[Congressional Record Volume 144, Number 25 (Wednesday, March 11, 1998)]
[Senate]
[Page S1718]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        NATIONAL TOBACCO POLICY

  Mr. CONRAD. Mr. President, I am coming to the floor this morning to 
address the question of national tobacco policy. I was asked last year 
by the Democratic leadership to chair the Senate Democratic task force 
on tobacco legislation.
  Today, we have 31 cosponsors of our bill called the HEALTHY Kids Act. 
The purpose of this legislation is, first of all, to reduce teen 
smoking, because we believe that is the overarching priority, and to 
protect the public health.
  The HEALTHY Kids Act represents responsible tobacco policy. As I have 
said, it protects children; it promotes the public health; it helps 
tobacco farmers who are completely left out of the proposed settlement. 
It resolves Federal, State, and local claims against the tobacco 
industry. It invests in children and health care, and it provides 
savings for Social Security and Medicare, and it reimburses taxpayers 
for the costs that were imposed on them by the use of these tobacco 
products.
  Importantly, the HEALTHY Kids Act also does not provide special 
protection to the tobacco industry. The HEALTHY Kids Act protects 
children in several different ways. First, it provides for a healthy 
price increase on tobacco products. The reason for that is, all of the 
experts that came and testified before our task force--and we had 18 
hearings and we heard from over 100 witnesses--said that first and most 
important in any comprehensive strategy

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to protect the public health is to have a healthy price increase, that 
children who are the most vulnerable, children who, after all, are the 
people who keep the tobacco industry going because if you don't start 
when you are young, you don't start--ninety percent of smokers start 
before the age of 19. Nearly half start before the age of 14. Once 
started, it is very hard to quit. So if you are going to have an 
effective, comprehensive strategy, you have to do lots of different 
things. One of them is to have a healthy price increase.
  Second, we provide for full FDA authority. The Food and Drug 
Administration ought to have the ability to regulate this product just 
as they regulate other drugs that are brought to market.
  Third, our legislation provides for strong look-back penalties. Look-
back penalties is a simple way of saying you set a goal for reduction 
of teen smoking, and if there is a failure to reach those goals, the 
industry pays a penalty.
  In the proposed settlement, the goal is to reduce teen smoking by 60 
percent over 10 years. In our legislation, our goal is to reduce teen 
smoking by 67 percent over 10 years. As an incentive to the industry to 
accomplish those goals, we put in these so-called look-back penalties 
in our legislation, and that is 10 cents a pack industrywide. If the 
industry fails to achieve the goals, it is 40 cents a pack on the 
individual companies that fail to meet the goals that are set in the 
legislation. We also provide for comprehensive antitobacco programs 
because, again, the experts who came before our task force said: You 
have to have a comprehensive plan. It is important, yes, to increase 
price, to have strong look-back penalties, but it is also critically 
important that you have counteradvertising and smoking cessation and 
smoking prevention programs.
  All of those are included in the HEALTHY Kids Act. Then we have a 
section on retailer compliance, and we have a provision for State 
licensure and no sales to minors.
  The HEALTHY Kids Act promotes the public health. It does that in a 
series of ways. First of all, it addresses the issue of secondhand 
smoke. We cover most public facilities, providing that they will be 
smoke free; although, if you are in a building and it is properly 
ventilated, a special place for smokers which is separate from others 
who don't choose to be exposed to secondhand smoke, that is something 
that is in the legislation. So there is a provision for smoking areas 
in public facilities.
  We also have broad exemptions. We exempt bars, casinos, bingo 
parlors, hotel guest rooms. Let me be clear. That simply means not all 
hotel guest rooms are exempt. If you have a hotel and you have some 
rooms that are smoking rooms and some that are nonsmoking, that is 
certainly acceptable. We exempt non-fast-food small restaurants with 
seating for less than 50 people, non-fast-food franchise type 
restaurants. We did that because the experts told us that compliance 
would be an issue. It is very difficult on an economic basis for some 
of these very small restaurants to adjust to a smoke-free requirement. 
We have also exempted prisons, tobacco shops, and private clubs. We 
have also said there will be no State or local preemption. The Federal 
Government is not going to go into a jurisdiction and say, ``You do it 
our way and that's it.'' We have allowed local jurisdictions to have 
stronger regulations if they so choose.
  The second major element of promoting the public health is to provide 
for document disclosure. This is an area of real controversy. What 
documents ought to be disclosed? We believe there is a public right to 
know, that the public ought to be able to have access to the documents 
that are being revealed. We see in Minnesota a major controversy now 
about what documents are going to be released. We hope and trust that 
ultimately all of the relevant documents will be made available for the 
public, so that they know what has happened in the past, what has been 
the behavior of this industry, and what has been the effect of their 
products.
  We provide that all documents be disclosed to the FDA. We believe 
that is an appropriate policy. The FDA would make public all documents. 
The public health interest overrides trade secret or attorney-client 
privileges. We do understand that there are special categories, such as 
attorney-client privilege and trade secrets. We have provided for those 
things, if in the FDA's judgment they can be protected and not in any 
way compromise the public health for those documents to remain 
privileged.
  We also provide for international tobacco marketing controls and no 
promotion of U.S. tobacco exports. I think it's important to 
acknowledge that the Federal Government is not doing that at this time. 
But it has done it in previous administrations. We think it ought to be 
codified, the current policy, so that we are not promoting tobacco 
products overseas. We also provide for a code of conduct that the 
industry would be asked to make a commitment that they would not have 
marketing to foreign children. We also have modest funding for 
international tobacco control efforts, and we require warning labels. 
If the country that is having tobacco products from the United States 
marketed in their country has their own warning labels, then that 
applies. If they have no requirement for a warning label, then the U.S. 
label applies.
  The HEALTHY Kids Act helps tobacco farmers. In the settlement, the 
tobacco farmers were just left out. Clearly, if you are going to reduce 
smoking in this country and reduce it, hopefully, substantially over 
time, that is going to have an effect on tobacco farmers. They deserve 
to have some consideration of their economic plight. We provide $10 
billion over 5 years for assistance to farmers and their communities, 
and we authorize funding for transition payments to farmers and quota 
holders, rural and community economic development efforts, retraining 
for tobacco factory workers and tobacco farmers. It's even authorized 
to have college scholarships for farm families who are adversely 
affected by this tobacco legislation.
  The HEALTHY Kids Act provides for no immunity for the tobacco 
industry. This is also an area of great controversy and great debate. 
The tobacco industry is coming to us and saying, look, we will not 
agree to any restrictions on our advertising or marketing unless you 
give us special legal protection--legal protection, by the way, that 
has never been granted to any other industry ever. That is what they 
are asking for. They are saying they have to be given a special shield. 
They are saying that they want a whole series of legal actions to be 
barred, such as government actions--all government actions barred under 
the terms of this proposed settlement; all actions that involve 
addiction or dependency are barred under the provisions of the proposed 
settlement; they bar all class actions under the proposed settlement, 
such as consolidations and other measures to make legal actions move 
more efficiently through the courts; all third party claims are barred 
under the proposed settlement. And the list goes on. Special 
protections are afforded this industry not only for their past 
wrongdoing, but also for any potential future wrongdoing--special 
protections never afforded any other industry at any time. That is 
wrong. That is wrong. It is not just my view that it is wrong; it is 
the view of the American people that it is wrong. They don't think this 
industry ought to be given special protection. They remember the 
history of this industry. They remember the tobacco executives coming 
before Congress and putting up their hand and swearing under oath that 
their products have not caused health problems, when we now know that 
they do. They remember the tobacco industry coming before Congress and 
swearing under oath that their products were not addictive, when we now 
know they are. They remember the tobacco industry coming before 
Congress and saying their products were never manipulated to have even 
greater addiction, when we now know they did that precisely. And the 
American people remember this industry coming to Congress and saying 
they have never targeted kids, when we now know that they have. 
American people remember that full well.

  So when the tobacco industry comes now and says to us, unless you 
give us these special protections, we will not agree to restrictions on 
advertising and marketing, the American people are very skeptical. And 
they should be, because the fact is you don't need to give

[[Page S1717]]

this industry the kind of special protection that it seeks in order to 
restrict advertising. That is abundantly clear from the research of our 
task force.
  Mr. President, when I say it is abundantly clear you don't have to 
give them those kinds of restrictions, let me say why that is the case.
  First of all, many advertising restrictions are constitutional 
without any agreement from the industry. Those restrictions provided 
for in the FDA rule, for example, were crafted to withstand any 
constitutional challenge. So those restrictions clearly could be put in 
place and withstand constitutional challenge.
  Second, additional restrictions could be put in place and also 
withstand any constitutional scrutiny. For example, in Baltimore they 
went beyond the restrictions on billboard advertising that are 
contained in the FDA rule. In fact, they banned outdoor advertising for 
alcohol and tobacco products. That has been upheld in the fourth 
circuit, and the U.S. Supreme Court refused to hear a review of that 
case. So it is clear that additional restrictions beyond those 
contained in the FDA rule could also be put in place and withstand 
constitutional challenge.
  Third, I think it should be kept in mind that it is possible for the 
industry to sign consent agreements without giving them the special 
protection that they are seeking. For example, the HEALTHY Kids Act 
says that we will resolve the State and local claims that are 
outstanding; we will resolve any potential Federal claim. And I believe 
on that basis the industry, when presented with the choice, if this 
legislation were to pass, would sign those consent agreements, and they 
would sign them ``Jimmy crack quick,'' because they would have resolved 
the legal actions that have, after all, brought us to where we are 
today.
  Fourth, I think it is important also to remember that what we are 
faced with here is an unusual circumstance. We have, I believe, a 
situation where, in signing a consent decree, we could wind up having 
the industry sign consent decrees in exchange for restricting their 
advertising. We might be buying a pig in a poke. Let me say why that is 
the case.
  The legal experts that came before our task force were very clear. 
They said yes, it would improve the chances of advertising 
restrictions--at least some advertising restrictions--to have the 
industry sign consent decrees. So they were agreeing to those 
limitations. But they also told us, and they warned us, that even if 
the manufacturers signed those consent decrees, third parties could 
come and challenge the constitutionality of some of these restrictions.
  Again, I want to make clear that many of the restrictions that are 
proposed in our legislation and in the proposed settlement will 
withstand any constitutional challenge. Some may not. They would be 
helped by having consent decrees signed by the industry. But we need to 
understand that even if the industry signs them--the manufacturers, and 
others affected by those consent decrees--they may challenge their 
constitutionality. For example, the advertising industry could go to 
court and challenge the constitutionality of some of the restrictions; 
the convenience store industry could challenge the constitutionality of 
some of these restrictions. So, ironically, we could be faced with the 
worst of both worlds.
  If we buy what the industry is telling us and we give them the 
special protections that they seek in exchange for restrictions on 
advertising and their consent to those restrictions, and later those 
restrictions are challenged by third parties and found to be 
unconstitutional, Congress will have bought a pig in a poke. We will 
have given special protection, and then we could face the prospect of 
those restrictions being held unconstitutional. And we would have lost 
on both ends of the bargain. Mr. President, I submit to you, that would 
be a profound mistake and it is a mistake we should not make.
  I was very pleased to see that Speaker Gingrich yesterday was 
reported to have said that he didn't think we needed to pay the tobacco 
industry to prevent them from continuing to advertise and addict our 
kids. He is right. He is exactly right on that score. We don't need to 
be giving special protection to this industry, of all industries, in 
order to get something that in the end may prove to be illusory.
  Mr. President, I point out to you that the American people feel 
strongly about these issues as well. Voters are opposed to providing 
special protection to the tobacco industry by 55 to 32. Let me say that 
the question that was put to them was a good deal more favorable to the 
industry than the wording on this chart. They spelled out what the 
restrictions would be. If you ask them about giving special protection 
to this industry, the numbers are much more dramatic, because the 
American people are smart. They certainly don't know all the details of 
every bill that is up here on tobacco--they have other things to be 
doing in their lives--but they know the history of this industry, and 
they don't believe this industry ought to be given special protection.
  Mr. President, no immunity. That is what the HEALTHY Kids Act 
provides--no special protection for future misconduct; no special 
protection against individuals redressing grievances through filing 
legal actions of their own; we do resolve the outstanding Federal, 
State, and local legal claims; we also provide that States can opt out 
of the money at the Federal level and continue their own lawsuits; we 
provide that cities and counties get a fair share of any reimbursement 
that goes to the States.
  On the controversial question of attorney fees, we resolve that by 
concluding that attorney fees that are in dispute ought to be resolved 
by arbitration panels using ABA ethical guidelines for legal fees.

  Mr. President, there is no question that some law firms are in a 
place to potentially secure truly windfall fees. We concluded that is 
not right; that just cannot be the ultimate outcome here. But where 
there is an agreement between those who hired attorneys and the 
attorneys themselves, where there is an agreement, the Federal 
Government shouldn't intervene. But where there is a dispute and a 
difference, those disputes ought to go to arbitration panels, and they 
ought to make the determination based on the ABA ethical guidelines for 
what the fee conclusion should be.
  We believe in a case like Florida where you have a dispute, that 
ought to go to an arbitration panel, and they ought to be empowered to 
make a decision of what is a reasonable fee based on the difficulty of 
the case, based on the investment of those who brought the action, and 
based on the recovery, based on the ABA's own ethical guidelines for 
settling fee disputes.
  Mr. President, the HEALTHY Kids Act invests in children and health, 
savings for Social Security and Medicare, and reimburses taxpayers at 
the Federal and State and local levels for costs that have been imposed 
on them.
  Our legislation provides that 41.5 percent of all the revenue would 
go to the States; 27 percent would go for improving children's health 
care and child care and education; 14.5 percent of the total would go 
to the States on an unrestricted basis. After all, they brought these 
lawsuits and have negotiated with the industry to this point. We think 
it is appropriate that they should get this share of the total.
  We also provide that antitobacco programs would get 15.5 percent of 
the money. Those are smoking cessation programs, counteradvertising 
programs, smoking prevention programs, and we provide that NIH health 
research would get about a fifth of the money--precisely 21 percent. We 
also concluded that when you get a windfall, you don't spend it all; 
you don't go and spend all the money; some of it you save. So we have 
started by putting 4 percent of the money into Medicare. That grows to 
10 percent over time as the demography of the country changes and more 
demands are put on the Medicare System and Social Security. We provide 
that 6 percent of the money initially goes to that use. That grows to 
12 percent over time.
  So ultimately we are saving 22 percent of the money by putting it 
into Medicare and Social Security to strengthen those programs. We 
think that is a wise use of the money.
  Finally, initially farmers will get 12 percent of the money. That is 
phased out over time. But we acknowledge that they were left out of the 
proposed settlement and ought to be considered.
  In terms of a comparison of how the money is spent--the President's 
bill

[[Page S1718]]

compared to what we have proposed--I would offer the following:
  Our total revenue is $82 billion over 5 years. The President's budget 
provides about $65 billion. Under our formula, $12 billion would go to 
the States unrestricted. That is just somewhat more than the 
President's $11.8 billion. The States, for improving children's health 
care and child care, education, would get $22 billion under our 
proposal compared to the President's $15.7 billion.
  Research under our proposal: NIH would get $17 billion over the 5 
years; the President had $25.3 billion for research; $17 billion--the 
same $17 billion that we had--for NIH health research, but he had $8 
billion for nonhealth research. And we believe that really more 
appropriately should be funded elsewhere, should not be funded out of 
this stream of revenue.
  Medicare: We provided $3 billion initially; the President, $800 
million. Farmers would get $10 billion under our proposal in the first 
5 years, and $13 billion would go for antitobacco programs, compared to 
the President providing $12 billion for both of those uses.
  So we have provided $10 billion for farmers and $13 billion for the 
antitobacco programs, for a total of $23 billion. The President didn't 
break that category down; he just provided a total of $12 billion for 
both.
  Finally, in Social Security: We put $5 billion in the first 5 years; 
the President doesn't use any of these proceeds for that purpose. 
Again, we start with the modest amount of money going to Social 
Security and Medicare, but we grow that over time as the demographics 
of the country change and require additional funding.
  The HEALTHY Kids Act accomplishes the five objectives that the 
President sent: Reduce teen smoking, including tough penalties. We 
provide the full FDA authority. We go a long way towards changing the 
industry culture. We meet additional health goals that the American 
people want addressed. And we protect the tobacco farmers and their 
communities.
  The HEALTHY Kids Act also accomplishes the eight goals set out by 
Drs. Koop and Kessler. They have called for full FDA authority to 
regulate this drug just as they regulate other drugs. We agree. They 
provide for protection of youth from tobacco influences. And we agree. 
They provide for adequate smoking cessation funding. We have provided 
for it. They ask, for secondhand smoke, expanded regulation. And we 
provide that. They say there should be no special immunity provisions, 
no special protection. And we agree. They say with respect to 
preemptions that local communities ought to judge and should not be 
preempted by Federal law. And we agree. We provide for no local 
preemption.

  We also are in agreement with them that there ought to be adequate 
compensation for tobacco farmers and that there ought to be strong 
international policies.
  We have met the five principles laid out by the President. We have 
met the eight goals laid out by Dr. Koop and Dr. Kessler. We believe 
that the provisions here are strongly supported by the American people. 
We did national polling to see if we were in sync with what, in fact, 
the American people believe. Let me show you what they told us.
  They want a significant per-pack price increase. They believe that it 
is a part of a comprehensive strategy. They support strong look-back 
penalties. And they say there should be no special protections for this 
industry. If you go to the polling data directly, what one finds is 
that the voters support a $1.50 health fee to reduce youth smoking and 
they support it on a very, very high level. Mr. President, 65 percent 
of the American people support a $1.50-a-pack health fee; 65 percent 
favor it, only about 30 percent oppose. Mr. President, 65 to 35 
percent, people say yes, let's put in a $1.50-a-pack health fee. And 
this is on a completely bipartisan basis. There is almost no difference 
between Democrats and Republicans on this question. In fact, you can 
see here: Health fee, $1.50--the blue are Democrats; 69 percent of 
Democrats support that, and 67 percent of Republicans support a $1.50-
a-pack-health fee. This was done by the well-known national polling 
firm, Lake, Sosin, Snell, Perry and Associates.
  There is also strong public support for a look-back penalty of 50 
cents a pack or more. That is what we provide in our legislation. If 
the industry fails to meet the goals for reducing teen smoking, we put 
in place a 50-cent-a-pack penalty. By 54 to 34, the American public 
supports that.
  Mr. President, to sum it up, we believe the HEALTHY Kids Act--that 
has now been cosponsored by 31 Senators, 31 of our colleagues--is 
strong legislation to protect the public health and to reduce teen 
smoking. If there is one thing that came through loud and clear in all 
the hearings that we held, it is that that is what our priority should 
be. If we keep our eye on the ball, that is what we will do. Protecting 
the public health is so important. If you listened to those who came 
and testified, they are saying to us that's the priority.
  I remember very well, when we were in Newark we had a series of 
witnesses, some of them victims. As we went around the country, we made 
it a practice to listen to those who have suffered the ill-effects that 
tobacco products cause. I found two witnesses in Newark especially 
moving. One was a young woman named Gina Seagrave. She told the story 
of her mother dying prematurely because of the effects of a lifetime of 
tobacco addiction. She broke down during her testimony as she described 
the effects on her family of her mother dying at a young age, the 
incredible impact that had on their family. I do not think there was a 
person in that hall who was not moved by her story.
  She was then followed by a big tough guy, a coach. He was a big, 
tough strapping guy, but you could hardly hear him when he testified. 
He spoke in a raspy voice. This big, tough guy could hardly be heard 
because he spoke in a raspy voice, and he explained that he had a 
laryngectomy. His larynx had been cut out because it had been filled 
with cancer after a lifetime of smoking. He told the members of the 
committee of the terror he felt when he was given the diagnosis. He 
told those of us who were there listening the profound regret he had 
that he hadn't listened to the warnings of those who told him of the 
dangers of smoking.
  This man was a coach and an assistant principal, and he told us that 
every day he goes to school and sees young people doing what he did, 
taking up the habit. He recalled once he had taken it up how hard it 
was to quit, he would quit for awhile but he would always go back to 
it, and how he hoped that some of these young people would learn from 
his experience.
  Mr. President, when you listen to the victims you cannot help but be 
moved by how serious a threat tobacco usage is to the public health of 
our country. We ought to do something about it. We have that chance 
this year.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The clerk will call the 
roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that I may speak 
for 20 minutes in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Wisconsin is recognized to speak for 20 minutes.
  Mr. FEINGOLD. I thank the Chair very much.

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