[Congressional Record Volume 141, Number 64 (Thursday, April 6, 1995)]
[Extensions of Remarks]
[Pages E809-E810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       TOBACCO HEALTH TAX AND AGRICULTURAL CONVERSION ACT OF 1995

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Thursday, April 6, 1995
  Mr. STARK. Mr. Speaker, today my colleague from Utah, Mr. Hansen, and 
I are introducing the Tobacco Health Tax and Agricultural Conversion 
Act of 1995, a bill to increase the cigarette tax to $2 per pack and to 
increase taxes on other tobacco products.
  We are joined in this by Mr. Durbin, Mr. Coyne, Ms. Pelosi, Mr. Lewis 
of Georgia, Mr. Lipinski, Mr. Moran, Mr. Oberstar, Mrs. Collins of 
Illinois, and Mr. Evans, as original cosponsors.
  The revenues raised by this bill would finance health education and 
medical research efforts, help fund the health care costs of our 
Nation's elderly, and assist tobacco workers and agricultural regions 
that may be adversely affected by an increase in the tobacco tax. But 
most importantly, this bill creates a powerful disincentive for 
Americans--particularly youngsters--from taking up smoking.
  We all know of the scourge that tobacco brings to America's families. 
The American Cancer Society, the American Lung Association, and the 
American Heart Association have reported that ``tobacco is the single 
greatest cause of preventable death and disease.''
  There are 419,000 deaths each and every year due to smoking. This 
equates to more than 1,100 Americans dying every day. Smoking-caused 
deaths exceed the number of deaths caused from alcohol, drug abuse, 
homicide, suicide, automobile and airplane accidents, and AIDS 
combined. Twenty-seven percent of all Americans who die between the 
ages of 35 and 64 die from tobacco-related disease.
  The scores of lives lost to tobacco provide sufficient reason to take 
the action I call for in this legislation. But lives lost is not the 
only cost fo smoking. Tobacco-caused illnesses tax our health care 
system, requiring more than $50 billion per year in direct health care 
expenditures, including $22 billion borne by the Federal Government. 
Losses in productivity suck tens of billions more out of our economy.
  But if there is an area where federal action can make a positive 
impact, it is with smoking. Tobacco is the single greatest cause of 
preventable death and disease--preventable! As proven by experiences in 
several States and in other countries, tobacco consumption--and the 
related costs--can be reduced. In my home State of California, through 
a modest 
[[Page E810]] rise in the cigarette tax and a statewide education 
campaign, a substantial reduction in smoking among California's 
teenagers resulted. The National Academy of Sciences' Institute of 
Medicine, a well-respected independent scientific organization, 
concluded that--

       If tobacco is made less affordable . . . consumption will 
     tend to decline, especially among children and youth, whose 
     smoking habits are not fully established. Therefore, 
     policymakers have an effective means available to them--
     increasing the real price of tobacco by increasing excise 
     taxes--to reduce the consumption of tobacco by youths and 
     thereby to reduce the health toll of tobacco use in future 
     years.

  Most people who smoke today--about 90 percent--bagan smoking when 
they were kids. If the cost of a pack of cigarettes were raised to the 
equivalent of two Big Macs rather than the equivalent of just one 
today, youngsters might think twice before putting down the money for 
the cigarettes. And without continued waves of new smokers, the 400,000 
Americans who die each year from smoking will not be replaced.
  In order to prevent nicotine addiction in children and youth, the 
National Academy of Sciences recommends the following--
  (1) Congress should enact a significant increase in the tobacco tax,
  (2) All tobacco products should be taxed on an equivalent basis, and
  (3) The real value of tobacco taxes should be maintained to account 
for inflation.
  The Tobacco Health Tax and Agricultural Conversion Act of 1995, if 
enacted, would accomplish each of these steps.
  In the past, concerns have been raised over the impact a tobacco tax 
hike would have on tobacco farmers. We believe this bill offers a 
solution, not a problem, for tobacco farmers.
  U.S. tobacco farming has been declining for more than a decade. This 
has not been caused by increased tobacco taxes in the United States. 
This is not a result of reduced cigarette manufacturing in the United 
States. The decline in U.S. tobacco farmers, from 179,000 in 1993 to 
137,000 today, is because U.S. cigarette manufacturers like Philip 
Morris and R.J. Reynolds have more than
 doubled their imports of less expensive foreign-grown tobacco over the 
past decade. Today, more than one-third of tobacco used in U.S.-
manufactured cigarettes is imported. This trend is anticipated to 
continue, leaving U.S. tobacco farmers and their farming communities 
devastated.

  The legislation we are introducing today would allocate 3 percent of 
the revenues raised to a Tobacco Conversion and Health Education Trust 
Fund. The purpose of this is to assist individuals and communities that 
today are reliant upon tobacco farming to convert to other crops and 
industries. These funds could be used to purchase tobacco allotments 
from farmers or to finance infrastructure construction and 
modernization for agricultural diversification. Affected communities 
would be able to use these funds to stimulate nontobacco related 
economic development. Under this legislation, literally hundreds of 
millions of dollars annually would become available to tobacco farmers 
and tobacco-growing regions.
  A portion of moneys in the Tobacco Conversion and Health Education 
Trust Fund would be allocated to support health education efforts. 
Rather than rely solely on the increase in the price of cigarettes to 
educate American consumers of the true costs of cigarettes, the 
Secretary of the Department of Health and Human Services would conduct 
campaigns--building on efforts already underway in several States--to 
educate Americans on health risks, including the risks from tobacco 
use.
  A larger portion of the funds raised would be used to fund expanded 
medical research efforts. A full 9 percent of the revenues raised, 
estimated at roughly $1.5 billion per year, would be placed in a newly 
created National Fund for Medical Research. These resources will 
augment the current effort underway at the National Institutes of 
Health and throughout the Nation to expand our understanding and 
ability to deal with complex medical problems. As we all know, only 
one-quarter of all worthwhile grant applications submitted to the NIH 
each year receive funding.
  The remainder of the revenues raised by this legislation would be 
deposited into the Medicare Part A Hospital Insurance Trust Fund. The 
reason for this is simple. As stated by a former HHS Secretary who held 
responsibility for the Medicare program, ``Smoking is the single 
largest drain on the Medicare trust fund, poised to take $800 billion 
over the next 20 years.'' The revenues from this bill may not cover 
Medicare's full smoking-related costs, but this bill provides a good 
start.
  In sum, this legislation is good for America--for America's youth, 
America's families, and the American economy. Lives will be saved, 
suffering from disease will be diminished, long-term health care costs 
will be reduced, diversification in farming communities will be 
supported, and revenues will be generated for the health care needs of 
our elders.
  Mr. Speaker, we could continue for hours to cite reason upon reason 
to support this legislation. Some may want me to do so, merely to delay 
taking action. But at some point we must take action. We must decide 
that this is a necessary step and that it can no longer be delayed. We 
believe that the time is now. We urge our colleagues to support this 
legislation.
  A summary of the bill follows--
Summary of ``The Tobacco Health Tax and Agricultural Conversion Act of 
                                 1995''


                    Increase in Tobacco Excise Taxes

       This legislation would increase the excise tax on 
     cigarettes by $1.76 per pack (from $.24 per pack to $2.00 per 
     pack) and increase the excise taxes on other tobacco 
     products.
       The excise taxes would increase in future years by an 
     amount equivalent to the rate of inflation.
       This legislation would become effective after September 30, 
     1995.


                            Use of Revenues

       Medicare Part A Trust Fund--88% of revenues--to strengthen 
     the solvency of the Medicare Part A Hospital Insurance Trust 
     Fund.
       National Fund for Medical Research--9% of revenues--to 
     augment the resources currently available to the National 
     Institutes for Health for medical research.
       Tobacco Conversion Account--1.5% of revenues--to assist 
     individuals and communities that today are reliant upon 
     tobacco farming to convert to other crops and industries.
       Health Education Account--1.5% of revenues--to educate 
     Americans on health risks, including tobacco use.
     

                          ____________________