16-Cent Cigarette Tax Extended

WASHINGTON — President Reagan on Monday signed legislation extending the 16 cents-a-pack tax on cigarettes through March 15.

The bill, which makes the extension retroactive to midnight last Thursday, kept the cigarette tax from dropping to 8 cents a pack.

Congress passed the emergency measure in the final hours before adjournment, after the Senate and House failed to agree on a $74-billion deficit-reduction bill that included the higher cigarette tax.

The tax was kept alive through extensions, the last of which ended at midnight last Thursday. At that point, technically, the government could collect only 8 cents a pack.

Without the extension of the higher federal tax, many states would have taken the defaulted 8 cents, under provisions enacted by their legislatures.

The bill also extended through March 15 Medicare payments for doctors and hospitals. A number of other provisions that also expired Dec. 19 were not extended, however. They included the trade adjustment assistance program, for people who lose their jobs because of increased foreign trade, and authority to borrow under the railroad unemployment insurance fund.

Congress also allowed to lapse a number of tax revisions that expire at the end of the year.