WASHINGTON – The White House will not relinquish its claim to a portion of the states’ $246 billion tobacco settlement unless the states agree to use the money for public health and anti-smoking programs.
Maryland officials chafed at that restriction Thursday, even though Gov. Parris Glendening has already said he plans to use the state’s share of the settlement for the programs envisioned by the White House.
“We believe the state of Maryland is entitled to every penny earned in the settlement without any strings attached,” said Assistant Attorney General Maureen M. Dove, the deputy chief of litigation for tobacco deals.
Maryland is scheduled to get $4.4 billion of the tobacco settlement. But the federal Health Care Financing Administration has said that, since it pays for about half of Medicaid costs for the states, it should get about half of the settlement that the states won for tobacco-related health-care costs.
Bills pending in the House and Senate would reserve settlement funds exclusively for the states.
The Senate bill has 28 co-sponsors — Maryland Sens. Barbara Mikulski, D-Baltimore, and Paul Sarbanes, D-Baltimore, are not among them. The companion House bill has 32 co- sponsors, including Rep. Elijah Cummings, D- Baltimore.
The White House announcement Wednesday came in response to those bills. The administration said it will oppose any bill that does not specify that settlement funds must be used to help tobacco farmers and for public health, including preventing teen smoking and assisting children.
Officials at HCFA said that they hope to resolve their claim to the settlement funds by working with the states and Congress on legislation that would mandate how the funds are used.
Despite that claim, however, the Clinton administration has already included $18.9 billion from the tobacco settlements in its five-year federal budget projection.
“It’s in the budget because we’re obliged to make the claim … in the absence of any alternative measure,” said Barry Toiv, a White House spokesman.
Toiv said legislation could relieve HCFA of its obligation to recoup the money, and that, if a satisfactory agreement is reached, the White House may adjust its budget accordingly.
Glendening did not include settlement money in his fiscal 2000 budget, but he has said that he wants to use it for programs to reduce smoking, help children, fund cancer research and help state tobacco farmers.
Glendening spokesman Don Vandrey said the state expects to get its full share, regardless of what it ultimately does with the money and despite what the White House may be planning.
“If they (White House officials) feel they can put it in the budget, that’s their decision on the federal level,” Vandrey said. “I’m not so sure the issue is settled.”
Supporters of the states say HCFA’s claim that it should be reimbursed for Medicaid costs is weak. They say that most states – including Maryland — sued the tobacco companies for more than Medicaid costs, and there is no way to distinguish Medicaid reimbursement from the total settlement.
They also say that the federal government should not receive any of the settlement, since it did not participate in the states’ suits and since the Justice Department is now pursuing its own legal action against the tobacco industry.