[Congressional Record Volume 144, Number 42 (Friday, April 3, 1998)]
[Senate]
[Pages S3212-S3214]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE PROPOSED TOBACCO LEGISLATION

  Mr. ENZI. Mr. President, as we are heading out on the Easter recess, 
I want to wish all my colleagues godspeed and also make a small request 
of them while they are in their home States. That request is for them 
to thank the people that smoke for their contribution of $368.5 
billion, or perhaps $510 billion. I think a lot of people out there 
think we are finally going to get to the big bad tobacco companies and 
get them to pay some money up front here and kick in for all the damage 
that has been done. But, really, the smokers are going to wind up 
paying this. I don't know whether it will be for increased tobacco 
costs, or whether it will be for an increased tobacco tax. At any rate, 
it is going to range from 50 cents to $1.10 or $1.50, or whatever they 
think will make a difference.
  Having said that, I ought to mention that I had not accepted any 
money from the tobacco companies during my campaign. It could have been 
very critical, as I had a highly underfunded campaign. I was offered 
money from the tobacco companies, but I would not accept it. I could 
see this sort of debate and discussion coming up later. I didn't want 
to be seen as favoring the tobacco companies and will not be favoring 
the tobacco companies.
  I have a lot of concerns, as we have gotten into this tobacco debate. 
In fact, the concerns have gotten to be so many that I am kind of 
depressed about whether or not there is any capability to do anything 
about the problem. When I was growing up, my folks smoked. Both my mom 
and my dad smoked, and they smoked a lot. In fact, I had the feeling 
that I didn't smoke because I could walk anywhere in the house, inhale, 
and get plenty of smoke. About the time I was a junior in high school, 
though, my dad saw a program on television. As part of this program, 
some kids visited a lab and they had a beaker about 6 inches in 
diameter and about a foot tall, half filled with some liquid. That was 
the amount of tar that the average smoker would have collected in their 
lungs. One of the kids reached into this beaker and pulled his fingers 
back up out of there and had strands of sticky tar hanging from it. At 
that point, my dad quit smoking.
  He and Mom had talked about smoking for as long as I could remember 
and about all of the money they would save if they quit smoking. But 
they had not quit--well, they quit several times, but they had taken it 
back up again. My mom had always said that if my dad would quit 
smoking, she would quit. My dad saw the picture of the stringy tar 
coming out of the beaker, thought about his lungs, and quit. It wasn't 
easy, but he quit. After a couple of weeks of my dad having quit, my 
mom decided that she had to quit, too; that was part of the deal.
  About a year later, I went for my annual athletic physical, and the 
doctor asked me to sit in his office for a minute because he wanted to 
talk to me, and I did; you always do what the doctor says. When he came 
in, he said, ``I am really glad to see that you quit smoking.'' I said, 
``I have never smoked.'' He said, ``Oh, yes, you have, take a look at 
these x-rays.'' He put up the x-ray of a year before and showed me how 
clogged my lungs were the year before. So for years I have known about 
secondary smoke. We didn't even know to call it ``secondary smoke'' 
problems at that time. But they were there. It was evident on the x-
rays. I also had a problem as I was growing up with hay fever. It 
wasn't seasonal, but I thought it had to do with molds, grass, and that 
sort of thing. Another benefit I had of my folks quitting smoking was 
that I got over hay fever. Secondary smoke again.
  About a year and a half ago, my mom had a heart attack. We found out 
at that time that she might still be smoking. It is a powerful 
addiction. So I do have some interest in smoking. I went to the George 
Washington University here in Washington, DC, when I went to college, 
and there used to be a medical museum on the mall right by the 
Smithsonian. It has been replaced by the Air and Space displays 
there. I think it still exists somewhere in the District. But one of 
the displays they had in there was parts of the human body cut up in 
thin slices, encased in plastic, and you could kind of page your way 
through a liver or a heart or lungs. They had lungs of smokers and 
nonsmokers. So there is a problem there, and it has been recognized for 
a long time. I do not think there is anybody now who argues that 
cigarettes will not kill you if you use enough of them long enough. It 
will have an effect on your health. I am very disturbed that there are 
still young people who are starting to smoke. They know what the damage 
is, they know what the outcome is going to be, and they still smoke.

  On behalf of all of these folks, we are going to look at a 
settlement. We are going to try to figure out whether we have the right 
to settle on behalf of the whole country and, if we do, in what 
categories we have that right to settle and what kind of a precedent we 
will be setting in all kinds of other fields where people may be 
damaged by things that at one point in time we did not know might 
damage them but now might clearly know that, because this will be 
precedent setting.
  The biggest thing I wish to talk about today is the smokers 
themselves, because I know as I travel around Wyoming--and I am in 
Wyoming almost every weekend; it is a big State with a lot of small 
towns, so it takes a lot of travel, and we get around regularly and 
talk to folks. But I know from talking to the smokers, it has not hit 
home yet that the smokers will pay the bill. Whether it is an increased 
tax or increased prices of cigarettes, the companies will collect it, 
the companies will forward it to us, but the smokers will pay the tab.
  Something that is happening back here that is disturbing me a little 
bit is, we have run into this $368.5 billion; that is a number that has 
been quoted for a long time. I noticed the tobacco settlement that came 
out of the Commerce Committee calls for about $510 billion. It doesn't 
matter which of those figures you want to use; they are both huge 
numbers. They are both probably too small a number to solve what we are 
talking about solving. But we are not necessarily talking about using 
that money to solve the problems of smoking, we are talking about it as 
a new addiction. That is what I call the political addiction --if there 
is some money and it is not earmarked, it is an addiction.
  I saw a cartoon. The cartoon essentially said: Don't give alcohol to 
an alcoholic; don't give drugs to a drug addict; and don't give money 
to a politician.
  This is more money than we have looked at in quite some time. There 
have always been constraints on the money we have had before. But this 
is pretty wide open. Oh, sure, we have said there are some things we 
would do with it. In fact, it was the States that brought up this issue 
originally. The States started some lawsuits against the tobacco 
companies, and they won. So now they have some money coming, and the 
tobacco companies can see that this could catch on, and it has. It has 
been to a number of States now. So the tobacco companies have said, 
let's get together and talk about a settlement; let's see how we can 
rein in a little bit of this and do some damage control. Of course, 
they are looking at damage control primarily for their companies, so 
they have reached some agreements with folks. It is a varied group of 
folks.
  Again, I do not know if they have the right to do the kinds of 
negotiations they say they are doing, but any way that you look at it, 
it is the States that started, the States that got agreements partly 
through the courts, now

[[Page S3213]]

partly through negotiations and a settlement, and it seems to me that 
those States expect that they are going to get some money to reimburse 
themselves for the Medicaid they have spent to take care of smokers.

  That is what the lawsuit was about. That is the basis on which they 
won. So probably we ought to think about a little bit of that money 
getting back to the States to do what we said would be done based on 
the lawsuits and the settlement that came out of them.
  Now, 57 percent of Medicaid is the Federal part of the cost. So do we 
just have the States collect their share? How much of the $368 billion 
or $510 billion ought to be ours? Well, that is something we ought to 
legitimately address. But I am concerned that there is not money in 
that settlement that deals with the cost of Medicare. Smokers are going 
to have bigger problems when they get into Medicare than nonsmokers. It 
works that way with insurance; it works that way with Medicare. There 
isn't any money talked about in the settlement.
  We have talked about taking the Federal portion of the money from 
tobacco and putting that into Medicare. Good idea. Part of it comes, 
though, from reimbursing Medicaid, the Federal portion, the 57 percent. 
So we ought to take some money and put it into Medicaid probably. But 
we are talking about taking it--and this is for ease of talking about 
how we are going to handle it. The Medicare system is in trouble partly 
because of smoking. We are going to take a portion, that portion that 
turns out to be the Federal portion, and put it into Medicare. Good 
idea. Good plan.
  Medicare ought to have an additional contribution based on how much 
of it is caused by smoking--something that has been known by the 
companies for a long time that they have been causing, something they 
didn't own up to completely, something they are now talking about. So 
we need to be sure there is some Medicare money in there.
  Now, one of the fascinating phases I have talked about in dealing 
with the Medicare thing is a comment by some of the tobacco companies 
that it really should not be a very big part of their expense, because 
most smokers do not live long enough to be a part of the Medicare 
problem. I do not know if that is justification or not. It does not 
seem to me that it would be.
  We are also talking about using some of the money to compensate the 
people who are growing the tobacco, and there probably is some 
obligation on our part--not necessarily out of the $368.5 billion--to 
compensate the growers. The growers probably have seen the damage that 
smoking has been causing over the years and have had some options on 
other things they could have done with their land, and so a total 
compensation for losses probably is not in order.
  There are vending machine owners, and they are small businessmen, and 
I think in the settlement we are talking about compensating them, 
compensating them even for future loss of revenues. I am an advocate of 
the small businessman. I have been a small businessman. I know what 
some of those problems are. But I cannot go along with compensating 
them both for the loss of the vending machine and the loss of their 
future revenues. That is the normal course of doing business--figuring 
out what the future is going to be, what changes there are going to be 
in the marketplace and how you will adjust. These changes are not 
coming on that suddenly that they have to be compensated for future 
loss of revenues.
  I am even interested, as the only accountant in the Senate, in how 
they are coming up with the cost of the vending machines. It seems to 
me it ought to be the cost of the vending machines less what they have 
been allowed to depreciate under the tax system.
  I suggest there ought to be another part to this, and that other part 
I call smokers' compensation. Since the smokers of this country are 
going to be paying the bill, at least a portion of the money that we 
are going to collect, whichever method we use, ought to go for some 
kind of a fund that is going to solve the future health problems of 
these folks who are paying the bill. They ought to have some individual 
responsibility. It is a decision they made on their own to smoke, it is 
something they have known about for a long time as causing their own 
problems, but we are about to have one of the biggest court gluts that 
we have ever seen. The tobacco settlement bill as it came out of the 
Commerce Committee, as I understand it, has some form of immunity in 
it. That is a cap for the tobacco companies, guaranteeing them they 
will not be sued for more than $6.5 billion a year.
  That's liability protection. That means it still goes through the 
normal system of lawsuits. Somebody has to sue the tobacco companies to 
get compensation. They still have to win in court. But the companies 
will not lose more than $6.5 billion in any way.
  What we are going to have is thousands of lawsuits piled up in the 
courts, lawsuits of people trying to get to be first to the money so 
their money will come within the $6.5 billion cap. It sounds like a lot 
of money. It is a lot of money. It is not enough money to take care of 
all of the problems caused by smoking out there. In fact, I am pretty 
sure that if we took the entire assets of every tobacco company in the 
United States, put them out of business and sold the assets, that that 
would not be enough money to take care of the problems that have been 
caused by smoking.
  Unfortunately, the courts have become one of the biggest lotteries 
that we have in the country. It is a legal lottery, but you have to 
have a lawyer to scratch your card for you. That has become one of the 
biggest attorney retirement funds there is. The attorneys typically get 
about 40 percent of what they win for you. They don't have any pain. 
They don't have any suffering. They don't have the problems with the 
smoking. They just provide their legal expertise--and you need that to 
go to court. In exchange for their legal expertise and the money that 
you receive, they will get about 40 percent plus expenses. It has been 
anticipated that probably less than half of whatever money goes into 
this legal fund will ever get to a smoker.
  So we have the problem of how much is going to get to the smoker. We 
have the courts jammed up now with everybody trying to be first in line 
to get his or her money. And I suspect, because we now know how bad the 
tobacco companies have been, that the first awards by the juries are 
going to be good ones. This is going to be truly the lottery. This is 
going to be a lot of money, and it will use up the $6.5 billion each 
and every year and leave some people without any compensation, or 
sharing in the lesser pool, or whatever.
  I am trying to figure out how this could be handled and how we could 
save some of that money so the smokers who are paying the bill could 
get some of their compensation back, could get some of their health 
problems taken care of. I am suggesting that we set up a smokers' 
compensation fund. A lot of people are familiar with Workers 
Compensation. That goes to the workers on the job. If a worker gets 
hurt, there is a set procedure already that he can get his medical 
bills paid and get some compensation for his loss of time and not have 
to go to court. That is to give him quicker treatment, which is 
essential, and make sure the doctors understand that they will be paid. 
It's a system that has developed over more than half a century to try 
to help the worker. It does preserve some money there.
  I am suggesting that same sort of system could be put in place so 
smokers, when they have a problem, can be assured of immediate 
treatment and immediate compensation, and the funds that they and the 
tobacco companies are paying in would be what provides this fund. So it 
not only provides for the smokers but it also provides that the 
nonsmokers are not funding the problem also. That is what we are doing 
now with Medicare. Medicare dollars from everybody go into the Medicare 
funds and then Medicare funds go to take care of the extra costs that 
come with the smoking.

  I know that is not possible. It is too complicated. I cannot even do 
an adequate job, in a limited amount of time, of explaining how 
smokers' compensation would work and how it would save the courts 
problems, and how it would assure that everybody would have an equal 
shot at the money and how there would be enough money, provided we 
force the companies and the smokers

[[Page S3214]]

to put that money into the fund. What I am suggesting is that we do put 
the money from the settlement for tobacco into Medicare and at the same 
time we begin to collect the statistics from the Medicare fund that 
show how many of the illnesses that are going into that fund, that are 
drawing money out of the fund, are smoking related.
  I looked at targeting them, decided that we can keep track of what is 
smoking related and what is not smoking related, so we will even have 
enough statistics that we would be able to establish a smokers' 
compensation fund where the smoking money goes to take care of the 
smoking problems and so there is money for the people who are there.
  This is going to be a long process. I don't think we will reach a 
settlement this year. When I was flying back on the plane last weekend, 
I started making a list of the complications that are going to keep a 
tobacco settlement from happening. It only takes 51 votes out of the 
100 here to stop anything. It is much harder to pass anything in a 
legislative body than it is to stop it, because when you pass 
something, it has to go through a whole series of processes starting 
with the committees, and at any one time in that process, if there is 
less than a majority vote, it is dead.
  It will have to go through that process here, too. If 51 people don't 
like the deal that's put together, it is not going to happen. When I 
was listing those things, I got up to three pages, single spaced, of 
outline only, of the problems that look to me to be rather 
insurmountable in dealing with the tobacco settlement. So I don't think 
anybody will get really excited about what is going to happen and 
whether it will happen. But one thing they can be assured is we are 
going to raise prices on tobacco one way or another. So we ought to be 
both thanking the smokers and asking how we can reduce smoking and how 
we can take care of the people who are going to be paying the bill on 
this, which is the smokers.
  Mr. President, I yield the floor and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LOTT. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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