentage point the industry misses the goal and lifting the $2-billion annual penalty cap.

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To settle 40 state lawsuits, tobacco companies agreed in June to pay $368 billion over 25 years and curb advertising. In return, they would win protection from smokers’ lawsuits and restrictions on how heavily the FDA can regulate nicotine.

The Clinton administration is finalizing its review of the proposed settlement, and congressional action would be necessary to put the agreement into effect.

In addition to altering the teen-smoking penalties, Clinton has indicated he will call for stricter government nicotine control when he returns from vacation in early September. But the White House has not signaled whether increasing the settlement’s tab is a high priority.

But the deal “certainly could unravel if this so-called list [of changes] means increasing the money figures or regulatory provisions,” warned lead tobacco negotiator J. Phil Carlton.