Pack It In

BURNED by embarrassing documents, abandoned by its political supporters, its executives accused of lying under oath—apparently that’s still frowned on in some circles— the feckless tobacco industry finds itself vilified as never before. That is the backdrop for the appalling bill that has emerged from the Senate Commerce Committee, chaired by Arizona Republican John McCain. His proposed legislation is harmful policy and unconstitutional to boot. But Congress seems willing to overlook such details when the spoils amount to hundreds of billions of dollars.

Last June, you will recall, a coterie of state attorneys general, joined by plaintiffs’ lawyers and public-health advocates, announced a sweeping “resolution” of state Medicaid suits. The tobacco industry agreed to disgorge $370 billion in monetary damages over 25 years, pay additional penalties if specified reductions in smoking by teenagers didn’t occur, submit to Food and Drug Administration regulation, cease all vending-machine sales, and rein in certain marketing practices allegedly targeted at children. In return, the tobacco companies were to be immunized from punitive damages for their past conduct and from new class-action lawsuits. Individuals could still sue, but subject to a $5-billion annual cap on compensatory damages.

RA

About the Author

Robert A. Levy

Robert A. Levy is chairman emeritus of the Cato Institute.

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BURNED by embarrassing documents, abandoned by its political supporters, its executives accused of lying under oath—apparently that’s still frowned on in some circles— the feckless tobacco industry finds itself vilified as never before. That is the backdrop for the appalling bill that has emerged from the Senate Commerce Committee, chaired by Arizona Republican John McCain. His proposed legislation is harmful policy and unconstitutional to boot. But Congress seems willing to overlook such details when the spoils amount to hundreds of billions of dollars.

Last June, you will recall, a coterie of state attorneys general, joined by plaintiffs’ lawyers and public-health advocates, announced a sweeping “resolution” of state Medicaid suits. The tobacco industry agreed to disgorge $370 billion in monetary damages over 25 years, pay additional penalties if specified reductions in smoking by teenagers didn’t occur, submit to Food and Drug Administration regulation, cease all vending-machine sales, and rein in certain marketing practices allegedly targeted at children. In return, the tobacco companies were to be immunized from punitive damages for their past conduct and from new class-action lawsuits. Individuals could still sue, but subject to a $5-billion annual cap on compensatory damages.