Will the Genie Grant a Cigarette-Ban Wish?
By Tommy J. Payne
Executive Vice President - External Relations
R.J. Reynolds Tobacco Holdings, Inc.

Surgeon General Richard Carmona uncorked a genie's bottle of political hypocrisy with his comment before Congress that he would support banning the sale of tobacco products.

Why didn't such a bold, sincerely delivered statement, coming from the nation's top physician, win him praise from the anti-smoking lobby and politicians who have long decried smoking?

Leaving issues of individual freedom, adult responsibility, social engineering and political correctness aside, the answer may lie in that famous piece of advice, "follow the money."

Surgeon General Carmona, perhaps unintentionally, revealed the ultimate game of wanting to have it both ways. The government is "addicted" to tobacco revenue.

Between 1998 and 2002, the government collected nearly $135 billion from U.S. smokers, who have a median annual household income of about $35,000. Government pockets more tobacco revenue per minute than the average working family brings home in a year. About 47 percent of the cost of an average pack of cigarettes goes to the government (R.J. Reynolds Tobacco's profit per pack, in contrast, is about 3 percent).

State governments are particularly dependent upon cigarette funding. If the Surgeon General were to get his wish, for example, the state of California would stand to lose $2.3 billion annually. New York would be out $2.1 billion. Texas would fall short by $17 billion and Michigan, more than $1 billion.

In 2002, 44 states faced budget deficits. Twenty of them increased cigarette taxes to help make up the difference. To date this year, nine states have increased cigarette taxes. It's a good thing that the suggestion to ban this enormous revenue stream to the states came from a physician - a number of state governors might need CPR if they were told they'd lost their state tobacco revenues.

Ironically, even the anti-smoking lobby couldn't warm up to the concept of banning cigarettes. Given that revenues from taxes and the Master Settlement Agreement between the states and major cigarette manufacturers have provided more than $2 billion in funding for youth nonsmoking programs and other tobacco-control activities, perhaps that's not as surprising as it might seem on its face.

Entirely apart from the government's financial dependence upon tobacco, banning a product used by nearly one-quarter of the adult U.S. population is a dicey proposal at best. Is it realistic to believe more than 40 million Americans would just quit smoking? The black market created by such a move would make the Sopranos look like a bunch of choir boys.

So in supporting the abolition of the government's golden - if not platinum -- goose, did Surgeon General Carmona lay an egg? Perhaps not. He deserves credit for raising an intellectually honest question of whether cigarettes should remain legal for adults in this country. If so, should they be operated by a government monopoly, as some nations do, or by private enterprise? And if they are to be operated by private enterprise, how should the manufacture and sale of a product with universally known health risks be regulated?

Current proposals to give the Food and Drug Administration (FDA) authority to regulate cigarettes would be tantamount to granting Surgeon General Carmona his wish. The U.S. Supreme Court has already ruled that as currently chartered, the FDA would be obligated to ban cigarettes.

There are additional reasonable regulations that could be placed on U.S. cigarette manufacturers that could serve the public interest - for example, uniform good manufacturing practices, consistent standards for ingredients and their disclosure, and rules for communicating "tar" and nicotine yields. But reasonable federal regulation should not include restrictions that restrain legitimate competition between manufacturers for adult smokers' business, nor should it lead to de facto prohibition by making cigarettes unacceptable to the adults who choose to smoke them.

Perhaps the best characterization of the reaction to Surgeon General Carmona's position is this: Be careful what you ask for. You just might get it.