[Congressional Record Volume 143, Number 40 (Tuesday, April 8, 1997)]
[Senate]
[Pages S2838-S2856]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. ABRAHAM:
S. 518. A bill to control crime by requiring mandatory victim
restitution; to the Committee on the Judiciary.
THE VICTIM RESTITUTION ENFORCEMENT ACT
Mr. ABRAHAM. Mr. President, I rise today to introduce the Victim
Restitution Enforcement Act of 1997. I have long supported restitution
for crime victims, and have long been convinced that justice requires
us to devise effective mechanisms through which victims can enforce
restitution orders and make criminals pay for their crimes.
I was very pleased when we enacted mandatory victim restitution
legislation last Congress as part of the Antiterrorism and Effective
Death Penalty Act of 1996. I supported that legislation and very much
appreciated the efforts of my colleagues, particularly Senators Hatch,
Biden, Nickles, Grassley, and McCain, to ensure that victim restitution
provisions were included in the antiterrorism legislation.
Those victim restitution provisions--brought together as the
Mandatory Victims Restitution Act of 1996--will significantly advance
the cause of justice for victims in Federal criminal cases. The act
requires Federal courts, when sentencing criminal defendants, to order
these defendants to pay restitution to the victims of their crimes. It
also establishes a single set of procedures for the issuance of
restitution orders in Federal criminal cases to provide uniformity in
the Federal system. Inclusion of mandatory victim restitution
provisions in the Federal criminal code was long overdue, and I am
pleased that Congress was able to accomplish that last year.
However, much more remains to be done to ensure that victims can
actually collect those restitution payments and to provide victims with
effective means to pursue whatever restitution payments are owed to
them. Even if a defendant may not have the resources to pay off a
restitution order fully, victims should still be entitled to go after
whatever resources a defendant does have and to collect whatever they
can. We should not effectively tell victims that it is not worth going
after whatever payments they might get. That is what could happen under
the current system, in which victims have to rely on Government
attorneys--who may be busy with many other matters--to pursue
restitution payments. Instead, we should give victims themselves the
tools they need so that they can get what is rightfully theirs.
The victim restitution provisions enacted last Congress consolidated
the procedures for the collection of unpaid restitution with existing
procedures for the collection of unpaid fines. Unless more steps are
taken to make enforcement of restitution orders more effective for
victims, we risk allowing mandatory restitution to be mandatory in name
only, with criminals able to evade ever paying their restitution and
victims left without the ability to take action to enforce restitution
orders.
Last Congress, I introduced the Victim Restitution Enforcement Act of
1995. Many components of my legislation were also included in the
victim restitution legislation enacted as part of the Antiterrorism and
Effective Death Penalty Act. The legislation I introduce today is
similar to the legislation I introduced last Congress as Senate bill
1504, and is designed to build on what are now current provisions of
law. All in all, I hope to ensure that restitution payments from
criminals to victims become a reality, and that victims have a greater
degree of control in going after criminals to obtain restitution
payments.
Under my legislation, restitution orders would be enforceable as a
civil debt, payable immediately. Most restitution is now collected
entirely through the criminal justice system. It is frequently paid as
directed by the probation officer, which means restitution payments
cannot begin until the prisoner is released. This bill makes
restitution orders payable immediately, as a civil debt, speeding
recovery and impeding attempts by criminals to avoid repayment. This
provision will not impose criminal penalties on those unable to pay,
but will simply allow civil collection against those who have assets.
This will provide victims with new means of collecting restitution
payments. If the debt is payable immediately, all normal civil
collection procedures, including the Federal Debt Collection Act, can
be used to collect the debt. The bill explicitly gives victims access
to other civil procedures already in place for the collection of debts.
This lightens the burden of collecting debt on our Federal courts and
prosecutors.
My bill further provides that Federal courts will continue to have
jurisdiction over criminal restitution judgments for 5 years, not
including time that the defendant is incarcerated. The court is
presently permitted to resentence or take several other actions against
a criminal who willfully refuses to make restitution payments; the
court may do so until the termination of the term of parole. Courts
should have the ability to do more over a longer period of time, and to
select those means that are more likely to prove successful. Under my
bill, during the extended period, Federal courts will be permitted,
where the defendant knowingly fails to make restitution payments, to
modify the terms or conditions of a defendant's parole, extend the
defendant's probation or supervised release, hold the defendant in
contempt, increase the defendant's original sentence, or revoke
probation or supervised release.
My legislation will also give the courts power to impose presentence
restraints on defendants' uses of their assets in appropriate cases.
This will prevent well-heeled defendants from dissipating assets prior
to sentencing. Without such provisions, mandatory victim restitution
provisions may well be useless in many cases. Even in those rare cases
in which a defendant has the means to pay full restitution at once, if
the court has no capacity to prevent the defendant from spending ill-
gotten gains or other assets prior to the sentencing phase, there may
be nothing left for the victim by the time the restitution order is
entered.
The provisions permitting presentence restraints are similar to other
provisions that already exist in the law for private civil actions and
asset forfeiture cases, and they provide adequate protections for
defendants. They require a court hearing, for example, and place the
burden on the Government to show by a preponderance of the evidence
that presentence restraints are warranted.
In short, I want to make criminals pay and to give victims the tools
with which to make them pay. In enacting mandatory victim restitution
legislation last Congress, we demonstrated our willingness to make some
crimes subject to this process. I believe we must take additional steps
to make those mandatorily issued orders easily enforceable.
This legislation is supported by the National Victim Center and by
the Michigan Coalition Against Domestic and Sexual Violence. I ask
unanimous consent to have placed in the Record letters of support from
those victims' rights organizations.
I urge my colleagues to support my legislation, which will empower
victims to collect on the debts that they
[[Page S2839]]
are owed by criminals and which will improve the enforceability of
restitution orders.
I also ask unanimous consent that the text of the bill be placed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 518
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Victim Restitution
Enforcement Act''.
SEC. 2. PROCEDURE FOR ISSUANCE AND ENFORCEMENT OF RESTITUTION
ORDER.
Section 3664 of title 18, United States Code, is amended to
read as follows:
``Sec. 3664. Procedure for issuance and enforcement of order
of restitution
``(a) In General.--
``(1) Reliance on information in presentence report.--With
respect to each order of restitution under this title, the
court shall order the probation service of the court to
obtain and include in its presentence report, or in a
separate report, as the court directs, information sufficient
for the court to exercise its discretion in fashioning a
restitution order.
``(2) Contents of report.--Each report described in
paragraph (1) shall include, to the extent practicable, a
complete accounting of the losses to each victim, any
restitution owed pursuant to a plea agreement, and
information relating to the economic circumstances of each
defendant. If the number or identity of victims cannot be
reasonably ascertained, or other circumstances exist that
make this requirement clearly impracticable, the probation
service shall so inform the court.
``(b) Disclosures.--The court shall disclose to both the
defendant and the attorney for the Government all portions of
the presentence or other report pertaining to the matters
described in subsection (a).
``(c) Applicability of Other Law.--This chapter, chapter
227, and Rule 32(c) of the Federal Rules of Criminal
Procedure are the only laws and rules applicable to
proceedings under this section.
``(d) Ensuring Availability of Property or Assets.--
``(1) In general.--
``(A) Restraining order, injunction, execution of
performance bond.--Upon application of the United States, the
court may enter a restraining order or injunction, require
the execution of a satisfactory performance bond, or take any
other action to preserve the availability of property or
assets necessary to satisfy a criminal restitution order
under this subchapter. An order under this subparagraph may
be entered in the following circumstances:
``(i) Prior to the filing of an indictment or information
charging an offense that may result in a criminal restitution
order, and upon the United States showing that--
``(I) there is a substantial probability that the United
States will obtain a criminal restitution order;
``(II) the defendant has or is likely to take action to
dissipate or hide the property or assets of the defendant;
and
``(III) the need to preserve the availability of the
property or assets through the requested order outweighs the
hardship of any party against whom the order is entered.
``(ii) Upon the filing of an indictment or information
charging an offense that may result in a criminal restitution
order, and upon the United States showing that the defendant
has or is likely to take action to dissipate or hide the
property or assets of the defendant.
``(iii) Upon the conviction, or entry of a guilty plea, to
an indictment or information charging an offense that may
result in a criminal restitution order, and upon the United
States showing that the defendant may take action to
dissipate or hide the property or assets of the defendant or
that an order is necessary to marshal and determine the
property or assets of the defendant.
``(B) Period of effectiveness.--An order entered under
subparagraph (A) shall be effective for not more than 90
days, unless extended by the court for good cause shown or
unless an indictment or information described in subparagraph
(A)(ii) has been filed.
``(2) Notice of order.--
``(A) In general.--Except as provided in paragraph (3), an
order entered under this subsection shall be after notice to
persons appearing to have an interest in the property and
opportunity for a hearing, and upon the United States
carrying the burden of proof by a preponderance of the
evidence.
``(B) Admissible evidence.--The court may receive and
consider, at a hearing held under this subsection, evidence
and information that would be inadmissible under the Federal
Rules of Evidence.
``(3) Temporary restraining order.--
``(A) In general.--A temporary restraining order may be
entered without notice or opportunity for a hearing if the
United States demonstrates that--
``(i) there is probable cause to believe that the property
or assets with respect to which the order is sought would be
subject to execution upon the entry of a criminal restitution
order;
``(ii) there is a substantial probability that the United
States will obtain a criminal restitution order; and
``(iii) the provision of notice would jeopardize the
availability of the property or assets for execution.
``(B) Expiration of order.--A temporary order under this
paragraph shall expire not later than 10 days after the date
on which it is entered, unless--
``(i) the court grants an extension for good cause shown;
or
``(ii) the party against whom the order is entered consents
to an extension for a longer period.
``(C) Hearing.--A hearing requested concerning an order
entered under this paragraph shall be held at the earliest
possible time, and prior to the expiration of the temporary
order.
``(4) Disclosure of certain information.--
``(A) In general.--Information concerning the net worth,
financial affairs, transactions or interests of the defendant
presented to the grand jury may be disclosed to an attorney
for the Government assisting in the enforcement of criminal
restitution orders, for use in the performance of the duties
of that attorney.
``(B) Use of consumer credit reports.--
``(i) In general.--An attorney for the Government
responsible for the prosecution of criminal offenses, or
responsible for the enforcement of criminal restitution
orders, may obtain and use consumer credit reports to--
``(I) obtain an order under this section;
``(II) determine the amount of restitution that is
appropriate; or
``(III) enforce a criminal restitution order.
``(ii) Grand jury subpoena.--This subparagraph does not
limit the availability of grand jury subpoenas to obtain a
consumer credit report.
``(iii) Probation service.--Upon conviction, a consumer
credit report used under this subparagraph may be furnished
to the United States Probation Service.
``(e) Information to Probation Service.--
``(1) In general.--
``(A) Provision of information by government.--Not later
than 60 days after conviction, and in any event not later
than 10 days prior to sentencing, the attorney for the
Government after consulting with all victims (when
practicable), shall promptly provide the probation service of
the court all information readily available to the attorney,
including matters occurring before the grand jury relating to
the identity of the victim or victims, the amount of losses,
and financial matters relating to the defendant.
``(B) Provision of information by defendants.--Each
defendant shall prepare and file with the probation officer
an affidavit fully describing the financial resources of the
defendant, including a complete listing of all assets owned
or controlled by the defendant as of the date on which the
defendant was arrested, the financial needs and earning
ability of the defendant and the defendant's dependents, and
any other information that the court requires relating to
such other factors as the court determines to be appropriate.
``(C) Notice to victims.--The attorney for the Government
shall, to the maximum extent practicable and as soon as
practicable after the provision of information by the
Government to the probation service under subparagraph (A),
provide notice to all victims. The notice shall inform the
victims of--
``(i) the offenses for which the defendant was convicted;
``(ii) the amounts subject to restitution and any other
information that is relevant to restitution submitted to the
probation service;
``(iii) the right of the victim to submit information to
the probation service concerning the amount of the losses of
the victim;
``(iv) the scheduled date, time, and place of the
sentencing hearing;
``(v) the availability of a lien in favor of the victim
under subsection (n)(1)(D); and
``(vi) the opportunity of the victim to file a separate
affidavit with the court under subparagraph (E).
``(D) Limitations on information.--Upon ex parte
application to the court, and a showing that the requirements
of subparagraph (A) may cause harm to any victim, or
jeopardize an ongoing investigation, the court may limit the
information to be provided to or sought by the probation
service of the court.
``(E) Affidavit of objection.--If any victim objects to any
of the information provided to the probation service by the
attorney for the Government under this paragraph, the victim
may file a separate affidavit with the court.
``(2) Additional documentation or testimony.--After
reviewing the report of the probation service of the court,
the court may require additional documentation or hear
testimony. The privacy of any records filed, or testimony
heard, under this section shall be maintained to the greatest
extent possible and those records may be filed or testimony
heard in camera.
``(3) Additional time for determination of losses.--If the
losses to the victim are not ascertainable by the date that
is 10 days prior to sentencing as provided in paragraph (1),
the United States Attorney (or a designee of the United
States Attorney) shall so inform the court, and the court
shall set a date for the final determination of the losses of
the victim, not to exceed 90 days after sentencing. If the
losses to the victim cannot
[[Page S2840]]
reasonably be ascertained, the court shall determine an
appropriate amount of restitution based on the available
information. If the victim subsequently discovers further
losses, the victim shall have 60 days after discovery of
those losses during which to petition the court for an
amended restitution order. The order may be granted only upon
a showing of good cause for the failure to include those
losses in the initial claim for restitutionary relief.
``(4) Referral to magistrate or special master.--The court
may refer any issue arising in connection with a proposed
order of restitution to a magistrate or special master for
proposed findings of fact and recommendations as to
disposition, subject to a de novo determination of the issue
by the court.
``(5) Insurance of victim not considered.--In no case shall
the fact that a victim has received or is entitled to receive
compensation with respect to a loss from insurance or any
other source be considered in determining the amount of
restitution.
``(f) Evidentiary Standard.--Any dispute as to the proper
amount or type of restitution shall be resolved by the court
by the preponderance of the evidence. The burden of
demonstrating the amount of the loss sustained by a victim as
a result of the offense shall be on the attorney for the
Government. The burden of demonstrating the financial
resources of the defendant and the financial needs of the
defendant and the dependents of the defendant shall be on the
defendant. The burden of demonstrating such other matters as
the court deems appropriate shall be upon the party
designated by the court as justice requires.
``(g) Factors for Consideration.--
``(1) In general.--
``(A) Economic circumstances of victim not considered.--In
each order of restitution, the court shall order restitution
to each victim in the full amount of the losses of each
victim as determined by the court and without consideration
of the economic circumstances of the defendant.
``(B) Award of reasonably ascertainable losses.--The court
shall order restitution in the amount of the total loss that
is reasonably ascertainable, if--
``(i) the number of victims is too great;
``(ii) the actual identity of the victims cannot be
ascertained; and
``(iii) or the full amount of the losses of each victim
cannot be reasonably ascertained;
``(2) Amount and timing of restitution.--The restitution
order shall be for a sum certain and payable immediately.
``(3) Nominal periodic payments.--If the court finds from
facts on the record that the economic circumstances of the
defendant do not allow and are not likely to allow the
defendant to make more than nominal payments under the
restitution order, the court shall direct the defendant to
make nominal periodic payments in the amount the defendant
can reasonably be expected to pay by making a diligent and
bona fide effort toward the restitution order entered under
paragraph (1). Nothing in the paragraph shall impair the
obligation of the defendant to make full restitution under
this subsection.
``(4) Status of debt.--Notwithstanding any payment schedule
entered by the court under paragraph (2), each order of
restitution shall be a civil debt, payable immediately, and
subject to the enforcement procedures provided in subsection
(n). In no event shall a defendant incur any criminal penalty
for failure to make a restitution payment under the
restitution order because of the indigency of the defendant.
``(h) Victim Rights.--
``(1) No participation required.--No victim shall be
required to participate in any phase of a restitution order.
If a victim declines to receive restitution made mandatory by
this title, the court shall order that the share of the
victim of any restitution owed be deposited in the Crime
Victims Fund in the Treasury.
``(2) Assignment of interest.--A victim may at any time
assign the interest of the victim in restitution payments to
the Crime Victims Fund in the Treasury without in any way
impairing the obligation of the defendant to make those
payments.
``(3) Victims not identified or located.--If the victim
cannot be located or identified, the court shall direct that
the restitution payments be made to the Crime Victims Fund of
the Treasury. This paragraph shall not be construed to impair
the obligation of the defendant to make those payments.
``(i) Joint and Several Liability of Multiple Defendants.--
If the court finds that more than 1 defendant has contributed
to the loss of a victim, the court may make each defendant
jointly and severally liable for payment of the full amount
of restitution or may apportion liability among the
defendants to reflect the level of contribution to the loss
of the victim and economic circumstances of each defendant.
``(j) Priority of Payments.--If the court finds that more
than 1 victim has sustained a loss requiring restitution by a
defendant, the court may issue an order of priority for
restitution payments based on the type and amount of the loss
of the victim accounting for the economic circumstances of
each victim. In any case in which the United States is a
victim, the court shall ensure that all individual victims
receive full restitution before the United States receives
any restitution.
``(k) Insurance.--
``(1) In general.--If a victim has received or is entitled
to receive compensation with respect to a loss from insurance
or any other source, the court shall order that restitution
shall be paid to the person who provided or is obligated to
provide the compensation, but the restitution order shall
provide that all restitution of victims required by the order
be paid to the victims before any restitution is paid to any
such provider of compensation.
``(2) Reduction of amount.--Any amount paid to a victim
under an order of restitution shall be reduced by any amount
later recovered as compensatory damages for the same loss by
the victim in--
``(A) any Federal civil proceeding; and
``(B) any State civil proceeding, to the extent provided by
the law of the State.
``(3) Other resources.--If a person obligated to provide
restitution receives substantial resources from any source,
including inheritance, settlement, or other judgment, that
person shall be required to apply the value of those
resources to any restitution still owed.
``(l) Material Changes in Economic Status of Defendant.--
The defendant shall notify the court and the Attorney General
of any material change in the economic circumstances of the
defendant that might affect the ability of the defendant to
pay restitution. Upon receipt of the notification, the court
may, on its own motion, or the motion of any party, including
the victim, adjust the payment schedule, or require immediate
payment in full, as the interests of justice require.
``(m) Jurisdiction of Court.--
``(1) In general.--The court shall retain jurisdiction over
any criminal restitution judgment or amended criminal
restitution judgment for a period of 5 years from the date
the sentence was imposed. This limitation shall be tolled
during any period of time that the defendant--
``(A) was incarcerated;
``(B) was a fugitive; or
``(C) was granted a stay that prevented the enforcement of
the restitution order.
``(2) Failure to pay.--While within the jurisdiction of the
court, if the defendant knowingly fails to make a bona fide
effort to pay whatever amount of restitution is ordered by
the court, or knowingly and willfully refuses to pay
restitution, the court may--
``(A) modify the terms or conditions of the probation or
supervised release of the defendant;
``(B) extend the probation or supervised release of the
defendant until a date not later than 10 years from the date
the sentence was imposed;
``(C) revoke the probation or supervised release of the
defendant;
``(D) hold the defendant in contempt; or
``(E) increase the sentence of the defendant to any
sentence that might originally have been imposed under the
applicable statute, without regard to the sentencing
guidelines.
``(n) Enforcement of Order of Restitution.--
``(1) In general.--An order of restitution may be
enforced--
``(A) through civil or administrative methods during the
period that the restitution lien provided for in section 3613
of title 18, United States Code, is enforceable;
``(B) by the United States in the manner provided for in
subchapter C of chapter 227 and subchapter B of chapter 229;
``(C) by the United States regardless of whether for the
benefit of the United States, in accordance with the
procedures of chapter 176 of part VI of title 28, or in
accordance with any other administrative or civil enforcement
means available to the United States to enforce a debt due
the United States; or
``(D) by any victim named in the restitution order as a
lien under section 1962 of title 28.
``(2) Estoppel.--A conviction of a defendant for an offense
giving rise to restitution under this section shall estop the
defendant from denying the essential allegations of that
offense in any subsequent Federal civil proceeding or State
civil proceeding, regardless of any State law precluding
estoppel for a lack of mutuality. The victim, in the
subsequent proceeding, shall not be precluded from
establishing a loss that is greater than the loss determined
by the court in the earlier criminal proceeding.''.
SEC. 3. CIVIL REMEDIES.
Section 3613 of title 18, United States Code, is amended--
(1) in the section heading, by inserting ``or restitution''
after ``fine''; and
(2) in subsection (a)--
(A) by striking ``The United States'' and inserting the
following:
``(1) Fines.--The United States'';
(B) by redesignating paragraphs (1), (2), and (3) as
subparagraphs (A), (B), and (C), respectively, and indenting
accordingly; and
(C) by adding at the end the following:
``(2) Restitution.--
``(A) In general.--
``(i) Lien.--An order of restitution shall operate as a
lien in favor of the United States for its benefit or for the
benefit of any non-Federal victims against all property
belonging to the defendant or defendants.
``(ii) Timing.--The lien shall arise at the time of the
entry of judgment or order and shall continue until the
liability is satisfied, remitted, or set aside, or until it
becomes otherwise unenforceable.
``(iii) Persons against whom lien applies.--The lien shall
apply against all property and property interests--
[[Page S2841]]
``(I) owned by the defendant or defendants at the time of
arrest; and
``(II) subsequently acquired by the defendant or
defendants.
``(B) Entry of lien.--The lien shall be entered in the name
of the United States on behalf of all ascertained victims,
unascertained victims, victims entitled to restitution who
choose not to participate in the restitution program and
victims entitled to restitution who cannot assert their
interests in the lien for any reason.
``(3) Jointly held property.--
``(A) In general.--
``(i) Division and sale of property.--If the court
enforcing an order of restitution under this section
determines that the defendant has an interest in property
with another, and that the defendant cannot satisfy the
restitution order from his or her separate property or
income, the court may, after considering all of the equities,
order that jointly owned property be divided and sold, upon
such conditions as the court deems just, notwithstanding any
Federal or State law to the contrary.
``(ii) Protection of innocent parties.--The court shall
take care to protect the reasonable and legitimate interests
of the innocent spouse and minor children of the defendant,
especially real property used as the actual home of that
innocent spouse and minor children, except to the extent that
the court determines that the interest of that innocent
spouse and children is the product of the criminal activity
of which the defendant has been convicted, or is the result
of a fraudulent transfer.
``(B) Fraudulent transfers.--In determining whether there
was a fraudulent transfer, the court shall consider whether
the debtor made the transfer--
``(i) with actual intent to hinder, delay, or defraud the
United States or other victim; or
``(ii) without receiving a reasonably equivalent value in
exchange for the transfer.
``(C) Considerations for protection of innocent parties.--
In determining what portion of the jointly owned property
shall be set aside for the innocent spouse or children of the
defendant, or whether to have sold or divided the jointly
held property, the court shall consider--
``(i) the contributions of the other joint owner to the
value of the property;
``(ii) the reasonable expectation of the other joint owner
to be able to enjoy the continued use of the property; and
``(iii) the economic circumstances and needs of the
defendant and dependents of the defendant and the economic
circumstances and needs of the victim and the dependents of
the victim.''.
SEC. 4. FINES.
Section 3572(b) of title 18, United States Code, is amended
to read as follows:
``(b) Payments; Effect of Indigency.--Any fine, special
assessment, restitution, or cost shall be for a sum certain
and shall be payable immediately. In no event shall a
defendant incur any criminal penalty for failure to make a
payment on a fine, special assessment, restitution, or cost
as a result of the indigency of the defendant.''.
SEC. 5. RESENTENCING.
Section 3614(a) of title 18, United States Code, is amended
by inserting before the period at the end the following: ``or
may increase the sentence of the defendant to any sentence
that might originally have been imposed under the applicable
statute''.
____
National Victim Center,
March 18, 1997.
Hon. Spencer Abraham,
U.S. Senate,
Washington, DC.
Dear Senator Abraham: The National Victim Center would like
to express it strong support for your bill, the Victims
Restitution Enforcement Act of 1997. Restitution is one of
the most direct manifestations of justice that our criminal
justice system can provide: requiring the convicted offender
to pay for the harm caused by his criminal conduct. No other
aspect of our system has a greater impact on the lives of
crime victims, or on their satisfaction with the criminal
justice process.
The provisions of this bill would greatly facilitate the
ordering and collection of restitution for victims' of
federal offenses, and would serve as a mode for state
legislatures who are searching for a means to enhance their
own restitution efforts. Adoption of this bill would fully
implement the spirit of the Mandatory Victims' Restitution
Act of 1996 (P.L. 104-132, Sec. 201 et seq.). It would
provide courts the information necessary to issue meaningful
restitution orders, would create a raft of mechanisms to
enhance the enforcement of those orders.
Passage of the Victims Restitution Enforcement Act of 1997
would send a strong signal to the American people that the
federal government will do everything in its power to provide
justice to our nation's crime victims. We urge your fellow
congress members to join in supporting this important
legislation.
Yours truly,
David Beatty,
Acting Executive Director.
____
Michigan Coalition,
April 8, 1997.
Hon. Spencer Abraham,
U.S. Senator,
Washington, DC.
Dear Senator Abraham: The Michigan Coalition Against
Domestic and Sexual Violence (MCADSV) fully supports the
Victim Restitution Enforcement Act that you introduce today.
Perpetrators of domestic violence and sexual assault exact a
devastating emotional toll on their victims, a price that
many survivors pay for a lifetime. Additionally, there are
often substantial financial costs borne by the victim.
Obvious expenses are those for property damage and medical
care. Often overlooked are the costs of counseling, lost work
time, child care, and expenses related to preparing for and
attending the trial.
While there is no legislative or other remedy to erase the
pain and terror experienced as a result of violent crime, we
can take greater measures to ensure that victims are not
forced to pay, out of their own pockets, for the actions of
criminals. This legislation is necessary both to empower
victims and require more perpetrators to pay for the
financial consequences of their crimes.
MCADSV greatly appreciates your advocacy efforts on behalf
of crime victims by sponsoring this important initiative.
Sincerely yours,
Kathleen Hagenian,
Director,
Public Policy and Program Services.
______
By Mr. FEINGOLD:
S. 520. A bill to terminate the F/A-18 E/F aircraft program; to the
Committee on Armed Services.
TERMINATING THE F/A-18 E/F SUPER HORNET LEGISLATION
Mr. FEINGOLD. Mr. President, I rise today to introduce legislation to
terminate the U.S. Navy's F/A-18 E/F Super Hornet Program.
The basis for this legislation is contained in a 1996 General
Accounting Office report entitled ``Navy Aviation: F/A-18 E/F Will
Provide Marginal Operational Improvement at High Cost.'' In this
report, GAO studied the rationale and need for the F/A-18 E/F in order
to determine whether continued development of the aircraft is the most
cost-effective approach to modernizing the Navy's tactical aircraft
fleet. GAO concluded that the marginal improvements of the F/A-18 E/F
are far outweighed by the high cost of the program.
Mr. President, in our current fiscal climate, I have serious concerns
about authorizing funding for such a costly program, which according to
GAO will deliver only marginal improvements over the current C/D
version of the F/A-18.
As GAO noted in its report, at a projected total program cost of
$89.15 billion, the F/A-18 E/F Program is one of the most costly
aviation programs in the Department of Defense. The total program cost
is comprised of $5.833 billion in development costs and $83.35 billion
in procurement costs for 1,000 aircraft.
Mr. President, before I begin to describe GAO's findings in detail, I
would first like to discuss briefly the role of the F/A-18 aircraft in
our Nation's overall naval aviation force structure. The Navy performs
its carrier-based missions with a mix of fighter (air-to-air combat),
strike (air-to-ground combat), and strike/fighter (multicombat role)
aircraft. Currently, carrier based F-14 fighter aircraft perform air-
to-air missions; A6E's perform air-to-ground missions; and F/A-18's
perform both air-to-air and air-to-ground missions. The F/A-18 E/F
Super Hornet is the latest version of the Navy's carrier-based F/A-18
strike/fighter plane.
Mr. President, the F/A-18 E/F is just one of three costly new fighter
programs the Department of Defense has on the drawing boards right now.
In addition to the F/A-18 E/F, there is the Air Force's F-22, which
is intended to replace the A-10 and the venerable F-16 Falcon. The F-22
is also intended to either supplant or augment the Air Force's top
fighter, the F-15. It will have stealth capabilities and will be able
to survive in dense air-defense environments.
And of course, there is the Joint Strike Fighter, which I will
discuss in greater detail in a few moments. The JSF is intended to
perform virtually every type of mission that fighter aircraft perform
in today's force structure, and is to be employed by the Navy, the Air
Force, and Marine Corps in unprecedented fashion.
There are few who seriously believe that the Pentagon can afford to
maintain all three tactical fighter programs. The General Accounting
Office, the Congressional Budget Office and many others have maintained
that the
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likelihood that all three programs can be fully funded with the planned
number of aircraft buys is virtually nil. In fact, many view the JSF as
the only modernization program that should be continued. Given our
fiscal constraints and Federal budget deficit, can we afford to finance
three separate fighter programs with the caliber and costs of the F/A-
18 E/F, the F-22, and the JSF?
The answer is unequivocally no. And that is why I am introducing
legislation to terminate any further development or procurement of the
program that appears to be most questionable, the E/F upgrade.
The Navy has based the need for development and procurement of the F/
A-18 E/F on existing or projected operational deficiencies of the F/A-
18C/D in the following key areas: strike range, carrier recovery
payload and survivability. In addition, the Navy notes limitations of
current C/D's with respect to avionics growth space and payload
capacity. In its report, GAO concludes that the operational
deficiencies in the C/D that the Navy cited in justifying the E/F
either have not materialized as projected or such deficiencies can be
corrected with nonstructural changes to the current C/D and additional
upgrades made which would further improve its capabilities.
One of the primary reasons the Navy cites in justifying the E/F is
the need for increased range and the C/D's inability to perform long-
range unrefueled missions against high-value targets. However, GAO
concludes that the Navy's F/A-18 strike range requirements can be met
by either the F/A-18 E/F or F/A-18 C/D. Furthermore, it concludes that
the increased range of the E/F is achieved at the expense of its aerial
combat performance, and that even with increased range, both aircraft
will still require aerial refueling for low-altitude missions.
The F/A-18 E/F specification requirements call for the aircraft to
have a flight range of 390 nautical miles (nm) while performing low-
altitude bombing missions. The F/A-18 E/F will achieve a strike range
of 465 nm while performing low-altitude missions by carrying 2 external
480 gallon fuel tanks. While current C/D's achieve a flight range of
325 nm with 2-330 gallon fuel tanks while performing low-altitude
missions--65 nm below the specification requirement of the E/F--when
they are equipped with the 2-480 gallon external fuel tanks that are
planned to be used on the E/F, the C/D can achieve a strike range of
393 nm on low-altitude missions.
Recent Navy range predictions show that the F/A-18 E/F is expected to
have a 683 nm strike range when flying a more fuel-efficient,
survivable, and lethal high-altitude mission profile rather than the
specified low-altitude profile. Similarly, although F/A-18 E/F range
will be greater than the F/A-18 C/D, the C/D could achieve strike
ranges (566 nm with 3-330 gallon fuel tanks or 600 nm with 2-480 gallon
tanks and 1-330 gallon tank) far greater than the target distances
stipulated in the E/F's system specifications by flying the same high-
altitude missions as the E/F. Additionally, according to GAO, the E/F's
increased strike range is achieved at the expense of the aircraft's
aerial combat performance as evidenced by its sustained turn rate,
maneuvering, and acceleration which impact its ability to maneuver in
either offensive or defensive modes.
One claim the Navy has made in response to the GAO report is that the
C/D cannot be outfitted with 480-gallon external fuel tanks. GAO
disputes this, citing contractor studies that concluded 480-gallon
tanks can be carried on the C/D's inboard stations. GAO also points out
that the Canadians have flown the F/A-18 C with the larger external
fuel tanks.
Mr. President, another significant reason the Navy cites in support
of the continued development of the E/F is an anticipated deficiency in
F/A-18C carrier recovery payload--the amount of fuel, weapons and
external equipment that an aircraft can carry when returning from a
mission and landing on a carrier.
However, the deficiency in carrier recovery payload which the Navy
anticipated of the F/A-18C simply has not materialized. When initially
procured, F/A-18C's had a total carrier recovery payload of 6,300
pounds. Because of the Navy's decision to increase the F/A-18C's
maximum allowable carrier landing weight and a lower aircraft operating
weight resulting from technological improvements, the F/A-18C now has a
carrier recovery payload of 7,113 pounds.
F/A-18C's operating in support of Bosnian operations are now
routinely returning to carriers with operational loads of 7,166 pounds,
which exceeds the Navy's stated carrier recovery payload capacity. This
recovery payload is substantially greater than the Navy projected it
would be and is even greater than when the F/A-18C was first introduced
in 1988. In addition, GAO notes that while it is not necessary,
upgrading F/A-18C's with stronger landing gear could allow them to
recover carrier payloads of more than 10,000 pounds--greater than that
sought for the F/A-18 E/F (9,000 pounds).
While the Navy also cites a need to improve combat survivability in
justifying the development of the F/A-18 E/F, the aircraft was not
developed to counter a particular military threat that could not be met
with existing or improved F/A-18 C/D's. Additional improvements have
subsequently been made or are planned for the F/A-18 C/D to enhance its
survivability including improvements to reduce its radar detectability,
while survivability improvements of the F/A-18 E/F are questionable.
For example, because the F/A-18 E/F will be carrying weapons and fuel
externally, the radar signature reduction improvements derived from the
structural design of the aircraft will be diminished and will only help
the aircraft penetrate slightly deeper than the F/A-18 C/D into an
integrated defensive system before being detected.
Mr. President, as we discuss survivability, it is relevant to
highlight the outstanding performance of the F/A-18 C/D in the gulf war
just a few short years ago. By the Navy's own account, the C/D
performed extraordinarily well, dropping 18 million pounds of
ordinance, recording all Navy MiG kills, and, in the Navy's own words,
experiencing ``unprecedented survivability.''
In addition to noting the operational capability improvements in
justifying the development of the F/A-18 E/F, the Navy also notes
limitations of current C/D's with respect to avionics growth space and
payload capacity. The Navy predicted that by the mid-1990's the F/A-18
C/D would not have growth space to accommodate additional new weapons
and systems under development. Specifically, the Navy predicted that by
fiscal year 1996 C/D's would only have 0.2 cubic feet of space
available for future avionics growth; however, 5.3 cubic feet of
available space have been identified for future system growth.
Furthermore, technological advancements such as miniaturization,
modularity and consolidation may result in additional growth space for
future avionics.
The Navy also stated that the F/A-18 E/F will provide increased
payload capacity as a result of two new outboard weapons stations;
however, unless current problems concerning weapons release are
resolved--air flow problems around the fuselage and weapons stations--
the types and amounts of weapons the E/F can carry will be restricted
and the possible payload increase may be negated. Also, while the E/F
will provide a marginal increase in air-to-air capability by carrying
two extra missiles, it will not increase its ability to carry the
heavier, precision-guided, air-to-ground weapons that are capable of
hitting fixed and mobile hard targets and the heavier stand-off weapons
that will be used to increase aircraft survivability.
Understanding that the F/A-18 E/F may not deliver as significant
operational capability improvements as originally expected, I would now
like to focus on the cost of the F/A-18 E/F Program and possible
alternatives to it. As previously mentioned, the total program cost of
the F/A-18 E/F is projected to be $89.15 billion. These program costs
are based on the procurement assumption of 1,000 aircraft--660 by the
Navy and 340 by the Marine Corps--at an annual production rate of 72
aircraft per year. Mr. President, as the GAO report points out, these
figures are overstated. According to Marine Corps officials and the
Marine Corps Aviation Master Plan, the Marine Corps does not intend to
buy any F/A-18 E/F's and, therefore, the projected 1,000 aircraft buy
is overstated by 340 aircraft.
[[Page S2843]]
Although the Pentagon contends that the Navy had intended to purchase
1,000 aircraft all along, extensive documentation and testimony
demonstrates this not to be the case and the 1,000 figure was the
original complete buy.
I would also note the importance of the Marine Corps opting out of
the E/F Program. Although the E/F was originally developed to service
two branches with differing needs and requirements, the Marine Corps
has chosen instead to invest in the Joint Strike Fighter program and
use those aircraft to replace their AV-8B Harriers and F/A-18 C/D's.
Furthermore, the Congress has stated that an annual production rate
of 72 E/F aircraft is probably not feasible due to funding limitations
and directed the Navy to calculate costs based on more realistic
production rates as 18, 36, and 54 aircraft per year. In fact,
according to the Congressional Research Service: ``* * * no naval
aircraft have been bought in such quantities in recent years, and it is
unlikely that such annual buys will be funded in the 1990's, given
expected force reductions and lower inventory requirements and the
absence of consensus about future military threats.''
Using the Navy's overstated assumptions about the total number of
planes procured and an estimated annual production rate of 72 aircraft
per year, the Navy calculates the unit recurring flyaway cost of the F/
A-18 E/F--costs related to the production of the basic aircraft--at $44
million. However, using GAO's more realistic assumptions of the
procurement of 660 aircraft by the Navy, at a production rate of 36
aircraft per year, the unit recurring flyaway cost of the E/F balloons
to $53 million. This is compared to the $28 million unit recurring
flyaway cost of the F/A-18 C/D based on a production rate of 36
aircraft per year. Thus, GAO estimates that this cost difference in
unit recurring flyaway would result in a savings of almost $17 billion
if the Navy were to procure the F/A-18 C/D's rather than the E/F's.
Mr. President, this is certainly a significant amount of savings. Now
I know that some of my colleagues will say that by halting production
of the F/A-18 E/F and instead relying on the F/A-18 C/D, we will be
mortgaging the future of our Naval aviation fleet. However, Mr.
President, there is a far less costly program already being developed
which may yield more significant returns in operational capability.
This program is the Joint Strike Fighter or JSF Program.
The JSF Program office is currently developing technology for a
family of affordable next generation multirole strike fighter aircraft
for the Air Force, Marine Corps, and Navy. The JSF is expected to be a
stealthy strike aircraft built on a single production line with a high
degree of parts and cost commonality. The driving focus of the JSF is
affordability achieved by triservice commonality. The Navy plans to
procure 300 JSF's with a projected initial operational capability
around 2007.
Contractor concept exploration and demonstration studies indicate
that the JSF will have superior or comparable capabilities in all Navy
tactical aircraft mission areas, especially range and survivability, at
far less cost than the F/A-18 E/F. The JSF is expected to be a stand
alone, stealthy, first-day-of-the-war, survivable aircraft. Overall,
the JSF is expected to be more survivable and capable than any existing
or planned tactical aircraft in strike and air-to-air missions, with
the possible exception of the F-22 in air-to-air missions. The Navy's
JSF variant is also expected to have longer ranges than the F/A-18 E/F
to attack high-value targets without using external tanks or tanking.
Unlike the F/A-18 E/F which would carry all of its weapons externally,
the Navy's JSF will carry at least four weapons for both air-to-air and
air-to-ground combat internally, thereby maximizing its stealthiness
and increasing its survivability. Finally, the JSF would not require
jamming support from EA-6B aircraft as does the F/A-18 E/F in carrying
out its mission in the face of integrated air defense systems.
While the JSF is expected to have superior operational capabilities,
it is expected to be developed and procured at far less expense than
the F/A-18 E/F. In fact, the unit recurring flyaway cost of the Navy's
JSF is estimated to range from $31-38 million depending on which
contractor design is chosen for the aircraft, as compared to GAO's $53
million estimate for the F/A-18 E/F. Additional cost benefits of the
JSF would result from having common aircraft spare parts, simplified
technical specifications, and reduced support equipment variations, as
well as reductions in aircrew and maintenance training requirements.
Mr. President, given the enormous cost and marginal improvement in
operational capabilities the F/A-18 E/F would provide, it seems that
the justification for the E/F is not as evident as once thought.
Operational deficiencies in the C/D aircraft either have not
materialized or can be corrected with nonstructural changes to the
plane. As a result, proceeding with the E/F program may not be the most
cost-effective approach to modernizing the Navy's tactical aircraft
fleet. In the short term, the Navy can continue to procure the F/A-18
C/D aircraft, while upgrading it to improve further its operational
capabilities. For the long term, the Navy can look toward the next
generation strike fighter, the JSF, which will provide more operational
capability at far less cost than the E/F.
Mr. President, succinctly put, the Navy needs an aircraft that will
bridge between the current force and the new, superior JSF which will
be operational around 2007. The question is whether the F/A-18 C/D can
serve that function, as it has demonstrated its ability to exceed
predicted capacity or whether we should proceed with an expensive, new
plane for a marginal level of improvement. The $17 billion difference
in projected costs does not appear to provide a significant return on
our investment. In times of severe fiscal constraints and a need to
look at all areas of the budget to identify more cost-effective
approaches, the F/A-18 E/F is a project in need of reevaluation.
Last year, I offered an amendment to the fiscal year 1997
authorization bill for the Department of Defense that required the
Pentagon to conduct a cost-benefit analysis of the F/A-18 E/F Program,
and to report their findings to the Congress by March 30, 1997. This
study was to include a review of the E/F program, an analysis and
estimate of the production costs of the program for the total number of
aircraft expected to be procured at several different production rates
and a comparison of the costs and benefits of this program with the
costs and benefits of the C/D Program. That analysis has not been
forwarded to the Congress as of this date.
In addition to this report, the Quadrennial Defense Review [QDR],
responsible for evaluating all weapon system programs, is also
scheduled to be completed in the near future.
Unfortunately, I was enormously disappointed when the Secretary of
Defense, rather than waiting for these reports to be completed and
publicly released, announced on March 28 his decision to move forward
with the E/F Program and procure 62 new F/A-18 E/F fighter planes at an
initial cost of $48 million each.
I would have hoped that the Secretary, who I have tremendous respect
and admiration for, would have waited until the mandated reports had
been provided to Congress and until the results of the QDR--which could
have a significant impact on the Pentagon's tactical aircraft
modernization plans--had been made public. Instead, this perplexing
decision to proceed with the procurement of 62 of these expensive
planes precludes the Congress from offering any input on the
Department's policy based on a review of the required reports. I am
puzzled as to why the new Secretary did not await these reports before
announcing this decision.
The 1996 GAO report concluded that we could achieve almost $17
billion in cost savings if the Navy elected to procure additional C/D
versions of the F/A-18 rather than the costlier E/F model. Mr.
President, by all accounts the F/A-18 C/D is a top quality aircraft
that has served the Navy well over the last decade, and could be
modified to meet every capacity the E/F is intended to fulfill over the
course of the next decade at a substantially lower cost.
Therefore, considering the Department of Defense has clearly
overextended itself in terms of supporting
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three major multirole fighter programs, and given that the most
promising tactical aviation program appears to be the triservice joint
strike fighter which will likely outperform the F/A-18 E/F at a
substantially lower cost, it is clear that we must discontinue the E/F
Program before the American taxpayer is asked to fund yet another
multibillion dollar duplicative program.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 520
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TERMINATION OF THE F/A-18E/F AIRCRAFT PROGRAM.
(a) Termination of Program.--The Secretary of Defense shall
terminate the F/A-18E/F aircraft program.
(b) Payment of Termination Costs.--Funds available for
procurement and for research, development, test, and
evaluation that are available on or after the date of the
enactment of this Act for obligation for the F/A-18E/F
aircraft program may be obligated for that program only for
payment of the costs associated with the termination of the
program.
______
By Mr. COVERDELL (for himself, Mr. Inhofe, Mr. Hutchinson, Mr.
Hagel, and Mr. Shelby):
S. 521. A bill to amend the Internal Revenue Code of 1986 to impose
civil and criminal penalties for the unauthorized access of tax returns
and tax return information by Federal employees and other persons, and
for other purposes; to the Committee on Finance.
the coverdell TAXPAYER PRIVACY PROTECTION ACT
Mr. COVERDELL. Mr. President, today I rise to offer legislation that
will end one of the most pernicious offenses forced upon honest
taxpayers. I am talking about file snooping. Others may call it
browsing or scanning. Whatever the name, it is just plain wrong, and it
ought to be stopped. That is why today I am introducing the Taxpayer
Privacy Protection Act.
Too often, the Internal Revenue Service acts as a bully, enforcing
the Tax Code through fear and intimidation. Even worse, legal loopholes
have allowed certain IRS employees to violate the privacy of innocent
citizens without punishment. Some of the most troubling abuses
committed by employees of the IRS against innocent Americans include
the practices of file snooping.
Recently in the Wall Street Journal, we learned of the case of Mr.
Richard W. Czubinski of Boston, MA. He is a member of the Ku Klux Klan
who used his IRS job to search the tax returns of political opponents
and people he suspected of being Government informers. He was
prosecuted and convicted by a jury, but his conviction was overturned
in the Federal Court of Appeals. In making its decision, the appellate
panel found Mr. Czubinski's browsing to be reprehensible, but also
found no crime had been committed because prosecutors could not prove
he had used the information or disclosed it.
In addition, a few years back, I was shocked to learn that in my home
city of Atlanta, nearly 370 employees of the local IRS office were
caught accessing the tax returns and return information of friends,
neighbors, and celebrities without proper authorization.
Mr. President, the Taxpayer Privacy Protection Act would make it a
crime to engage in file snooping, punishable by a fine of up to $1,000
and/or 1 year imprisonment. Further, a convicted offender would have to
reimburse all costs of prosecution and face dismissal.
My legislation also requires notification of taxpayers who suffer
this abuse. Unfortunately, what should seem to be a simple matter of
decency must be required of the IRS. In response to suggestions
taxpayers be notified when their privacy has been invaded by file
snoopers, IRS Commissioner Margaret Richardson stated, ``I'm not sure
there would be serious value to that in terms of protecting the
taxpayers' rights.'' With all respect, such sentiment is typical of a
Washington status quo mentality that is out-of-touch with the rest of
America.
Finally, my proposal would provide taxpayers who have been victims of
file snooping with the option of seeking civil action. Quite simply, it
is the decent thing to do.
Taxpayer privacy is one of the most sacred trusts we place in the
IRS. Unfortunately, this agency has not lived up to this trust. With
passage of the Taxpayer Privacy Protection Act, honest, hardworking
taxpayers can be assured their full privacy will be protected every
April 15. They deserve no less.
______
By Mr. GLENN:
S. 523. A bill to amend the Internal Revenue Code of 1986 to prevent
the unauthorized inspection of tax returns or tax return information;
to the Committee on Finance.
irs systems security legislation
Mr. GLENN. Mr. President, the date of April 15 is indelibly etched in
the minds of most Americans. For it is on or by that day that honest,
hard-working citizens voluntarily share their most personal and
sensitive financial information with their Government.
All Americans should have unbridled faith that their tax returns will
remain absolutely confidential and zealously safeguarded. That is the
foundation of our taxpaying system. If this trust is breached, then the
bonds that tie citizens with their Government may break, with
disastrous consequences for us all.
In 1993 and 1994, as chairman of the Governmental Affairs Committee,
I held hearings which first exposed that vulnerability. We found out
that hundreds of IRS employees had been investigated for what I term
``computer voyeurism'', where they call up returns of friends, enemies,
celebrities, relatives, or neighbors just to snoop and satisfy their
own prurient interests. Even worse, in some cases, IRS employees either
altered their own returns to get refunds, or conspired with other
taxpayer friends to change their returns and get a kickback from those
refunds.
My investigation revealed serious flaws in the IRS' ability to
monitor, prevent, and detect browsing.
In response, the IRS Commissioner pledged a zero tolerance policy to
protect taxpayer privacy and vigorously discipline those who abuse this
trust. The Commissioner also implemented a new system called EARL--
Electronic Audit Research Log--to help identify inappropriate and
unauthorized access to taxpayer information stored in the IRS' main
computer system.
That primary system, IDRS--Integrated Data Retrieval System--handles
more than 100 million transactions per month and is used by over 55,000
IRS employees. At least one-third of those employees are authorized to
input adjustments to tax account records.
I had asked the General Accounting Office [GAO] to review the
progress made by the IRS in reducing computer security risks and in
curbing browsing. Earlier this year, GAO produced that report. However,
because some of the specific details could jeopardize IRS security,
that report was designated for ``Limited Official Use'' with restricted
access.
Due to my involvement in this important issue, and because I believe
the public has a right to know, I requested that GAO issue a redacted
version of the report suitable for public release. I would like to
thank GAO for their hard work in this matter and also the IRS for their
cooperation in making this possible.
The findings of GAO's report are disturbing. Even more important,
their findings are reaffirmed by the IRS in a comprehensive internal
report of their own compiled last fall.
Before I get to the specifics, I just want to say a couple of things.
Point One. The vast majority of IRS employees are dedicated and
committed to their jobs, and labor in extremely difficult conditions
with very outmoded systems. Unfortunately, in this day and age, they
must also fear for their own personal safety.
Some 99.9 percent of them would never engage in such snooping or
fraud. It is not as if every American has reason to believe that his or
her privacy and tax return information has been compromised. But even
just a single incidence of this behavior is one too many and cannot be
tolerated.
Just last year, in Tennessee, a jury acquitted a former IRS employee
who had been charged with 70 counts of improperly peeking at the tax
returns of celebrities such as Elizabeth Taylor, Dolly Parton, Wynonna
Judd, Michael
[[Page S2845]]
Jordan, Lucille Ball, Tom Cruise, President Clinton, and Elvis Presley.
More recently, just a few weeks ago, a Federal appeals court in
Boston reversed the conviction of a former employee who had been found
guilty of several counts of wire and computer fraud by improperly
accessing the IRS taxpayer database. It was reported that he had
browsed through several files, including those of a local politician
who had beaten him in an election, and a woman he once had dated. The
Government had alleged this worker was a member of a white-supremacist
group and was collecting data on people he thought could be Government
informers.
In both of these cases, because of a loophole in the law, no criminal
penalties could be meted out. The reason? No disclosures had been made
to third parties.
I doubt these kinds of decisions give great comfort to honest, law-
abiding citizens. That is why today I am reintroducing my legislation--
the Taxpayer Privacy Protection Act--to close this gap and ensure that
any unauthorized access or inspection of return information, in
whatever form, is punishable as a criminal offense and that employees
so convicted are fired immediately.
I know that the chairman of the House Ways and Means Committee is
interested in passing such a bill as are several of my Senate
colleagues including Senator Coverdell. I commend everyone for their
interest and looking forward to making this bill--finally--a reality.
Let's pass this by April 15 and send a signal across the land that
those who violate the privacy of tax paying Americans will be fined,
will be fired, and will be jailed. The public rightfully expects no
less.
Point Two. The IRS has recognized this serious issue and has
undertaken some responsive actions. Warnings of possible prosecution
for unauthorized use of the system appear whenever employees log onto
the taxpayer account database. They have installed automated detection
programs in some of their systems to monitor employee use and alert
managers to possible misuse. And, the IRS has just created a new Office
of Systems Standards and Evaluations to centralize and enforce IRS
standards and policies for all major security programs. I have
confidence that this Office, if given the proper resources, will be a
positive force in this effort.
The problem, however, is that these efforts, while well-intentioned,
have come too late and fall far short of the commitment, management,
and determination sorely needed to confront this matter head-on.
The sad fact is that with 1 week to go until tax returns are due, one
thing is clear: the IRS has flunked its own audit and has let down the
American people.
The agency promised zero tolerance for browsing. Today's information
suggests that they have failed to live up to that pledge--1,515 new
cases of browsing have been identified since our last report. Of those
only 27 have resulted in employees being fired. I don't know what kind
of new math they may be using, but that doesn't sound like zero
tolerance to me.
GAO even found that the 1,515 figure may drastically underestimate
actual incidents because--and I quote--the agency's ``ability to detect
browsing is limited''.
Overall, GAO found that IRS' approach to computer security is not
effective. Serious weaknesses persist in security controls intended to
safeguard IRS computer systems, data, and facilities and expose tax
processing operations to the risk of disruption and taxpayer data to
the risk of unauthorized use, modification, and destruction. Further,
although IRS has taken some action to detect and prevent browsing, the
fact remains that the IRS has no effective means for measuring the
extent of the browsing problem, the damage being done by browsing, or
the progress being made to deter browsing.
This finding is candidly confirmed in IRS' own internal report:
progress in developing efficient prevention and detection
programs has been painfully slow. The program has suffered
from a lack of overall consistent, strong leadership and
oversight.
Quite distressing to me is the finding, as stated in the IRS' own
report, that employees, when confronted, indicate that they browsed
because they do not believe it is wrong and that there will be little
or no consequence to them if they are caught.
Before summarizing the major findings, I also want to point out
another facet of this report. That is, the effectiveness of controls
used to safeguard IRS systems, facilities, and taxpayer data. GAO found
serious weaknesses in these efforts, especially in the areas of
physical and logical security.
For example, the facilities visited by GAO could not account for
about 6,400 units of magnetic storage media, such as tapes and
cartridges, which might contain taxpayer data. Further, they found that
printouts containing taxpayer data were left unprotected and unattended
in open areas of two facilities where they could be compromised.
I really don't want to say much more on this portion of the report
than I have already. Except that these matters, and the others referred
to by GAO, must be dealt with swiftly and effectively.
I have summarized GAO's findings in a handout. Where appropriate, I
have also included references from IRS' own recent internal report on
their browsing deterrence and detection program. As I mentioned
earlier, that report--[Electronic Audit Research Log (EARL) Executive
Steering Committee Report, Sept. 30, 1996]--and I commend the IRS for
its candid and frank evaluations in it--affirms most of GAO's findings,
conclusions, and recommendations.
I will briefly highlight the major findings in these attachments:
the irs system designed to detect browsing [earl] is limited
GAO found that the system used to monitor and detect browsing is
ineffective because it can't distinguish between legitimate work
activity and illegal browsing.
Moreover, EARL only monitors the main taxpayer database. There are
several other systems used by employees to create, access, or modify
data which, apparently, go unsupervised. This is something I have asked
the GAO to look into further.
According to GAO:
because IRS does not monitor the activities of all employees
authorized to access taxpayer data . . . IRS has no assurance
that these employees are not browsing taxpayer data and no
analytical basis on which to estimate the extent of the
browsing problem or any damage being done.
In fact, according to the IRS' EARL report:
The current system of reports does not provide accurate and
meaningful data about what the abuse detection programs are
producing, the quality of the outputs, the efficiency of our
abuse detection research efforts, or the level of functional
management follow through and discipline. This impedes our
ability to respond to critics and congressional oversight
inquiries about our abuse detection efforts.
IRS Progress in Reducing and Disciplining Browsing Cases is Unclear
The systems used by the IRS cannot report on the total number of
unauthorized browsing incidents. Nor do they contain sufficient
information to determine, for each case investigated, how many taxpayer
accounts were inappropriately accessed or how many times each account
was accessed.
Consequently, for known incidents of browsing, IRS cannot efficiently
determine how many and how often taxpayers' accounts were
inappropriately accessed. Without such information, IRS cannot measure
whether it is making progress from year to year in reducing browsing.
Internal IRS figures show a fluctuation in the number of browsing
cases closed in the last few years: 521 cases in fiscal year 1991; 787
in fiscal year 1992; 522 in fiscal year 1993; 646 in fiscal year 1994,
and; 869 in fiscal year 1995.
More distressing, however, is the fact that in spite of the
Commissioner's announced zero tolerance policy, the percentages of
cases resulting in discipline has remained constant from year to year,
averaging 29 percent.
IRS itself reported that almost one-third of the cases detected were
situations where an employee accessed their own account, which,
according to the report, is ``generally attributable to trainee
error''.
Their answer creates simply more questions, however. Why are
employees accessing their own accounts? Is this a wise policy?
Penalties for Browsing are Inconsistent Across IRS
Despite IRS policy to ensure that browsing penalties are handled
consistently across the agency, it appears
[[Page S2846]]
that there are disparities in how similar cases are decided among
different offices.
For instance, the number of browsing cases resulting in employees
being terminated in the last year surveyed ranged from 0 percent at one
facility to a high of only 7 percent at another.
The percentage of browsing cases resulting in employee counseling
ranged from 0 percent at one facility to 77 percent at another.
Even more incredible to me--and quite distressing--is the extremely
low percentage of employees caught browsing each year who are fired for
their offense, according to the IRS' own figures. Would you believe
that, for all of the browsing cases detected and closed each year, the
highest number of employees fired in 1 year has been 12. Between fiscal
year 1991 and fiscal year 1995, only 43 employees were fired after
browsing investigations. That is generally 1 percent of the total
number of cases brought each year. Even if you include the category of
resignation and retirement, the highest percentage of employees
terminated through separation or resignation/retirement in any 1 year
has been 6 percent.
I could go on and on, but I think you get the idea.
Taxpayer privacy is being jeapordized and the IRS is not doing enough
to address it.
A new law to make browsing a crime will be an important tool and I
have worked with the IRS and the Justice Department in crafting my
legislation.
I will also be looking forward to Thursday's hearing of the Senate
Governmental Affairs Committee when the IRS will be testifying and this
issue is likely to come up.
In closing, I do not want to be standing up here again next year
talking about browsing. Although the computer age makes guarding
taxpayer privacy more difficult and complex, the fact remains: the IRS
can and must do better. The American people expect and demand nothing
less.
______
By Mr. DASCHLE (for himself and Mr. Dorgan):
S. 524. A bill to amend title XVIII of the Social Security Act to
remove the requirement of an x ray as a condition of coverage of
chiropractic services under the Medicare Program; to the Committee on
Finance.
MEDICARE LEGISLATION
Mr. DASCHLE. Mr. President, today I am introducing legislation that
makes a commonsense change to Medicare's outdated policy regarding
chiropractic care. Specifically, my bill would eliminate the
requirement that beneficiaries get an x ray before they are authorized
to be reimbursed for chiropractic services under Medicare. This
legislation accomplishes two important goals. First, it removes
outdated vestiges of still pronounced discrimination against
chiropractic practitioners in the Medicare Program. Second, this bill
makes chiropractic services more accessible and affordable for
beneficiaries. I encourage my colleagues to join me in supporting this
measure, which is the Senate companion to legislation introduced in the
House of Representatives on March 4, 1997 by Representative Phil Crane.
Existing Medicare law strictly limits reimbursement for chiropractic
services to manual manipulation of the spine and only to correct a
subluxation. However, before beneficiaries can be reimbursed for
chiropractic care, Medicare requires that the patient get an x ray to
confirm the need for these services. Beneficiaries must either pay for
the x ray out of their own pockets, a cost that many cannot afford, or
pass through the ``gateway'' controlled by other medical providers,
whose x rays, typically far more expensive, are reimbursable under the
program.
While x rays are often a useful diagnostic tool to verify a medical
condition, most medical professionals and health analysts agree that
there is no clinical justification for a blanket requirement that
Medicare beneficiaries verify the need for chiropactic care through an
x ray. Medicare's statutory x ray requirement results in unnecessary
patient exposure to x rays and simply cannot be justified as an across-
the-board requirement.
Representatives of the Health Care Financing Administration [HCFA]
who have closely studied this issue reached the same conclusion that I
did and recommended to the President that this provision be included in
his Medicare reform plan. I am pleased that the President did include
in his fiscal year 1998 balanced budget proposal a provision calling
for the elimination of the x ray requirement for chiropractic care. I
am cautiously optimistic that bipartisan support from within the
Congress and the administration will help facilitate passage of this
modest, but important, measure.
I grew up in a community where chiropractors perform a valuable
service by providing an alternative to allopathic medicine. The nearly
200 chiropractors in South Dakota serve the State well. In rural States
like mine, chiropractors are often an essential source of health care
delivery. Sometimes they are the only health providers in the
community. In rural States across the country, the chiropractic
profession plays an integral role in the health care system.
But the issue is even larger than one of correcting inequities in the
law and recognizing the contributions of chiropractors alone. We are
constantly searching for ways to give more Americans greater access to
quality health care, and to facilitate that availability of care in the
most cost-effective manner. One proven way to make progress toward
those goals is to exploit the talent and dedication represented in the
diversity of practitioners increasingly involved in the delivery of
health care services in the United States. Competition among different
kinds of providers and access to less expensive forms of care have to
be emphasized if we are to control escalating health care costs. Yet
this competition is virtually impossible when programs like Medicare
put up barriers to beneficiaries receiving care from a group of
licensed professionals like chiropractors.
As health care cost increases continue to threaten both the quality
and economic stability of our national health care delivery system, the
cost savings potential of chiropractic care should be fully explored.
The bill I am introducing today will help provide access to quality
care at a reasonable cost. I urge my colleagues in the Senate to
support this measure to ensure Medicare patients have appropriate
access to the benefits of chiropractic care.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 524
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REMOVAL OF REQUIREMENT FOR X-RAY AS A CONDITION OF
COVERAGE OF CHIROPRACTIC SERVICES UNDER THE
MEDICARE PROGRAM.
(a) In General.--Section 1861(r)(5) of the Social Security
Act (42 U.S.C. 1395x(r)(5)) is amended by striking
``demonstrated by X-ray to exist''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services furnished on or after January 1,
1998.
______
By Mr. HATCH (for himself, Mr. Kennedy, Ms. Snowe, Mr. Kerry, Mr.
Jeffords, Mr. Dodd, Mr. Stevens, Mr. Rockefeller, Mr. Bennett,
Mr. Daschle, Ms. Collins, Mr. Wellstone, Mr. Smith of Oregon,
Mr. Bingaman, Mr. Campbell, Mrs. Murray, Mr. Reed, Mrs. Boxer,
Mr. Lautenberg, Mr. Durbin, and Mr. Reid):
S. 525. A bill to amend the Public Health Service Act to provide
access to health care insurance coverage for children; to the Committee
on Labor and Human Resources.
Child Health Insurance and Lower Deficit Act
Mr. HATCH. Mr. President, today, Senator Kennedy, I, and a number of
others, are introducing the Hatch-Kennedy child health insurance and
lower deficit bill, or the CHILD Act, S. 525. We will also introduce a
companion measure, S. 526, which contains a tobacco excise tax increase
to pay for the program established in the CHILD bill.
The CHILD bill has been negotiated over a long period of time in
intensive and sometimes heated negotiations. As anybody can understand,
it is difficult to get the two sides together on matters like this. So
we have worked very, very hard to try and bring both sides together.
[[Page S2847]]
It is no secret that Senator Kennedy and I have worked together in
the past. And, we have fought each other in the past. But today is a
time of unity, for I believe we have written a bill that really makes
sense, a bill that will work and that will help one of the most
vulnerable segments of our society, children without health insurance.
Of the 40 million people who are uninsured in this country, 10
million of them are children. Of those 10 million, about 3 million do
qualify for Medicaid, but are not enrolled.
While it has its problems, Medicaid is an excellent program overall,
a program that does assist the poorest of the poor children and
families. But those above the Medicaid eligibility poverty levels,
comprise about 7 million children, most of whom are often called the
near poor, or the working poor.
Mr. President, as a recent study has made abundantly clear, about one
out of three children in this country lacks health insurance. It is a
pathetic situation.
As my colleagues are aware, Senator Kennedy and Senator Kerry
introduced a bill last year which addressed the child health insurance
problem from a considerably different perspective than the bill we are
finally going to introduce today.
I think it is important to point out the differences for the
edification of my colleagues.
The bill we will file today is a bill that is a straight block grant
to the States. The States have flexibility to determine their own
eligibility standards with minimal Federal requirements.
The proposal is not an entitlement program. It is a fully funded
program. It is a 5-year authorization.
The mechanism for funding the CHILD program authorization is an
increase in the tobacco excise tax, amounting to 43 cents per package
for cigarettes and proportionate increases on other tobacco products.
Some have analogized this to a user fee on those who use tobacco
products.
We think this excise tax is justified. In 1955, a package of
cigarettes cost about 23 cents. Of that amount, 8 cents consisted of a
Federal excise tax on the cigarettes.
Today, a package of cigarettes costs almost $2, at least $1.82 in
most States, but we have only a 24-cent Federal excise tax on the
utilization of those cigarettes.
We think this provision is also justified from a public health
perspective.
Smoking is the largest preventable cause of premature death in the
United States.
Thirty percent of all cancer patients develop their diseases from
smoking. Almost all lung cancer comes from smoking. And much of the
cardiovascular disease that we have in our society comes from smoking--
including passive smoking as well.
It should be no secret to my colleagues that it was a difficult
decision for me to submit a bill which will increase taxes, but after
considerable study I concluded in this case it is a just and a right
thing to do.
And if we increase the cigarette tax by 43 cents, we will still be
below the percentage the excise tax was back in 1955 when a package of
cigarettes cost 23 cents and the excise tax was 8 cents of that.
It is important to note that two-thirds of the revenue raised from
this bill over the next 5 years will be used for the new child health
insurance. The States will be able to negotiate with private health
insurance companies to provide coverage, and they will be able to
utilize the community health centers which are giving low-cost but
high-quality health care in America today.
I am one of the strongest advocate for community health centers, and,
I must say, they have done a superlative job of delivering health care
in general in our society.
In Utah, we have what is known as the Caring Foundation. For every
dollar we raise in charity, Blue Cross/Blue Shield matches that dollar
with $1, making $2 for child health insurance. I believe that can be
duplicated across this country in the best interest of children and
families.
When someone inquires about why I am sponsoring the CHILD Act, my
thoughts turn to scores of constituents who have brought their concerns
about the cost and availability of health insurance to my attention.
It is heart rending to me when I have uninsured families come into my
office--many of whom are young and who have children. These families
are frantic; they don't know where to turn when a child gets sick.
Two young women from Provo in my home State came in to visit me
recently. Both had six children. They both work part time. Their
husbands work full time, but neither family makes more than $20,000 a
year. They are hard-working people. They are the working people of our
society who are the poorest of the poor not on Medicaid, who cannot
afford health insurance and, frankly, who do not know where to turn.
I think that it behooves us to solve this problem for them, and the
best way to do it is with a straight block grant to the States.
The grant approach has a lot of benefits. There should be minimal new
bureaucracy, because the IRS already collects excise taxes on
cigarettes. There should be minimal bureaucracy because HHS will
distribute the funds based on a simple formula reflecting the number of
uninsured in a State.
We provide a safeguard so there is no incentive for businesses to
drop the lower paid people off their health insurance. In this bill, if
a company wishes to drop any employee from the company health plan,
then they will have to drop all their employees, from the top
executives on down.
We are trying to help those who cannot help themselves, which I think
is the most conservative thing we can do in this society. We are not
trying to help those who can help themselves but refuse to. People who
can help themselves ought to help themselves.
What I am saying, Mr. President, is that it is time. It is time for
this Congress to get down to business.
Mr. President, it is time.
It is time for us to get down to business.
It is time for the Congress to focus on how to make a great country
greater on how to set aside partisan differences and help the people we
were elected to help.
It is time to focus on what truly needs to be done in this country
not on deadlock or gridlock or shutdown.
It is time to wake up and realize that--in this great land of
incredible riches and abundance--in the greatest country of the world--
there are still children being left behind.
Who cannot be disturbed, even frightened, by the statistics?
Drug use among our young people is dramatically on the rise. In its
ninth annual survey of students in grades 6-12, the National Parents'
Resource Institute for Drug Education [PRIDE] reported that annual use
of most drugs was at the highest level since the survey began 10 years
ago. Record use was reported for cigarettes, marijuana, cocaine,
uppers, downers, inhalants, and hallucinogens.
Serious questions have been raised about our children's ability to
learn. Our children rank pitifully behind other countries in
educational scores. One survey of international test scores for math
and science, found Americans to rank dead last and South Koreans
ranking the best. And, who could not be disturbed by this? A 1991
National Assessment of Education Progress survey, revealed that only 5
percent of high school seniors demonstrated enough understanding of
geometry and algebra to be prepared for college-level math.
Violence is rapidly becoming a way of life for today's children. Over
the past decade, the rate of homicide committed by teenagers aged 14-17
has more than doubled, increasing 172 percent from 1985 to 1994. In
fact, 35 percent of all violent crime is committed by offenders less
than 20 years of age.
And here's another astounding fact. Two years ago, a survey of 1,000
teachers showed that 11 percent had been assaulted in school. Teachers
have been robbed, vandalized, slashed by razors, physically assaulted,
shot, and set on fire in the schools. What kind of learning environment
is that for our children?
And, let's look at child health. How many Senators are aware that
almost one out of three children have no health insurance?
Ten million children have no health insurance at all. That is more
children than the entire populations of Maine,
[[Page S2848]]
Rhode Island, Alaska, Delaware, Georgia, Hawaii, Montana, Nebraska,
South Dakota, and Vermont--10 States--combined.
Did anyone know this? Over 500,000 American infants are uninsured,
infants who need such critical services as immunizations to grow up
healthy.
Mr. President, these are astounding statistics. Terrifying predictors
of our world as we head into the 21st century.
And I, for one, am going to put my foot down. I will do everything I
can to reverse this trend.
I challenge each Senator in this body to work with me on what must be
the top agenda item for the 105th Congress: Making this world a better
place for our children.
I will make this a top priority in the Judiciary Committee.
We will look at such issues as the Federal Gang Violence Act,
violence in the schools, and, importantly, a strong national antidrug
abuse strategy.
Already the committee has approved--only to suffer the most narrow of
defeats on the floor--the Balanced Budget Act, passage of which is
perhaps the most important legacy we can leave for our children, each
of whom is born saddled with $20,000 in debt.
And I hope other committees will be working as well.
For no effort to improve this world for our children can be complete
without measures to improve their ability to grow up healthy.
That is why I have united with my good friend and sometimes
adversary, Senator Kennedy, to draft the bill we are introducing today:
the Child Health Insurance and Lower Deficit Act. We call it the CHILD
bill. The CHILD bill will be accompanied by additional legislation we
also introduce today which provides the funding offset for the CHILD
Program through an increase in the tobacco excise tax.
Introduction today of S. 525, and the companion bill to increase the
tobacco excise tax, completes 3 months of intense negotiations between
myself and Senator Kennedy.
Our discussions were sometimes heated, sometimes acrimonious, but
always well intentioned. They have resulted in a bill, the adoption of
which I think will make this country a better place.
And so, today, Senator Kennedy and I have found a solid center--we
have compromised from the left and from the right. We are doing this to
help the 10 million children in the United States who are without
health insurance. We are doing it because it is the right thing to do.
The child health insurance and services bill Senator Kennedy and I
will introduce today is targeted to the near poor, primarily working
families, who are not covered by existing Government programs. Two-
thirds of the uninsured children come from low-income working families
with annual incomes of $25,000 or less; 86 percent are from families
where at least one parent is employed.
I think any honest examination of this would show that these
statistics are deplorable. Children are our most precious natural
resource. If we had a vote on that today, it would pass 100 to 0. And
if you agree on that, the next step is simple. I can't think of a more
appropriate role for the Federal Government than helping the most
vulnerable in our society. It has become a cliche, but children are our
future.
Already I have taken criticism for this bill and for uniting with a
Democrat to sponsor the CHILD Act. It is true that Senator Kennedy and
I represent the most divergent philosophies in the U.S. Congress. It is
for that very reason we are proposing S. 525 today. United, we can
provide the basis for a consensus position we hope all our colleagues
will endorse.
It is true that Senator Kennedy and I do not often agree on public
policy. I can't even count the number of times I have stood on this
floor to oppose--even filibuster--legislation he has sponsored. But
with respect to health care--when it comes to helping people--we both
have a strong commitment to doing the right thing regardless of
politics. And this legislation is the right thing to do.
Joining Senator Kennedy and me today in cosponsorship of the CHILD
bill, S. 525, are 19 Senators, for a total of 21. Those Senators are:
Snowe, Kerry, Jeffords, Dodd, Stevens, Rockefeller, Bennett, Daschle,
Collins, Wellstone, Smith (OR), Bingaman, Campbell, Murray, Reed,
Boxer, Lautenberg, Durbin, and Reid.
Joining us in cosponsorship of the tobacco tax bill, S. 525, are
Senators Bennett, Bingaman, Boxer, Dodd, Durbin, Jeffords, Kerry,
Lautenberg, Murray, Reed, Reid, Rockefeller, Snowe, and Wellstone.
What are the major features of the CHILD bill?
Our proposal sets up a voluntary State grant program--I repeat,
voluntary State grant program. The funds will be used by States to
subsidize the cost, or part of the cost, of private health insurance
for needy children. States will also be able to use Community and
Migrant Health Centers to provide services directly to children.
We hope our program will be a catalyst to improve health care for
kids. It is a Federal/State/private partnership. Any State that wishes
to participate must contribute to the program. States may require
individuals or their employers to contribute as well.
We have designed an approach which we believe is fiscally
responsible. The bill authorizes program expenditures for each of 5
years, and it is fully financed with a 43-cent increase in tobacco
excise taxes. Two-thirds of the revenues will be used for program
services, and one-third for deficit reduction.
In drafting S. 525, we have worked very hard to make certain that no
large, new bureaucracy will be needed to implement the CHILD Program.
The idea of a huge new Federal involvement in health care frightens
most Americans, as was so amply evidenced by the resounding defeat of
the Clinton health care bill in 1994.
I was one of the loudest objectors to that legislation as a member of
both the Finance and Labor Committees at the time it was considered. I
want to assure my colleagues that we are not replicating that exercise
here today.
HHS will disburse the grant money according to existing Medicaid
formulas and the number of uninsured children in the State. The
Treasury Department already collects an excise tax.
The States will set eligibility levels, which presumably they could
do very easily based on their experiences with Medicaid and other State
programs to help the poor and near poor. The States will use their
current Medicaid benefits packages to negotiate contracts for insurance
coverage. These are not complex calculations. They should be easily
achievable.
We also worked very hard to allay any concerns that we were
establishing a new entitlement program.
We are not.
The bill does not establish any individual entitlement to benefits.
It is a 5-year authorization which is fully funded. It is not like
Medicare where we guarantee we will pay for the services of every
eligible beneficiary. It is not like Medicaid where we pay an open-
ended amount, which is appropriated annually.
What we are really talking about doing with this bill is finding
cost-effective ways to get quality health care services to children.
Our bill recognizes and strengthens the important role that community,
migrant and homeless centers play in caring for the Nation's uninsured
children and their families. Community and rural health centers already
exist. We are not creating them or remaking them in this bill.
They are located in medically underserved communities where many
uninsured children live. Over 940 health centers in every State serve
one out of six low-income American children, over 4.5 million children.
They are currently the family doctor for one out of seven uninsured
children, totaling 1.3 million children. Last year, health center
professionals delivered one of every 10 babies born in the United
States, and one out of every five low income babies. They are experts
in providing quality, comprehensive primary and preventive care to
uninsured children--the very type of care we are trying to get to
children with this bill.
Our bill permits these children to continue to choose health centers
as their primary care provider and to make the choice of a health
center available to other uninsured children. In each area currently
served by a health center, a direct service option will be available to
children who are served by a health center. Families choosing the
direct service option will
[[Page S2849]]
get the same comprehensive Medicaid package of services as do those who
opt for a children's policy. Under the direct service option, children
will receive their primary and preventive care at the health center
they select and will receive specialty and inpatient care through
networks of providers certified by the State or through a wrap-around
insurance policy.
We believe that the direct service option will be as cost effective
as an insurance policy and may even be less expensive. Several studies
which compared the total annual cost of health care for Medicaid
patients served by health centers--including primary and specialty care
and inpatient care--to the total annual cost of care for Medicaid
patients served by other types of providers--including health
maintenance organizations and private physicians--found that health
center care was the least expensive.
The reason? Health centers prevent illness because of the primary and
preventive care they provide. Based on these studies, the cost of all
care--primary, specialty, and inpatient--under the direct service
option is expected to be lower than the cost for a child cared for by
another type of provider.
As the chief sponsor of the balanced budget amendment, I could not
support the creation of any new entitlement program.
Indeed, I believe this proposal is fully consistent with the BBA.
First, our bill is fully financed by the proposed tobacco products tax.
Second, for every $2 of program cost the Hatch-Kennedy bill dedicates
$1 to deficit reduction.
When all is said and done, this bill would help to bring the budget
in balance--which I believe will be nearly as essential to children in
the long-run as necessary health care is in the short-run.
Let me underscore that the net cost to the Federal Government of the
CHILD Act is zero, because it is fully funded. In fact, the bill
literally saves money, because it provides at least $10 billion in
funds for deficit reduction over the next 5 years.
We cap Federal expenditures at $20 billion over 5 years for services,
with $10 billion for deficit reduction. Over the 5-year period, the
ratio of services to deficit reduction will be 2 to 1.
For services, we will provide the following amounts: 1998: $3
billion, 1999: $3 billion, 2000: $4 billion, 2001: $5 billion, 2002: $5
billion.
For deficit reduction, we provide the following amounts: 1998: $3
billion, 1999: $3 billion, 2000: $2 billion, 2001: $1 billion, and
2002: $1 billion.
Let me make perfectly clear that the size of this program is capped
each year. In fact, if not enough revenue is generated, then the size
of the program will be lowered accordingly.
Let me take a moment to address other potential concerns about this
bill.
Many have asked why we need a new program. Indeed, we have the
Medicaid Program, which helps the poorest of the poor. Even so, there
are 10 million children without coverage. In fact, 3 million uninsured
children are eligible for Medicaid, but are not enrolled.
There is no program for the remaining 7 million children, most of
whom come from near poor families. Those families are faced with two
very unattractive options: a choice between dropping out of the labor
force in order to get Medicaid eligibility, or keeping their jobs with
no health care coverage at all.
It might be logical to assume that Medicaid would provide the basis
for a program to increase child health coverage. And we did examine
that idea. But, Medicaid is an open-ended entitlement--and an expensive
one at that. Both the States and the Federal Government are seriously
concerned about the runaway costs of Medicaid.
In contrast, our capped program is not an entitlement. It is a
targeted approach which allows States considerable flexibility in
design and administration.
Others have suggested that we use a tax-based approach. I would be
willing to consider a tax credit approach, if we could design one that
really works. But I foresee two problems in developing such an
approach.
The first is that a tax credit could really amount to an open-ended
entitlement, whereas the size of our program is capped each year. The
second is that poor and near-poor families, who we are trying to help
with this bill, simply cannot afford to buy insurance coverage during
the year, and wait until the next April to get the money back.
For the benefit of my colleagues, I want to respond to two other
concerns.
First, I must emphasize that S. 525 is not the Kerry-Kennedy bill
from last year, S. 2186. It is a new proposal that Senator Kennedy and
I wrote together. Senator Kennedy and I have both moved considerable
distances to write this compromise legislation.
This bill is not an open-ended, permanent entitlement; it is a capped
5-year program, run by the States and, as such, is very similar to a
proposal former House Republican Leader Bob Michel authored in 1995.
Second is the assertion that this bill is part of the Clinton agenda
on health care. If helping the needy is crime, then I plead guilty. But
I hope I have convinced those here today that there is a big difference
between Clintoncare and the Hatch-Kennedy bill.
Indeed, I am aware that some believe there is a hidden Clinton agenda
to enact health care reform piece by piece, starting with kids care.
I think that is a red herring. This argument suggests to me that we
should never do anything worthwhile because of the possibility that it
may evolve into something bad. I agree that we do not want the huge
Clinton health care mandate proposed and debated during the 103d
Congress. But, this bill is not that bill--it is not even a look-alike
bill.
I have tried to design a Reaganesque block grant tailored to meet a
specific problem with a wide degree of flexibility for the States.
Unlike the Clinton program, the CHILD Act is focused. It is fully
financed; it does not establish a new Federal bureaucracy; and it does
not create any new entitlements. There are no price controls and no
regional alliances and no global budgets.
Another difference is that we are trying to make this a bipartisan
approach right from the beginning. We have the wisdom of that national
debate 2 years ago and are far wiser for it.
Let me next turn to the issue of the tobacco tax as a source of
revenue for the Children's Health Insurance and Lower Deficit Act.
There can be no doubt that smoking and tobacco use is a major public
health problem. By any measure, it is also costly.
Smoking is our Nation's No. 1 preventable health threat. There are
about 48 million Americans who smoke. About 2 million Americans use
other tobacco products like chewing tobacco.
Consider these facts.
Tobacco kills an estimated 419,000 Americans each year.
An additional 2.5 million more people throughout the world die from
smoking each year.
Smoking accounts for about 1 in 5 deaths in the United States.
Tobacco accounts for more deaths than homicide, car and airplane
accidents, alcohol, heroin, crack, and AIDS--combined. In fact,
cigarettes are also a major cause of fire fatalities in the United
States. In 1990, cigarettes were responsible for about one-quarter of
all deaths associated with residential fires; this represented over
1,000 deaths.
Each day nearly 3,000 young Americans become regular smokers.
Eventually, 1,000 will die early from tobacco-related diseases.
Unfortunately, cigarette smoking is on the rise among the young:
According to the Centers for Disease Control and Prevention [CDC], the
number of high school students reporting that they smoked in the last
month rose about one-third between 1991 and 1995, from 27.5 percent in
1991 to 34.8 percent in 1995.
Among black high school age males the jump in smoking was even more
alarming, doubling from 14 percent in 1991 to 28 in 1995.
About 8 in 10 smokers begin to use tobacco before age 18 and about
one-half of all smokers started at age 14 or earlier.
In 1964, Surgeon General Luther Terry reported that smoking causes
lung cancer in men.
In 1988, the Surgeon General C. Everett Koop reported that smoking
was an addictive behavior--the same as for heroin or cocaine.
Each year, the estimated 1 million youngsters who become smokers add
[[Page S2850]]
about $9 to $10 billion to the Nation's health care costs over their
lifetimes.
According to a 1994 CDC report, tobacco cost an estimated $50 billion
in direct health care costs in 1993. Of this total, CDC estimated that
$26.9 billion went for hospital expenditures, $15.5 billion for
physician expenditures, $4.9 billion for nursing home expenditures,
$1.8 billion for prescription drugs, and $900 million for home health
care expenditures.
The 1994 CDC report notes: ``The findings in this report indicate
that cigarette smoking accounts for a substantial and preventable
portion of all medical-care costs in the United States.''
According to CDC projections, in 1993 approximately 24 billion
packages of cigarettes were sold in the United States and for each of
these packages about $2.06 was spent on medical care attributable to
smoking. Of this $2.06 per pack estimated societal medical care cost,
CDC estimated that $0.89 was paid through public sources.
The CDC study estimated that there was a twofold increase in
estimated direct medical care costs attributable to smoking between
1987 and 1993.
Extrapolating the 1987 survey data reported by CDC, it can be
estimated that, in 1993, about $10 billion in Medicare costs and $5
billion in Medicaid costs were attributable to smoking.
It has been estimated that smoking cost $4.75 billion to other
Federal health care programs, $1.6 billion to other State health
programs, and over $16.7 billion in higher premiums paid to private
health insurance companies.
In addition to the direct cost of about $50 billion annually, experts
agree that a similar amount of costs are borne by society through lost
productivity--that is, the foregone earnings of those dying
prematurely.
Researchers at the University of California at San Francisco, Drs.
Wendy Max and Dorothy Rice, estimate that the 1993 mortality costs due
to smoking were $47 billion.
Overall, smoking costs society over $100 billion annually. This is
simply too high a price to pay.
It is estimated by the Joint Tax Committee that a 43 cent per pack
increase in the cigarette tax, coupled with proportionate tax increases
for other tobacco products, would yield about $6 billion in new
revenues.
Another point that I want to make today is that the tobacco tax
simply has not kept up with inflation. As a matter of fact, the
relative component of the price of cigarettes devoted toward taxes has
slipped over the last three decades and, even with the increase we
propose today, will actually be lower proportionately once this bill is
enacted than it was in 1964 when Surgeon General Luther Terry reported
that smoking causes cancer.
In 1964, the average total price of a pack of cigarettes was about
30.5 cents per pack. Of this total, 8 cents went to pay the Federal tax
and another 8.5 cents per pack were levied in State cigarette and sales
tax. In sum, in 1964, about 50.5 percent of the cost of a pack of
cigarettes went to taxes.
Currently, the average price per pack of cigarettes is about $1.94.
Of this total, 24 cents represents the Federal tax and an additional
31.7 cents per pack is levied by the States together with an additional
9.3 cents per pack in sales taxes. All in all, the share of the per
pack price of cigarettes devoted to taxes has dropped to about 33.5
percent today from the 1964 level of 50.5 percent.
If the CHILD Act were signed into law and the new 43 cents per pack
tax were added, and if this new tax were passed on directly to the
consumer to increase the per pack price to $2.37 per pack, the share of
the total price devoted to taxes--45.6 percent--would still be lower
than it was in 1964.
Even when this new tax is factored in, the United States would still
have a relatively modest tax component built into the price of
cigarettes compared with other industrialized countries. For example,
in Canada 64 percent of the price of cigarettes is devoted to taxes. In
Great Britain, the comparable figure is 82 percent.
As a conservative, I am generally opposed to tax increases. I firmly
believe that the Federal Government should spend less, and the American
people should keep more of the money that is earned in our economy.
As a conservative, I believe in a balanced budget. That is why I
spent the better part of February managing the floor debate for the
balanced-budget amendment. That is why I worked hard to convince
Senator Kennedy to earmark one-third of the revenues raised by the
proposed increase in the cigarette tax for deficit reduction.
Yet, the statistics about tobacco use and cost that I cited above, I
believe, make the case that tobacco products are imposing external
costs onto society that are not adequately reflected in the price of
these inherently dangerous products. Simply stated, the producers and
consumers of tobacco products are not paying the full costs of this
product.
When I balance the opportunity that we have in terms of helping to
provide health insurance and services to children, coupled with a
significant deficit reduction component, against my natural aversion to
raising taxes, I come down in favor of this financing mechanism with
this tobacco tax--or, as I call it, a user fee. I believe that both the
public health and economics reasons are unique and compelling.
I believe that when my colleagues in Congress have the opportunity to
fully consider these issues that they will agree with the cosponsors of
this legislation and support the CHILD Act.
In closing, Mr. President, let me state my intention to work with all
interested parties to improve this bill as it moves through the
legislative process.
Indeed, as I have stated, there are some provisions contained within
this bill that I believe could be improved through a thorough public
discussion.
In particular, I would like to hear from the Governors about how this
bill meets their needs with respect to the uninsured population.
I am aware that they may have a few concerns about the bill, such as
using the Medicaid benefits package as the model for the private
insurance contracts.
Senator Kennedy and I inserted that provision in the bill for two
reasons. We knew that the Governors would be familiar with it and, most
importantly, it would obviate the need at either the Federal or State
levels to undertake the onerous task of creating a benefits package.
Our Utah Governor, Mike Leavitt, has stated on more than one occasion
that he believes the Medicaid benefit package is too ``rich;'' in other
words, a more efficient package would be less costly and still provide
needed care. I look forward to working with him and the leaders of
other States to address this issue.
Another issue of critical concern is the interrelationship of this
program with the employer community. We were very careful to design a
program that would complement existing employer efforts to insure their
employees without a costly Federal mandate. On the other hand, though,
we wanted to make sure that there was no incentive for employers to
``dump'' employees into the new program in order to relieve themselves
of a benefit cost.
That is why we inserted a provision that states that any employer who
makes health insurance contributions for an employee cannot vary such
contributions based on an individual's eligibility under the CHILD Act.
The only way an employer could put a currently insured employee into
the CHILD program would be to eliminate coverage for all employees in
the company plan. We think this is highly unlikely to happen.
Again, let me state that we were very sensitive to the concerns about
a mandate on employers, and we look forward to a very careful
examination of this issue as the legislation progresses.
Let me also discuss for a moment the issue that Senator Lott has
already mentioned, that of making certain that the 3 million children
who are currently eligible for Medicaid, but not participating, become
enrolled. While our bill does not address that issue, it is something
we need to do. I hope to work with Senator Jeffords and Senator DeWine
who have indicated in interest to me in working to make certain that
those who are eligible for Medicaid can participate.
But let me hasten to add that only 3 million out of the 10 million
uninsured children are eligible for Medicaid. So, Senator Lott's idea--
which is a good one--would still leave 70 percent of the problem
untouched.
Mr. President, in closing I want to reiterate my commitment to
working
[[Page S2851]]
with Senator Kennedy and all 98 of my other colleagues to enact a bill
this year which will improve child health insurance coverage in the
United States.
It is time, and I hope the majority of this body will agree.
The PRESIDING OFFICER. Under the previous unanimous-consent request,
the 15 minutes allocated to the Senator from Utah has expired.
Mr. HATCH. Will my friend yield me 30 seconds?
Mr. KENNEDY. Sure.
Mr. HATCH. I want to compliment my friend for the remaining 30
seconds. I wish I could spend more time.
Development of these bills has not been an easy thing for him to do,
or for me. But I am convinced we have drafted a program that will work.
I have to suggest that if Senator Kennedy and Senator Hatch--who have
such widespread differences of philosophy--can unite to propose a
program like this, then anybody can get together. Despite our
philosophical differences, which are wide, we both have a great deal of
friendship and caring for each other. We are working as hard as we can
to do what is right here.
I want to thank my colleague for his great work in this effort.
I yield the floor.
Mr. KENNEDY. Mr. President, I want to thank Senator Hatch for his
leadership on this important issue affecting our Nation's children.
Those of us in the Senate have noted that Senator Hatch was
instrumental a number of years ago, working with Senator Dodd and
myself, on the child care block grant program, which still is in
existence. It has been evaluated as an extremely effective program for
providing child care for the working poor.
A number of years ago we also worked closely together in the summer
jobs initiative that included continuing education programs.
In the area of children, I think Senator Hatch and I as well as many
others understand that this is neither a Democratic issue nor a
Republican issue. Nor is it a North or South issue. It is an American
family issue.
For every American family children come first, as well they should.
They are our greatest asset and they represent our Nation's future.
When we invest in our children, we are investing in America's future.
That is why this effort is of such importance and why Senator Hatch and
I are now working closely together to make sure that this legislation
becomes law.
Mr. President, it is reasonable to ask, why now? Why children?
The fact of the matter is 3,000 children every single day lose their
health insurance. Nine out of ten of those who are losing their health
insurance in this country are children.
The number of uninsured children is growing. It will rise to 5
million by the year 2000, making it increasingly urgent that we address
the fact that more and more children are becoming uninsured.
We are talking about the sons and daughters of working families--
families that are working 52 weeks of the year, 40 hours a week, trying
to make ends meet and play by the rules. One of the things they are
unable to do is provide health care coverage for their children.
Their children require this coverage, which is why Senator Hatch and
I and many others want to make health insurance accessible and
affordable for all of America's children. We know the number of
children who have ear infections and never see a primary care doctor.
We know the number of children who are in school at this very hour and
have difficulty seeing the blackboard or reading a book and are
humiliated in their classroom because they have not had their eyes
tested.
This crisis is occuring all over the country. It is happening in
urban areas and in rural communities. But we can do something about it,
and that is why the legislation is of such importance.
Ten million children are uninsured. Their parents are working hard
trying to make ends meet, and the one thing they cannot afford are the
premiums to provide health care coverage for their children.
As Senator Hatch has pointed out, our legislation will build on
existing programs in the States, and the States by and large are
overwhelmingly using the voucher system. I know there are those who
favor a tax credit program, but it has been tried and did not work in
the past.
We are also building on the private sector because the insurance that
will be provided and distributed is going to be as a result of
competition in the States.
Finally, we are paying for the program with a 43-cents-per-pack
increase in the Federal tobacco tax.
Some say, isn't this unfair and unjustified? We say that tobacco
costs the Nation $50 billion a year in direct medical costs--$50
billion a year. By adding 43 cents on a pack of cigarettes, we will
have even less than the proportion of tax--Federal, State, and sales
tax--for a pack of cigarettes than we had in the early 1960's.
When we look at where we are in comparison to where other countries
around the world--our cigarette taxes are well below every other
industrial country in the world. With our 43-cents-per-pack increase in
the Federal cigarette tax, it will still be among the lowest of all
industrial nations.
Mr. President, we strongly support this increase in the cigarette tax
because it can do more to stop children from smoking than any other
action we could possibly undertake. This will have a dramatic impact on
reducing addiction among teenagers, who have less income than adults to
spend on cigarettes. That is when the smoking really starts and where
the child becomes addicted.
We say that not only because that has been the history of pricing
over the period of the last 30 years, but it is there in the documents
and statements of the tobacco companies as we have seen in the Liggett
story recently.
Mr. President, this is legislation which the American people support.
It makes sense from a health point of view. It makes sense from their
family point of view. It makes sense for the future in terms of having
children who are going to have good quality health care. It makes sense
because it will save the lives of over 800,000 children who would
otherwise have died from a smoking-caused illness. And it will also
provide a modest reduction in terms of the deficit.
This is a win-win-win for the American people. It should be a
bipartisan effort. I want to commend Senator Hatch for his leadership
and I thank all of our Democratic colleagues for joining in our
efforts.
I am honored to join Senator Hatch in introducing the Child Health
Insurance and Lower Deficit Act of 1997, which will be a major step
toward making health insurance accessible and affordable for all of
America's children. I am hopeful that the legislation we are
introducing today will be approved by this Congress, and signed by
President Clinton. It shows that Democrats and Republicans can work
together to solve this national problem.
One of the most urgent needs of children is health insurance
coverage. Insurance is the best possible ticket to adequate health
care--and every child deserves such care.
Today, however, more than 10 million children have no health
insurance--1 child in every 7--and the number has been increasing in
recent years. Every day, 3,000 more children lose their private health
insurance. If the total continues to rise at the current rate, 13
million children will have no insurance coverage by the year 2000.
Almost 90 percent of these uninsured children are members of working
families. Two-thirds are in two-parent families. Most of these families
have incomes above the Medicaid eligibility line, but well below the
income level it takes to afford private health insurance today.
The children's health care crisis begins at the beginning--with
inadequate prenatal care. Some 17 industrial countries have lower
infant mortality rates than the United States. Every day, 636 infants
are born to mothers in this country who did not have proper prenatal
care; 56 die before they are 1 month old. And 110 die before the age of
1. Many more grow up with permanent disabilities that could have been
avoided with prenatal care. Uninsured pregnant mothers have sicker
babies, and these babies are at greater risk--low birth weight,
miscarriage, and infant mortality.
Too many young children are not receiving the preventive medical care
they need. Uninsured children are twice as likely to go without medical
care for conditions such as asthma,
[[Page S2852]]
sore throats, ear infections, and injuries. One child in four is not
receiving basic childhood vaccines on a timely basis. Periodic physical
examinations are out of reach for millions of children, even though
such exams can identify and correct conditions before they cause a
lifetime of pain and disability.
Preventive care is the key to a healthy childhood, and it also is a
cost-effective investment for society. Every dollar invested in
childhood immunizations saves $10 in later hospital and other treatment
costs.
Some say there is no health care crisis for children. But I reply,
tell that to the hard-working parents who cannot afford coverage for
their families or whose employers won't provide it.
Tell it to the hospital emergency room physicians who are often the
only family doctor these children know, and who have to treat them for
heart-breaking conditions that could have been prevented or easily
cured with timely care.
Tell it to school teachers struggling to teach children too sick to
learn. Tell it to children's advocates across the country, who see
children every day with health care needs neglected for too long.
Between 30 and 40 percent of children in the child protective system
suffer from significant health problems.
For all these reasons and many more--10 million more--the children's
health care crisis is real, and the time to address it is now. Every
child deserves a healthy start in life. No family should have to fear
that the loss of a job, or an employer's decision to drop coverage or
hike the insurance premium will leave their children without health
care.
The current neglect is all the more unconscionable, because children
and adolescents are so inexpensive to cover. That is why we can and
must cover them this year--in this Congress. The cost is affordable--
and the benefits for children are undeniable.
The legislation that Senator Hatch and I are introducing will make
health insurance coverage more affordable for every working family with
uninsured children. It does so without imposing new Government
mandates. It encourages family responsibility, by offering parents the
help they need to purchase affordable health insurance for their
children.
Under our plan, $20 billion over the next 5 years will be available
to expand health insurance coverage for children, and $10 billion will
be available for deficit reduction. I share Senator Hatch's commitment
to balancing the Federal budget by the year 2002. As our plan today
suggests, we believe we can do it, and do it fairly.
When fully phased in, our legislation will provide direct financial
assistance to approximately 5 million children annually. Every family
with an uninsured child will have access to more affordable coverage.
Combined with efforts to enroll more eligible children in Medicaid,
this plan is a giant step toward the day when every American child has
health insurance coverage. This bill is the most important single step
the Congress can take this year to provide a better life for every
American child.
States choosing to participate in the program will contract with
private insurers to provide child-only private coverage. These
subsidies will be available to help eligible families purchase coverage
for their children, or participate in employment-based health plans.
Coverage will be available for every child, including children in
families not eligible for financial assistance. The program also allows
States to allocate up to 5 percent of total program costs to provide
preventive care and primary care to pregnant women. Participating
States must contribute to the cost of the program, and must maintain
their current levels of Medicaid coverage for children.
The basic principles of this proposal are neither novel nor untested.
Fourteen States already have similar programs for children. In
Massachusetts, an existing program was expanded last year, so that
families up to 400 percent of the poverty level are now eligible for
financial assistance to buy insurance. In 17 additional States, Blue
Cross/Blue Shield offers children's-only coverage, with subsidies for
low-income families. These State initiatives provide a solid base on
which to build an effective Federal-State-private partnership to get
the job done for all children.
Senator Hatch and I propose to pay for this program of children's
health insurance and deficit reduction with an increase of 43 cents a
pack in the Federal cigarette tax, from its current level of 24 cents.
It makes sense to finance the coverage this way, because of the higher
costs for health care and premature deaths caused by smoking.
Smoking is the leading preventable cause of death in the United
States. It kills more than 400,000 Americans a year. It costs the
Nation $50 billion a year in direct health costs, and another $50
billion in lost productivity. A cigarette pack sold for $1.80 costs the
Nation $3.90 cents in smoking-related expenses.
Even with our proposed increase, cigarette taxes as a percent of the
product price will still be lower than they were in 1965 and will be
far below the levels in almost every other industrialized country.
A higher cigarette tax will have the added benefit of reducing
smoking among teenagers. If we do nothing to reduce such smoking, 5
million deaths from smoking-related diseases will occur over the
lifetime of the current generation of children.
Raising tobacco taxes to finance health insurance for children has
the support of an overwhelming 73 percent of the public. If the tobacco
tax is raised, an even higher 87 percent support using the revenue to
expand health services for children.
I look forward to early action by Congress on this issue. Every day
we delay means more children fail to get the healthy start in life they
need. When we fail our children, we also fail our country and its
future.
I yield the remaining time to the Senator from Connecticut, Senator
Dodd.
Mr. DODD addressed the Chair.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, let me thank my colleague from Massachusetts
for yielding.
Let me begin these brief remarks by commending him and, of course,
our good friend and colleague from Utah, Senator Hatch, who is the lead
sponsor of this legislation, for his efforts here, along with our
colleague from Massachusetts who historically, of course, has taken the
leadership role over the last number of decades on health-care-related
issues.
Our colleague from Utah and I have had the pleasure and privilege of
working together on major legislation. When he says, if you have a bill
with Orrin Hatch's name on it, there is a good chance it is going to
become law, I can testify to that, having worked with him on the act
for better child care. Today millions of people have accidental health
care and decent child care because of his efforts. So I commend, Mr.
President, both of our colleagues.
I offered the first child health care package almost 4 years ago to
deal with children's health. As both of our colleagues have pointed
out, Mr. President, we have about 10 to 10.5 million children in the
country who do not have any health care at all. In my State of
Connecticut, about 110,000 children are without any health care
coverage at all.
What makes this so ironic in many ways, Mr. President--as we have
gone through a debate on welfare reform fairly recently--is that 88
percent of the parents of these children without health care are
working. The assumption I think a lot of people must have is that
children without health care are the children of parents who are living
on public assistance. Nothing could be further from the truth. If you
are on public assistance, you get health care, you get Medicaid. If you
are out of work on welfare, you get Medicaid. If you are in jail, you
get health care in this country. But God help you if you are a working
family out there working at the lower income levels trying to provide
for your family when we have a seen a dramatic increase in the
reduction of private health care coverage.
Mr. President, I asked for a General Accounting Office study a number
of months ago, the results of which came back about a few weeks ago on
what has happened to private health insurance for working families. We
have seen about a 4.5 to 5 percent increase nationwide in the number of
families who have dropped or been dropped from private health
insurance. In 1993, 29
[[Page S2853]]
million families lost their health care coverage in this country. And
the premium costs went up. Small employers decided to drop it
altogether.
So we have watched a tremendous increase in the number of families,
working families, with children without any kind of health care
coverage at all.
Many of our State laws, Mr. President, require, under law, that you
insure your automobile. Many of our State laws, if not all of them,
require that if you have a home mortgage, there be insurance on your
house. All that we are suggesting here today is that if you have a
child, there ought to be health care coverage or insurance for that
child.
If it is mandatory that your home be insured, if it is mandatory your
car be insured, if you are out of work and on public assistance you get
health care, if you are in prison you get health care, what our
colleagues from Massachusetts and Utah, and those of us who are
supporting them, are suggesting, is that if you are a working family in
this country, your children--your children--also ought to have a safety
net for health care. So this proposal does just that.
Mr. President, I will just conclude with a story. We had a press
conference announcing this GAO study a few days ago. I brought with me
a woman from Connecticut. Both she and her husband work. Her husband is
in construction. She works for a nonprofit organization in the State of
Connecticut. They have two children. Their oldest boy has a serious
mental health problem. It is a serious mental health illness with a
cost of over $1,000 a month, on average, for medication. They have run
out of support from the State program. There is not going to be any
more. They were left with this choice--until someone stepped in and
made an exception in their case--but left with this choice: Either they
could quit their jobs and go on public assistance and get health care
for that child, that is one option, or the other was to take their
child and turn him over to the State, give up custody and let him
become a ward of the State, so that then the child could get health
care coverage.
We hear people talking of family values and families staying together
all the time. But somehow, in this situation, this family wants
desperately to keep custody of their child, and they keep working and
they get no help whatever. There is something fundamentally erroneous
about the situation that presently exists that if you work and want to
keep your children, you run the risk of losing the health care, whereas
if you go on public assistance or give up the custody of your child,
you can get health care coverage.
Mr. President, the suggestion of both of our colleagues is to fill in
this gap that exists for these 10\1/2\ million children today that are
without any health care coverage. The numbers are growing, by the way.
This is not a number that is declining, but is a number that is
growing.
They have come up with a funding scheme that I think most people will
support in this country. It is controversial. Obviously, some will
object to how this is paid for. I think it is a very sound idea to come
up with this funding scheme and also to allocate some of the resources
for deficit reduction.
Again, Mr. President, if we can insure our cars by law, our homes by
law, if you are on welfare or in prison and you get health care
coverage, at the very least, we ought to do the same for America's
children. This legislation allows us to do that. I commend both of our
colleagues and look forward to adoption of the law.
The PRESIDING OFFICER. The Senator from Massachusetts is recognized
for 5 minutes.
Mr. KERRY. Mr. President, I am delighted to join with my colleague,
Senator Kennedy, with Senator Hatch, and others, in introducing today
legislation to provide health care to the 10 million children in the
United States who today do not have that care.
Last year, Senator Kennedy and I joined together with other Senators
to introduce legislation to similarly provide health care to these
children. Since the time that we introduced legislation a year ago,
over 750,000 children under the age of 18 have lost health insurance.
One child loses health insurance every 35 seconds in the United States.
We are the only industrial country on the face of this planet that does
not insure our children, or that does not insure, even, many of our
adults.
What is extraordinary about this situation is that we are not talking
about the poorest of our poor in America. The poorest of the poor get
help. They have health insurance. They get Medicaid. The fact is that
we are talking about 10 million children who are the children of
working Americans, fully three-fifths of whom work full-time jobs, and
90 percent of whom are working at some job or another.
I visited recently at the Children's Hospital in Boston and I
listened to the story of two parents who are working, both of whom are
just not earning enough money in their full-time jobs to be able to pay
the premiums for the expensive insurance that their sick child needs.
The fact is that over one-half of all the children in the United
States who have asthma never see a doctor. One-third of all the
children in the United States who have an ear problem never see a
doctor. Similarly, for eye problems: As we have learned from medical
experts, those problems, often undiagnosed, become chronic ailments and
many times become lifetime impairments. We then pick up the cost of
those impairments with special education needs, and at the back end of
often substance abuse or other kinds of highly intensive, labor-
intensive interventions which we could have avoided early on.
Just take the case of neonatal/prenatal care. It costs $1,000 for a
year of covering a pregnant woman with early nutrition, early
intervention, for pregnancy. But if a child is born underweight as a
consequence of the lack of that kind of intervention, it costs $1,100 a
day.
I have talked to teachers in schools who have told me the stories of
young students who come into the school; they are in the classroom and
they are disruptive, not because they want to be disruptive, but
because they have a problem. In one particular case, a teacher told me
of a child who chronically disrupted the entire class. They could not
figure it out. They finally got the child to a clinic because the child
had not been examined by a doctor, and they found the child had a
chronic earache problem as a consequence of an infection. Antibiotics
were given, the infection was cleared up, and the child became a full
participant in the classroom.
Mr. President, there are countless stories like these. I want to
congratulate Senator Kennedy and Senator Hatch for working together in
helping to come up with a scheme to fund this, that clearly addresses
other health needs of the country. When we consider the costs of our
various wings of hospitals that are dedicated to pulmonary disease, to
emphysema, to cancer as a consequence of smoking, we are spending
billions upon billions of dollars, far in excess of the cost of this
kind of program, to provide preventive care at the early outset.
So this is really an investment, not an expenditure. This will repay
itself many times over. We know that the health care expenditure in
early prevention will save anywhere from $3.40 to $16 by virtue of $1
invested.
Mr. President, it is time in America for us for catch up to the rest
of the industrialized world and provide insurance to the young children
of this Nation who desperately need it.
______
By Mr. LAUTENBERG (for himself, Mr. Durbin, Mr. Harkin, Mr.
Wellstone and Mr. Kennedy):
S. 527. A bill to prescribe labels for packages and advertising for
tobacco products, to provide for the disclosure of certain information
relating to tobacco products, and for other purposes; to the Committee
on Commerce, Science, and Transportation.
TOBACCO DISCLOSURE AND WARNING ACT OF 1997
Mr. LAUTENBERG. Mr. President, I rise today to introduce a bill we
are calling the Tobacco Disclosure and Warning Act of 1997. Frankly, I
hope we are going to be able to look back at this day and say this was
a great day for America's children, that this was a great day for the
future well-being of coming generations.
I am joined by my Senate colleague from Illinois, Senator Dick
Durbin,
[[Page S2854]]
who worked with me in the past on establishing a ban on smoking in
airplanes, he was a Member of the House before, and Senator Harkin from
Iowa, and Senator Wellstone from Minnesota. They joined me this morning
in declaring that we are interested this day in the health of our
children. We want to warn them that a habit that they could be
induced--if I may use the term more crudely, seduced--into, if they
join in the tobacco addiction group, that they may be jeopardizing
their health very seriously.
Our bill will force tobacco companies to tell the truth, finally, to
the American people. As witnessed by the Liggett & Myers' settlement,
which wiped away the secrecy and deception perpetrated by the industry,
truth is one of the few items in short supply in the tobacco industry.
This bill will require tobacco manufacturers to disclose the
ingredients of their product to the public.
Actually, it is a modest step. Of the hundreds of products on sale in
America that go into the human body, tobacco products are the only
ones--the only ones--for which manufacturers do not have to disclose
the ingredients. Take a company like Coca-Cola, one of the world's
great companies. They have a proud tradition of keeping their formula
secret. They have to list Coke's ingredients on every can.
There is a major difference, of course, between Coca-Cola and
cigarettes. Coca-Cola does not kill anybody and cigarettes kill 400,000
people a year--more than 400,000. That is one out of every three new
users that the industry is trying to recruit. That is according to the
Centers for Disease Control.
Manufacturers of every food product and every over-the-counter drug
disclose their contents. Cigarette manufacturers do not. Can we wonder
why? Yet, of any consumable product for sale in the United States, it
is by far among the most deadly.
When you think about the materials that are in cigarettes,
carcinogens--43. Should not America know that when you inhale you are
going to get some arsenic, going to get some benzine, materials that
are very dangerous to health?
Lead, we fight all over the place to take lead out of gasoline, take
lead out of paint. But we sell it to the kids. That is what the tobacco
industry wants to do. Cadmium, nickel--you would not let your child go
near these things, yet everyday this industry, these companies, get tax
deductions to advertise their addictive, health-damaging product--maybe
lethal.
Our bill also is going to replace the warnings. We ask, A, they list
the ingredients. B, we ask also that health warnings on the side of a
cigarette package be significant, with larger warnings on the front and
back that are simple and direct, saying: ``Cigarettes kill. Smoking can
kill you. Cigarettes are addictive. Cigarettes cause heart attacks and
stroke.''
It is pretty simple. But maybe, just maybe, then we will be able to
stop the industry from targeting its recruits for the day. Mr.
President, 3,000 children, young people, a day, are attracted and start
smoking. And then they cannot quit.
These kinds of warnings exist all around the world. Cigarettes kill
one out of every three, again, I repeat, of its users. Over 400,000
Americans every year die from smoking and lots more get sick:
Emphysema, heart attacks, cannot conduct their normal activity, cannot
associate with their families, cannot show the kids how to hit a ball,
run a base or go skating or skiing. We should disclose information on
the ingredients of cigarettes to the public and provide it with
realistic warnings about the health risks that cigarettes cause. It may
seem that most smokers know a single cigarette may have hundreds of
dangerous ingredients, but I doubt it. When a smoker lights a
cigarette, some of these ingredients burn to create other chemicals,
and some of these are carcinogenic.
A Surgeon General's report in 1989 reported that cigarettes contain
43 carcinogens. The list is here, over 43. I did not know it until
recently. But the public certainly has a right to know. Do most smokers
realize that one of these chemicals is arsenic? I do not think so. Our
bill would disclose that, as well as the other chemical carcinogens in
cigarettes.
With all these known dangers about smoking, we should not hide health
warning labels in small type on the side of a cigarette pack. Other
countries, countries like Canada, Australia, Thailand, put large labels
on the front of each pack and they put it, of course, in their native
language. The United States should provide equal protection to
consumers. The warnings should be stark, brutal if necessary, and
easily seen. When cigarettes get in the hands of kids, and 3,000 of
them take up smoking every day, they ought to be looking at something
that says: Smoking can kill you. Smoking is addictive. Smoking harms
athletic performance.
That is a lot more graphic and descriptive than the small print that
appears today. We should have no beating around the bush because this
bush kills you. With large and honest warnings, more children will get
the message and perhaps some will put down that pack rather than
lighting it up.
Mr. President, the 105th Congress should enact this legislation. It
should not be a partisan issue. In the coming weeks I expect this bill
will attract cosponsors from both sides of the aisle. The public has a
right to know. They have a right to know the truth. Unless Congress
forces the industry's hand, it will never fully disclose to customers
what it puts in its product, what it puts in their products.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 527
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tobacco Disclosure and
Warning Act of 1997''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Tobacco products are the largest preventable cause of
illness and premature death, responsible for one of every 5
deaths in the United States.
(2) Tobacco is a uniquely harmful product in that it is the
only product which kills when used as intended.
(3) Cigarettes and spit tobacco products are powerfully
addictive because they contain nicotine which is a poisonous,
addictive drug.
(4) Tobacco-related addiction is a pediatric disease. The
vast majority of new smokers are teenagers or younger and
children are beginning to smoke today at a younger age than
ever before.
(5) The United States health care system spends an
estimated $50 billion a year to treat diseases caused by
tobacco use. In addition, the United States economy loses $50
billion a year from lost productivity due to tobacco-related
illnesses and premature death.
(6) The nicotine in tobacco products is responsible for the
addiction of up to one half of all children who experiment
with tobacco.
(7) More than 3,000 children begin smoking each day. An
estimated 1,000 of them will die from a tobacco-related
illness.
(8) Tobacco manufacturers manipulate the levels and
presence of the drug nicotine in their products with the
intent to cause and sustain addiction in consumers.
(9) In 1997 the tobacco industry will spend over $5 billion
on advertising and promotion to attract new users, retain
current users, increase current consumption, and generate
favorable long-term attitudes toward smoking and tobacco use.
(10) The Federal Government has a substantial interest in
ensuring that those who do not use tobacco products are not
encouraged to use them and those who use tobacco products are
discouraged from continuing their use.
(11) A failure to provide adequate and complete health
warnings and labeling information to fully inform consumers
about the risks and dangers of tobacco use is misleading.
(12) Health warnings on cigarette packages have not been
updated since 1984 and do not fully reflect current
scientific knowledge on the adverse health effects of tobacco
use.
(13) The display format of tobacco health warnings can be
more effective as a vehicle for promoting public knowledge of
the health risks.
(14) Health warnings are most effective when directed at
those people who are tempted to try smoking, who are
experimenting with smoking, or who are considering a decision
to quit smoking.
(15) Health warnings will be most effective when they are
present each time the opportunity to use a tobacco product
occurs and each time tobacco products are promoted and
advertised.
(16) Changes in warning format and revisions in the text of
health warnings further the Federal government's commitment
to reduce tobacco-related disease and are a low cost means of
enhancing the effectiveness of other tobacco reduction
programs.
[[Page S2855]]
SEC. 3. DEFINITIONS.
As used in this Act:
(1) The term ``advertisement'' means--
(A) all newspapers and magazine advertisements and
advertising inserts, billboards, posters, signs, decals,
banners, matchbook advertising, point-of-purchase display
material and all other written or other material used for
promoting the sale or consumption of tobacco products to
consumers,
(B) advertising at an internet site,
(C) advertising promotion allowances,
(D) the appearance on any item (other than cigarettes or
other tobacco products) of the brand name (alone or in
conjunction with any other word), logo, symbol, motto,
selling message, recognizable color or pattern of colors, or
any other indicia of product identification identical or
similar to, or identifiable with, those used for any brand of
cigarettes or other tobacco products,
(E) any other means used to promote the identification or
purchase of tobacco products.
(2) The term ``brand'' means a variety of tobacco products
distinguished by the tobacco used, tar and nicotine content,
flavoring used, size of the tobacco product, filtration, or
packaging.
(3) The term ``cigarette'' means--
(A) any roll of tobacco wrapped in paper or in any
substance not containing tobacco which is to be burned,
(B) any roll of tobacco wrapped in any substance containing
tobacco which, because of its appearance, the type of tobacco
used in the filler, or its packaging and labeling is likely
to be offered to, or purchased by consumers as a cigarette
described in subparagraph (A),
(C) little cigars which are any roll of tobacco wrapped in
leaf tobacco or any substance containing tobacco (other than
any roll of tobacco which is a cigarette within the meaning
of subparagraph (A)) and as to which one thousand units weigh
not more than 3 pounds, and
(D) loose rolling tobacco and papers or tubes used to
contain such tobacco.
(4) The term ``constituent'' means any element of tobacco
or cigarette mainstream or sidestream smoke, including tar,
the components of the tar, nicotine, and carbon monoxide or
any other component designated by the Secretary.
(5) The term ``distributor'' does not include a retailer
and the term ``distribute'' does not include retail
distribution.
(6) The term ``ingredient'' means any substance the use of
which results, or may reasonably be expected to result,
directly or indirectly, in its becoming a component of any
tobacco product, including any component of the paper or
filter of such product.
(7) The term ``package'' means a pack, box, carton, or
other container of any kind in which cigarettes or other
tobacco products are offered for sale, sold, or otherwise
distributed to customers.
(8) The term ``Secretary'' means the Secretary of Health
and Human Services.
(9) The term ``spit tobacco'' means any finely cut, ground,
powdered, or leaf tobacco that is intended to be placed in
the oral cavity.
(10) The term ``tar'' means the particulate matter from
tobacco smoke minus water and nicotine.
(11) The term ``tobacco product'' means--
(A) cigarettes,
(B) little cigars,
(C) cigars as defined in section 5702 of the Internal
Revenue Code of 1954,
(D) pipe tobacco,
(E) loose rolling tobacco and papers used to contain such
tobacco,
(F) products referred to as spit tobacco, and
(G) any other form of tobacco intended for human
consumption.
(12) The term ``trademark'' means any word, name, symbol,
logo, or device or any combination thereof used by a person
to identify or distinguish such person's goods from those
manufactured or sold by another person and to indicate the
source of the goods.
(13) The term ``United States'' includes the States and
installations of the Armed Forces of the United States
located outside a State.
(14) The term ``State'' includes, in addition to the 50
States, the District of Columbia, Guam, the Commonwealth of
Puerto Rico, the Northern Mariana Islands, the Virgin
Islands, American Samoa, and the Trust Territory of the
Pacific Islands.
SEC. 4. PRODUCT PACKAGE LABELING.
(a) In General.--
(1) Cigarettes.--
(A) Warnings.--It shall be unlawful for any person to
manufacture, import, package, or distribute for sale within
the United States any cigarettes unless the cigarette package
bears, in accordance with the requirements of this section,
one of the following warning labels:
WARNING: Cigarettes Kill
WARNING: Cigarettes Cause Lung Cancer and Emphysema
WARNING: Cigarettes Cause Infant Death
WARNING: Cigarettes Cause Heart Attacks and Stroke
WARNING: Cigarettes Are Addictive
WARNING: Nicotine Is An Addictive Drug
WARNING: Cigarette Smoking Harms Athletic Performance
WARNING: Smoking During Pregnancy Can Harm Your Baby
WARNING: Cigarette Smoke Is Harmful to Children
WARNING: Smoke From * Cigarettes Can Cause Cancer in
Nonsmokers.
For purposes of the last warning in the preceding sentence, *
denotes the name of the brand of cigarettes required to bear
such label.
(B) Ingredients and constituents.--It shall be unlawful for
any person to manufacture, import, package, or distribute for
sale within the United States any cigarettes unless the
cigarette package contains a package insert, in accordance
with the requirements of this section, the ingredients and
constituents of the cigarettes which were reported to the
Secretary under section 7 and which the Secretary determines
should be made public.
(C) Package insert.--
(i) In general.--It shall be unlawful for any person to
manufacture, import, package, or distribute for sale within
the United States any cigarettes unless the cigarette package
includes a package insert, prepared in accordance with
guidelines established by the Secretary by regulation, on the
carcinogens and other substances posing a risk to human
health contained in the ingredients and constituents of the
cigarettes in such package.
(ii) Regulations.--The Secretary shall issue regulations
requiring the package insert required by clause (i) to
provide the information required by such clause (including
carcinogens and other dangerous substances) in a prominent,
clear fashion and a detailed list of the ingredients and
constituents.
(2) Spit tobacco product.--
(A) Warnings.--It shall be unlawful for any person to
manufacture, import, package, or distribute for sale within
the United States any spit tobacco product unless the product
package bears, in accordance with the requirements of this
section, one of the following warning labels:
WARNING: Spit Tobacco Causes Mouth Cancer
WARNING: Spit Tobacco Is Not a Safe Alternative to Cigarettes
WARNING: Spit Tobacco Is Addictive
WARNING: Nicotine Is An Addictive Drug
WARNING: Use of * Spit Tobacco Can Cause Gum Disease
WARNING: Use of * Spit Tobacco Can Cause Tooth Loss
For purposes of the last warning in the preceding sentence, *
denotes the name of the brand of spit tobacco required to
bear such label.
(B) Ingredients and constituents.--It shall be unlawful for
any person to manufacture, import, package, or distribute for
sale within the United States any spit tobacco unless the
spit tobacco package bears, in accordance with the
requirements of this section, the ingredients and
constituents of the spit tobacco which were reported to the
Secretary under section 7 and which the Secretary determines
should be made public.
(3) Other tobacco products.--
(A) Warnings.--It shall be unlawful for any person to
manufacture, import, package, or distribute for sale within
the United States any tobacco product, other than cigarettes
or spit tobacco, unless the product package bears, in
accordance with the requirements of this section, one of the
following warning labels:
WARNING: Tobacco Kills
WARNING: Tobacco Causes Lung Cancer and Emphysema
WARNING: Tobacco Causes Infant Death
WARNING: Tobacco Causes Heart Attacks and Stroke
WARNING: Tobacco Is Addictive
WARNING: Nicotine Is An Addictive Drug
WARNING: Tobacco Harms Athletic Performance
WARNING: Tobacco Use During Pregnancy Can Harm Your Baby
WARNING: Tobacco Smoke Is Harmful to Children
WARNING: Tobacco Smoke Can Cause Cancer in Nonsmokers
(B) Ingredients and constituents.--It shall be unlawful for
any person to manufacture, import, package, or distribute for
sale within the United States any tobacco product subject to
subparagraph (A) unless the tobacco product package bears, in
accordance with the requirements of this section, the
ingredients and constituents of the tobacco product which
were reported to the Secretary under section 7 and which the
Secretary determines should be made public.
(b) Label Format.--
(1) In general.--The warning labels required by paragraphs
(1)(A), (2), and (3) of subsection (a) shall--
(A) appear on the top of the 2 most prominent sides of the
product package on which the label is required and 1 label
shall be in Spanish,
(B) be in a size which is not less than 33 percent of the
side on which the label is placed,
(C) appear in white letters on black backing or in black
letters on white backing, whichever is more conspicuous and
prominent in contrast to the color of the package, except
that the words ``WARNING'' shall appear in bright red letters
and if the package does not have any color, the words
``WARNING'' shall be in black or white as prescribed by this
subparagraph and shall be boldly underlined with a black or
white underlining,
(D) be in a rectangular shape enclosed in a border of color
contrasting to the color of the backing prescribed by
subparagraph (C) and to the predominant color of the package,
and
(E) include letters in a height, thickness, and type face
which assures that the letters in the space provided for the
statement will
[[Page S2856]]
be no less legible, prominent, and conspicuous than the most
legible, prominent, and conspicuous typeface, typography, and
size of other matter printed on the side of the package on
which the label statement appears.
(2) Format for other cigarette labels.--The label required
by paragraph (1)(B) of subsection (a) shall appear on the
package in such style and format as the Secretary may by
regulation prescribe.
(c) Rotation.--The warning labels required by paragraphs
(1)(A) and (2) of subsection (a) shall be rotated by each
manufacturer of cigarettes and spit tobacco products on each
brand of cigarettes and spit tobacco products in accordance
with a plan approved for the manufacturer by the Secretary.
Each such plan shall provide for an approximately even
distribution of the labels among the packages of a brand of
the cigarettes and spit tobacco products of each manufacturer
each year.
SEC. 5. LABELING IN ADVERTISING.
(a) In General.--
(1) Cigarette advertising.--It shall be unlawful for any
person to manufacture, import, package, or distribute for
sale within the United States any brand of cigarettes unless
the advertising for such brand bears the warning label
required for cigarettes by section 4(a)(1)(A).
(2) Spit tobacco.--It shall be unlawful for any person to
manufacture, import, package, or distribute for sale within
the United States any spit tobacco product unless the
advertising for such product bears the warning label required
for spit tobacco products by section 4(a)(2)).
(3) Other tobacco products.--It shall be unlawful for any
person to manufacture, import, package, or distribute for
sale within the United States any tobacco product, other than
cigarettes or spit tobacco, unless the advertising for such
product bears the warning label required for such product by
section 4(a)(3)).
(b) Format.--
(1) Warning labels.--The warning label required by
subsection (a) for advertising shall--
(A) appear in white letters on black backing or in black
letters on white backing, whichever is most prominent
relative to the color of the advertisement, except that the
word ``WARNING'' shall appear in bright red letters and in a
advertisement without color ``WARNING'' shall be in black or
white as prescribed by this subparagraph and shall be boldly
underlined with a black or white underlining,
(B) be in a rectangular shape which occupies 33 percent of
the space of each advertisement and which is located at the
top of the advertisement and enclosed in a border of color
contrasting to the color of the backing prescribed by
subparagraph (A) and to the predominant color of the
advertisement of the tobacco product being advertised,
(C) include letters in a type face and size which, within
the space limitation prescribed by subparagraph (B), assure
that the letters in the statement will be no less legible,
prominent, or conspicuous than the most legible, prominent,
and conspicuous typeface, typography, and size of other
matter printed on the advertisement, and
(D) be in the same language as the text of the advertising
in which it appears.
(2) Billboards with lighting.--The warning label on
billboards which use artificial lighting shall be no less
visible than other printed matter on the billboard when the
lighting is in use.
(c) Rotation.--
(1) Non-billboard advertising.--Warning labels on
advertising (other than billboard advertising) shall be
rotated quarterly in alternating sequence for each brand of
cigarettes or spit tobacco product manufactured by the
manufacturer or imported by the importer in accordance with a
plan submitted by the manufacturer or importer and approved
by the Secretary.
(2) Billboards.--Warning labels on advertising displayed on
billboards shall be rotated annually or whenever the
advertisement is changed, whichever occurs first.
SEC. 6. AUTHORITY TO REVISE HEALTH WARNINGS.
The Secretary may by regulation revise any health warning
required by section 4(a)(1)(A), 4(a)(2), or 4(a)(3) and the
format for the display of such warning if the Secretary finds
that such revision would promote greater understanding of the
risks of tobacco.
SEC. 7. TOBACCO PRODUCT INGREDIENTS AND CONSTITUENTS.
(a) General Rule.--Each person which manufactures,
packages, or imports into the United States any tobacco
product shall annually report, in a form and at a time
specified by the Secretary by regulation--
(1) the identity of any added constituent of the tobacco
product other than tobacco, water, or reconstituted tobacco
sheet made wholly from tobacco, and
(2) the nicotine, tar, and carbon monoxide yield ratings
which shall accurately predict the nicotine, tar, and carbon
monoxide intake from such tobacco product for average
consumers based on standards established by the Secretary by
regulation,
if such information is not information which the Secretary
determines to be trade secret or confidential information
subject to section 552(b)(4) of title 5, United States Code,
and section 1905 of title 18, United States Code. The
constituents identified under paragraph (1) shall be listed
in descending order according to weight, measure, or
numerical count. If any of such constituents is carcinogenic
or otherwise poses a risk to human health, as determined by
the Secretary, such information shall be included in the
report.
(b) Public Dissemination.--The Secretary shall review the
information contained in each report submitted under
subsection (a) and if the Secretary determines that such
information directly affects the public health, the Secretary
shall require that such information be included in a label
under sections 4(a)(1)(B), 4(a)(2)(B), and 4(a)(3)(B).
(c) Other Sources of Information.--The Secretary shall
establish a toll-free telephone number and a site on the
Internet which shall make available additional information on
the ingredients of tobacco products, except information which
the Secretary determines to be trade secret or confidential
information subject to section 552(b)(4) of title 5, United
States Code, and section 1905 of title 18, United States
Code.
SEC. 8. ENFORCEMENT.
(a) In General.--
(1) The Secretary shall carry out the Secretary's duties
under this Act through the Commissioner of Food and Drugs.
(2) The Secretary shall issue such regulations as may be
appropriate for the implementation of this Act. The Secretary
shall issue proposed regulations for such implementation
within 180 days of the date of the enactment of this Act. Not
later than 180 days after the date of the publication of such
proposed regulations, the Secretary shall issue final
regulations for such implementation. If the Secretary does
not issue such final regulations before the expiration of
such 180 days, the proposed regulations shall become final
and the Secretary shall publish a notice in the Federal
Register about the new status of the proposed regulations.
(3) In carrying out the Secretary's duties under this Act,
the Secretary shall, as appropriate, consult with such
experts as may have appropriate training and experience in
the matters subject to such duties.
(4) The Secretary shall monitor compliance with the
requirements of this Act.
(5) The Secretary shall recommend to the Attorney General
such enforcement actions as may be appropriate.
(b) Injunction.--
(1) The district courts of the United States shall have
jurisdiction over civil actions brought to restrain
violations of sections 4 and 5. Such a civil action may be
brought in the United States district court for the judicial
district in which any substantial portion of the violation
occurred or in which the defendant is found or transacts
business. In such a civil action, process may be served on a
defendant in any judicial district in which the defendant
resides or may be found and subpoenas requiring attendance of
witnesses in any such action may be served in any judicial
district.
(2) Any interested organization may bring a civil action
described in paragraph (1). If such an organization
substantially prevails in such an action, the court may award
it reasonable attorney's fees and expenses. For purposes of
this paragraph, the term ``interested organization'' means
any nonprofit organization one of whose purposes, and a
substantial part of its activities, include the promotion of
public health through reduction in the use of tobacco
products.
(c) Civil Penalty.--Any person who manufactures, packages,
distributes, or advertises a tobacco product in violation of
section 4 or 5 shall be subject to a civil penalty of not
more than $100,000 for each violation per day.
SEC. 9. LIABILITY.
Compliance with any requirement of this Act, the Federal
Cigarette Labeling and Advertising Act (15 U.S.C. 1331 et
seq.), or the Comprehensive Smokeless Tobacco Health
Education Act of 1986 (15 U.S.C. 4401 et seq.) shall not
relieve any person from liability to any other person at
common law or under State statutory law.
SEC. 10. EFFECTIVE DATES AND CONFORMING AMENDMENTS.
(a) Effective Dates.--This Act shall take effect on the
date of the enactment of this Act, except that
(1) sections 4, 5, and 7 shall take effect one year after
the date of the enactment of this Act,
(2) section 6 shall take effect 3 years after the date of
the enactment of this Act.
(b) Conforming Amendments.--Effective one year from the
date of the enactment of this Act, the Federal Cigarette
Labeling and Advertising Act (other than sections 6, 9, 10,
and 11) (15 U.S.C. 1331 et seq.) and the Comprehensive
Smokeless Tobacco Health Education Act of 1986 (other than
sections 1, 2, 3(f), and 8) (15 U.S.C. 4401 et seq.) are
repealed.
____________________