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OCR Page 1 of 38THE WHITE HOUSE
WASHINGTON
September 5, 1997
MEMORANDUM FOR THE PRESIDENT
FROM:
Bruce Reed
SUBJECT:
Tobacco Update
When you return next week, Secretary Shalala and I will give you detailed
recommendations on how to proceed on tobacco. We are scheduled to meet with you on Friday,
and you are scheduled to announce your position on Tuesday the 16th. This memo is a brief
summary of what we are likely to recommend and what strategic and policy decisions you will
need to make.
I. Overview
Although the industry was hoping for quick passage, some Republican leaders in both
houses said this week that the tobacco settlement was too complicated for Congress to enact
before they adjourn in late October. Lott would still like to get it done this year, but with the
legislation being referred to six committees in the Senate alone, we need to stake out positions
that can hold up over time.
Over the past two months, we have held extensive discussions with the public health
community, attorneys general, members of Congress, and farmers. The public health community
will welcome our recommendations on most issues: guaranteeing full authority for FDA to
regulate nicotine; imposing tougher penalties on the industry if it fails to reduce teen smoking;
demanding an additional $50 billion to offset the credit in the budget agreement; making it
somewhat easier to disclose industry documents; looking out for tobacco farmers; and so on.
The only concerns of tobacco opponents that we cannot easily meet are dramatically increasing
the overall price tag (Kennedy would like to see it doubled, to $700 billion) and demanding to
see all the documents before capping liability (Leahy, Waxman, and Skip Humphrey are pushing
for "no immunity without disclosure").
The central strategic question is how far we want to push the industry for additional
concessions, at the risk of losing this opportunity altogether. Bruce Lindsey and I have
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