The U.S. tobacco industry is likely to be hit with higher taxes and more regulation as its political influence wanes and a Democratic president takes office, Dow Jones reported Nov. 14.

In 2009 Congress is expected to raise federal tobacco taxes to pay for expanding the State Children's Health Insurance Program (SCHIP) -- previously vetoed by President Bush -- and pass a law giving the U.S. Food and Drug Administration (FDA) regulatory power over tobacco products.

"Both the FDA bill and the SCHIP funded by tobacco tax have demonstrated bipartisan support and therefore present the new Congress and the new president with the opportunity for early victories," said Matthew Myers, president of the Campaign for Tobacco-Free Kids. "This president and this Congress is likely to be more supportive to efforts to reduce tobacco use than any in history."

"It's a more adversarial environment for tobacco companies," said industry analyst Christopher Growe, who predicts that the expected SCHIP tax could raise the price of a pack of cigarettes 15 percent and result in a 5-10 percent decline in cigarette sales. A spokesperson for Reynolds American said the new taxes could result in higher illegal sales of cigarettes, while a spokesperson for Altria -- parent company of Philip Morris -- said the firm would continue to oppose increases in federal tobacco taxes.