When, in March legislation finally moved forward in the Senate, the tobacco industry launched an all out public relations war against it. The BCT and IAM also opposed the legislation, which threatened to eliminate jobs in the export sector, bankrupt the domestic companies and create a huge contraband market. The bill introduced by Republican Senator McCain featured most of the most draconian demands of the rejection front, including a USD1.50 tax increase and a package of penalties and payments driving the cost up to between USD 600 and USD 800 billion over 25 years. Nonetheless it was attacked by Koop, Kessler and the rejection front as too lenient on the industry. After two months of debate, a majority of Republicans eventually voted to kill the McCain bill.
Legislation implementing the settlement is also dead.
For the moment there is stalemate in Congress. The tobacco wars also resumed in the courts. But a week later an earlier decision against the company in a suit by another smoker was overturned by a higher court. Battle against the state lawsuits will resume in September in Washington State. While the possibility of a verdict in a state lawsuit bankrupting one or more companies remains possible, a decision has been taken by the industry that such uncertainty is preferable to certain bankruptcy through legislation.