Tobacco Documents Online

~L 'Economic Affairs its initial budget cuts earlier in the |:..l ~'|illI ,~"~ ,~'~, ~ ~'~ I: year. Those cuts were drafted under ~' ~' [for the cu~]. so Congress could work President Reagan's latest round of budget cut proposals faces growing opposition on Capitol Hill. In the Senate, Republican leaders have begun exploring alternatives to Reagan's Sept. 24 call for an addi- tional $13 billion 'i~ fiscal 1982 spend- i~g cut~ and $8: 'b~ll~o]a tn i, ncfegsed revenue.~, ".~h'ere's gre_:~,~t ~o~ste~t|0n ~h-at B"u'd~e~l~ ~- ommittee"Oh~t~srart Pete V. D~'menioi, R-N.M: "There's an evolv- :_ ing consensus that we need big cuts, but made up differently than the • president has proposed." (Reaga~ proposals,. Weekly Repor~ p. 1819_) "The most- dramatic turnaround is the consensus that we have to raise - some more revenues," he said, "bu~ can't all come from the revenue side." Reagan"s leader in the House, Rep. Robert H. Michel, R-Ill., earlier had said the president would be doing well to win $12 billion in additional savings. (Weekly Report p. I883) In a further rebuff to the presi- dent, the Democrat/c-controlled House Oct. 6 approved an $87.2 billion appropriations bill for the depart- ments of Labor, Health and Human Services and Education (HR 4560), about $4 billion over the administra- tion's new request. Thirty-nine Re- publicans joined House Democrats on the crucial vote supporting the bill. (S~ory, p, 1948) Meanwhile, as Congress an- guished over budget-cutting options, the administration appeared to be re- considering its own budget strategy. Senate Republicans' Mo~es Republican members of the Sen- ate Appmprintions Committee cau- cused Oct. 6 and repudiated the ad- ministration's request for a 12 percent across-the-board cut in fiscal 1982 ap- propriations bills. The COP panel members decided they could cut no --By Dale Tare more than $5 billion in outlays from fiscal 1982 appropriations, as opposed to the $10.4 billion in cuts sought by the administration. Although no vote was taken, there appeared ~o be a consensus for dou- bling the cuts requested in fiscal 1982 defense o-ulfl~ays, from $2 billion to $4 bill.h~n~ Th~ w~uld |ease only about $~.~b~ ~ ~e ~u~ from all' oth:e~r di~ Th'e /~,~0~oi~riattons Republicans also ~ked about achieving some sav- ings by delaying cost-of-living adjust- merits for entitlement programs, for.. which benefit payments are manda- tory under present law. "There*s great consterna: tion that the president's mix won'~ work." --Budget Committee Chairman Pete V. Domenici, R-N.M. ~nd they discussed delaying for three months the tax cut due to take effect in mid-1982 and levying $2.6 billion in excise taxes on liquor and tobaceo.~ Appropriations Chairman Mark 0. Hatfield, R-Ore., said the COP pro- posals would be discussed by an ad hoe committee set up by Majority Leader Howard H, Baker Jr., R- Tenn., and comprised of Finance Chairman Robert Dole, R-Kan.; Bud- get Chairman .Domenici; Banking Chairman J.ake Garn, R-Utah; and Hatfield. This group will try to come up with a plan for the rest of the year. (Hatfield's budget role, p. 1945) Administration Strategy The dlreetor of the Office of Man- agement and Budget (OMB), David A. Stockman, indicated Oct. 8 that the administration might try to push its latest round of budget cuts through under some kind of common plan," Stockman said in testimony before the Senate Budget Committee. "Some mechanism, perhaps the second budget resolution, would pro- vide a vehicle so all parts of the insti- tutlon could move forward under the po'l,i¢~ ~ong~ress chooses," he added. C)~a Sept. 25, the day after the $16 bil~Itt~r~ savings package w,~s an- n0unc;~'d~ ~ocl~.m:a,n had ;J~ol'd .r~p.orters th'~t s~ia-~e '~here '~as no %ui~bte vole, i- tie, we will have to contest ~he cuts] one bill at a time." He reiterated that view under questioning by the House Budget Committee Oct. 1. (Weekly Repor$ pp, 1884, 1819) - The alternative to using-the see- end budget resolution as the frame- work for the savings might be- an ex-. tension <if ..... the continuing appropriations measure (PL 97-51) that is scheduled to expire Nov. 20. An extension may be needed if President Reagan carries through on his threats to veto appropriations bills that ex- ceed his requests. (Continuing resolu- tion, Weehly Report p. 1891) Budget Cbmmittees' Plans Senate Budget Committee Demo- crats have asked for additional hear- ings on the second budget resolution, and Stockman probably will be back before the panel after the Columbus Day recess. This will delay markup of the resolution, which the committee tentatively had planned to begin on Oct. 15. A staff aide said many members feel they still do not have enough de- tails about the new round of cuts. They also want to see what hal)pens in the appropriations process. The committee staff has put to- gether a working paper for drafting the second resolution that contains a number of spending options ~ includ- ing one calling for the administration's March savings requests that were not included in the budget reconciliation package. Another option would use T105280 7

Economic Affairs - 2 Budget Busting: Whose Priorities Count? President Reagan's threat to veto "budget-busting" appropri, ations bills, including the massive Labor- ~ge[ busting, ~t seems, depends on ~o is count- ing, B.~g~use they use diffezent accountin~ systems, 1982 spending measures, the House Appropriations Commit~e maintains that most of the bills it has re- pored meet or are under the administration's requesL The problem has aroused concern among Republi- cans as well as Democrat. House Minority Leader Rob- ert H. Michel, R-Ill., told repor~rs Oct. 1 that he and David A. Stockman, director of the Office of Manage- ment ~nd~ Budget, had held a meeting Sept. 30 to discuss the..~al ~r~eb'lem abe~t w~se ~m,b~ers we~e right. ~¢~el said he told Stockman, "One thing we've got ~~;t :~ these estlay~~d budget Budge[ Au{hoHty ~s. Outlays Michel says ~he heart of the problem is-the ~radi- tional congressional focus on budget authority rather than outlays. Budget authority is the amount government agen- cies are allowed to obligate for particular programs. It usually takes-the form of appropriations, Which are vo~ed by Congress. Outlays are the amoun~ actually disbursed by the government in cash or checks during the year. OMB and the administration are concerned primar- ily with outlays, s~nce those are the numbers that deter- mine the deficit. "Let's face it," Michel said, "in 1982, outlays are what ~t's all about." An OMB spokesman concurs. "Our problem is out- lays because that's the deficit," he said, while the Ap- propriations committees want to deal in budget author- ity. "All budget authority is not created equal," he con- tinued. It is entirely possible for the Appropriations Committee "Jn complete good faith, by changing the mix of budget authority, to come out with outlay figures that will ultimately be a lot higher th~n they project." Much of this is due to "spend-out," or the rate at which the programs are paid for. Some pzograms, such as d~ef, ense, s~end o~t s~owly at first~ so the outlays from ,th.~s_e programme l~_eatl~a~s ~et as ~gh a.s e~ec~d the early years. But as the programs progress, outlays later yea~ may be higher than anticipated. Senate Appropriations Commit~e Chai~an Mark Tb~h~g~t-authority is like a checking account that we're putting in the bank," he said. "We're not drawing against it. It's the agencies downtown that draw against that. And again, iFs not mandated levels of spending. Those are ceilings." Di[[ere~l Benchmarks A senior analyst at the Congressional Budget Office (CBO) disagrees with the contention that the Appropri- ations committees pay no attention to outlays. Although that was perhaps true in the past, he said, this year has been. spending more time ~oing over outlay figures wit~ the ~p~ia~ions ~ommittees than an~hin~ else, he said. A~cording to the CBO analyst, the basic problem that the administration and Congress ~se different ~ benchmarks -- or b~seHnss -- toj~dge whether an appropriations bill meets its mark: • T~e administration uses i~ budget re,pests and calculates._spending according to i~ economic assump* tions, using its own caleul~ting methods. • Congress, through CBO, uses th~ first b~d~e~ reso- lution as i~ baseline and the economic assumptions included in i~, along with CBO's somewhat different estimaiing technique. The president's Sep~mber revision of his budget request complicates the baseline problem further and "makes the gap all that much larger," the eBO aide said. The baseline incompatibility, he said, "has always been a source of some confusion, and it will always be a question of whose priorities should provail -- ~ongress' or the administration's." The problem has arisen with all administrations. But, the aide noted, "this administration is very closely watching the budget process, and nobody has followed it as closely ~s D~vid Stockman," --By Dale Tote 0 spending ceilings that reflect the num- bers in Senate appropriations bills. In the House, a Budget Commit- tee staffer said~ there is some disagree- ment within the committee between those who w~i~ ~o draft the resolution now and those who want to wait until they have the administration's pro- posals in hand. A decision on schedul- ing may be made after Congress re- turns from its Columbus Day recess. PAGE 1944--Oct. 10, 1981 Reconciliation Appraised Stockman told the Senate Gov- ernmental Affairs C~mmittee Oct. 6 that reconciliation, rather than the regular appropriations process, should be used as the "ma~or technique for dealing with the budget." Although Stockman's testimony was backed by Domenici, reconcili- ation was roundly criticized by other members of Congress- "The exploitation of the reconcili- ation process, coupled with Draconian Republican party discipline, enabled the executive to unilaterally impose its will in near totality on Congress," said Rep. Richard Bolling, D-Mo. Senate Appropriations Chairman Hatfield maintained that "'the whole thrust of the use of reconciliation this year is foreign to the concept as set forth in the Budget Act." | "[1O5280068

Agriculture Ce l;i tm, n Beg ou, ps A ro nd ,Hiou se Bz II "Phe frayed farm eoal.i.tion, has re- able sonstituency of urban poor, he storage facility loans, except in areas ~, e ~ugar a~ da~r~-section~-0f the Those changes, Bedeli said, years than either President Reagan or the Senate wants. The coalition was operating Oct. 7 when the House, by a 400-14 vote, ac- cepted a compromise package of amendments cutting the cost of its over-budget commi~ttee bill (HR 3603) and then emphatica~y rejected twe~ f6rts to tmker wR?h the compromise s wOV~ :flare threatened dd~e Vote- trading greemen~ among regional commodity interes~ ~d urban food- s~ advocates. ~ the agreemen~ hold, threat- eneggain, tobacco, peanut and sugar programs could survive hostile amend: men~ when the House returns to the 15. farm bill OcL 14 or [~ "We just live~-~-day," re- marked ~p. Charlie Rose, D-N.C., a tobacco advocate who w~ rounding up votes for the compromise. Protective Alignment By the time the Senate finished i~ under-budget farm bill (S 884) Sept. 18, severM rounds of spending cu~ had bruised the coalition. (Weekly Report pp. 1830, 1805) However, during the first~ay of House voting, "you could see the pea- nut and ~ain and cotton and rice peo- ple all working the fl~r for dairy," according to American Farm Bureau Federation lobbyist Mike Durando. Having won fo~-s~mp conces- sions from the administration with the backing of his AgH¢~ulture Co~it~e colleague, ~p. Fr¢d Richmond, D- N.Y, ~Id the Ho~e, "! port sugar . .. ~e~ rice, co~n, dairy, every one of ~ese other ~m- m~ities." Richmond is chM~man of the su~mmit~ with f~ s~mp ju- risdiction. (Weekly Report p. 18~). Richmond's s~tement was no~- ble for severM rea~ns. With hh sir- --By Elizabeth Wehr compromise will hike supermarket prices. Also, in July Richmond had warned that the tobacco program would suffer from backlash against s' R-N. stringent attitudes toward food stamps and other social programs. (Tobacco back- ground, p. 1675) Tom Smith, of the nutrition group a~owledged-the strength of the co- ~i.~t~i~n but st~g~ested that foes ~ the sugar program, in particular, could sti~! prevail because "the choice is much clearer--just do you have this expensive program or don't you." Future Cost Overruns The $I billion cost-cutting com- promise offered by Berkley BedeIl, D~ Iowa~~ fixed dairy pricd~ supports for fiscal 1982 at the existing dollar level of $13.10 per hundredweight, almost 73 percent of parity, the index meant to ensure farmers' purchasing power. In 1988, the minimum would be 72.~ percent of parity. In 1984-85, it would drop to 70 percent, unless fed- eral purchases of surplus dairy goods were estimated to be less than the equivalent of 3.5 billion pounds of milk in either year. Then, the mini- mum would rise to 75 percent. The committee bill had provided 75 percent of parity for four years, while S 884 set a 70 percent or $13.10 minimum under certain circum- stances. Dairymen argue that by 1983 or 1984, the $13.10 figure could represent supports as low as 60 percent of par- BedeWs amendment also:. $Lowered to 18 cents a pound:, from 19.6 cents, the 1982 sugar sup- port price of the committee bill, with annual half-cent increases thereafter. e Made these programs optional for the secretary of agriculture, in- stead of mandatory:, a new price sup- port program for sunflowers, the emergency feed program and farm brought the total fiscal 1982 cost of HR 3603 to $2.165 billion, compared with $2.139 billion for S 884, as calcu- lated under the assumptions of the first budget resolution. That meant the bill complied with the first budget resolution levels for 1982. However, ~tals for the subse- quent years, summed up by Rep. Wil- liam C. Wampler, R-V~, showed co,st overruns: fiscal, 1983, budget resolu- ti:on, $1.671 bfl~li~n in new entitlement authority, compared with $1.903 bil- lion for HR 3603 as amended by Bedell; fiscal 1984, budget resol(~tion, $1.407 billion, compared with $2:237 billion for the amended bill, He added that since the numbem were based on re-estimates of the res- olution, they cannot ~'determine -whether the bills ~re over d~ under.'" Victory for Dairymen The attack on the compromise came from Rep. Barney Frank, D- Mass., who lo~t by I53-243 in his at- tempt to insert Reagan's dairy section as approved by the Senate. Rep. James M. Jeffords, R-Vt., also sought unsuccessfully to fix a 70 percent or $13.10 minimum for one year only and then to let the dairy program revert to 75 percent as provided by the 1949 farm law. Jeffords' amendment lost 123-277. (Votes 240 and 241, p. 1984). While Jeffords' plan had more surface appeal for dairymen, it was Bedell who had the backing of most of the industry because his compromise assured votes from other commodity interests. Frank recognized that he had been caught in a lobbying maneuver designed to favor Bedell by making himself and Jeffords both appear to be extremists. Jeffords' amendment, Frank said, was "not serious." Patrick B. Hsaly, ~ecretary of the National Milk Producers Federation and a key coalition engineer, said afterward that "we're very well pleased" with the House dairy vot.es. | Oct. t0~ 1981--PAOS 199[~O~5 T105280069

LETTERS uals involved in this case.. Clearly, many facts about this episode have not suneao~L The slx~itic individuals who wrote the let- ters are known to bo dedicated physicians and scientists who have spent their entire lives in teaohing~ research .an.d i~. tie, nt care. I suspect they ,arc being w'otnmzect on ac- count of'the actions of othe~s- P&IILIP I,tU, M.D. BalSam an~ '~om,Ws l~ospital In general, NEWSWEEK is to b~ con- an unusu.a..~/fao- pital ever call for verification of the letters? Why was Dr. Hussain:s medical license not suspended7 Why was he released on person- al recognizance if he was considered to tm a danger to society? . MICHAEL STANTON-HICKS University of Massachusctts Medical Center Worcester, Mass. In you~ a_~le a ~bo:ut,Dr. Ardf~,.,~u_sg~n, one of tliose who is s~id to halve: Written checkmakes lcttca's to the 1~affalo hospital recommend- ing Dr. Hussaln for appointment. In fact, Dr. &abel did not recommend Dr. Hussain to the Children's Hospital in Buffalo or to anyone else. THEODORE CHASE Boston, Mass. ~ Dr. aabel wrote a character reference on Dr. ltussain for thesentencingjudg~ This is quitedifferent from a letter of recoramen- c~aHon, and ~WSWEEK regrets the error. T0baccd'Puffery~" The Tobacco Institute's ads about how much , the tobacco industry The morality I understand, but Fm still left with a question:if it's so good economically, how come they need a governm~mt subsidy2 BARRY W. HILL-TOUT Athens, Thanks for telling mc all about how much the tobacco industry means to thh economy of Virginia, which has yet to raft- Fy the Equal Rights Amendment. I'm sure ~ha~t mY f, mi~ist friends who~.smoke will g~t ~h¢ message. Baltimore, Md. Solidarity in Amerie~ I am thoroughly displeased at your meao ger coverage of Solidarity Day (~A~ONAL A~AmS, ScpL 28). This was the laxgcst meeting of labor groups in this decade and was virtually ignored by you. As one of the mor~ than. 250,000 pat~d'~ipants, my disap- pointment is understandable. I am a local union l~aderwho until Solidarity Day felt a bit alone. Now I know what unionism and solidati~ arv--4ahc working peopi~ of Am~fi ~a m~ting tog~fl~er out hcrc bc~ing affected by Reagan'.s budget policy. The working people have spoken; let's hop* the politicians, listen. Does your covm-age of Solidarity Day • mean that the new social value is watching soap operas while ~atin$ cake from $200,000 dinner service2 If so, perhaps we need not worr~ about the enemy without~ we will do quite well by LAURA E. BERTERA Cleveland, Ohio Leonard's Victory Pete Axthelm shouldn't accuse the judges in the, Thomas Hearns-Sugar Ra.y Lconard fight of any larceny or incompe- tence (SPOXTS, Sept. 28). Leonard wa~ way Consider all the advantages of paying by ¢heck.~ Checks arc safer to carry - around than cash. They give you a permanent record Of your expenditures. And when you pay by check ~here are no interest charges on your purchases. All good reasons why smart shoppers like yOU are turning increasingly to checks. And, wherever you see a TeleCheck® sticker, you know that the merchant who displays it will take your check.with no hassle...even when you're out of town. TclcChcck service let's him verify it in seconds--so you don't have to wait, or suffer through long, embarrassing pro- cedures. Only one ID is re- quired, and you don't have to join anything; your good name is cnough. I.xa short, theT~leCheck emblem is the sign of a mer- chant who really values your business. Look for it when you shop.~ ® /~" NEWSWEEK/OC10OBER 19, 19|i Tt05280070