[Congressional Record Volume 144, Number 11 (Thursday, February 12, 1998)]
[Senate]
[Pages S754-S766]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Ms. Collins, and Mr. Enzi):
  S. 1648. A bill to amend the Public Health Service Act and the Food, 
Drug and Cosmetic Act to provide for reductions in youth smoking, for 
advancements in tobacco-related research, and the development of safer 
tobacco products, and for other purposes; to the Committee on Labor and 
Human Resources.


               preventing addiction of smoking teens act

  Mr. JEFFORDS. Mr. President, I rise today to introduce legislation 
with one principal aim: to put an end to teenage smoking. I am honored 
to be joined by two other distinguished members of the Committee on 
Labor and Human Resources, Senator Collins, and Senator Enzi.

  By now, we are all familiar with the grim statistics that tell the 
story of youth smoking in our country--the thousands of children that 
experiment with tobacco, the thousands that become addicted, and the 
thousands who will die prematurely as a result.
  For too long, the federal government has been of little assistance in 
combating the number one preventable disease in this country. Apart 
from the efforts of Surgeons General from Luther Terry to C. Everett 
Koop, and sporadic efforts by Congress, the federal government has 
barely acknowledged there's a problem.
  The states, especially my home state of Vermont, have been leaders in 
the effort to end teenage smoking. And last summer, the proposed 
settlement by the Attorneys General ignited a whole new debate on this 
issue by providing us with a template for action.
  Eight months later, it is easy for us to minimize that 
accomplishment, but by any fair appraisal the settlement was a 
tremendously important step.
  When the tobacco settlement was announced, some people thought it 
might be only a few months before it would be ratified by Congress. 
Today, people wonder whether it can be revived by Congress.
  I am confident that we can and will reach agreement on a national 
tobacco policy. But I am just as certain that we'll never do so if we 
pursue a partisan approach.
  Since the settlement, the Committee on Labor and Human Resources has 
held four hearings on this subject, and across Capitol Hill dozens of 
hearings have been held by other committees of jurisdiction.
  Today we take the next important step in this process, by introducing 
legislation that I hope will serve as the basis for a broad, bipartisan 
approach to the three basic public health issues of a national tobacco 
policy: prevention, safer products, and cessation.
  If we can achieve a national tobacco policy, it could be the biggest 
public health breakthrough ever achieved outside a lab.
  The settlement has been criticized as being too weak by some, too 
ambitious by others. I agree the settlement has flaws.
  But I think we must never lose sight of the ultimate goal--what is 
the best public health approach that we can enact to reduce teen 
smoking?
  I am less concerned about exacting the last measure of revenge for 
the past actions of the tobacco companies than I am about ensuring the 
future of the children who become addicted every day. We need to keep 
our priorities straight.
  It will take a broad, bipartisan consensus to pass tobacco 
legislation. Right now, that consensus seems entirely absent and is in 
danger of slipping into partisan grand standing over who loves kids and 
hates tobacco.
  That consensus can only come through compromise. There will be many 
opportunities to derail legislation of this magnitude if it is only 
supported by a slim majority. If we expect enactment, we must forge 
broad agreement in the Congress.
  The legislation we introduce today, called the Preventing Addiction 
to Smoking Among Teens, or PAST Act, will enact and improve upon the 
public health provisions of the tobacco settlement. It is not designed 
to solve every question before us, rather, it addresses the public 
health issues that are before the Labor Committee.
  It is no longer feasible for tobacco to escape the same type of 
regulation we require for foods and medicines. Our bill will give the 
Food and Drug Administration every bit of authority it needs to 
regulate tobacco products and their components. The tobacco industry 
will have to turn over all of its

[[Page S763]]

health documents to the FDA. FDA will be able to reduce or eliminate 
harmful ingredients or require safer technological improvements through 
informal rulemaking to achieve overall public health benefits.
  Of course, we will not achieve the public health benefits we seek 
from mandating safer products if the resulting products are 
unacceptable to consumers who can't quit smoking. Part of the process 
for setting these standards will be consideration of just this 
question.
  We encourage the development of safer products subject to the same 
type of scientific review for other FDA regulated products. And FDA can 
propose, after ten years, the outright prohibition of cigarettes or 
smokeless tobacco products.
  But our bill will not permit FDA to ban cigarettes or smokeless 
tobacco for adult usage on its own. That decision, in my opinion, is 
one that should be made by Congress, not a single government agency.
  Our bill adopts a comprehensive approach to preventing teens from 
smoking, and helping people to quit who are already hooked. And 
finally, our bill will provide for a coordinated regime to research the 
many unanswered questions about tobacco, its effects on us, and how to 
mitigate those effects.
  I ask unanimous consent that a summary of our bill be included at the 
end of my remarks.
  Next week, Senator Gregg and I will hold a hearing in New Hampshire 
to listen to state and local concerns on tobacco issues within the 
jurisdiction of the Senate Committee on Labor and Human Resources. And 
in a month, I hope to have found bipartisan support for my bill and to 
have moved it through the committee.
  Finally, I want to note that many of my colleagues are also working 
on legislation to help move the discussion forward, and there are many 
good ideas that deserve consideration. In particular, I look forward to 
working with Senator Enzi on his proposal to establish a fund supported 
by tobacco industry resources. This fund would be a sustainable way to 
provide compensation for treating tobacco-related diseases, and could 
also be used to pay for some of the prevention proposals I have 
outlined in my bill
  Even though we have much work to do before we decide the overall 
architecture of tobacco policy, it is not at all too soon to begin 
pouring the foundation. As in New England, we have a short building 
season. If we are to clear the committees, combine our approaches, 
clear the floor and conference, we must act now. I urge my colleagues 
to give me their support, and greatly appreciate those who have already 
done so.
  We need to make teen smoking a thing of the past.
  Mr. President, I ask unanimous consent that bill summary be printed 
in the Record.
  There being no objection, the bill summary was ordered to be printed 
in the Record, as follows:

  The Preventing Addiction to Smoking Among Teens (PAST) Act--Overview


                                Problem

       Smoking is the single most preventable cause of death in 
     the United States.
       Smoking-related diseases kill 400,000 Americans each year.
       82% of adult smokers began smoking when they were 
     teenager--people generally do not start smoking past the teen 
     years, making it imperative to prevent smoking among teens.
       But the trend is going in the wrong direction: more kids 
     are smoking; 6,000 kids a day try a cigarette, and 3,000 of 
     those will become addicted; every day, 1,000 kids who start 
     smoking will eventually die prematurely due to smoking.


                              The PAST Act

       Across the board, the provisions of the PAST Act are 
     tougher than those approved by the Attorneys General and 
     plaintiffs' attorneys in the June 20, 1997 proposed tobacco 
     settlement. The PAST Act:
       Is a comprehensive public health approach to reduce youth 
     smoking, help people who want to quit, bring safer products 
     to the market, and provide for the research we need to 
     improve our understanding of addiction and how to prevent it.
       Requires that tobacco settlement funds be used for tobacco-
     related initiatives.
       Provides for: Straightforward and effective authority for 
     FDA to regulate tobacco products; tough and enforceable 
     restrictions on youth access to tobacco products; evidence-
     based prevention and cessation programs; research that will 
     help us understand why certain people become addicted to 
     tobacco products and provide science-based methods to prevent 
     addiction.


                           Summary of the Act

     1. Regulation of Tobacco Products and Tobacco Product 
         Development
       Purpose: To provide strong and effective Food and Drug 
     Administration (FDA) regulatory authority over cigarettes, 
     smokeless tobacco products, and safer tobacco products.
       Summary: No longer will the tobacco companies be exempt 
     from the type of regulation which ensures that our foods and 
     medicines are safe and properly labeled.
       The PAST Act gives FDA regulatory authority to:
       Oversee the manufacturing processes of tobacco products;
       require elimination of tobacco product additives and 
     reductions in nicotine;
       quickly and easily promulgate performance standards to 
     ensure that new and safer technology reaches consumers with 
     truthful information on health issues related to products;
       regulate the content of product labels and advertising;
       require tobacco companies to divulge all health-related 
     research on tobacco products and ingredients;
       set national rules for product regulation while preserving 
     important state and local authorities to require tougher 
     requirements for youth access rules and point-of-sale 
     advertising;
       periodically assess and improve the effectiveness of 
     tobacco product warning labels.
       The PAST Act bans billboard advertising of tobacco 
     products, cartoon figure and human figures (like Joe Camel 
     and the Marlboro Man) and restricts in-store marketing.
       The PAST Act does not preempt the ability of state or 
     localities to pass stricter laws on sale to minors or point-
     of-sale advertising.
       1. FDA Authority to Approve Reduced Risk Tobacco Products 
     and Require Reductions in Nicotine and Elimination of Tobacco 
     Product Hazards.
       50 million Americans smoke. For those who can't quit as 
     soon as they'd like, we must both provide them with less 
     harmful alternatives to today's tobacco products and take 
     steps immediately to reduce the danger in existing tobacco 
     products. The PAST Act establishes science and public health-
     based decision making at FDA to achieve these goals.
       The PAST Act includes a program designed to encourage 
     tobacco companies to develop and market reduced risk tobacco 
     products. FDA authority over reduced risk tobacco products 
     requires that FDA approve specific ``reduced risk'' claims 
     manufacturers make. In addition, manufacturers must notify 
     FDA of any reduced risk technology they develop or acquire.
       FDA is to require tobacco companies to conduct the same 
     type of high quality scientific studies expected of drug and 
     device companies to demonstrate that a new tobacco product 
     carries a ``reduced risk.'' FDA will take into account the 
     effect of the product on overall public health concerns 
     including whether fewer people will quit smoking as a result 
     of its availability. FDA will require both short-term and 
     long-term studies to ensure that the products have a positive 
     public health effect. FDA can revoke the approval to market 
     the product if the studies do not support the health claims 
     or if the studies are not completed in a timely manner.
       In addition, if FDA determines that a particular reduced 
     risk technology is less hazardous it may: require disclosure 
     of the safer technology; prohibit the use of technology that 
     is superseded by the new technology, or; require that 
     manufacturers stop selling tobacco products that do not 
     incorporate such technology.
       In addition to reviewing reduced risk products, FDA has 
     authority to mandate the elimination of hazardous components 
     of tobacco products and reduce nicotine levels to achieve 
     overall public health benefits. Before requiring changes to 
     tobacco products, FDA will employ a notice and comment 
     rulemaking proces--the same as that used for drugs and 
     devices. FDA is not! required to prove that a black market 
     will not result.
       2. FDA Authority to Regulate Product Labels, Warnings, 
     Advertising, and Marketing.
       The PAST Act will enact: new warning labels, and the 
     flexibility for the Secretary to change the labels; 
     restrictions on labeling and advertising of tobacco products; 
     restrictions on advertising in non-adult media and 
     glamorization of tobacco; bans on non-tobacco items and event 
     sponsorship.
       The PAST Act does not prevent states and localities from 
     enacting tougher laws on youth access and point-of-sale 
     cigarette advertising and marketing.
     II. National Efforts to Reduce Youth Smoking
       Purpose: To provide all the essential ingredients for 
     comprehensive and effective programs to reduce youth smoking.
       Summary: The PAST Act sets high but achievable goals to 
     reduce youth smoking. To ensure that the tobacco 
     manufacturers partner with communities to achieve these 
     goals, the PAST Act exacts tough penalties on the industry if 
     goals are not met. Further, unlike the June 20 proposed 
     tobacco settlement, and some other bills that have been 
     introduced, the PAST Act does not permit the penalties to be 
     capped, and it ensures that the penalties are calculated 
     accurately.
       The PAST Act entrusts the states with the necessary 
     resources from the Tobacco Settlement Trust Fund for local 
     anti-tobacco

[[Page S764]]

     programs that will effectively: restrict the sale of tobacco 
     products to minors; prevent youth smoking; assure that people 
     who want to quit smoking can get proven cessation treatment.
       The PAST Act gives the Office on Smoking and Health of 
     Centers for Disease Control the resources to provide 
     oversight and technical help to state and local authorities, 
     thus guaranteeing that the latest and most effective 
     strategies to prevent and stop smoking can be employed.
       The PAST Act provides funds for research to help us 
     understand addiction to tobacco products, and to ensure that 
     the results of this research are swiftly incorporated into 
     community-based programs.
       The PAST Act establishes an innovative and far-reaching 
     national public health promotion and health education 
     campaign on the dangers of smoking.
       1. Required Reduction in Underage Use of Tobacco Products.
       Purpose: To promote an immediate reduction in the number of 
     underage consumers of tobacco products by imposing financial 
     surcharges dramatically stiffer than the June 20 proposed 
     tobacco settlement on participating manufacturers if underage 
     tobacco-use reduction targets are not met.
       If the targets are not met, surcharges will be imposed on 
     manufacturers, and for each 5 percentage points short of the 
     target, the surcharge on manufacturers increases 
     substantially.
       Cigarettes: for the first 5 percentage points for which the 
     rate of youth smoking falls short of the target: the product 
     of $80,000,000 and the number of applicable percentage 
     points; for 6 to 10 percentage points short of the goal: the 
     product of $400,000,000 and the number of applicable 
     percentage points; for 11 or more percentage points short of 
     the goal: the product of $500,000,000 and the number of 
     applicable percentage points.
       Smokeless Tobacco Products: for the first 5 percentage 
     points for which the rate of youth smokeless tobacco use 
     falls short of the target: the product of $15,000,000 and the 
     number of applicable percentage points; for 6 to 10 
     percentage points short of the goal: the product of 
     $30,000,000 and the number of applicable percentage points; 
     for 11 or more percentage points short of the goal: the 
     product of $45,000,000 and the number of applicable 
     percentage points.
       Targets for reduction of tobacco product use in individuals 
     under 18:
       Cigarettes: 30 percent in the fifth and sixth years; 50 
     percent in the seventh, eighth and ninth years; 60 percent in 
     the tenth and subsequent years.
       Smokeless tobacco: 25 percent in the fifth and sixth years; 
     35 percent in the seventh, eighth and ninth years; 45 percent 
     in the tenth and subsequent years.
       2. Restrictions on Access to Tobacco Products.
       Purpose: To ensure that strict state laws are passed and 
     enforced that will prohibit the sale and distribution of 
     tobacco products to minors, and to provide civil penalties to 
     minors who purchase or smoke tobacco products.
       State laws must include the following provisions, and may 
     include stricter provisions:
       At least 90% of minors attempts to purchase must be 
     unsuccessful; requirement of a state or local license to sell 
     tobacco products; a prohibition on sale of cigarettes and 
     smokeless tobacco to individuals under 18 years of age; the 
     following requirements for distribution:
       The licensee must verify age through a government issued 
     photo identification; no verification is required for any 
     individual who is at least 27 years of age; no direct access 
     to tobacco products; face-to-face exchange for purchase; no 
     out-of-package sale of tobacco products; no special marketing 
     rules for adult only stores; minors may not purchase or 
     consume tobacco products. States may enforce this provision 
     through civil penalties, including a written warning, a 
     possible fine of up to $150 for repeated offenses, or other 
     civil penalties determined appropriate by the state.
       3. State and Community Action Programs.
       Purpose: To promote the development of state and community 
     action programs designed to educate the public on addiction 
     and the hazards of tobacco use, and to promote prevention and 
     cessation of the use of tobacco products.
       Funds will be available to each state from the Tobacco 
     Settlement Trust Fund after approval of a state plan. Funding 
     increases from $145,000,000 for each of the fiscal years 1999 
     and 2000 to $440,000,000 for fiscal year 2008.
       State and local initiatives may include: evidence-based 
     programs to prevent tobacco use and promote cessation; health 
     education and promotion efforts relating to tobacco use; 
     public policy initiatives to prevent tobacco use and promote 
     cessation; evidence-based programs in schools to prevent and 
     reduce tobacco use and addiction.
       4. Tobacco Use Cessation Programs.
       Purpose: to help addicted individuals who want to quit.
       Funding allocated to the states from the Tobacco Settlement 
     Trust Fund: $1,000,000,000 for each of the fiscal years 1999 
     through 2002; $1,500,000,000 for each of the fiscal years 
     2003 through 2008.
       Programs to be funded may include: evidence-based programs 
     designed to assist individuals to stop their use of tobacco 
     products; training for health care providers in cessation 
     intervention methods; efforts to encourage health plans and 
     insurers to provide coverage for evidence-based tobacco use 
     cessation treatment.
       5. Research Initiatives to Prevent Tobacco Addiction.
       Purpose: To promote tobacco-related research strategies.
       The Institute of Medicine will perform an independent study 
     to provide recommendations for tobacco-related research. 
     Tobacco-related research at CDC, NIH, and AHCPR will include 
     investigation of: surveillance and epidemiology of tobacco 
     use; prevention of tobacco use; the science of addiction; 
     cessation strategies.
       An interagency council will ensure that: the research 
     strategy is implemented, and that it is modified to take into 
     account new findings; new developments are disseminated to 
     states and communities.
       6. National Public Health Education Campaign.
       Purpose: To provide for a national public health promotion 
     and health education campaign designed to reduce the use of 
     tobacco products.
     III. Standards to Reduce Involuntary Exposure to Tobacco 
         Smoke
       The PAST Act will require OSHA to promulgate within 12 
     months a final rule relating to indoor air quality in 
     industrial and nonindustrial indoor and enclosed work 
     environments.

  Ms. COLLINS. Mr. President, I am pleased to join with my colleagues, 
Senators Jeffords and Enzi in introducing the Preventing Addiction to 
Smoking Among Teens Act.
  Tobacco is the No. 1 preventable cause of death in the United States, 
accounting for more than 400,000 deaths a year and more than $50 
billion in health care costs. Clearly the single most effective thing 
we can do to improve our Nation's health and control health care costs 
is to stop smoking.
  While recent headlines detailing the settlement of multimillion 
dollar lawsuits against the tobacco industry might delude us into 
thinking that we are winning the war against tobacco, the facts tell a 
far different story. Despite extensive public health campaigns linking 
smoking to heart disease and cancer, smoking rates are actually going 
up, particularly among our young people. Tragically, addiction is 
increasingly a ``teen-onset'' disease: in fact, Mr. President, 90 
percent of all smokers began smoking before age 21,
  What is particularly alarming is that children, especially girls, are 
smoking at younger and younger ages. Smoking is at a 19-year high among 
high school seniors and has increased over 35 percent among eighth 
graders and 43 percent among tenth graders over the last 7 years.
  Moreover, of the 3,000 teens who enter the ranks of ``regular 
smokers'' every day, one-third will die tobacco-related deaths. Mr. 
President, I am very proud of many of the accomplishments and 
achievements of my great State of Maine, but there is one area where we 
do need to do much, much better. The sad fact is that my State of Maine 
has the dubious distinction of having the highest smoking rate among 
people age 18 to 34 in the entire United States. In Maine, almost 40 
percent of high school students smoke. They purchase 1.4 million packs 
of cigarettes illegally each year. If this trend continues, more than 
31,000 young people in Maine currently under the age of 18 will die 
prematurely from tobacco-related diseases. If we are to put an end to 
this tragic yet preventable epidemic, we must accelerate our efforts 
not only to help more smokers to quit, but also to discourage young 
people from ever lighting up in the first place.
  The Preventing Addiction to Smoking Among Teens Act, which we are 
introducing today, adopts a comprehensive approach to prevent teens 
from smoking and builds upon and improves the public health components 
of the tobacco settlement announced last summer. It is not designed to 
deal with every question and every issue raised by the settlement. 
Rather, it focuses on what I believe should be the prime goal of any 
tobacco settlement, and that is to reduce teen smoking.
  Among its provisions, this legislation gives clear and comprehensive 
authority to the FDA to regulate tobacco products and their components. 
The tobacco industry will have to turn over all--all--of its documents 
to the FDA related to cigarette research and health, and the FDA will 
be able to require the companies to reduce or to eliminate harmful 
ingredients or to require safer technological improvements through 
informal rulemaking. Moreover, after 10 years, the FDA could can 
propose an outright ban on

[[Page S765]]

cigarettes or smokeless tobacco products. However, should such a 
prohibition be required or undertaken, it would require congressional 
approval. I think that is appropriate. I think that a decision of that 
magnitude should come back to Congress.
  In my judgment, these provisions represent a marked improvement over 
last summer's proposed tobacco settlement. The settlement has been 
criticized for requiring the Food and Drug Administration to go through 
an arduous formal rulemaking process. Moreoever, unlike the tobacco 
settlement, our bill does not require the FDA to prove the absence of a 
black market--which critics have rightly pointed out would be 
impossible--in order to regulate a product. Finally, to provide the 
resources necessary for their expanded regulatory powers, the bill 
requires the FDA to assess a ``user fee'' of $100 million annually on 
all manufacturers selling FDA-regulated tobacco products in the United 
States.
  The bill also incorporates very important recommendations on 
combating teenage smoking. It calls for strong warning labels. It calls 
for a ban on vending machine sales that make tobacco products so 
available to teenagers, it would ban outdoor advertising and the brand-
name sponsorship of sporting events, and it would prohibit the use of 
images like Joe Camel and the Marlboro Man.
  It also, Mr. President, holds the tobacco companies accountable by 
imposing stiff financial penalties if the smoking rate among children 
does not decline by 30 percent in 5 years, 50 percent in 7 years, and 
60 percent in 10 years. Moreover, under our bill, there is no cap on 
penalties, and the price goes up the more the companies miss the 
targets. These are very important, tough new improvements over the 
proposed settlement.
  Our bill incorporates strong measures to ensure that restrictions on 
youth access to tobacco products are tough and enforceable. It promotes 
the development of State and community action programs designed to 
educate the public on addiction and the hazards of tobacco use and to 
promote the prevention and the cessation of cigarette smoking.
  It calls for a national public education campaign to deglamorize the 
use of tobacco products and to discourage young kids from smoking. And 
finally, it calls for a comprehensive tobacco related research program 
to study the nature of addiction, the effects of nicotine on the body, 
and how to change behavior, particularly that of children and teens.
  Mr. President, I believe that the legislation we are introducing 
today can serve as a basis for broad, bipartisan support to deal with 
the public health issues that should serve as the foundation for any 
national health policy in this area.
  I look forward to working with Chairman Jeffords, Senator Enzi, and 
my other colleagues on the Labor Committee as Congress deals with this 
important issue.
  Mr. ENZI. Mr. President, I rise today as an original cosponsor of 
legislation offered by my esteemed colleague from Vermont, Senator 
Jeffords. I appreciate his steady commitment to improving our nation's 
public health--especially as it relates to the pending global tobacco 
settlement. I, too, believe that we have an opportunity to dramatically 
affect the number of current and future smokers through education, 
research and regulation of tobacco products. It is my belief that the 
Prevention Addiction to Smoking Among Teens, or PAST Act, is a 
significant component that accomplishes just that.
  The PAST Act is the first piece of legislation fashioned after the 
global tobacco settlement--reflecting the resolution's public health 
aspects. I commend the Senator and his staff for working with me on 
remedying a number of outstanding issues in this bill. I look forward 
to working closely with my colleague on tightening this legislation as 
it works its way through the mix.
  I do wish to share my thoughts on a number of issues in the global 
settlement that must not be overlooked. In addition, I would point out 
that a handful of these issues relating to public health are already 
addressed in the PAST Act. First, I believe the settlement fails to 
complement FDA's regulatory role by tapping the expertise of other 
federal agencies with relative jurisdiction. Second, the look-back 
provisions prescribed by the global settlement are only geared toward 
our nation's youth and don't apply to smokers above the age of 18. 
Third, the settlement focuses largely on reimbursing Medicaid 
expenditures and ignores enormous Medicare expenditures for smoking 
related illnesses. Finally, the settlement's overall compensation 
mechanism fails to address long-term smoking attributed illnesses. In 
light of these and other inherent difficulties, I am reluctant to 
embrace the entire global settlement with open arms. We are accepting 
revenues for past problems and insuring the future without 
compensation.
  Let me first share my concerns regarding the FDA's role. The global 
settlement would delegate all regulatory authority of tobacco products 
to the Food and Drug Administration (FDA), including advertising and 
education. Although I favor FDA being the key regulatory agency of 
tobacco products, I do not believe the agency needs an annual 
allocation of $300 million to carry out its obligations--that's nearly 
10 times what the FDA requested to enforce its original tobacco rule 
and one-third the agency's total annual budget. Such funding for one 
agency could not only foster regulatory abuses, but also stretch FDA's 
internal resources while simultaneously compounding Congress' oversight 
responsibilities. Such an approach is nothing more than a blueprint for 
yet another big government bureaucracy incapable of meeting its alleged 
purpose. I believe Senator Jeffords has acknowledged this predicament 
in the PAST Act. Rather than allotting $300 million each year for the 
FDA, the agency would receive $100 million, while other federal 
agencies with jurisdiction would receive $135 million, with the 
remaining $65 million going to the states for enforcement. This is a 
very fairminded approach and we largely avoid an unfunded federal 
mandate.
  Second, the look-back provisions included in the global settlement 
were written to be applicable to our nation's youth--ages 18 and under. 
As a result, Senator Jeffords' bill only addresses the admirable 
objective of reducing underage smoking. While I have no problem with 
setting strict goals for reducing underage tobacco use, I firmly 
believe that the global settlement and any subsequent legislation 
should not overlook the need to reduce the overall impact of smoking 
related illnesses. We must be careful not to lend pride of being an 
adult to smoking. I appreciate Senator Jeffords' commitment to 
strengthening this section of the PAST Act.
  Third, the global settlement fails to address Medicare smoking-
attributable expenditures by focusing all of its attention on 
reimbursing states for Medicaid expenditures. This is a substantial 
financial oversight in my opinion. In 1995, the Health Care Financing 
Administration spent $176.9 billion in Medicare payments. Medicare 
outlays for fiscal 1996 are estimated to be $193.9 billion. 
Conservatively assuming that only 5 percent of those expenditures were 
smoking related, the average Medicare expenditures attributable to 
smoking during 1995-1996 would still amount to $9.3 billion per year, 
thereby bringing the twenty-five year total to $192.3 billion. This is 
an astronomical sum that deserves consideration.
  Finally, the global settlement's reimbursement structure is dubious 
at best. It is my belief that Senator Jeffords' legislation must 
receive a sound, long-term financial commitment from the tobacco 
industry. Under the current settlement, tobacco companies would pay an 
initial $10 billion, and make annual payments starting at $8.5 billion 
in the first year and increases to $15 billion in the fifth year of the 
settlement. While the total estimated payments over 25 years would be 
$368.5 billion, there is no guarantee under the settlement's structure 
that the total amount would be collected. Economic conditions could 
change or tobacco companies could be driven out of business leaving the 
federal government holding an enormous tab for a very expensive 
regulatory scheme. Moreover, a large portion of the global settlement 
total may not even go to reimburse government for the costs of 
cigarette smoking. The money is designed to fund everything from 
underage smoking cessation campaigns to

[[Page S766]]

potentially large civil damage awards. The scope of expenditures under 
the global settlement is too broad and the reimbursement mechanism is 
too incomplete to warrant Congressional approval.
  In the coming weeks, I will continue to advocate an alternative 
reimbursement mechanism that not only caters to the PAST Act, but 
compensates for smoking attributed illnesses under the Medicare program 
as well. Two principles lie at the heart of this alternative approach. 
First, nonsmoking taxpayers should not be expected to continue footing 
the bill for what are largely self-induced illnesses. Second, Congress 
must ensure that the actual compensation fund is solvent for years to 
come. To these ends, I believe we should give serious thought to a new 
industry-based approach in which the government determines the costs 
caused by the manufacturer's product, and then requires the 
manufacturer and smoker to pay for these costs. Such a program would 
entirely eliminate smoking-attributed reimbursements from Medicaid and 
Medicare.
  A ``Smoker's Compensation Fund'' of this type could be modeled on the 
Worker's Compensation Funds already in existence in the states. The 
proceeds for this fund would come from the tobacco industry, and 
ultimately from smokers themselves in the form of higher cigarette 
prices. The tobacco industry's annual contributions to the fund could 
be tied to the number of occurrences of smoking illnesses--the greater 
the occurrences, the larger the contribution. Using Worker's 
Compensation as a model, a rolling multi-year average could form the 
basis of annual premiums to individuals suffering from smoking-
attributed illnesses. This would create an economic incentive for the 
tobacco companies to take actions to reduce tobacco-related illnesses, 
thereby driving down the number of smokers over the long-term--a true 
look-back policy.
  Moreover, an industry-based approach would not allow tobacco 
companies to walk away from long-term smoking attributed illnesses 
through a total $368.5 billion payment over a 25 year period. Instead, 
it would administratively make the tobacco companies and the smokers 
themselves responsible for paying for the medical care of individuals 
with smoking-related illnesses indefinitely. I believe that the 
Smoker's Compensation Fund concept would be the best vehicle to provide 
long-term financial coverage not only for the Medicaid and Medicare 
programs and smokers of all ages, but for the public health provisions 
outlined in Senator Jeffords' bill being introduced today.
  Thank you, Mr. President.
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