[Congressional Record Volume 143, Number 121 (Friday, September 12, 1997)]
[Senate]
[Page S9300]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                    REPEAL OF THE TOBACCO TAX CREDIT

 Mr. McCAIN. Mr. President, I supported the amendment offered 
this week by my colleagues, Senators Durbin and Collins, to eliminate 
the tax credit for tobacco companies contained in the Balanced Budget 
Act of 1997.
  I am amazed at the inventiveness of the process that resulted in this 
little known provision becoming law. The tax credit was not included in 
either the balanced budget or taxpayer relief bills that were first 
considered in the House and Senate. It was not included in the final, 
conference version of the 1,056-page Balanced Budget Act that the 
Senate approved on July 31. Instead, it was added to the Balanced 
Budget Act by means of an amendment quietly slipped into the final, 
conference version of the 809-page Taxpayer Relief Act, that the Senate 
passed just hours later on the same day.
  This $50 billion giveaway was never discussed or reviewed in an open, 
public forum, but was added at the eleventh hour, in a conference 
meeting behind closed doors. This is not the way the Congress should 
conduct the people's business.
  Not only did this unnecessary and undeserved multi-billion-dollar tax 
credit bypass the normal and appropriate procedures of both Houses of 
Congress, it also ignored the good intentions of both the Senate and 
House to provide health care to our Nation's children. This tax break 
would give the tobacco industry a share of the $50 billion raised from 
increased tobacco excise taxes, instead of protecting those funds to 
fund new children's health care initiatives. This tax break would 
benefit the tobacco industry by shortchanging an important and widely 
supported public health initiative.
  The overwhelming vote to repeal this unwarranted tax credit 
demonstrates clearly that the majority in the Senate did not intend to 
give a $50 billion tax break to tobacco companies, instead of providing 
funds to meet the health care needs of approximately 10 million 
uninsured children in our country. Congress intended to, and did, 
gradually raise the tax on tobacco products by 15 cents, to provide 
much-needed funds for health insurance for uninsured children.
  I am very concerned that the tobacco tax credit provision that was 
inserted into the Balanced Budget Act was an attempt by some to begin 
drafting tobacco liability settlement legislation before Congress has 
had an opportunity to carefully review the proposed settlement. The 
provision the Senate voted to repeal would have credited a portion of 
the increased tobacco excise taxes toward liability payments the 
tobacco companies could be required to make under legislation 
implementing the settlement. Clearly, this is inappropriate since 
Congress is still conducting a thorough examination of the settlement 
and has not reached a consensus on this matter.
  While Congress continues to examine the multibillion-dollar 
litigation settlement between the tobacco industry and several States, 
we need to remain mindful that the most important aspect of these 
discussion is public health, particularly the welfare of our children. 
By approving the Dubin-Collins amendment and repealing the tax break to 
tobacco companies, Congress sent a clear message to the American public 
that their health and well-being is the priority in the complex tobacco 
settlement discussions. Supporting the Durbin amendment returns $50 
billion to the general Treasury while protecting the $24 billion 
necessary for funding the children's health care initiative.

  We need to carefully examine utilizing the funds returned to the 
treasury as financial support for various public health initiatives. 
Particularly, we need to discuss using these funds for developing 
initiatives which would provide our children with the appropriate 
guidance and information regarding the potential health dangers 
associated with tobacco products. It is imperative that we create 
educational campaigns which utilize a variety of tools including 
advertisement, special events, and public service campaigns. By 
disseminating the appropriate information to the public, specifically 
children, we could significantly raise awareness on the perils 
associated with smoking.
  History demonstrates that anti-smoking campaigns, particularly on 
television and the radio can serve as strong disincentives for smoking. 
During the late 1960's, the Federal Communications Commission mandated 
televised antismoking messages to counter the tobacco advertising which 
was filling the television airwaves. Anti-smoking advertisements and 
public service announcements caused a decline in the number of smokers 
in the country. However, in 1971, the FCC implemented a ban on radio 
and television advertisement. Since implementation of that ban, 
antismoking campaigns have also declined.
  As chairman of the Commerce Committee, which has jurisdiction over 
many aspects of the tobacco settlement, I have already held one hearing 
on the settlement and fully intend on holding more hearings in the near 
future. Specifically, I intend to hold a hearing regarding the impact 
of television and radio messages in the antismoking campaign. I believe 
it is important to hold a hearing which examines the role of various 
media in the campaign to raise public awareness regarding the dangers 
associated with tobacco products, especially for the Nation's children.
  Mr. President, it is important that we continue to give all aspects 
of the proposed tobacco settlement careful and coordinated 
consideration. At the same time, we need to remain mindful that a very 
important goal of any settlement ought to be the protection of the 
health and welfare of our children and the general public.

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