Up In Smoke

By NANCY GIBBS

Like any smoky gentlemen's club, the U.S. Senate includes some members the others wish had never got in. Too pushy. Always wanting to change things, even bedrock traditions like due respect for the marriage of money and power. So when the deeply scarred, highly disruptive Republican John McCain stood on the Senate floor last Wednesday, stared down his colleagues and accused them of honoring their debts to Big Tobacco over their obligations to "those who can't care for themselves in this society, and that includes our children," the few G.O.P. statesmen present sat silent while Democrats across the aisle stood and applauded. McCain walked out of the chamber.

How did it happen that one of the decade's most ambitious pieces of legislation, which had so defied the odds that it seemed on the brink of passing, could have died so suddenly last week? McCain's landmark tobacco bill would have raised at least $516 billion over the next 25 years from higher cigarette taxes while increasing regulation, capping liability and fighting teen smoking. President Clinton was staking the finale of his presidency on moving the bill--not to mention the $65.5 billion worth of education and health programs in his budget that were pegged to new revenues. A majority of Senators supported some kind of legislation, and the public had clearly signaled its disgust for a mendacious industry that had been exposed in a series of court cases for specifically targeting children in its advertising to ensure a steady supply of lifetime customers.

There was no mood change in the country, only one in the narrow political calculations of its major political players: a Republican Congress with a slim majority desperate to play to the activists who will turn out in the fall, a White House too distracted and declawed by scandal to fight and an electorate too content to complain much.

Certainly the breathtaking $40 million ad campaign by the tobacco industry left its mark on those voters who were paying attention; just as the health-insurance industry recast Clinton's health-care initiative four years ago as a bureaucratic monster, the tobacco industry successfully reframed the legislation as a Big Government, big-spending, tax-hiking mess. But that effort alone could not have worked if a lot of politicians had not sat down and done the math and found that the poll numbers did not add up the way they had long expected. In the months leading up to the midterm elections, when only the party's hard-core base of supporters can be counted on to turn up, Republicans are more concerned with the priorities of the social conservatives and the business community than with a broader public that doesn't seem to be paying much attention anyway.

Most calculating of all is Senate majority leader Trent Lott, the man who allowed the bill to get as far as it did--and the man who ultimately killed it. Lott's willingness to work with Clinton in years past had produced a balanced budget, a chemical-weapons treaty and a reformed welfare system. This time, cutting a deal on a tobacco bill began to look like his "least worst option." He remembered well how Clinton and the Democrats had humiliated Bob Dole after Dole told Katie Couric that smoking might not be addictive. If the Republicans were seen to be blocking antismoking legislation at a time when the tobacco industry was by far the biggest soft-money donor to the G.O.P., they'd be pummeled by the White House and Democrats in the midterm elections.

When the wrestling began earlier this spring, even Lott's close ally Mitch McConnell, from Kentucky tobacco country, was telling him he had to pass something. McConnell hated the McCain bill. He called it "a turkey" in public and worse in private. But he advised Lott to push the process forward rather than get run over by it. Lott went to McCain and asked him to craft a bill in the Commerce Committee, knowing he was the man to get an ugly job done. McCain had credibility with Democrats and the White House; and if the process exploded in McCain's face, that wouldn't be such a disaster either. A lot of McCain's colleagues would be happy to see that happen to the man with a habit of exposing pork-barrel projects, pushing campaign-finance reform and generally making life less comfortable for his Republican colleagues.

McCain muscled his bill out of committee with a 19-to-1 vote after several days of bruising negotiations. He took the original $368 billion deal the state attorneys general had struck with the tobacco industry last year and went much further. McCain's version would have cost cigarette makers some $516 billion over 25 years, with more legal liability and serious penalties if teen smoking didn't actually drop. Lott followed the process closely and constantly reassured McCain that he was supporting his chairman. "Trent Lott has been straight with me throughout this process," McCain said repeatedly. Privately, those close to the process who wanted a bill counted Lott as a tacit ally.

In fact, Lott's complicity created all kinds of problems for him within his own party. Some members hated the prospect of losing tobacco money: farm-state Senators worried about their tobacco farmers; tax haters like Phil Gramm were against tax increases in general. Pulled in opposite directions, Lott wiggled his way through the process, some days describing the McCain bill as big and bad and unworkable, the next day suggesting it should survive. "Just be patient," he told a proponent recently. "We'll get there." He promised proponents that the bill would have a much better chance at passing if they allowed amendments like Gramm's, which would cut the "marriage penalty" in the tax code, and Senators Paul Coverdell and Larry Craig's, which would provide new antidrug funding. Those amendments passed two weeks ago, and suddenly it seemed that the McCain bill might defy the odds and clear the Senate.

But a different drama was unfolding in private. On June 9, at the regular Tuesday lunch of Senate Republicans in the Mansfield Room of the Capitol, conservatives started passing out copies of a new survey by G.O.P. pollster Linda DiVall that showed that voters rejected the McCain bill 57% to 34%. Her findings on tobacco were startling--and exactly what some conservatives, and the tobacco companies, wanted to hear: when given the right message, respondents preferred a candidate who placed a higher priority on fighting illegal drug use than on raising cigarette taxes to fight teen smoking--and didn't like anything that looked like the return of Big Government.

By the end of that week, Republicans all over the Hill who opposed the McCain bill were talking about the DiVall poll. Never mind that the survey had been partly funded by the tobacco industry and the questions had been written in a way that tarred the bill. "If this is a crisis in America," said Gramm, "America doesn't know it." Flying with Lott to Barry Goldwater's funeral, Speaker Newt Gingrich had also made it clear how desperately the House wanted to avoid a big fight with its base supporters before November.

In the end, it was McConnell who was most persuasive. He told Lott that things had changed since the process had begun in April. His Senate candidates were safe; in tight Senate races, such as in North Carolina and Kentucky, defending tobacco would help more than hurt. Besides, McConnell argued, the industry was promising to run ads on behalf of G.O.P. Senators to defend them against charges that they'd killed the bill. "We can walk away from this," he told Lott.

G.O.P. Senators held a special conference in Lott's private offices Wednesday morning. From the moment Lott started the meeting, it became apparent to McCain that it had been called in order to choose a procedure for killing his bill. But McCain gave it one last try. "This has become a Republican bill!" McCain argued. "Are we going to say no to a tax cut and no to funding for the drug war? Are we going to say no to the two highest priorities in the Republican Congress?" The answer was still yes. "We're pulling it down, John," Lott told a deflated McCain.

In a lusciously cynical switch, the amendments that various G.O.P. Senators had tacked on to make the bill more palatable now made it easier to deride as a huge, mangled monument to Big Government. And so Lott spun in place and called for a vote on whether to let the bill come to the floor, knowing full well that McCain did not have the 60 votes he would need. And with that, any chance of passing a comprehensive bill died, stalling the engine that was meant to power the last two years of the Clinton presidency.

No single domestic-policy issue has consumed so much of Clinton's public time and attention, though in the larger context of this turbulent season, that is not saying much. Since January there have been two White Houses: the one that handles scandal and the one that handles everything else. The only problem with that survival strategy, as last week's vote made clear, is that there isn't much else. For all his shiny approval ratings, Clinton has been foiled time and again in moving anything through Congress, from imf funding and voluntary national standards for student testing to campaign-finance reform and U.N. dues. A tobacco deal was supposed to show that Clinton was still in the game, while also funding programs for child care and education that he had laid out in January. That's why Clinton had been so willing to compromise on everything from tax cuts to liability limits.

Lott believes the President could have got a deal if he really wanted one. According to a source close to him, Lott began telling lobbyists last year that they had better get Clinton on board if they wanted a deal. "We're not gonna walk the plank alone," Lott told them. The two men spoke over the phone on occasion, but most of Lott's contact was with chief of staff Erskine Bowles--someone Lott "likes and trusts." The President remained disengaged, which surprised Lott as he watched Clinton's window of opportunity closing fast.

Now it's not just Republicans who have declared themselves in no mood to deal. Democrats on the Hill, who had acceded to Bowles' pleas to accept things they hated, like the marriage-penalty tax cut, found themselves burned when the Republicans walked out anyway. Their only hope for regaining their majority in November--and it's a slim one--is in getting voters riled against a Republican majority that happens to be enjoying some of its highest approval ratings ever. Democrats are relishing the prospect of labeling the Republicans in November as captives of Big Tobacco and a do-nothing bunch of laggards. Within 24 hours, their pollsters were arguing that the G.O.P. had badly misjudged public sentiment, that even if the ads had turned people against this bill, more than two-thirds of voters still want some bill. If the G.O.P. thinks the polls show the public won't punish them, says a White House political strategist, "they're getting snowed by the tobacco lobby."

In the first 48 hours after the deal collapsed, the President made guarded comments as if still looking for a deal. Fighting has always gone against Clinton's basic nature; which instincts usually had him looking for the third way, and if that doesn't work, the fourth, fifth and sixth. At this moment of simmering scandal, it also works against Clinton's survival instincts. As his former chief of staff Leon Panetta put it, the President is feeling particularly cautious now because "he's got to maintain a good relationship with the Congress that could ultimately be his judge" if Starr ends up handing it the whole Lewinsky investigation.

By Friday the President was sounding more bareknuckled, denouncing Republican proposals for a stripped-down bill as "a charade." The Senators, he said, "voted not to implement a program that can save a million lives a year. It was a vote against our children and for the tobacco lobby. It's as simple at that." The goal for him now is to inflict the maximum political pain on the Republicans without totally killing any prospect of a deal. But a political campaign for a new bill requires focus, which is something this White House has largely lacked during the second term, and particularly since the Lewinsky scandal broke open in January. Between managing an Asian financial crisis, nuclear tests in India and Pakistan and ethnic conflicts in Kosovo, the strategy is to book his days so fully that he never appears bogged down in scandal. Recent weeks have seen him planting flowers in Harpers Ferry, Va., talking to the Delaware assembly on education, discussing census sampling techniques at a Houston community center, dedicating a new institute at Walden Woods and studying tidal pools in Monterey, Calif. And, of course, raising money for Democrats almost everywhere. They now have a rich issue to add to their political war chests.

--Reported by Jay Branegan, James Carney, John F. Dickerson and Karen Tumulty/Washington

With reporting by Jay Branegan, James Carney, John F. Dickerson and Karen Tumulty/Washington