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                     Office of the Press Secretary
                         (Carrollton, Kentucky)
For Immediate Release                                      April 9, 1998

                            PRESS BRIEFING 
                           AND MIKE MCCURRY
                      Carroll County High School
                         Carrollton, Kentucky

12:26 P.M. EDT

MR. MCCURRY: I wanted both Bruce Reed, the President's principal domestic policy adviser, assistant to the President, and Secretary of Agriculture Glickman to be here and take any questions you have related to some of the issues surrounding the assistance programs for tobacco or anything else about the legislation.

Let me just advise networks and others, I anticipate the President at the top of his remarks to make a brief announcement concerning the tornado damage in Alabama and Georgia. He will be dispatching two senior ranking federal officials to view the damage and saying some things about the destruction there earlier today, and I can come back again if you have anything else.

Secretary Glickman.

SECRETARY GLICKMAN: I have with me Under Secretary Dallas Smith, who is the principal USDA person involved with the tobacco program for years, so I'd be glad to take any questions that you may have.

Q Senator Ford's proposed legislation is separate from, or is it part of --

SECRETARY GLICKMAN: Part of. It was added to the McCain bill in committee.

Q So it all rises or falls together. It is not a separate piece of legislation.


Q Can you give us an update of the status of Lugar's legislation on the price support issue? That's moving separately? Is that right? And are you against it?

SECRETARY GLICKMAN: Well, as I understand it, Senator Lugar wanted to have as part of the larger tobacco settlement issue the buy-out of the quota, and that would be it. And that was not adopted in the McCain committee. The Ford proposal was adopted. So my presumption is the Lugar proposal is not a live proposal.

MR. REED: He introduced it, but Senate commerce did not take it up.

Q So it could come up again on the floor?

MR. REED: It could very well.

Q And is the President essentially in favor of the Ford approach, as opposed to the Lugar approach?

SECRETARY GLICKMAN: Based upon what the President said today and his previous statements, he is in favor of keeping a program in place in addition to offering a voluntary buy-out, so that would be much more compatible with the Ford proposal. So the answer is basically yes.

Q Outside of coming here and sounding somewhat sympathetic to the problems of the farmers, what does the President plan to offer them today? Anything?

SECRETARY GLICKMAN: Well, first of all, let me say, I was here a week ago myself and I addressed some of these issues in terms of -- the main thing the farmers want to know is there will be stability for them in connection with whatever settlement is finally agreed to. That is life or death for them because of the nature of the program. And I think the President gave them that assurance today, that there will be stability, that he will no doubt work with Senator Ford and other members of this delegation to make sure that that happens. That's the most important message I can tell you that the folks out here want to hear.

In addition to that, I think the President talked about other ways that we can help communities as well as farmers in connection with the long-term possibility that there may be some reduced demand -- and that's the whole idea, reduced teen demand -- and what we can do in terms of rural development, other kinds of things, help the communities survive.

By the way, so that you know, the tobacco program is different from every other farm program. It is a no net cost program. Most farm programs historically have the government paying out money to farmers in the form of deficiency payments; the tobacco program does not. It relies on -- the monies are largely paid by consumers of tobacco, and the monies that are administered, of the tobacco program, are raised through the tobacco program itself. There is an assessment that is provided. So this is a different program than virtually every other type of program.

And while you can argue the merits of the program, when people talk about tobacco subsidies, that is really an inaccurate assessment of what this program is.

Thank you.

MR. MCCURRY: All right, we're going to get started with the speech in a minute. Anything else that anyone needs to know about? Anything else?

Q Mike, has the administration said that they -- on the Pol Pot story, can you confirm the Times and the Post stories?

MR. MCCURRY: Let me provide a little background. Some of you haven't had a chance to see a pool report yet, but I did talk to the pool on the plane about this. The United States government, for quite some time, has believed that Pol Pot and other senior members of the Khmer Rouge leadership who were responsible for the mass slaughter during the killing fields episodes of 1975 through 1979 should be brought to account for those atrocities.

We have had conversations, consultations with a number of governments with respect to our desire to see justice done. Our belief is that Pol Pot and others could be brought to justice in an appropriate forum, whether it be an international tribunal, some third-country court, or perhaps even an on-location court, but that ought to be done consistent with guidelines established at the United Nations. We've had a number of conversations with respect to that.

At the moment, it is a hypothetical and moot point because he is not in a position to be incarcerated, believed to be in the jungle area on the border between Thailand and Cambodia, but we have had deliberations within our government to discuss hypotheticals to better inform the dialogue that we're having with other governments.

Q Does that include plans for an arrest?

MR. MCCURRY: That includes a number of hypothetical scenarios. Beyond that, I'm not going to comment.

Q But how he might be arrested, is that one of the plans being discussed?

MR. MCCURRY: It includes a number of hypothetical scenarios, but I'm not going to discuss any of those specifically.

Q Is there concern over Beijing's reaction to such a plan ahead of the President's trip?

MR. MCCURRY: There are a host of concerns about reactions, what the diplomatic issues might be, and one can easily imagine that we would have internal deliberations within our government that would better inform the diplomatic dialogue we'd have with other countries.

Q What is accomplished by having leaked the story? Are you sending a message to Pol Pot that he ought to keep his head down?

MR. MCCURRY: Much to the contrary. There is in fact a great deal of anger that the story appeared and some degree of likelihood that any such operation, if one were to be imagined, would be far less likely to succeed.

Q Are you concerned now -- I mean, does this put him on notice that he is a target and you've got to --

MR. MCCURRY: I have no way of speculating what degree of notice he may or may not have.

Q But is that the purpose of your anger that this has come out?

MR. MCCURRY: Among other purposes, yes.

Q I have a question for Mr. Reed. There is an awful lot of hostility coming out of the tobacco industry now. Is the President concerned that tobacco farmers are going to turn against the legislative process also?

MR. REED: No, I don't think so. I think what we heard today is that what tobacco farmers want most is to see legislation passed this year along the lines of the commerce committee bill that includes provisions to protect farmers and their communities. They don't want to go back to the original agreement, which did nothing for farmers. They don't want to see no legislation passed, which leaves them in limbo. They want the security and certainty of knowing that, if tobacco consumption is going to decline in the years to come, their communities are going to be provided for.

Q It sounded like Mr. Sprague, among others, was saying that if you send the industry into bankruptcy, that's going to hurt tobacco farmers. Isn't that a concern?

MR. REED: Well, as we've said before, we're not interested in bankrupting the tobacco companies. We just want them to change the way they do business. We want to put them out of the business of selling cigarettes to kids. And we believe that that can be done in a way that can still maintain tobacco farmers' livelihoods for those who wish to stay on the farm, and that there is a longstanding tension between the growers and the companies, which we heard some of today. Their interests are not exactly aligned.

But in any event, the tobacco industry is dramatically overstating the risk of bankruptcy in an effort to hold down the price of the deal, and we are going to continue to press forward for the principles the President put forward last year.

Q -- longstanding tensions between the industry and farmers?

MR. REED: I think that the tobacco industry has few friends to begin with, and even fewer after yesterday. And we just want to make clear to the people of Kentucky and North Carolina and other tobacco-producing states that we're not out to get tobacco; we're just out to stop teen smoking. And we think that that can be done in a way that keeps these communities alive.

Q Bruce, are you saying the companies basically are just posturing on this, when you say "dramatically overstating"? And is there anything at all that the administration feels that should be done to address the concerns they have with the current legislation?

MR. REED: We fundamentally disagree with their analysis of the Senate commerce committee bill. We think it's a good bill and a big step in the right direction. We don't think it threatens their business. It's impossible to say whether they're posturing or whether they mean it.

Q Bruce, the bill that came out of committee is decidedly different from the settlement they reached on June 20th, is it not?

MR. REED: Yes, it is, and it's different in several ways that are very important to the administration and to the public health community and to members of Congress on both sides of the aisle. The Senate commerce committee reflects the price increases that the President called for in his budget and that public health experts have called for. It secures authority for the Food and Drug Administration. It takes care of the farmers. So it's changed in significant ways, but not ways that we believe would put the tobacco companies anywhere close to out of business.

Q But it's much more expensive than what they agreed to. I mean, they have a point on that, don't they?

MR. REED: Both the original settlement and the commerce committee bill would have some impact on the tobacco industry's domestic profits and reduce their operating margins here in the United States. But with the original settlement and with this bill, the tobacco companies will still be able to pass on many of those costs to consumers. And it will have some impact on their bottom lines because overall consumption of cigarettes will decline.

But remember, cigarette making is one of the most profitable businesses there is. They have very high profit margins to begin with. And though this will squeeze their domestic profits in some way, it is nowhere near to bankruptcy. The only thing that could put them out of business is if they lost a slew of very expensive lawsuits, which is the threat that brought them to the table in the first place.

Q But there is nothing the administration thinks needs to be done to address their concerns at this point?

MR. REED: Yesterday they said they were just up and walking away, so it's difficult to address that concern. But we basically think that the Senate commerce committee is a very good bill, and we're going to keep working to build bipartisan support to get it done.

Q Has Treasury done some kind of definitive analysis that looks at the McCain Bill and concludes, on the basis of those price increases and the lack of legal protection that's in it, that even RJR, with its heavy debt, would continue to survive?

MR. REED: The Treasury Department has looked at the kind of financial impact that this legislation would have on the tobacco companies, including RJR. It is impossible to quantify the legal risk. The tobacco industry has never paid out a dime, so we can't project five years, ten years from now, what their annual legal costs are going to be. If they're astronomical, they could very well go out of business. That's a risk that they would run in any case, and the commerce committee bill does limit their legal exposure to some degree.

Q We missed the top. Can you tell us again -- the apprehension of Pol Pot -- what the U.S. role would be in that?

MR. MCCURRY: Again, to restate what I said earlier, without commenting specifically on that story, we have had conversations about our desire to bring Pol Pot and other senior leadership of the Khmer Rouge regime to justice for the atrocities that occurred in Cambodia in the period 1975 to 1979. At the moment, any scenario that would lead to that type of justice is purely hypothetical because Pol Pot is not in a position to be incarcerated.

Q Could the U.S. try him for crimes he committed in Cambodia?

MR. MCCURRY: I'm not going to speculate on, hypothetically, how he might be brought to justice.

Q Under the commerce committee bill, do you have an idea of how much demand for tobacco would fall. I've seen estimates of 30 percent over five years. Do you have an estimate?

MR. REED: We have estimated that it would have a dramatic impact on youth smoking, that we could see a reduction on the order of 45 to 50 percent in youth prevalence over the next five to ten years. In terms of overall cigarette volume, I believe our estimate is around a 25 percent drop.

As the Wall Street Journal has learned from the Treasury Department, we estimate that -- well, current volume of cigarettes is 24 billion packs a year, and under the commerce committee bill we estimate that that would drop to 17 billion packs a year.

Q By when?

MR. REED: By 2003 when the full price increase is phased in. I don't have a figure off the top of my head. I think the settlement was on the nature of, well, it would probably be a 15 percent drop, would be my guess.

MR. MCCURRY: Okay, I think the President is talking so we'll knock off. Thank you.

END 12:44 P.M. EDT