WASHINGTON (AP) - As the government urges people to stop smoking, the Department of Housing and Urban Development has given $4.2 million to build Indian-run smoke shops selling discount cigarettes.

Sen. Christopher Bond proposed a halt Tuesday to the HUD grants and was quickly seconded by Housing Secretary Andrew Cuomo, whose agency previously has sparred with the senator over the shops. At issue is $4.2 million in HUD grants to American Indian smoke shops and truck stops that sell cheap cigarettes. Bond, chairman of the spending panel that controls HUD's budget, argues that cheaper cigarettes encourage smoking among minors. ``No matter where it happens, awarding government subsidies to sell cheap cigarettes is a bad idea,'' Bond said Tuesday at a news conference with the Campaign for Tobacco Free Kids and the American Lung Association. ``Cheaper cigarettes mean more kids smoking, and these grants mean more cheap cigarettes,'' said Matthew L. Myers, president of Campaign for Tobacco Free Kids. As the Senate begins a weeklong debate on a $1.83 trillion budget for the coming fiscal year, Bond said he will introduce an amendment to bar HUD from using tax dollars for smoke shops where discount cigarettes are sold. While the spending resolution isn't legally binding, it sends a powerful political message further reinforced by Cuomo's support for the idea. Bond learned last spring of a 1997 grant to the Reno Sparks Indian Colony in Verdi, Nev. While HUD told Bond ``only one'' smoke shop received such a grant, the senator discovered a half-dozen such grants. Small Business Committee counsel John Stoody narrated videotapes Tuesday that he took of Oklahoma smoke shops and their advertising. ``Rows and rows of tobacco products of all kinds,'' Stoody said. ``Contrary to it being called a convenience store, this is all cigarettes. If you call them on the phone, they'll answer, `Thackerville Smoke Shop.''' HUD officials have insisted the agency has no legal authority to ban sales of tobacco products in stores that get federal funds. But Cuomo immediately embraced the senator's move Tuesday. ``This legislation will give HUD the ability to refuse funding to tobacco stores in all parts of the United States,'' he said. HUD spokesman David Egner said the agency told Bond last June that it could not stop the grants without action by Congress and would support restrictions like those proposed by Bond to stop funding tobacco stores.

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