Congress, Tobacco, And a President Who Lights Up

Congress, Tobacco, And a President Who Lights Up

November 10, 2009
Originally published in Cigar Magazine

It’s called the Family Smoking Prevention and Tobacco Control Act but, outside of its title, the word “family” appears nowhere in the bill. It was signed into law by a president who apparently lights up in secret now and then, but who carefully ducks the question of whether he’s still a smoker.

And it focuses on an activity that, a decade ago, was as reviled by the elites as the emission of carbon dioxide is today. However, unlike today’s global-warming mania, which has yet to peak, the antitobacco bandwagon has arrived at its destination and dumped its beaten-into-submission load. Big Tobacco has been whipped. Go to the Web site of its major player—the first message you see is “Philip Morris supports federal regulation of tobacco.” Or, look at the smokers huddled on their sidewalk sanctuaries outside office entrances; they have less political clout these days than Hummer drivers.

I exaggerate, perhaps—but not by much. Tobacco’s status is so low that it was the occasion for President Obama’s first violation of his no-new-taxes campaign pledge.

It may be hard to remember now, but Obama actually did make such a promise during his campaign: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes… except tobacco taxes.”

Did I get you? Those last three words were not part of Obama’s pledge. He promised not to raise any of your taxes—period. Nonetheless, Obama hadn’t been president for even a month before he broke that promise with a law expanding subsidies for children’s health insurance, conveniently funded by a more-than-100-percent hike in the federal cigarette tax (cigars were also hit, though not as badly as in earlier proposals).

Only a product whose legitimacy had been totally destroyed could so quickly become a revenue doormat for the new administration. As the old joke goes (my old joke, that is), if you think tobacco is addictive, wait till you see the addictiveness of tobacco revenues.

Four months after the tobacco tax hike came the Family Smoking Prevention and Tobacco Control Act (often referred to as Kennedy-Waxman for its two major congressional sponsors), a totally different law than the health insurance bill. Tax increases tend to be relatively easy for the public to figure out, which is why politicians avoid them when possible (unless, that is, they involve soaking a demonized product such as tobacco for a saintly purpose, such as kids’ health insurance).

Kennedy-Waxman, on the other hand, was an incredibly complex regulatory bill. It bestowed an entirely new power on one of the country’s largest government agencies, it chipped away even further at First Amendment protection for advertising, and it triggered a major battle within Big Tobacco. In all likelihood, it will do little to advance public health, but it sure does have a nice name: the Family Smoking Prevention and Tobacco Control Act (even if the word “family” is purely for show).

The New Food and Drug and Tobacco Administration

The FDA has vast regulatory power over food and over medical drugs and devices, but tobacco has long been off-limits to the agency. But in 1995, under Commissioner David Kessler, the agency tried to bestow power on itself over tobacco. It declared that cigarettes were “nicotine-delivery systems,” and thus fell within the FDA’s medical jurisdiction. This claim was ingenious but it was also illegal, and the agencywas slapped down by the Supreme Court five years later. The court ruled that Congress had never given the FDA power over tobacco—a fact buttressed by tobacco’s lack of similarity to pharmaceuticals. If tobacco was a medicine, then what disease did it treat?

However, with the new law, the FDA now has clear power from Congress, and that power is massive. The FDA will set and enforce new standards for labels and warnings (the new warnings on cigarette packages, by the way, will be huge, occupying the upper half of both the front and back of the pack). The FDA will also enforce mandatory ingredient listings, and control certain selling and advertising methods. Added flavors, other than menthol, will be banned. “New tobacco products” will now have to be approved by the FDA before they can be marketed, as will “modified risk products,” which attempt to reduce the hazards of tobacco use. The FDA can also set limits on nicotine levels. However, there are certain things the FDA cannot do, such as categorically ban cigarettes, cigars, or existing products, and it cannot totally eliminate nicotine.

These last provisions were undoubtedly intended to calm the fears of the industry and smokers that the law would eventually result in a total ban. There had been similar fears when the FDA had unveiled its 1995 proposal, but both the FDA itself and antitobacco activists dismissed these fears as absurd overreactions at the time. In his 2001 book, A Question of Intent, which details his time as head of the FDA, Kessler derides these predictions of a new Prohibition as feeding “the peculiarly American distrust of government.” But, as that book makes clear (perhaps unintentionally), Kessler and his aides themselves thought that tobacco regulation might well lead to a total ban on smoking. And, despite the new law’s exclusion of categorical bans of cigarettes or cigars, those who fear Prohibition might still turn out to be right. There’s less to those provisions than meets the eye.

For example, the FDA might not be able to set a zero-limit on nicotine, but it might very well set one that’s perilously close. Cigarettes currently vary greatly in nicotine levels. Regular cigarettes may have 10 times or more the nicotine of low-nic brands, but by requiring a sufficiently low nicotine level, such as .01 milligrams per cigarette, the FDA could make even today’s low-nic brands taste strong by comparison. We could end up with cigarettes that range from ultra-low-nicotine to ultra-ultra-low. Many smokers might quit in disgust, but many others might not. And if, at some point, the FDA decided that there were still too many smokers in this country, it could push its nicotine standard down to.001, or .0001. In short, the FDA could make cigarettes as unsatisfying as it wants to, effectively eliminating demand for them without violating the law’s requirement that it not ban them. After all, it could argue, isn’t this in line with our prime function of protecting the nation’s health?

Call it Prohibition with a twist.

What Agencies Want : A Civics Lesson

Government agencies covet power. More power means bigger budgets, larger staffs, higher profiles, and an increased chance to do good. Well, hold off on that last point; in the case of cigarettes, is there an adult with a pulse in this country who does not know that smoking is a damn risky activity? Prohibiting cigarette sales to minors is clearly a valid government function, but sales to minors are already illegal and have been for decades. Did those laws need to be strengthened? Perhaps, though smoking among high-school students is at a historic low. But what did that have to do with the huge new regulatory apparatus that the Family Protection Act established within the FDA? If adults know the risks of something, why shouldn’t they be able to take those risks—just as they take the risks of skiing, hang gliding, and overeating?

A decade or two ago, the answers to those questions would have been obvious. Of course adults should be able to take these risks—that’s what much of life is all about. But times have changed; while skiing and hang gliding may not be under political assault, that’s no longer true of overeating. Beginning in the 1990s, the alleged costs that being overweight imposes on society became the basis for a slew of academic studies and policy proposals, ranging from school-lunch reform and vending-machine restrictions to special taxes on snack foods. These policies’ advocates became known as the “food police,” and, in the last few years, they’ve gone from being viewed as nuts to being part of the Obama administration. One place where a number of them are now situated is the FDA. They’ve warmly welcomed the powers vested under the Family Protection Act.

Under the Bush administration, the FDA had taken a far different view. In 2007, its head, Dr. Andrew C. Von Eschenbach, did something practically unheard of for an agency chief: he opposed expanding the power of his agency. In his view, FDA regulation of tobacco would undercut the agency’s public health role; the agency could assure the safety and effectiveness of medical drugs, but it could hardly do that for a product that it viewed as inherently unhealthy. For example, the bill would ban what it defined as “adulterated” tobacco products—those that contained substances that were “filthy, putrid, or decomposed” or “injurious to health.” Von Eschenbach didn’t quibble with those first three criteria, but he didn’t see how the last one could make sense if tobacco was unhealthy by its very nature. He also believed that formal approval by the FDA of new tobacco products (as required under the bill) would give the public a false sense of safety. Finally, he thought that FDA knew bubkes (my term, not his) about tobacco, and that it would cost the agency a bundle to gain the necessary expertise—all this at a time when the agency was under fire for a wide range of alleged safety lapses, especially regarding imported foods and drugs.

Not unexpectedly, the bill’s supporters disagreed with Dr. Von Eschenbach. Representative Henry Waxman declared that he was “surprised,” “distressed,” “dismayed,” and “alarmed” (not in the same sentence, but in the same letter).

Dr. Von Eschenbach resigned once the Obama administration came in. His successor at the FDA shared none of Von Eschenbach’s concerns and instead proclaimed that the agency “welcomes the authority given to us by Congress.” Kennedy-Waxman was passed by Congress last spring, and was signed into law on June 22.

Big Tobacco’s Cat Fight: An other Civics Lesson

If the FDA’s initial opposition to Kennedy-Waxman was a big surprise, so was the tobacco industry’s split over the bill—at least to outsiders. Philip Morris was a major supporter, while R.J. Reynolds and Lorillard, its two smaller competitors, opposed it. Their split sheds some interesting light on the corporate infighting that can accompany, and sometimes even trigger, government regulation.

Industries generally oppose government regulation; they have products to sell, and bureaucratic rules get in the way.But, in some cases, regulations can give certain companies big advantages over their competitors. For example, testing and reporting requirements can impose sizable costs, but companies with larger market shares can spread those costs more widely. Their smaller competitors, on the other hand, don’t have that ability; they’ll have to raise their prices more than the larger companies, or take a bigger loss per unit. With their competition hamstrung, larger companies can end up benefiting overall, despite the fact that regulatory compliance costs have gone up.

Or, take a case where one company has a lock on certain new technologies. If new regulations end up mandating the use of those technologies, that company will have a major advantage; its competitors may have to pay huge licensing fees for the technology, embark on expensive crash programs to develop their own, or drop out of the market entirely.

Similarly, restrictions on new products and advertising may help lock in a large company’s dominance by making it more difficult for smaller firms to create and advertise new products. Existing products, on the other hand, get off easy because they’re usually “grandfathered”—that is, exempted from the new rules. In fact, a Wall Street Journal editorial dubbed Kennedy-Waxman the “Marlboro Preservation Act.”

These, however, are not the arguments that a proregulation company would put forth publicly—that sort of crass honesty would get it nothing but laughs. Instead, its arguments would be cast in terms of serving the public interest.

This large company/small company split was exactly the pattern of the lobbying battle over Kennedy-Waxman. Philip Morris has over half the cigarette market in the US, more than R.J. Reynolds and Lorillard combined. Philip Morris praised the bill for creating a “comprehensive national tobacco policy that could potentially create a competitive framework within which manufacturers are focused on reducing the harm that tobacco causes.” The ultimate beneficiary, it argued, would be tobacco consumers. Both R.J. Reynolds and Lorillard, on the other hand, expressed concerns about restricted competition, the disregard of consumer acceptability, and the possibility of an eventual tobacco ban. Several small-business associations took similar positions.

As for the rest of us, the major antitobacco groups supported the legislation, as did the health and medical groups—American Cancer, American Heart, American Lung, American (fill in the blank with your choice of disease or organ). So did most major newspapers. And so it was something of a surprise when, on the date the president signed the bill, a Gallup poll found that, by a narrow margin, Americans actually opposed it. The public over was 52 percent opposed and 46 percent in favor. Nonsmokers favored the bill by a narrower margin (50 percent to 48 percent), while smokers opposed the bill by more than two to one. More encouragingly, a mere 17 percent of the public favored a total ban on smoking. Perhaps those huddled sidewalk smokers aren’t as politically isolated as they look.

Protecting Us?

So, just what will the Family Smoking Prevention Act do to protect our health? On that basic point, there’s good reason to think it won’t do anything at all and that, in fact, it will actually be unhealthy. Consider these allegedly prohealth provisions of the law:

Nicotine standards: As previously explained, the FDA could set a near-zero standard as a backdoor means of banning cigarettes, but is unlikely to try that in the near-term because it would face both public opposition (even from nonsmokers) and heavy litigation. But even if the FDA just lowers nicotine levels moderately, this could have some bad health consequences for smokers. Nicotine is what smokers crave in their cigarettes, while tar is what hurts them. The less nicotine a cigarette has, the more tar most smokers will inhale in order to get their fix. For this reason, low-nicotine cigarettes may well be the unhealthiest ones for many smokers.

Mandatory smokeless tobacco warnings: The Act mandates a set of warnings about addictiveness and disease that smokeless tobacco products (such as snuff and chewing tobacco) must carry in rotation, including the statement that “this product is not a safe alternative to cigarettes.” However, while smokeless tobacco does carry medical risks, it clearly is safer than smoking cigarettes; by some estimates, the health risks of cigarettes are 50 times as great as those of smokeless. In Sweden, for example, the growing switch by smokers to snus, a form of smokeless tobacco, has greatly reduced that country’s tobacco-related death rate. As even an American Cancer Society spokesman acknowledged, “switching to spit tobacco and quitting tobacco altogether are both far less lethal than continuing to smoke.”

In the US, most smokers know next to nothing about the comparative health risks of smokeless tobacco and cigarettes. But the new law’s warning mandates, coupled with its advertising restrictions, make it far more likely that those people will stay in the dark.

Approval requirements for new and “reduced risk” tobacco products: The Act also prohibits new tobacco products that are substantially different than those currently available, or that claim to be less risky than current products unless FDA approves them. One outlandish factor that will go into that approval process is a “for the good of society” standard. Imagine a smokeless cigarette that actually tastes good—it might be both safer and better than any cigarette out there today. But if the FDA decides that this great new product might entice nonsmokers to start smoking, or that it might keep smokers from quitting, it could ban it on that basis alone, regardless of the benefits it would offer to smokers who have no intention of quitting.

It’s for this reason that American Enterprise Institute scholar John E. Calfee calls the Act “one of the worst public health laws ever conceived.” He and other analysts see such restrictions as “severely undermining” the incentives of anyone to develop better or safer products. Similarly, Boston University public health professor Michael Siegel, a longstanding antitobacco activist, asks, “Why would Congress want to ban potentially safer products and continue to allow the deadliest nicotine product (conventional cigarettes) to remain on the market?”

Part of the answer lies in the fact that most antitobacco forces view safer cigarettes as a threat to their cause. The less risky smoking is, the more attractive it might become.

To which, I suspect, many might respond, “What’s wrong with that?” What is wrong with giving people better options? Shouldn’t adults be able to make their own decisions on matters like this?

Which brings us to one adult in particular.

Back to the Smoker in the Rose Garden

So what are we to think of President Obama sneaking off, out of the public eye, to grab a puff? In one sense, he isn’t all that different from those smokers standing outside building entrances; they all have to scurry away from where they’d normally be in order to light up. On the other hand, he’s the prez; for him, finding a safe place to smoke is a lot easier.

Let’s turn to the wise words of the cofather of the new law, Representative Henry Waxman, whose comment on Obama was, “He’s an adult and knows the dangers.”

Too bad Mr. Waxman and his colleagues, including Obama himself, don’t have the same respect for the rest of us adults.