Around the Nation

Around the Nation

GOP might exceed spending limits

"I'm not saying we're going to bust them or not bust them," Speaker Dennis Hastert (R-Ill.) said.

Some top Republican aides went further, saying that in private consultations, the House GOP seemed to be moving toward surpassing the spending limits for fiscal 2000 by billions of dollars. The aides said no decision has been made.

The budget Clinton sent Congress this month claimed to obey the limits for fiscal 2000, which begins Oct. 1. But Republicans have accused him of breaking those caps by paying for extra expenditures with higher tobacco taxes, user fees and other savings.

The spending issue is among several in which Clinton's budget attempts to corner Republicans as Congress begins crafting a 2000 budget. He has proposed using hundreds of billions of dollars in projected budget surpluses to shore up Social Security and Medicare, two widely supported programs, daring them to use some of that money for tax cuts the GOP wants.

"He has a habit of trying to put us in a box on every issue," said Rep. Saxby Chambliss (R-Ga.) a senior member of the House Budget Committee. "We've just got to work through it.''

For years, Republicans have made reducing the size of government a philosophical tenet. They won billions in cuts after taking control of Congress in 1995, but spending has since crept upward. Last fall, they acceded to Clinton's demands for extra spending and added some increases of their own to produce a session-ending measure that exceeded 1999 budget limits by $20 billion.

This year, many Republicans are concerned that staying within the limits for 2000 would entail cutting popular programs and perhaps a risky budget fight with Clinton. In addition, both parties want to boost the Pentagon's budget, making it even harder to stay within spending limits.

"The world changes every day," said Rep. Jerry Lewis (R-Calif.) chairman of the House Appropriations Committee's subcommittee that oversees military spending. "We can't pretend we're operating in a rigid forum.''

The 1997 budget-balancing pact enacted by Clinton and the GOP-controlled Congress would limit discretionary spending in 2000 to $536 billion, or less than one-third of next year's $1.77 trillion budget. Discretionary spending covers all defense and domestic programs, excluding benefits such as Social Security and Medicare, plus interest on the national debt.

More than 12 unions sue tobacco industry

The first of more than a dozen such lawsuits went to trial in federal court this week in Akron, Ohio, with 114 Ohio union health funds demanding $2 billion and accusing Big Tobacco of using images like Joe Camel and the Marlboro Man to sell cigarettes to less-educated, blue-collar workers.

"The tobacco industry was aware that people with lower incomes and less education are more susceptible to the advertising," said Mike Withey, an attorney for the plaintiffs.

The health funds in the 1997 class-action suit are led by Iron Workers Local Union No. 17 Insurance Fund.

The tobacco companies contend there is nothing illegal about their advertising. However, one defendant, the Liggett Group, an industry maverick, settled and plans to cooperate with the unions' case.

Over the years, plaintiffs suing the tobacco industry have run the gamut: flight attendants; the nations of Guatemala, Panama and Bolivia; a pediatrician with emphysema who is a lead plaintiff in a $200 billion class-action suit on behalf of Florida smokers.

Union health plans are part of a ring of plaintiffs that some call "secondhand entities" - organizations or governments that claim financial damage, as opposed to individual smokers claiming cigarettes made them sick.

So far, the union cases have been largely unsuccessful. Nine have been thrown out, with some judges saying the unions have no legal standing unless they file separate lawsuits on behalf of every smoker.

"These claims are too remote. They've been a resounding failure," said Steven Rissman, assistant general counsel for Philip Morris. "Akron is certainly an aberration. We're not concerned about floodgates."

Nonetheless, a victory in Ohio "would clearly break new ground," said Richard Daynard, chairperson of the anti-cigarette Tobacco Products Liability Project at Northeastern University in Boston.

Because last year's $246 billion settlement with the states immunized companies from individual states' lawsuits, he said, many thought the industry "would be basically home free."

"It's now apparent that they're far from it," Daynard said. "If they settle this, they're in very bad shape," because "presumably you have other health-care providers in the wings. If they lose, they're in even worse shape because they've proven to people there's no reason these suits can't win."

Coming two weeks after a $51.5 million verdict against Philip Morris in California and several months after the $246 billion settlement, the case raises the question: How much more can cigarette makers take?

Nobody is suggesting the industry is ready to crumble. While cigarette company stocks are down, the two biggest players, Philip Morris and RJR Nabisco, are involved in many more businesses than just tobacco.

"They don't call it Big Tobacco for nothing. It's not on its knees yet," said Carl Bogus, a product-liability expert at Roger Williams University.

All of the litigation has helped push some tobacco stocks down sharply. Philip Morris sold for $40.87 1/2 as of midday Wednesday, down 19 percent from its 52-week high; Loew's Inc., owner of Lorillard, sold for $79.56 1/4, down more than 26 percent. Others have dropped less drastically.

Martin Feldman, a tobacco analyst at Solomon Smith Barney, acknowledged that these big cases - and the sensitive internal industry documents they've dislodged - can scare investors. But he is not staying away.

"Big settlements encourage the plaintiff bar to seek further ways of profiting from the tobacco pot," Feldman said. "But at the end of the day, they face an industry that's well-funded and substantially has the law on its side."

CIA: Russia vulnerable for YK2

Air Force Gen. John Gordon, CIA deputy director, told a Senate Armed Services Committee hearing that Russia appears particularly vulnerable, raising concerns about the safety of its missiles, nuclear plants and gas pipelines.

02-25-99