[Congressional Record Volume 144, Number 49 (Tuesday, April 28, 1998)]
[Senate]
[Pages S3678-S3680]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              THE TOBACCO INDUSTRY'S CAMPAIGN OF DIVERSION

  Mr. McCAIN. Mr. President, much has been said and written about the 
tobacco bill approved by the Senate Commerce Committee 19 to 1, three 
weeks ago.
  The Senate will soon have an opportunity to debate, offer amendments 
and vote on tobacco legislation. I know the Senate can and must work 
cooperatively and without partisanship, as we have on the Commerce 
Committee, to improve the measure, and assure that it serves the public 
health interests of our nation--most particularly our children.
  The Commerce Committee measure is a bipartisan bill that was 
developed in consultation with the attorneys general, the 
administration and the public health representatives including Dr. 
Koop, Dr. Kessler, and Matt Myers of the National Center for Tobacco 
Free-Kids.
  It's a comprehensive bill aimed at dramatically reducing youth 
smoking. Every living Surgeon General has signed a letter to Congress 
urging us to pass comprehensive legislation this year to address what 
is our nation's number one public health problem.
  The tobacco industry is now embarked on a campaign of diversion to 
change the subject from health and children. They are trying to take 
attention away from the facts, and use specious ``buzz word'' attacks 
to kill a bill they know might actually stop kids from smoking and 
reduce their ability to lock teens in as lifetime smokers.
  So, Mr. President, this is about money--the tobacco industry's 
money--and the lengths they'll go to make more, including lieing to 
Congress, manipulating nicotine to hook customers and marketing to 
kids.
  Mr. President, I would like to quote recent newspaper items 
responding to the industry's attacks and regarding new evidence of the 
prevalence of smoking among minority children as reported in the 
Washington Post. First, from USA Today:

       Some, ever eager for some raw meat, were sucked right in by 
     the rhetoric. But before you believe it, pause a moment for 
     one little bit of truth: Everything the industry is railing 
     against today it agreed to in some form just 10 months ago. 
     Here's the rundown:

[[Page S3679]]

       Big tax boost. Half a trillion dollars. That's how much 
     those greedy lawmakers want to take from smokers. And a 
     disproportionate amount would come from poor people because 
     they smoke more.
       But wait a minute. Where were these brave champions of the 
     downtrodden last June? Ooops. They were signing a settlement 
     deal with a group of state attorneys general to dig $400 
     billion from smokers' pockets. The AGs and congress sought 
     high prices to discourage smoking, particularly in the teen 
     years when most smokers start. The poor? Flip the tax idea 
     around. Imagine what the reaction would be to a plan that 
     lowered their costs in order to lure them into a deadly 
     habit.
       Big government. Standing athwart the onward march of big 
     government, tobacco executives now warn that ``Washington 
     wants to create 17 new bureaucracies.'' Memories of 
     Clintoncare dance in their heads.
       Just don't pay any attention to the fact that 10 months ago 
     these same executives were whipping big government on. The 
     June settlement gave the Food and Drug Administration a 30% 
     boost in its budget, the feds new powers to ban indoor 
     smoking, and on and on.
       Ad restrictions. Why those do-gooders in Washington even 
     want to strip the industry of its First Amendment rights by 
     sharply restricting advertising. No human images, no color 
     ads, and so on. Yet somehow all this was perfectly fine with 
     the industry last June.
       Tobacco farmers. Congress' plan would put hundreds, if not 
     thousands, of tobacco farmers out of work. The Senate bill 
     does set aside some $28 billion in a trust fund to help 
     growers and their communities dislocated by the cut in 
     smoking rates. Guess how much the industry secured for these 
     beloved farmers when cutting its June deal? Zip. Zero. Nada.
       What changed between June and today is this: Congress 
     started to give the appearance of closing loopholes the 
     industry had artfully built into the June deal--a tactic it 
     has exploited in the past. Penalties for failing to reduce 
     teen smoking, for instance, were too small to matter.
       Some observers have suggested that the industry quit 
     negotiations now only to improve chances for a weak deal 
     later. That remains to be seen, but one thing is certain. All 
     Big Tobacco has done for two weeks is blow smoke.

  As reported in the Washington Post:

       The latest annual report by the surgeon general, David 
     Satcher, showed what other studies have highlighted: that 
     smoking continues to increase in allure to young people even 
     as fewer adults smoke. Over the past six years, it said, 
     youth smoking has risen by nearly a third, and some 40 
     percent of white high school students smoke. Smoking by high 
     school-age blacks, who still smoke less than white 
     counterparts, rose by nearly 80 percent from 1991 to 1997. 
     The smoking rate among Hispanic students rose by 34 percent, 
     the study found.

  Here are the facts.
  First the statistics on youth smoking are clear and alarming: 3000 
kids a day start smoking every day; 1000 of them will die early from 
smoking related disease; and one out of every three adolescents uses 
tobacco by age 18. Mr. President, we're not talking about kids who 
sneak a cigarette out of their mother's purse. According to a Surgeon 
General's report: Seventy-one percent of youth smokers, use tobacco 
daily.
  The Centers for Disease Control reports that youth smoking is on the 
rise, a trend that the American Cancer Society calls a ``pediatric 
epidemic.'' Ninety percent of lifetime smokers take up the habit before 
the age of 18--when it is illegal to buy tobacco products in every 
state in the union. We know from documents discovered in state suits 
against the tobacco industry that they have long understood the adverse 
health impacts and addictiveness of their products, yet actively 
marketed to children, including studying 5-7 year olds.
  The cost of this problem is enormous!
  Mr. President, 435 thousand Americans die from smoking related 
illness every year--the single greatest cause of preventable disease 
and death in America by far. Every year, taxpayers must foot the bill 
for $50 billion in health care costs to treat smoking related disease. 
According to the Department of the Treasury, smoking related injury, 
damage and economic cost exceed over $130 billion annually. To recoup 
some of these costs to taxpayers, 41 states have sued the industry.
  Mr. President, the severity and urgency of the problem is beyond 
question. Now is the time for action. As I said, every living surgeon 
general of the United States has signed a letter urging Congress to 
pass comprehensive tobacco control legislation.
  The bill passed by the Commerce Committee is comprehensive and 
mirrors the framework of the tobacco settlement reached between the 
industry and the attorney general.
  The bill: Restricts tobacco advertising and marketing aimed at kids; 
sets aggressive but achievable youth smoking reduction targets, and 
holds the industry responsible for failing to achieve the reductions; 
increases the price-per-pack of cigarettes by $1.10 over five years to 
reduce youth consumption. Experts agree such a hike is a critical part 
of the overall effort to curb youth from smoking.
  It provides the Food and Drug Administration with authority to 
oversee nicotine and tobacco product ingredients and marketing. It 
requires the industry to pay up to $516 billion over 25 years to 
compensate states for tobacco related costs to Medicaid and public 
health programs; to fund youth smoking reduction and health research 
initiatives; and to assist tobacco farmers.
  The bill is about our kids, it's about accountability and it's about 
solving a national problem. The industry wants to change the subject 
with the tried and true tactics of diversion.
  I understand they now intend to spend $100 million for print and 
broadcast media to maintain the status quo. Perhaps if the industry had 
spent some of their resources on legitimate anti-youth smoking 
activities, we wouldn't have the problem we do today.
  The industry diversion play book consists of four themes.


diversion one--solving the problem of youth smoking is really about tax 
                          and spend government

  Experts agree that a price increase is an essential component of the 
effort to stop youth from taking up the habit--the industry doesn't 
want a bill that will truly diminish the number of their 
``replacement'' users.
  The money raised by a settlement would be used to reimburse taxpayers 
for the $50 billion yearly tax that big tobacco places on American 
taxpayers in the form of tobacco health care--including a substantial 
drain on Medicare and Medicaid.
  The funds would also finance: Youth anti-smoking initiatives; vital 
health research to find new cures and treatment for smoking related 
disease including, cancer, stroke and heart disease. It would assist 
farmers who will be affected by reductions in tobacco consumption--hard 
working middle class Americans who for years have been encouraged to 
grow tobacco by federal policies.
  The bulk of the revenue raised--up to $195 billion--will be dispensed 
to the states to settle their cases against the tobacco companies and 
could be used for tax cuts at the State level.
  It's more than slightly ironic that last summer the industry agreed 
to a substantial price increase in their settlement with the attorneys 
general. They further tax their own credibility by suggesting that an 
additional 10 cents more per year by the year 2003 is the difference 
between enlightened public policy and tax and spend government.


diversion two--the effort to stop youth smoking is about big government

  The tobacco companys ads say that the bill approved by the Commerce 
Committee contains seventeen new boards and panels, and is government 
run amok.
  Of the dozen boards, most of which were contemplated in the 
industry's agreement, eight of them are part-time or advisory and 
entail little or no cost; two are temporary, including one created to 
reimburse small business people for the termination of cigarette 
vending machines. And, one is to ensure that increased research dollars 
are not wasted.
  Furthermore, the majority of these initiatives were contemplated in 
the June 20th agreement signed by the industry.


             Diversion Three--The industry will go bankrupt

  The Commerce Committee bill implements the President's request for 
$1.10 increase in the price per pack of cigarettes over five years.
  The Deputy Secretary of the Treasury, Lawrence Summers, testified 
before the Commerce Committee that this increase would not bankrupt or 
render the industry financially unviable.
  The President has stated that it is not the administration's 
intention to drive the industry out of business, but to get them to 
stop marketing and selling to kids.
  If the industry truly believes the President's request creates a 
bankruptcy situation, it's incumbent upon

[[Page S3680]]

them to make their case to the Department of the Treasury, not simply 
walk away from the table, and threaten to go back to business as usual.


       diversion four--price increases will create a black market

  Again, the administration has assured that the President's request 
will not stimulate a substantial black market.
  It's important to understand that today there is a black market today 
in cigarettes, as there is in a variety of consumer goods.
  If the industry has credible evidence that price hikes will create a 
substantial black market that poses a threat to public safety or health 
they should produce that evidence.
  I don't believe, however, that most Americans would agree we should 
refrain from doing what's necessary to stop youth smoking based on 
unsubstantiated conjecture.
  One answer to the omnipresent black market issue is to better enforce 
our laws against smuggling and sale of contraband.
  Let me conclude by saying Congress and the administration must focus 
on enacting a fair, effective and responsible piece of legislation that 
will stop youth from smoking. The American people demand it.
  They do not want a political football, or partisan politics.
  Certainly, improvements in the Commerce Committee bill can be made, 
and I look forward to continuing to work with all Senators to achieve 
that end. Now is the time for all sides to lower the rhetoric, make 
their case and let the legislative process work.
  Mr. President, I appreciate the indulgence of the Presiding Officer, 
and I yield the floor.

                          ____________________