Friday, November 9, 2007

Fear of Big Tobacco in California?

This morning Mike Zapler at the Sacramento Bureau of the Mercury News examines the the new tobacco tax proposed in California as a means of funding health care reform. Two dollars a pack could generate a lot of revenue for expanding coverage to the twenty percent of California residents who lack it, but will it be that easy?

Problem is, it might be the very thing that dooms health care reform.

A new cigarette tax would be tantamount to a declaration of war on Big Tobacco, which last year spent more than $65 million to defeat a $2.60-a-pack tax on the California ballot and just this week easily turned back an attempt in Oregon to raise tobacco taxes.

"You can bet they would aggressively fight it, and I don't think they'd be alone," said Sacramento political consultant Frank Schubert, who advised tobacco companies during last year's ballot campaign.

Any attempt to overhaul health care is bound to invite opposition, given the huge financial stakes in the system. The tobacco tax idea is an example of the difficult balance that Gov. Arnold Schwarzenegger and Democrats are struggling to strike at the negotiating table: achieving meaningful reform without triggering insurmountable opposition.

The challenge is amplified by the fact that any health care proposal is certain to end up on the ballot, where interest groups can spend tens or even hundreds of millions of dollars to defeat it.

He goes on to look at the pros and cons of several aspects of the legislation in its current form, paying particular attention to sections of the law that could be contentious. From Governor Arnold Schwarzenegger's lottery lease plan to the Democratic provision for purchasing drugs in bulk, he provides a concise summary of the options being put forth.

As for tobacco, backers of the proposed cigarette tax - which would be on top of the current 87-cent-a-pack tax - acknowledge the industry's political might. But they say the millions of dollars tobacco companies likely would spend against a health care initiative wouldn't necessarily ensure defeat, given the industry's low standing among the public.

"If you have all of the health care community backing reform, I think it can trump the money spent by tobacco," said Kris Deutschman, a political consultant who advised last year's failed campaign to raise the tobacco tax. "Because all they have is money and self-interest."

SOURCE: "Analysis: Tobacco Tax Could Doom Plan for Health Overhaul" 11/09/07
photo courtesy of curran.kelleher, used under this Creative Commons license

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