[Congressional Record Volume 144, Number 63 (Monday, May 18, 1998)]
[Senate]
[Pages S5001-S5012]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT
The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to S. 1415, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 1415) to reform and restructure the processes by
which tobacco products are manufactured, marketed, and
distributed, to prevent the use of tobacco products by
minors, to redress the adverse health effects of tobacco use,
and for other purposes.
The Senate proceeded to consider the bill which had been reported
from the Committee on Finance.
MODIFICATIONS TO COMMERCE COMMITTEE SUBSTITUTE
Mr. LOTT. Mr. President, on behalf of the chairman, the ranking
member and a majority of the members of the Commerce Committee, I wish
to modify the Commerce Committee substitute.
Before the Chair declares the amendment is modified, I announce to
the Members that this is the text of the so-called managers' amendment
that the chairman and ranking member have been working on for the last
few days. The modification also incorporates the Finance Committee
reported amendments as part of the new Commerce Committee substitute.
Mr. HOLLINGS. May I make an inquiry of the majority leader?
Mr. LOTT. We have a series of things we need to do in a row, if I
could get through those.
The Chair needs to rule, I believe.
The PRESIDING OFFICER. The amendment is so modified.
Mr. LOTT. On behalf of the chairman and a majority of the members of
the Commerce Committee, I wish to further modify the Commerce Committee
substitute. Again, before the Chair declares that the amendment is
further modified, I announce to the membership this modification would
delete some of the Finance Committee amendments from the text of the
Commerce Committee modification.
The PRESIDING OFFICER. The amendment is so modified.
Mr. LOTT. Finally, again on behalf of the chairman and a majority of
the members of the Commerce Committee, I further modify the committee
substitute. Again, before the Chair announces the modification, this
last change would incorporate the Lugar Farmer's protection amendment
as part of the Commerce Committee substitute.
The PRESIDING OFFICER. The amendment is so modified.
Mr. LOTT. For the information of all Senators, as a result of this
action, the pending Commerce Committee Substitute contains the
following: The so-called managers' amendment; all of the Finance
Committee reported amendments, except the $1.50 increase; Title 14,
with respect to declaring the price increase a tax increase; the three
deletions with respect to the LEAF Act; the lookback and the compliance
fund and tobacco tax trust fund; and the Lugar-Farmer's protection
amendment.
Finally, I ask unanimous consent that the modified committee
substitute be printed as a Senate amendment and the final version
incorporating all of the modifications only be printed in the Record.
Mr. HOLLINGS. I object.
Mr. LOTT. At this point, Mr. President, I ask the Senate if they
would allow me to go through this.
Mr. HOLLINGS. I do object.
Mr. LOTT. I wanted to give you a chance to inquire, but by objecting
you certainly can inquire.
Mr. HOLLINGS. I do object. Mr. President, this has been a long, hard
road, as you well know. Almost a year ago the White House, health
community and the States, and the States' attorneys general all met and
everyone was provided for except the person who really depended on his
living--that is, the tobacco farmer. So I got together during the fall
with the distinguished Senator from Kentucky, Senator Ford, and he and
I worked diligently over the fall period developing what we call the
LEAF Act, which not only took care of the farmer but the farm
community; namely, the warehousemen, the bank that is financing, the
equipment dealer, and everything else of that kind.
There is no question that if this so-called tobacco bill works, there
can't be any tobacco farmer unless they are tobacco companies. This is
going to diminish the tobacco companies to a great extent and limit the
tobacco farmers, as they go down or out of business. We have included
the LEAF Act as sort of a safety net. Now, we met in the Commerce
Committee on that basis. I know the distinguished chairman, Senator
McCain, came to me, and on the basis of him going along with the LEAF
Act, we made it a bipartisan bill and voted it out 19-1.
The distinguished chairman also went to South Carolina before
thousands of farmers and represented: Don't worry about the LEAF Act.
Mr. President, I have been in five conferences now--two actually in my
own hideaway in the Capitol--with the White House, the majority
leadership, Senator McCain, and others, on this pack of bills. It
included Senators on both sides of the aisle, with staffs and
everything else. In the five meetings, including the one at 4 o'clock
this afternoon, I was always counseled: Don't worry, the LEAF Act is
intact.
Don't give me the double talk that it is still intact, not when you
put in the Lugar bill by a majority vote. The Lugar bill, by a majority
vote, puts that farmer out of business. That is the one thing that the
distinguished Senator from Kentucky, and others, have worked and
counseled against, and everything else of that kind.
I question, respectfully, that the majority leader identified the
majority of the Commerce Committee members. That is all your
Republicans; is that what you say?
Mr. LOTT. Yes, it is.
Mr. HOLLINGS. I am dismayed. About a half-hour ago, I had a chance to
talk, of course, just a bit with the majority leader. Until now,
nothing has been said, and this kind of conduct and course of conduct
is just the worst I have seen in my 30-some years up here. There is
nothing you can do if they want to change their votes. They all voted
for the bill, and I know how they felt because I talked to various
Members. I have been talking to them intermittently over the past
several months, and over the past 1 month in conferences with the White
House. And now, to come at the last minute and have the ground cut from
under you with this particular request on the premise that you want to
be fair and give everybody a fair vote, that isn't what I worked for. I
worked to give this a particular priority that no one else has given
it--and certainly not to tobacco companies. I think the tobacco
companies have the pressure on at this point to go along with the Lugar
amendment and save them billions of dollars. That could be the case.
I yield to my distinguished friend from Kentucky.
Mr. FORD. Mr. President, reserving the right to object, I say this
with all respect to the majority leader and to my colleague. It is very
difficult to understand what has developed. I thought I understood the
rules very well and worked diligently, along with the distinguished
Senator from South Carolina, and others, including Senator Frist, who
worked hard to work out the FDA amendment that is in the bill; all of
us worked hard to put this together.
I understand the 60-vote rule. I understand that very well, because
this amendment by Senator Lugar cannot raise the money. They talked
about a lump sum payment and had to change it today because it is 3
years or more. There is no lump sum payment here. You are fooling the
farmers, misrepresenting things to the farmer, if the Lugar amendment
gets in here. It is
[[Page S5002]]
the farmer versus the manufacturer. The manufacturer, under the Lugar
amendment, will save a billion dollars a year, minimum--a billion
dollars a year. You are going to see that check signed tomorrow. You
are going to see the press conference tomorrow. You are going to see
the farmers come in here tomorrow, because they are opposed to Lugar.
You can have all the misgivings you want. There could be ghosts behind
every tombstone about the future, but you have to lay groundwork.
I say to the majority leader, with all respect, if this is done to
us, I am going to make it as difficult as I can to see that the bill is
not passed this week, and probably not in June. I believe my
responsibility here is to the farmer, not to the manufacturer and not
to misrepresent that 40 percent of all the money raised by the McCain
bill will go to the farmers under 3 years.
Think about that 40 percent. What are you going to reduce? Research?
What are you going to reduce? Advertising? What are you going to reduce
in order to get that money? Sure, you have to raise it $1.50 to pay for
Lugar, and you may not be able to do it then. So here we are, saying to
those of us who have worked for months--and I have been on the front
porches of grocery stores, in kitchens of farmers, I have been in six
States talking to farmers, and this is what the farmers wrote--the LEAF
Act. They didn't write the Lugar amendment.
I am sorry that the chairman of the Agriculture Committee is not
going to have a vote. I feel sorry for him, but this is the nature of
this institution. This is the nature, this is the rule, and this is the
precedent. You are following the rules, that is true. But when it comes
down to the farmer versus the manufacturer--and this Lugar amendment
will give billions to the manufacturer--then I think that the Senate
will have a question of whether they want to support the farmer or
whether they want to support the tobacco manufacturer.
I know there is nothing I can do, Mr. President. I can object to the
unanimous consent, but eventually we will vote on it. Everybody is
working hard on the other side to get a bill out of here--just get it
out of here. We don't want to touch it, we don't want to fool with it
anymore, because what comes out of conference is going to be a
minuscule bill. You will have a hard time getting that bill through
this body. So rather than starting to take the hide off of folks in the
beginning before you even bring the bill up, it seems to me it is a
little bit disconcerting.
The chairman of the Commerce Committee has been as straight with me
and with us as he could be. I find no fault with what he has attempted
to do, because some things we can't agree on. But we were not
disagreeable. Everything has always been on top of the table with us,
and his word has been as good as gold; his word has been his bond. And
now the majority leader takes over all this hard work he has done and
say to the chairman of the committee, and to us who worked to
cooperate, that what you did and your cooperation is for naught.
I yield the floor.
The PRESIDING OFFICER. Is there objection to the unanimous consent
request of the majority leader?
Mr. HOLLINGS. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. LOTT. Mr. President, there is objection. Before I renew the
request that I made, which was merely that this substitute be printed
as a Senate amendment and the final version only be printed in the
Record, I want to note that all this means is that we would have to
print all three of these documents, which are all pretty substantial in
size. We can do that, but there is a cost involved and there is time
involved. I hoped that there would not be objection to having this
document printed. It would be available to the Members to review. But
if there is objection to that, it won't stop anything. We will go
forward.
Let me respond to a lot that has been said because I thought it was
important that the former chairman of the Commerce Committee, the
Senator from South Carolina who worked with Senator McCain, be heard,
and I thought it was very important that the Senator from Kentucky make
his case. But let me also explain what is going on here.
Everybody knows this has not been easy to get through the committee
process to get at this point on the floor of the Senate with a lot of
give and take and a lot of Senators who had to take positions that were
hard for them, including the Senator from Arizona, Senator McCain. And
other Senators who are going to be involved in this have had to accept
some things they didn't go along with. I acknowledge that the Senator
from South Carolina has worked very carefully with the Senator from
Arizona. But also it is my job as majority leader to try to find a
responsible way to move this forward to get it to the floor in the
fairest possible way. There is no way to do that without some people
feeling like, ``Well it is not exactly the way I wanted it,'' or ``It
doesn't give me a fair position,'' or ``It doesn't give me more than a
fair position. All I want is an advantage.''
Now the Senator from Indiana is chairman of the Agriculture
Committee. It seems rational to me that you would understand that as
majority leader I would be interested and concerned in the position, or
an amendment to be offered on this important piece of legislation by
the chairman of the Agriculture Committee, and, if we didn't do it this
way, he would be disadvantaged in that he would have to have 60 votes,
not 51--not a majority, a supermajority of 60 votes. I understand that
the Senator from Kentucky wanted to require that, and he has used his
influence to get it in the position where that could have occurred. He
also understands that what I am doing here is perfectly within the
rules. I am trying to get everybody on a fair and equal footing. I
don't know how the votes are going to go.
Mr. FORD. Will the majority leader yield?
Mr. LOTT. If I could, because I didn't interrupt the Senator from
Kentucky.
I don't know how the voting is going to go. Senator Lugar might get
51 votes. Senator Ford might win and prevail because 51 votes cannot be
achieved for the Lugar amendment. There are a lot of people who don't
think either one of these are all that hot. Quite frankly, they would
like a whole different arrangement to be of assistance legitimately to
the tobacco farmers. These are not the only two solutions in the world.
There might be some other ones.
I do not want to disadvantage anybody. But this is an amendment that
has been around on this subject for quite some time. Senator Lugar has
never made it a secret of the fact that he would want this to be
offered, or as an alternative available to him to be offered. There are
others who do not like this provision or that provision that is
included or not included. But, in other instances, the Senators would
have to offer an amendment only to get 50 votes.
So I think this is a fair way to go. I am sorry the Senator doesn't
agree with it. But I have been very meticulous to make sure that
everybody was aware of what we were trying to do here. I have not been
in all of these substantive negotiations. I have been strictly looking
at how we can move this forward and what the process is to have it come
up and considered in a fair way.
The chairman of the Finance Committee is standing here now wanting to
ask some questions of the Chair about what this means for the Finance
Committee and what they did. They had a tough time. They came up with
some improvements. They came up with some things certainly I don't
agree with, and I don't think the chairman does, either. But he is
willing to get a clarification of what it means for him, and to go
forward. I think he has taken the right position.
So I just wanted to take this opportunity to say that I understand
where everybody is coming from but that I think this is the fair way to
do it.
I don't think we ought to start over by saying, ``Well, if we don't
get this, or don't get that, we are going to kill it.'' I don't think
anybody wants that to happen on your side of the aisle. Let's go
forward. Let's have some amendments. And let's see where the votes are.
That is the way to do this.
Mr. FORD. Mr. President, continuing to reserve the right to object.
Mr. LOTT. I believe there is no reservation.
The PRESIDING OFFICER. An objection was heard, and the majority
leader is recognized.
[[Page S5003]]
Mr. LOTT. Let me do this, Mr. President, so that the Senator can
respond. I yield to the Senator from Kentucky so he can respond.
Mr. FORD. I say to the majority leader that I understand that Senator
Lugar is chairman of the Agriculture Committee. I understand that
Senator Lugar has been around here more than a week or two. I
understand that Senator Lugar should understand the rules. And I
understand that he has been working diligently, along with others, to
make this work. I have been doing the same. And then when I get it to a
point where you have it where you think you are safe and that you are
protected, then in order to be fair about it, in order to be fair about
it, you change everything we have done for the last 10 months, except
that I get a vote up and down. But I had the position--or we had it in
a position where it would take 60.
So I think that the fairness now in all of the work that you do that
is not fair, and so, therefore, the work you do is out the window
because it is not fair. I thought when you made it through here, and
you got it through the committee, and you got it on the floor, that was
pretty fair after 10 months. Now because another Senator doesn't have
an opportunity to bring it up----
Mr. LOTT. The only time there would be a guarantee of that is when it
has gone through the Senate, the House, then a conference, and the
President puts pen to paper.
Mr. FORD. I understand you are talking about fairness here and you
are being unfair to those of us who worked so hard.
Mr. LOTT. Mr. President, I renew my request with respect to the
subcommittee substitute.
Mr. KERRY. Reserving the right to object.
Mr. HOLLINGS. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Massachusetts is recognized
under the reservation.
Mr. KERRY. Mr. President, nobody needs to speak for either the
Senator from Kentucky or the Senator from South Carolina. They have
done it for many years here, and they are as capable as anybody. But I
would like to say that I understand the difficulties in which the
majority leader finds himself. He gets approached by people on both
sides, from all sides, and it is difficult to bring this piece to the
floor. But there is a process by which we have been working and by
which, I think, most of us understood that we were sort of teeing this
legislation up for the floor. I think it has been an exceptional
process. I applaud the Senator from Arizona, the chairman of the
Commerce Committee, for the way in which he has tried to meld those
forces over the course of the last months.
The truth is that the Senator from Kentucky and the Senator from
South Carolina, who is the ranking member and who could have stood in
the way, significantly along the way here, of progress, has moved along
the way to get us to where we are with an understanding of where he
stood with respect to critical issues. Everybody here understands how
you approach any of these negotiations. There is a certain amount that
you are willing to give up with an understanding of what you are
getting and that you are where you are.
Through all of these meetings, through all of the interventions to
this point in time, neither the Senator from South Carolina nor I have
been part of those meetings, nor any of my colleagues have had any
knowledge whatsoever that this ``rule'' might be invoked. They have had
no opportunity to think about an alternative process to work with their
colleagues, or otherwise.
I simply say that suddenly at 4 o'clock in the afternoon the entire
ground has shifted. That is within the rules. The Senator from Kentucky
has acknowledged that. I acknowledge that. That may be one of the very
difficult decisions that the majority leader has to make.
But if fairness is what we are really looking for here, it seems to
me that maybe there is a way to find some alternative method of
including the Senator from Kentucky and the Senator from South Carolina
and the chairman of the Agriculture Committee to find out how you might
resolve this other than to do it in this sort of fairly unilateral
fashion. I don't know if that is possible. But I would certainly say
that in the context of the way in which the negotiations have been
conducted to reach this point that also strikes me as being fair.
Mr. LOTT. Mr. President, will the Senator yield?
Mr. KERRY. I am happy to yield.
Mr. LOTT. The Senator from Massachusetts is speaking under
reservation.
Let me assure him that I have looked at all of the alternatives. I
have looked at the best possible way to bring this up. I didn't know it
was going to wind up having to be done this way. We didn't know 2 weeks
ago that we would have the Finance Committee angles. I have said all
along that Senator Lugar, chairman of the Agriculture Committee, was
going to have a fair shot, along with anybody else, to offer his
amendment and win or lose by majority vote. I am surprised that some
people are surprised by this. But I understand. But I just say that I
have been having people on this side of the aisle complain about this,
too. There are a lot of people on my side of the aisle who do not want
this brought up under this concept, or any other.
But I will say this to Senators on both sides of the aisle: Anybody
who wants to stand in the way of this bill, if you don't want us to try
to find a way to deal with children's porn, and drug abuse by children,
if you don't want us to find a way to try to deal with the health
problems caused by tobacco--all I am trying to do is get a 51-vote
majority for an amendment--go right ahead. There are people on both
sides of the aisle threatening to do just that.
Now, I know the Senator from Massachusetts is trying to contribute by
saying let's keep calm and can we find a way to work this out. I think
this is a fair way, and I admonish everybody to stay calm, too, and
keep our eye on what is the target here. It is bigger than the sum of
its parts, and we ought to keep that in mind. We may not be able to do
it this week. We may never be able to do it. The odds are very strong
that this thing is going to implode by the weight we are placing on it.
Every time we tested it, it has gotten bigger, fatter and more
difficult to get through. So it is OK with me however it works out. But
I believe we have here a reasonable way to begin this process, and I
urge my colleagues, hold your fire. Let's go ahead with the opening
statements by the Senators. Let's get some amendments going. Who knows
for sure how it is going to work out?
Mr. McCAIN. Will the Senator yield?
Mr. KERRY. I would be happy to yield after I finish my comment.
I will not object, Mr. President. But I would simply say that I think
the Senator from Arizona would agree that in the judgment of most of us
we thought we made it smaller and slimmer and easier, but that will be
proven over the course of the next days. I appreciate what the majority
leader has said, and I think hopefully we can find some way to resolve
this as we go through the next days.
Mr. McCAIN. Will the Senator yield?
Mr. KERRY. I will yield the floor.
The PRESIDING OFFICER. Is there objection to the majority leader's--
--
Mr. McCAIN addressed the Chair.
Mr. HOLLINGS. Reserving the right to object.
Mr. KERRY. I yield to the Senator from Arizona.
The PRESIDING OFFICER. The Senator from Massachusetts has not had the
floor--
Mr. McCAIN. Reserving the right to object.
The PRESIDING OFFICER. And thereby does not have the authority to
yield. The majority leader has the floor.
Mr. McCAIN. Will the majority leader yield to me for a brief comment?
The majority leader has the floor.
Mr. LOTT. Mr. President, I had a request pending, but if I have the
time----
The PRESIDING OFFICER. Is there an objection?
Mr. McCAIN. Reserving the right to object.
Mr. HOLLINGS. Reserving the right to object.
The PRESIDING OFFICER. The Senator is recognized.
Mr. McCAIN. This is a difficult situation and not the first that we
have been through in this process, nor regrettably, I feel, will it be
the last. I
[[Page S5004]]
have great sympathy for my two dear friends--one from Kentucky, one
from South Carolina--who fought very hard for the people they
represent. I also understand, and I think we all should, the position
of the majority leader, who, despite the predictions of many, has been
steadfast throughout as far as saying this bill would come to the floor
and we would resolve it, if there was anything within his power to do
it.
It was my understanding I would be managing this bill with the
distinguished Senator from South Carolina. I will make every effort to
make sure that fairness is the order of the day, which has been the way
we have conducted our relationship and our negotiations throughout this
bill. I will do everything in my power.
I understand very well how concerned the Senators from South Carolina
and Kentucky are. I also understand that the majority leader has the
right to do these things. We saw them when the other side of the aisle
was in the majority. I saw it on several bills where modifications were
put into bills which made it no longer a 60-vote proposition but 51-49.
I didn't like that at the time. But it is perfectly correct in the
parliamentary fashion.
I would, again, like to echo the words of the majority leader. We are
going to hear attacks. There are people waiting right now to attack
this bill in the most vociferous and passionate fashion, and there are
people on the other side who will say: You guys aren't tough enough on
these tobacco companies; you have got to do more. The first amendment
is going to smack them for a buck 50 instead of a buck ten. We will
hear over here: This is the biggest tax increase in history; you are
doing way too much.
But I believe the great center will hold on this bill, and I believe
that a fair procedure will follow. And I want to commit to my
colleagues that will happen. I am sorry, I say to my friends from South
Carolina and from Kentucky, this has been distressing to them, but I
hope we can move forward in a fair and equitable fashion.
The PRESIDING OFFICER. Is there objection to the majority leader's--
--
Mr. HOLLINGS. Reserving the right to object.
Mr. DASCHLE. Reserving the right to object.
The PRESIDING OFFICER. The distinguished Democratic leader is
recognized.
Mr. DASCHLE. Mr. President, I have not wanted to get into this until
now, but I must say I applaud what the distinguished chairman has said
in a couple of aspects. First of all, I think that it is true; up until
now, there has been a good deal of effort on both sides to bring this
bill to the floor. We wouldn't be here today were it not for the
leadership of the Senator from Arizona and the tremendous work put
forth by the Senator from South Carolina, as well as the Senator from
Kentucky. It is the only way we got to this point. We got here because
the ranking member and the chairman concluded that this bill needed to
get to the floor, and we were under a timeframe within which to do
that.
That has now happened. It was only through that effort that we were
able to get this far. And I think it is fair to say both sides have
been working in good faith to bring us to this point.
So there is really two questions here. No. 1, is it within the right
of the majority leader to amend his legislation as he has proposed to
do? And clearly he is within his rights to do that. The real question
is, Is it in keeping with what we have established as the working order
here? Are we in the same kind of partnership that we thought we had all
the way through this process as we moved procedurally to the floor?
The answer clearly is no; this was a surprise. Senator Hollings has
been in the meetings discussing what would go in the managers'
amendment until at least 4 o'clock this afternoon. Senator Hollings,
the administration and others have signed off on every single piece of
what was to go into the managers' amendment.
I just left the floor to check with the administration to see if they
knew that this was in the managers' amendment, and the answer was
emphatically no. No one told them this was going to be included. No one
gave them any indication.
So clearly we start this debate with a very serious misunderstanding
and a very serious violation of good faith. It is within the right of
the majority to take steps of this kind, but, unfortunately, it comes
at a price. That price is the cooperation needed to complete our work.
The price is coming to terms with all the other procedural questions we
have to face.
How is it possible to get unanimous consent under these
circumstances? How is it possible to get any understanding about the
degree to which we can agree on amendments with this problem?
So, Mr. President, we have compounded the problem this afternoon,
unnecessarily it seems to me. The majority leader has a job to do. He
has to make choices, and I understand that. But I hope as those choices
are made, we clearly demonstrate the appreciation for the kind of
communication that is going to be absolutely essential if we get
anything done at all. I hope we can work through this. I hope before
the night is out, or at the very latest tomorrow morning, we can
resolve this matter, because if we are going to move forward
adequately, successfully, it has to be resolved. I yield the floor.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER (Mr. Frist). Is there objection?
Mr. HOLLINGS. Reserving the right to object.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. I thank the distinguished Chair.
Mr. President, there is not any question about the majority leader's
right to proceed as he does and make that request. But he only does
that with the majority vote of the Commerce Committee. That is the
dismaying thing to this particular Senator, because when you meet as
the ranking member, you represent not only yourself but the committee
members and other Senators interested, of course, in the tobacco
farmer. And you are not just wanting to assure yourself. You are
wanting to assure others you represent because they are constantly
asking these questions. So everyone, the White House, the health
community, everyone now has gotten in step as of 4 o'clock on the LEAF
Act, and to come now with this procedure and say they have the
majority, which would include the distinguished chairman of the
committee, is a shocking surprise to me. I can tell you that right now
because I have been with him. I got with him only on this
understanding. And to come now and put the LEAF Act in jeopardy with
this particular procedure, I just had to stand up here and register my
objection.
Now, I don't want to object in a silly fashion to the printing, so I
will withhold it, but the bipartisanship is ended.
Mr. ROTH. Parliamentary inquiry, Mr. President.
The PRESIDING OFFICER. Without objection, the majority leader's
request is agreed to.
(The committee substitute, as modified to incorporate the text of
amendment No. 2420, will be printed in a future edition of the Record.)
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. Mr. President, I rise to make a parliamentary inquiry on
behalf of my distinguished ranking member, Senator Moynihan, and
myself, as chairman of the Finance Committee.
The Senate has before it a modification to the Commerce Committee
substitute and Finance Committee amendment to S. 1415, the National
Tobacco Policy and Youth Smoking Reduction Act. If the modification
were introduced as a bill, would it be referred to the Finance
Committee?
The PRESIDING OFFICER. Yes, it will.
Mr. ROTH. Mr. President, further parliamentary inquiry----
Mr. MOYNIHAN addressed the Chair.
The PRESIDING OFFICER. Yes, it would.
Mr. ROTH. The modification contains settlement payments and health
fees. Is it true that these provisions, no matter how they are
designated, are revenue measures, and, thus, within the jurisdiction of
the Finance Committee?
The PRESIDING OFFICER. The Senator is correct.
Mr. ROTH. Mr. President, Senator Moynihan and myself would like to
note for the record that the modification of the Commerce Committee
substitute violates Rule 15 of the Standing
[[Page S5005]]
Rules of the Senate. Neither Senator Moynihan nor I will raise the
point of order because, even if we did raise the point of order, the
leaders or managers could accomplish the same result by offering the
identical text as a floor amendment.
Mr. President, I ask unanimous consent that additional material be
printed in the Record. This material is the technical explanation that
describes the amendments made by the Committee on Finance to S. 1415,
as reported by the Committee on Commerce, Science, and Transportation.
There being no objection, the material was ordered to be printed in
the Record, as follows:
TECHNICAL EXPLANATION OF FINANCE COMMITTEE AMENDMENT TO S. 1415 (AS
APPROVED ON MAY 14, 1998)
I. Tobacco Excise Tax and Trust Fund Provisions
A. Present-Law Tax and Trust Fund Provisions
Excise taxes on tobacco products. Excise taxes imposed on
cigarettes, cigars, chewing tobacco and snuff, pipe tobacco,
and cigarette papers and tubes (Code sec. 5701). In addition,
tax will be extended to ``roll-your-own tobacco'' at the same
rates as pipe tobacco, effective on January 1, 2000. These
taxes are imposed upon removal of the taxable tobacco
products by the manufacturer, or on importation into the
United States.\1\ The current tax rates are shown in the
table below:
---------------------------------------------------------------------------
\1\ Footnotes appear at end of article.
------------------------------------------------------------------------
Tobacco product Tax rate
------------------------------------------------------------------------
Cigarettes:
Small cigarettes\2\................. $12.00 per thousand (24 cents
per pack of 20 cigarettes).
Large cigarettes.................... $25.20 per thousand.
Cigars:
Small cigars........................ $1.125 per thousand.
Large cigars........................ 12.75% of manufacturer's price,
up to $30 per thousand.
Chewing tobacco....................... $0.12 per pound.
Snuff................................. $0.36 per pound.
Pipe tobacco.......................... $0.675 per pound.
Cigarette papers...................... $0.0075 per 50 papers.
Cigarette tubes....................... $0.15 per 50 tubes.
------------------------------------------------------------------------
Effective on January 1, 2000, the tax rate on small
cigarettes is scheduled to increase by $5 per thousand (to 34
cents per pack of 20 small cigarettes), and the tax rates on
other taxable tobacco products are scheduled to increase by
proportionate amounts. Effective on January 1, 2002, a
further increase of $2.50 per thousand (to 39 cents per pack
of 20 small cigarettes) is scheduled to become effective.
(Tax rates on other taxable tobacco products will increase
proportionately on that date as well.)
Generally, excise taxes on tobacco products that are
removed during any semimonthly period must be paid by the
14th day after the last day of such semimonthly
period. Late payment of tobacco excise taxes is subject to
interest charges and penalties in the same manner as the late
payment of other types of taxes. In addition, a failure to
pay penalty equal to 5 percent of the tax due, but unpaid, is
assessed under section 5761(b).
Revenues from the current tobacco products excise taxes are
deposited in the General Fund of the Treasury.
Tobacco occupational excise tax. An annual excise tax of
$1,000 per premise generally is imposed on manufacturers of
tobacco products, manufacturers of cigarette papers and
tubes, and export warehouse proprietors (Code sec. 5731). The
occupational tax is $500 per premise for taxpayers with
annual gross receipts less than $500,000. Revenues from the
occupational tax are deposited in the General Fund of the
Treasury.
Penaly excise taxes. In addition to excise taxes imposed
primarily to raise revenue, the Internal Revenue Code (the
``Code'') includes several excise taxes imposed as
``penalties'' for taking (or failing to take) certain
required actions. Examples of these excise taxes include
taxes on excess lobbying expenditures by charitable
organizations, certain ``self-dealing'' activities by
officers and others involved with private foundations,
failures by private foundations to distribute required
percentages of income, and numerous regulatory excise taxes
imposed with respect to specified activities of qualified
pension plans. Present law does not establish any underage
smoking reduction goals or impose any penalty excise tax with
respect to such goals.
Overview of Internal Revenue Code Trust Funds. Most Trust
Funds that are financed with dedicated excise tax revenues
are established in the Code (secs 9501 et. seq.). Examples of
these Trust Funds are the Airport and Airway Trust Fund, the
Highway Trust Fund, the Black Lung Trust Fund, the Aquatic
Resources Trust Fund, the Inland Waterways Trust Fund, the
Hazardous Substance Superfund, the Leaking Underground
Storage Tank Trust Fund and the Oil Spill Liability Trust
Fund. Each of these Trust Funds includes provisions
dedicating specified revenues to the Trust Fund and
provisions approving expenditure purposes of the Trust Fund
(generally as those purposes are in effect on the date of
enactment of specific authorizing legislation). The Code also
contains general provisions relating to the management of
these Trust Funds. In general, Trust Fund expenditures are
subject to the annual appropriations process. Under present
law, there is no Federal trust fund relating to tobacco taxes
and spending programs.
b. description of finance committee amendment relating to tobacco taxes
and trust fund
Increase in tobacco products excise tax rates. In lieu of
the payments (including the initial $10 billion payment)
required of tobacco manufacturers under S. 1415, as reported
by the Committee on Commerce, Science, and Transportation
(the ``Commerce Committee''), the current Federal excise tax
rate on small cigarettes is increased by $1.50 per pack of 20
small cigarettes. The tax rates on all other taxable tobacco
products are increased proportionately to the increases
specified for small cigarettes. In addition, the effective
date for imposition of tax on ``roll-your-own'' tobacco is
accelerated from January 1, 2000, to January 1, 1999. Each of
these rate increases will be phased-in ratably over a three-
year period (calender years 1999, 2000, and 2001). Thus, for
example, the tax rate on small cigarettes will increase by 50
cents per pack of 20 cigarettes on January 1, 1999, by an
additional 50 cents per pack on January 1, 2000, and by an
additional 50 cents per pack on January 1, 2001. (These
increases are in addition to the rate increases currently
scheduled to take effect in 2001 and 2003.)
On each January 1 beginning in calendar year 2002, all
tobacco excise tax rates will be adjusted for inflation, as
measured by changes in the CPI occurring during the 12-month
period ending on the preceding August 31.
Floor stocks taxes comparable to those imposed when tobacco
excise tax rates previously have been increased will be
imposed on each tax increase date. Floor stocks taxes must be
paid no later than July 1 of the year of tax increase.
As stated above in the description of present law, the
current tobacco products excise taxes apply to tobacco
products manufactured in, or imported into, the United
States. Solely for purposes of these increased tax amounts,
the term United States includes U.S. possessions as well as
the 50 States and the District of Columbia. Accordingly, no
amount of the increase will be covered-over to U.S.
possessions under Code section 7652.
Further, the effective date of certain compliance
provisions relating to exported cigarettes is accelerated
from January 1, 2000, to January 1, 1999.
Impose penalty excise tax for failure to meet underage
smoking reducing goals. Both the National Tobacco Proposed
Resolution (the ``Proposed Resolution'') and S. 1415, as
reported by the Commerce Committee, would establish goals for
the reduction of underage smoking and would impose lookback
``surcharges'' or ``assessments'' on tobacco manufacturers if
these goals are not met. In lieu of the lookback surcharges
or assessments, the Finance Committee amendment imposes a
non-deductible penalty excise tax on all manufacturers and
importers of cigarettes and smokeless tobacco.
All manufacturers and importers of cigarettes and smokeless
tobacco are subject to the penalty excise tax. Imposition of
this penalty excise tax is governed by the smoking reduction
goals and imposed at the rates specified in S. 1415, as
reported by the Commerce Committee. In addition, the Finance
Committee amendment provides that the determination of
whether underage smoking goals are met is determined under
rules prescribed by the Secretary of the Treasury (in
consultation with the Public Health Service). Beginning in
that year, the Secretary of the Treasury is directed to
publish by February 15 of each calendar year the amount of
tax allocated to each cigarette and smokeless tobacco
manufacturer and importer based on their prior year's excise
tax liability.
The penalty excise tax is payable in full no later than
April 1 of each calendar year. Cigarette manufacturers and
importers are jointly and severally liable for payment of
this tax imposed with respect to cigarettes as provided in
the Proposed Resolution and S. 1415, as reported by the
Commerce Committee. Smokeless tobacco manufacturers and
importers similarly are jointly and severally liable for
payment of tax attributable to smokeless tobacco. Other Code
administrative and enforcement provisions applicable to
excise taxes generally apply to this tax.
Deletion of Federal requirements relating to ``pass
through'' of payments. The provisions in S. 1415, as reported
by the Commerce Committee, requiring that tobacco
manufacturers use their best efforts to pass through to
consumers the amount of any payments on a per unit basis are
deleted.
Deletion or modification of miscellaneous ``fees''
contained in S. 1415. The provisions of S. 1415, as reported
by the Commerce Committee, that impose separate ``fees'' to
support the Tobacco Community Revitalization Trust Fund
programs, the ``fees'' and operative Trust Fund provisions
related to international tobacco control, the ``fees'' and
``assessments'' on nonparticipating manufacturers, the
Tobacco Asbestos Trust Fund and related programmatic
provisions, the Compliance Bonus Fund, and the provision
relating to child care and early childhood development
spending are deleted from the bill.
The Finance Committee amendment provides that,
notwithstanding any other provision of law, all charges or
user fees imposed under the titles of the bill other than the
revenue title must be set in amounts that recover only costs
attributable to providing services to the party paying the
fees (i.e.,
[[Page S5006]]
must be true, or cost-based, user fees rather than disguised
taxes).
Establishment of National Tobacco Settlement Trust Fund. In
lieu of the multiple separate Trust Funds provided for under
the Commerce Committee titles of S. 1415, as reported, a
National Tobacco Settlement Trust Fund (the ``Tobacco
Trust Fund'') is established in the Treasury Department
pursuant to provisions enacted into the Trust Fund
provisions of the Code. Amounts equal to the net revenues
\4\ from the changes made by the Finance Committee
amendment are to be deposited in the Tobacco Trust
Fund.\5\ The Tobacco Trust Fund further will receive
amounts equal to all penalties imposed under S. 1415.
Amounts in the Tobacco Trust Fund generally are available
for expenditure as provided in subsequently enacted
appropriations Acts.\6\
Amounts in the Tobacco Trust Fund are available for
expenditure for the programs provided in S. 1415, as those
programs are in effect on the date of the bill's enactment.
The Tobacco Trust Fund includes a separate account, the
State Tobacco Settlement Account (the ``State Account''), to
administer distribution of Trust Fund monies to States. The
State Account will receive revenues equal to 30 percent of
the net revenues produced by the increases in tobacco taxes
during the five calendar years, 1999 through 2003. In
calendar year 2004 and thereafter, this percentage will
increase to 45 percent. These revenues are not available to
finance any other Trust Fund expenditure purposes. States are
eligible for payments from the State Account and the Tobacco
Trust Fund generally only if they waive their rights to any
future payments under State settlements with the tobacco
manufacturers or importers.
Each State is eligible to receive the portion of the monies
in the State Account shown in the table entitled
``Distribution of Funds to States'' below, except the States
of Mississippi, Florida, Texas, and Minnesota are guaranteed
that amounts those States receive will not be less than the
amounts they would have received under their previously
negotiated settlements with the tobacco companies, determined
on a year-by-year basis.
In general, there are no requirements or restrictions on
the use of funds appropriated to the States from the Tobacco
Trust Fund; however, the Finance Committee amendment
clarifies that the Medicaid cost recovery provisions apply to
States that use Tobacco Trust Fund payments in their Medicaid
programs. Cost recovery is waived for States that use the
Tobacco Trust Fund for other purposes.
Provisions further are included ensuring that no tax
revenues are deposited into the Tobacco Trust Fund if any
monies are spent other than as authorized under these
provisions.
General administrative provisions applicable to Code Trust
Funds apply to the Tobacco Trust Fund, except no interest
would accrue on unspent balances in the Tobacco Trust Fund.
As with other Code Trust Funds, the Tobacco Trust Fund is not
permitted to borrow from the General Fund.
DISTRIBUTION OF FUNDS TO STATES
------------------------------------------------------------------------
State Percentage
------------------------------------------------------------------------
Alabama.................................................... 1.237
Alaska..................................................... 0.400
Arizona.................................................... 1.709
Arkansas................................................... 0.954
California................................................. 8.695
Colorado................................................... 0.990
Connecticut................................................ 1.548
Delaware................................................... 0.400
D.C........................................................ 0.474
Florida.................................................... 4.768
Georgia.................................................... 2.735
Hawaii..................................................... 0.800
Idaho...................................................... 0.400
Illinois................................................... 3.930
Indiana.................................................... 1.490
Iowa....................................................... 0.932
Kansas..................................................... 0.800
Kentucky................................................... 1.664
Louisiana.................................................. 1.723
Maine...................................................... 0.800
Maryland................................................... 1.425
Massachusetts.............................................. 3.802
Michigan................................................... 3.586
Minnesota.................................................. 1.246
Mississippi................................................ 1.701
Missouri................................................... 1.701
Montana.................................................... 0.400
Nebraska................................................... 0.400
Nevada..................................................... 0.400
New Hampshire.............................................. 0.400
New Jersey................................................. 3.755
New Mexico................................................. 0.800
New York................................................... 12.812
North Carolina............................................. 1.977
North Dakota............................................... 0.400
Ohio....................................................... 4.205
Oklahoma................................................... 0.800
Oregon..................................................... 1.353
Pennsylvania............................................... 4.421
Rhode Island............................................... 0.800
South Carolina............................................. 1.090
South Dakota............................................... 0.400
Tennessee.................................................. 2.851
Texas...................................................... 5.930
Utah....................................................... 0.400
Vermont.................................................... 0.400
Virginia................................................... 1.348
Washington................................................. 1.726
West Virginia.............................................. 0.782
Wisconsin.................................................. 1.841
Wyoming.................................................... 0.400
------------------------------------------------------------------------
II. Trade Provisions
1. Section 1107--Ban on distribution of tobacco products
produced by child labor. The Finance Committee amendment to
Section 1107 clarifies that the amendment to Section 307 of
the Tariff Act of 1930 contained in S. 1415 applies to
imports of tobacco products produced by forced or indentured
child labor.
2. Section 1133--Limits on the authority to promote the
exportation of tobacco. The Finance Committee amendment
codifies current policy set out in the Departments of
Commerce, Justice and State, the Judiciary and Related
Agencies Appropriations Act, 1998, which prohibits any
officer, employee, department or agency of the United States
from promoting the sale or export of tobacco products, or
from seeking the removal of nondiscriminatory barriers to
trade in tobacco. The Finance Committee amendment clarifies
that ministerial or clerical functions, such as the
collection of export documents by Customs Service officials
upon export through a U.S. port, would not constitute
promotion of the sale or export of tobacco products within
the meaning of section 1133. The Finance Committee clarifies
further that United States Trade Representative (USTR)
retains the authority to seek redress from discriminatory
barriers to U.S. market access, with the proviso that USTR
must consult with the Department of Health and Human Services
prior to taking such action. Finally, in the Committee's
view, nothing in section 1133 should be construed to prohibit
the reduction of tariffs or other trade barriers through
comprehensive trade negotiations that incidentally include
tobacco products, provided that such reductions are not
primarily directed at reducing tariffs or trade restraints on
tobacco products.
3. Section 1134--Report on impact on U.S. international
obligations. The Finance Committee amendment strikes Section
1134 from the bill.
4. Section 1145--Anti-smuggling provisions/prohibition on
imports except under a permit. The Finance Committee
amendment ensures that the bill imposes identical permit
requirements on persons engaged in the production or
marketing of tobacco products, regardless of the country or
origin of the product and irrespective of their role in the
distribution chain, whether through the manufacture, import,
sale, distribution or warehousing of tobacco products. The
Finance Committee amendment clarifies that the legislation
does not create a separate import licensing regime for
imports. The legislation does not affect the administration
of tariff rate quotas the United States currently imposes on
imports of tobacco and manufactured tobacco.
5. Section 1147--Ships stores, duty-free shops, and foreign
trade zones. The Finance Committee amendment would permit the
continued use of duty-free stores and foreign trade zones for
the import, sale, manufacture, distribution, and export of
tobacco products, provided that such activities comply with
all applicable U.S. laws relating to the import, sale,
distribution and/or marking of tobacco products in the
customs territory of the United States, including
restrictions on sales to minors. The Finance Committee
amendment would also prohibit the importation of tobacco or
tobacco products previously sold for export and exempt from
excise tax as ships stores or in duty-free shops.
III. Elimination of Limitation on Medicaid Coverage of Smoking
Cessation Agents
Under the committee amendment, states will not be allowed
to exclude from coverage or restrict agents when used to
promote smoking cessation. States will maintain the authority
to exclude from coverage or restrict nonprescription drugs
when used to promote smoking cessation.
IV. Mastectomy Health Care Provision
a. present law
Under present law, group health plans must meet certain
requirements with respect to limitations on exclusions of
preexisting conditions and must not discriminate against
individuals based on health status. An excise tax of $100 per
day during the period of noncompliance is imposed on the
employer sponsoring the plan if the plan fails to meet these
requirements. The maximum tax that can be imposed during
taxable year cannot exceed the lesser of 10 percent of the
employer's group health plan expenses for the prior year or
$500,000. No tax is imposed if the Secretary determines that
the employer did not know, and exercising reasonable
diligence would not have known, that the failure existed.
b. description of finance committee amendment
The Finance Committee amendment requires that certain group
health plans satisfy two additional requirements: (1) provide
for impatient coverage with respect to the treatment of
breast cancer, and (2) provide inpatient coverage for
reconstructive surgery following mastectomies. Failure to
comply with these requirements would result in the same
exercise tax applicable to failure to comply with the
limitations on exclusions of preexisting conditions and
discriminating against individuals based on health status.
The amendment requires a group health plan that provides
medical and surgical benefits to ensure that inpatient
coverage with respect to the treatment of breast cancer is
provided for a period of time as determined by the attending
physician to be medically appropriate following: (1) a
mastectomy; (2) a lumpectomy; or (3) a lymph node dissection
for the treatment of breast cancer.
The amendment requires a group health plan that provides
medical and surgical benefits with respect to a mastectomy to
ensure that, in a case in which a mastectomy patient elect
breast reconstruction, coverage is provided for: (1) all
stages of reconstruction
[[Page S5007]]
of the breast on which the mastectomy has been performed; (2)
surgery and reconstruction of the other breast to produce a
symmetrical appearance; and (3) the costs of prostheses and
complications of mastectomy including lymphodemas, in the
manner determined by the attending physician and the patient
to be appropriate.
The amendment requires a group health plan to provide
notice to all participants and beneficiaries under the plan
of the inpatient coverage available with respect to the
treatment of breast cancer and reconstructive surgery
following mastectomies.
The amendment does not pre-empt any State law in effect on
the date of enactment with respect to health insurance
coverage that: (1) requires coverage for a minimum length of
hospital stay following a surgical treatment for breast
cancer; (2) requires coverage of at least the coverage of
reconstructive breast surgery required under the proposal; or
(3) requires coverage for breast cancer treatments (including
breast reconstruction) in accordance with scientific
evidence-based practices or guidelines recommended by
established medical associations.
footnotes
\1\ The term United States includes the 50 States and the
District of Columbia.
\2\ A significant majority of taxable cigarettes, and of
taxable tobacco products, is small cigarettes.
\3\ These rules may be, but are not required to be, based on
the University of Michigan's National High School Drug Use
Survey, ``Monitoring the Future'' (the specified source under
the Proposed Resolution and S. 1415, as reported by the
Commerce Committee.
\4\ The term ``net revenues'' means the gross payments
received less an income tax offset.
\5\ These amounts would be reduced by any refunds of tax
previously paid that were properly allocable to revenues
deposited into the Tobacco Trust Fund.
\6\ As reported by the Commerce Committee, S. 1415 provides
that spending for certain programs is to be direct spending.
This provision in the Finance Committee amendment supersedes
those direct spending provisions (except in the case of
amounts deposited into the State Account, described below,
and S. 1415's provisions for payments to tobacco farmers).
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from New York.
Mr. MOYNIHAN. Mr. President, I concur in the judgment of our
distinguished chairman on the important question of the jurisdiction of
the Committee on Finance and I thank him for insisting that it be made
clear for the record, as indeed has been done thanks to the
distinguished Presiding Officer.
Mr. President, S. 1415, the tobacco legislation now before the
Senate, was ordered referred to the Committee on Finance on May 13,
1998. It was so referred because the Senate Parliamentarian determined
that the bill is in the jurisdiction of the Finance Committee. That
action preserved the jurisdiction over tax legislation for which the
Finance Committee has been responsible for 181 years.
The Record should be clear that this is indeed a tax bill. The
Parliamentarian has so determined; the Joint Committee on Taxation has
concurred.
One may refer to certain provisions of this legislation as ``annual
payments,'' ``lookback assessments,'' or ``fees,'' but they are taxes.
As Richard Cardinal Cushing said, ``When I see a bird that walks like a
duck and swims like a duck and quacks like a duck, I call that bird a
duck.'' Call it whatever you like, but this bill raises taxes on
tobacco, and we're not fooling anybody to suggest otherwise.
And as I have said, taxes have been the jurisdiction of the Committee
on Finance for going on two centuries now. In the case of excise taxes,
which figure prominently in this bill, the Finance Committee's
jurisdiction has been recognized since 1817, the year after the
Committee was established. That was the 14th Congress. George W.
Campbell of Tennessee, was Chairman; Senator Rufus King, of New York,
was Ranking Member.
Likewise our jurisdiction over income taxes has been recognized since
the first income tax was enacted in 1861. And the Standing Rules of the
Senate have explicitly provided for our jurisdiction over ``revenue
measures generally''--tax bills--since 1946, the year that the
jurisdictions of all Senate Committees were first set forth in the
Rules. I might add that our jurisdiction over international trade
matters, which also arise in this bill, is equally clear and equally
longstanding.
Our revered Chairman, Senator Roth, last week insisted--with the full
support of our Committee Members--that this legislation be considered
by the Finance Committee before it went to the floor. It was referred
to us on Wednesday, and we marked it up on Thursday. The vote to report
favorably the Finance Committee amendments was 13-6.
The Finance Committee made several important improvements to the
bill. First, we converted the assorted ``payments'' and ``assessments''
to taxes. Second, we approved an increase of $1.50 per pack in the tax
on tobacco, to be phased in over three years. Third, we struck from the
bill a tax on exports that was a clear violation of Article I, Section
9 of the U.S. Constitution. And finally, we adopted an amendment by
Senator D'Amato to require that health plans provide coverage for
minimum hospital stays and reconstructive surgery associated with the
treatment of breast cancer.
Some of these changes have now been included in the pending Commerce
Committee substitute. Owning to the parliamentary situation, some of
the other Finance Committee amendments will require separate votes. But
thanks to our Chairman, the essential point has been made; the
jurisdiction of the Committee on Finance has been preserved and
affirmed.
I thank the Chair and yield the floor.
Mr. McCAIN. Mr. President, I now ask unanimous consent that there be
a period for the transaction of routine morning business until 8 p.m.,
with Senators permitted to speak for up to 10 minutes each.
Mr. ASHCROFT. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. ASHCROFT. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The Senator from Arizona has the floor.
Mr. McCAIN. Mr. President, the Senator from Missouri is not
recognized for suggesting the absence of a quorum, is that right?
The PRESIDING OFFICER. The Senator from Arizona does not lose the
floor when he makes a unanimous consent request.
Mr. McCAIN. Thank you. Mr. President, the Senate will now take up the
National Tobacco Policy and Youth Smoking Reduction Act (S. 1415). Six
weeks ago, the Senate Commerce Committee approved this measure by an
overwhelming vote of 19-1.
I want to thank the Majority Leader and Senator Daschle, and all
Senators for allowing this bill to come to the floor. Thanks to the
work of so many people including the medical community, especially Dr.
Koop, Dr. Kessler; the attorneys general, and so many of our colleagues
on both sides of the aisle over many years, Congress has a rare and
historic opportunity to put an end to what the American Medical
Association calls a ``pediatric epidemic.''
Mr. President tobacco is a legal product that adults may acquire if
they choose to do so. Under this bill it will remain so. But the
widespread use of tobacco in this country presents a problem every
responsible adult would concede will not go away on its own.
Three thousand American children take up the smoking habit every day.
For one thousand of them the decision will prove to be fatal. Those
children will be among the 460,000 Americans a year who die early--
substantially early--from smoking related disease including cancer,
emphysema, stroke and heart disease. Warnings about the lethal effect
of tobacco have not discouraged juvenile smoking. Sadly, the Center for
Disease Control reports that teen smoking is on the rise today.
In recent years, we have learned how callously indifferent tobacco
companies are to the loss and suffering their product causes. We have
learned how tobacco companies will undermine any public good if it
serves their commercial interests. We have learned that nothing, not
even the health of children, is off limits to tobacco companies if it
serves their bottom line. What profits the nation is a matter of no
consequence to tobacco companies if it does not profit them.
Mr. President, we have learned that the tobacco companies, well aware
that kids make up the vast majority of their ``replacement'' market
have, for years, intentionally and systematically targeted children in
their marketing and advertising--kids as young as 13 years old, and
even younger.
The disclosure of truckloads of internal industry documents have
exposed once and for all the appallingly malicious lie that tobacco
executives have for years sworn, often under oath, to be true--that
they do not market to children.
They not only have marketed to children, they have thrived on it. And
I am
[[Page S5008]]
entirely confident that they will continue to do so unless we who are
elected to protect the national interest, stand up, at long last, to
the tobacco interests. That is what this legislation is intended to do.
Studies show that children are particularly susceptible to the
industry's marketing pitches. So effective have these companies been at
appealing to youth, many children can identify Joe Camel as readily as
they do Barney or cartoon characters.
We have come to learn that as part of their strategy to hook kids
early, at any cost, tobacco companies manipulated nicotine levels to
enhance its addictive qualities; engaged in sham medical research;
quashed information about the danger and addictiveness of tobacco;
abused the nation's laws to cloak their activities and lied to Congress
and the American people.
Tobacco companies have long hoped that money, in the form of campaign
contributions, would enable them to maintain the status quo, and
insulate them from the consequences of their actions. For too long, I
fear, they have been right.
We are all too familiar with the influence of tobacco money. I appeal
to my colleagues, now is the time to stop tobacco companies from buying
political indulgence of their intentional sacrifice of our children to
the imperatives of preserving a market for their product.
It is illegal for children to purchase tobacco in every state in the
country. And in every state in the country, tobacco companies have
invested enormous sums of money and time to encourage widespread law
breaking.
Now is the time to put an end to it. And, Mr. President, now is also
the time to stop the endless drain on taxpayers, which amounts to an
annual tax of $50 billion imposed on taxpayers to underwrite tobacco
related health care costs--an estimated $1.7 trillion over the life of
this bill.
Over the past 3 weeks, the tobacco companies have launched a massive
campaign of diversion. Once again, they hope to use their vast
resources to divert the country from the truth, and to frustrate us in
our task to defend against the threat they pose to our children. As
they have so often in the past, the tobacco companies are lying to all
of us again, and using their wealth to frighten us all into submission.
I would like to quote Dr. C. Everett Koop who said about this
campaign.
When you see the advertising from the tobacco industry
consider the source. These people are experts at manipulation
and have been lying to the American people for decades.
Dr. Koop called on all Members of Congress to support tough tobacco
legislation. Mr. President, the bill we are presenting to the Senate is
indeed tough medicine, for a tough problem. Every expert medical
witness who has testified before Congress, as well as every living
Surgeon General has called on Congress to pass tough, comprehensive
tobacco legislation. The measure we will now consider is exactly that--
tough, comprehensive legislation.
The bill is based on the framework of the June 20th settlement
between the industry and the state attorneys general and contains the
six major elements experts agree are essential if we are to stop kids
from smoking.
These include restrictions on marketing aimed at youth; stronger
youth access prohibitions; deterrant price increases; regulatory
oversight of tobacco ingredients; and counteradvertising campaigns to
educate youth.
I would like to address each of these in greater detail. First, like
the June 20th settlement, the bill imposes advertising restrictions to
eliminate marketing appeals to youth. The bill would implement the FDA
rules banning tobacco billboard and outdoor advertising around schools,
playgrounds and other areas frequented by children.
It would restrict point-of-sale advertising to ensure that cigarette
pitches aren't directed at children and would require bold new warning
labels on cigarette packaging.
Second, as contemplated in the June 20th agreement, the bill will
raise cigarette prices sufficient to deter youth consumption. Experts
say the most important step to deter youth consumption is a substantial
hike in the price of tobacco products. I want to say that again, Mr.
President. Experts say the most important step to deter youth
consumption is a substantial hike in the price of tobacco products.
The Centers for Disease Control reports that smoking less than 100
cigarettes can result in clinical addiction, and that higher pricing is
essential to deter underage use. Accordingly, the bill would increase
the price per pack of cigarettes by a minimum of $1.10 over five years
with a commensurate rise in the price of smokeless tobacco. The
administration believes that this hike, included in the President's
budget request, would cut youth consumption in half.
Three, the bill establishes the same youth smoking reduction targets
agreed to by the industry last summer. Four and one-half million
underage Americans use tobacco and the number is growing. The bill
calls for a 60 percent reduction in youth consumption within 10 years
and levies heavy financial assessments on the industry if they are not
achieved. Tobacco companies have skillfully determined how to induce
kids to smoke. With ample motivation they can apply those skills to
help reverse their handiwork.
Four, stronger enforcement of youth access rules. While smoking by
minors is prohibited in every state, kids continue to buy tobacco. The
bill would require retailers to be licensed by the state and card
tobacco purchasers in the same manner as alcohol sales. And it requires
that tobacco products be stored in areas inaccessible to youth. In
addition, the bill would ban cigarette sales from vending machines, a
major conduit of tobacco products to kids. all of these restrictions
were part of last year's settlement.
Five, cigarette ingredient regulation. Cigarettes contain numerous
active ingredients harmful to health including nicotine, tar and
ammonia. Evidence suggests that the tobacco industry has manipulated
these ingredients to enhance their addictive qualities, and in some
instances added benign substances such as molasses to sweeten the taste
for introductory users, which is how the industry refers to children.
The bill would permit the FDA to oversee and regulate tobacco
products to protect public health, and promote the development of safer
cigarettes. In rulemaking two years ago, FDA asserted authority over
tobacco under its existing ``drug device powers.'' This bill, thanks to
the Presiding Officer, Senator Frist--Dr. Frist establishes basically
the same authorities, but in a separate and distinct chapter of law
that addresses tobacco products only.
The legislation, however, imposes several important checks on the FDA
authority. Any ban on nicotine or class of tobacco product could not go
into effect for two years, enabling Congress market potential of any
modification to cigarettes that would push smokers to contraband.
Again, the attorneys general, in their agreement with the industry
called for greater FDA oversight of tobacco.
Six, the bill provides funding for smoking prevention and cessation
programs; counter-advertising campaigns, and vital health research.
These initiatives are financed by annual payments made by the industry.
Smoking related health care costs exceed $50 billion per year. The
bill would require the industry to pay $526 billion over the next 25
years to reimburse taxpayers for costs to Medicare and state health
care programs. Last summer's agreement called on the industry to pay
$368.5 billion. This would have raised the price per pack of cigarettes
by $68 cents over 5 years, an amount public health authorities found
insufficient to effect youth usage. And the sums would not have been
sufficient to pay for assistance to farmers, who were left out of last
year's agreement by the industry.
Finally, the bill would place a cap on the tobacco industry's yearly
liability exposure without barring any individual or group's ability to
sue or receive compensation. The tobacco industry has successfully
fended off lawsuits for years. However, the trend is changing and as
massive new judgments are awarded against the tobacco industry,
bankruptcy is always a possibility.
Experts agree that bankruptcy is an undesirable outcome for the
nation economically, legally and medically. Involving bankruptcy would
permit the industry to shield themselves from
[[Page S5009]]
their financial responsibilities including compensation to victims.
When the asbestos companies went bankrupt and left a financial and
legal mess that is still with us, only the lawyers made out. Moreover,
the extinction of domestic manufacturers would simply push tobacco
users to foreign brands or unregulated contraband which would
constitute a public health crisis.
We have heard many opinions about whether the industry will submit to
this legislation. Legal challenges, of course, would delay reforms, so
industry cooperation would be advantageous. While, according to public
health authorities, price hikes are essential, they, alone, won't do
the job. The proposed advertising restrictions and youth usage
penalties, which industry is threatening to challenge, are also
essential parts of the solution.
The National Tobacco Policy and Youth Smoking Reduction Act, however,
was never intended to be a ``deal'' with the tobacco industry. Our
mission was to pass the best possible legislation to stop children from
smoking.
As I said, tobacco is a legal product and the decision to use it,
though risky, is a choice for adults to make. Nevertheless, the Nation
requires that the tobacco industry join us in the fight to protect our
children. If they choose not to, the American people will respond
accordingly, Congress will act, and the States will resume their
lawsuits to extract in court what we might more efficiently achieve
through cooperation.
Mr. President, we sent a modification to the bill to the desk in the
form of a committee substitute. I would like to take a moment to
explain how it would modify the bill as passed by the committee.
First, the amendment addresses the concern expressed by some that the
bill was too ``bureaucratic.'' Although the bulk of the panels and
boards were temporary, advisory and entailed little or no additional
federal costs, and the majority were contemplated in the June 20th
Agreement, the Committee substitute eliminates all but three: an unpaid
Scientific advisory board at FDA to help assess lower risk tobacco
products; a part time board to help formulate counter-advertising
strategies; and a three judge panel to assess attorney client privilege
claims.
Second, all receipts and disbursements under the act are routed
through a single, on-budget, trust fund operated by the Secretary of
the Treasury. The amendment eliminates, the role of special trustees;
the international trust fund, the farmers trust fund as well as the
asbestos trust funds and associated trustees. All funding under the act
will come from the single Tobacco trust.
Third, the amendment toughens enforcement against contraband
smuggling by requiring that manufacturers and wholesalers be licensed;
that records be kept for large transactions. These and other anti-
smuggling measures were worked out with the administration.
Four, the amendment drops certain provisions with respect to
international marketing that had constitutional problems, or were
violations of international law. Among the items dropped was the
special licensing fee, the designated trust fund; prohibitions with
respect to duty free shops, extra-territorial criminal provisions.
Five, the amendment imposes tougher look-back assessments on the
industry. The Committee reported bill capped look-back assessments at
$3.5 billion per year. The amendment raises the ceiling to $4 billion,
and establishes a company-specific penalty of $1,000 per underage user
of a particular tobacco brand beyond the target level.
Six, the amendment modifies the committee bill with respect to second
hand smoke. Under the bill as reported, states were given the
opportunity to opt out of the federal program. Under the amendment,
negotiated with the White House, state can only opt out if they
implement their own program that is as effective in protecting public
health, based on the best available science.
Seven, the amendment eliminates the asbestos trust fund. In its place
the modification authorizes appropriations from the main fund to assist
asbestos victims should Congress establish a program to do so.
Eight, the amendment ensures that with certain deminimus exceptions,
all tobacco companies, whether it choses to settle its state cases or
not, are responsible for the annual payments to effect the $1.10 price
increase.
The requirement that non-participating manufacturers pay 150% of the
annual payment has been dropped. Instead, manufacturers that wish to
settle their state cases must pay the upfront payment they agreed to
last year, and sign the state protocols binding them to the additional
requirements they agreed to with the state attorneys general, including
tougher advertising and marketing restrictions. In return for agreeing
to the broader restrictions, and not to challenge their obligations
under the protocols, participating companies would receive a yearly
liability cap of $8 billion.
In addition, the committee modification drops several civil liability
provisions, including a requirement that civil actions be directed at
the tobacco manufacturer not its parent company.
Finally, the Committee modification sets out funding parameters for
the trust fund.
The Joint Committee on Tax anticipates receipts into the trust fund
of nearly $65 billion over five years. Because the payments are volume
adjusted, this number could rise or fall depending upon the volume of
tobacco sales.
For this reason, the amendment expresses annual funding in terms of
percentage of yearly receipts and, except for state funding, places a
dollar ceiling should receipt exceed expectations. Any amount above the
ceiling would be transferred to the Medicare Trust funds.
Under the modifications, the States would receive 40 percent of the
yearly receipts; health research--22 percent; public health programs--
22 percent; and farmer assistance--16 percent.
The Office of Management and Budget estimates that under this
prescription, States would receive a total of $26 billion over five
years. In a modification agreed to by the National Governors
Association, 50 percent of the state funds--regarded as the federal
share of Medicaid recoupment--will be made available to the states for
a menu of purposes, including safe and drug free schools, Child Care
and Development Block Grants, substance abuse grants and others. As I
said, this menu was agreed to by the National Governors Association.
The other half of the State money would have no menu attached and
would be used at the sole discretion of the State.
Mr. President, I would like to briefly comment on the chief criticism
of this bill launched by the industry--that it is all about tax and
spend Government.
The industry agreed last summer to pay $368 billion and to submit
itself to almost every aspect of the legislation we are debating. The
agreed to increase the price per pack of cigarettes to reduce youth
consumption. They agreed to abide by advertising restrictions. They
agreed to submit themselves to lookback assessments. They agreed to
enhanced FDA authority over their products. They agreed to stiffer
youth access rules and they agreed to open up their documents to the
public. And they agreed to finance smoking prevention and cessation
programs and health research.
Are the measures tougher than they agreed to? Yes, without question.
Now because the industry fears that the bill may actually achieve
what it purports to, the effort has been transmuted from enlightened
public policy to tax and spend Government.
Let us be clear, those who vote against this measure because they
believe it is tax will merely kill the ability to settle State suits
collectively and efficiently so that we can move on to the job at
hand--protecting the health of our kids.
If this bill is killed, the States will merely resume their suits, at
great cost in terms of money and time, and the outcome will be the same
as it has been in Mississippi, Florida, Texas and Minnesota. If we take
that unwise course, the ultimate prices in cigarettes will be little
different from what might result from this bill, but we will pay an
awful price in terms of the 3,000 children a day who will become
regular users of tobacco and consign themselves to the consequences
before they are adult enough to make that life or death decision.
Mr. President, I asserted earlier that tobacco companies have long
sought
[[Page S5010]]
refuge in lies. They have lied about the effects of their product and
about the strategies they use to market them. They are lying about the
purposes and effect of the bill we are now considering. They have
spared no expense to cover their purposes with lies. They have lied, no
matter the cost to public health. They have sacrificed the truth and
our children to their greed. They have lied, because lying has been
profitable, Mr. President, because lying worked. No more. No more. The
lying stops today.
Mr. President, I yield the floor.
Mr. KERRY addressed the Chair.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KERRY. Mr. President, I thank the distinguished chairman, the
manager, for his eloquent comments with respect to the debate that now
begins in the U.S. Senate.
Senator Hollings has asked me to open on behalf of the committee, and
I do so with great respect for his leadership and his involvement in
helping to bring the U.S. Senate to a point where we can engage in this
consideration. He continues to fight extraordinarily for what he
believes in very deeply, and particularly, along with the Senator from
Kentucky, for the farmers who may be impacted by this legislation. And
that is a fight that we will continue to have over the course of the
days ahead.
This is not just the opportunity, Mr. President, for a historic
debate; it is an extraordinary opportunity for historic action by the
U.S. Senate.
For years, many people across this country have worked hard for this
moment. For years, we have waited for the opportunity for the Senate to
be able to step up to bat and exercise its responsibility to protect
the children of the country. And literally we have the opportunity,
whether it is this week, which we hope it might be, or in the next
weeks, when it might inevitably be, we have the opportunity to act on
behalf of the children of this country in a very direct way that expert
after expert, Surgeon General after Surgeon General, pediatrician after
pediatrician, cancer specialist after cancer specialist, all have said
is necessary for the better health policy of our Nation.
It is a tribute to the outrage in this country that by now millions
of Americans understand that 3,000 children will start smoking today
and will get hooked--some 6,000 will try it, but 3,000 children will
wind up smoking. And of those, 1,000 of them will die early because of
the habit they get that they could not kick. Every American has now
come to understand the way in which children have been manipulated,
aggressively marketed to, in order to suck them into this addiction
which ultimately can cost their lives.
That is what we are voting on on the floor of the U.S. Senate. That
is what this debate will be about over the course of the next few days.
There is a growing awareness now in America that we lose the lives of
over 400,000 of our fellow citizens each year because of smoking-
related illnesses--more people than we lost in all of World War II,
more people than we lost in all of Vietnam and all of Desert Storm
combined. And we lose this every year. And it costs us billions of
dollars in the health care system of our Nation, in our insurance, in
the hospital wards where some people who have no insurance are paid for
by the rest of their fellow Americans.
So this week in the Senate, we are moving beyond the point of simply
articulating a threat to the children of our country. No one, I think,
now disputes the notion that there is harm associated with smoking. And
now the U.S. Senate and the Congress need to act with legislation that
carries the imprints of both parties, of Senators of both parties, of
Governors of both parties, of 44 very tenacious and courageous
attorneys general. Now is the time to follow through on their efforts.
I urge all my colleagues--Democrat, Republican, liberal,
conservative, no matter what particular passion politically brings them
to the U.S. Senate--I urge them over the course of the next days to put
aside that partisanship and to try to set aside the inclination to make
the perfect the enemy of the very good and to focus today and
throughout this week on passing effective legislation that puts
America's children out of harm's way and secures for the Senate's
legacy one of cooperation and accomplishment, something that many
people have felt has been too absent in the workings of the Senate
these recent years.
There is a growing feeling that unless we act with a sense of
bipartisan and a real dedication to doing what is in the national
interest on smoking, that somehow we might let this historic
opportunity slip through our fingers. I do not dispute the possibility
of that, but, on the other hand, I believe that the Senate clearly has
shown its willingness on many occasions in the past to rise to this
kind of occasion, to ignore those that Senator McCain just referred to
who will spend billions and billions of dollars, who have a long record
of misleading America and the Congress with respect to this issue--that
we will ignore those special, narrow interests in favor of the larger
common interests of our fellow citizens. That is precisely what most of
us came here to see this Senate do. And now we can take pride in the
possibility of being part of that.
I believe that when my colleagues read the managers' amendment, the
bill that is before them, they will find that there is in this a
mainstream concept, that there is in this a view that really does
represent common sense. I think it is a rare occasion that, on a
subject as ripe for dissent as the subject of tobacco, any committee in
the Senate could conceivably send a bill to the floor of the Senate by
a vote of 19-1.
The Commerce Committee is, in point of fact, a microcosm of the whole
Senate. There are the extremes that we have on both sides, the hard-
line points of view on both sides; and there is, of course, every point
of view in between that somehow finds a center. And I believe that in
the end, when all of the debate and all of the anguish over this bill
has been worked through, we will find that we will be somewhere
relatively close to what the managers' amendment proposes and to what
the Senate has advocated.
As I say that, I personally believe there are improvements that can
be made. There are things in this bill with which I don't agree. There
are things that we have all reserved the right to try to change. What
is important, Mr. President, that we permit the Senate, at this moment,
to affect that change, that we permit it to work its will and to
ultimately vote on a bill.
Senator McCain, I might say, has approached this task by reaching out
all across party lines, reaching out to every sector of interest group
that is represented in this debate. I know that he and others on the
committee have tried to listen hard. It is my belief that when Senators
examine the bill, while they will undoubtedly find a particular point
of view here or there with which they could find disagreement and make
suggestions for improvement, I believe the fact is that they will have
a renewed respect for the way in which Senator McCain and the Commerce
Committee and Senator Hollings reached out to demonstrate some tough
decisionmaking under difficult pressures.
I also believe that in the end the changes that have been made, most
of those in the managers' amendment, clearly make this a stronger and
better bill than it was when it did leave the Commerce Committee. I
remind my colleagues that the Commerce Committee, at the time we sent
it out of committee, reserved the right at that point, knowing there
were some issues that weren't quite completely vetted, to make changes
in a managers' amendment as we brought it to the floor. The structure
of the bill has now been changed so that the provisions that are most
critical--for reducing youth smoking, the annual payments, the look-
back assessments, and the advertising restrictions--will be implemented
without the tobacco industry's assent, if that is our only choice.
I think every member of the committee, I am sure every Member of the
Senate, would prefer that the tobacco companies were part of the
solution and not a continued part of the problem. We would prefer that
they were, in fact, signing on to all, everything, that we may embrace
here in the Senate. I believe that the industry's participation in
youth smoking reduction efforts is obviously preferable, but I think we
have made a genuine effort to try to respond to most of their needs. As
the chairman pointed out and I will
[[Page S5011]]
underscore, almost every concept in this bill was embraced by the
tobacco companies in their settlements that they arrived at with the
attorneys general. In fact, most of the concepts are arrived at in the
settlements they have still reached, most recently last week in
Minnesota, with a few exceptions.
The fact is there are some aspects of this that are tougher--but
tougher in fact, not tougher in total concept. They do reach farther in
amount of money. There are greater limitations on liability because
many people believe those liability provisions were too great. But the
fundamental principle that there should be some restraints, that there
should be some kind of look back, that there should be advertising
restraints, that there should be an increase in the price, were all
accepted by the companies themselves, and it is certainly subject to
debate and to discretion within the Senate to ultimately agree on what
those levels ought to be.
When first presented to the Commerce Committee, the tobacco
settlement would have provided the tobacco companies with what most
people believe was an unprecedented level of immunity from civil
action--elimination of class actions, punitive damages. Aggregation of
claims would not have been allowed. Claims based on addiction would not
have been allowed. It would have allowed parent companies to shield
their tobacco profits from liability. It would have risked the ability
of injured persons to file State claims. It would have kept those State
claims in State courts.
Mr. President, those restraints on the ability of our citizens to be
able to seek redress were plain and simply excessive. These liability
restrictions are especially dangerous to the public health because this
kind of liability threat is, in the final analysis, the strongest and
most important insurance that the tobacco companies will take public
health concerns seriously, finally, after so many years of ignoring
them.
Let me be clear: The bill before the Senate no longer contains
special protections for the industry. That, I believe, was an important
step towards a workable piece of legislation.
We also must pass legislation that contains high compliance standards
to ensure that retailers will stop selling cigarettes to minors. We
believe we have strengthened this element of the bill. We penalize
States which do not achieve a 90-percent compliance rate after a 5-year
grace period. When 62 percent of 12-to 17-year-old children in this
Nation report they could succeed in buying their own cigarettes, that
nearly half of them have never been asked to provide a positive
identification, it seems to me it is time for us, as a nation, to get
serious about compliance. This bill does that.
In order to ensure that the tobacco companies actually have
sufficient incentives to reduce youth smoking, they and their
shareholders must now know that they will pay significantly if youth
smoking rates do not decrease dramatically, which means they must join
in the efforts to help us reduce smoking among our youth. That is why
the look-back assessments are so important.
Under the managers' bill, the cap on industry-wide assessments has
been raised to $4 billion, and there are new uncapped company-by-
company payments of $1,000 per child who smokes. That is an incentive
to be helpful. Not only have the assessments been significantly
increased but they are no longer tax deductible. That is, in fact, a
greater incentive for people to understand that this bill means
business.
In addition, and this is very important to many who have been part of
the process, the look-back assessments are now tied to the liability
provision so that companies which continue to entice minors will lose
any liability protections whatever--that is to say the cap particularly
or any other protections in the aggregation preemption.
I think it is nearly universally agreed that we cannot fundamentally
regulate tobacco without a strong and effective FDA authority over
tobacco products. The distinguished Presiding Officer has played a
critical role, along with Dr. Koop and Dr. Kessler, the White House,
and the Department of Health and Human Services, in helping to come
together in a considerable effort of negotiation in order to come up
with FDA authority within this legislation.
The FDA will have specific and broad new authority to regulate
tobacco products. Indeed, Dr. Koop has publicly praised the provision
as a substantial improvement over the provision in the proposed
settlement. I am confident that Dr. Koop, Dr. Kessler, and others will
continue to work with Congress on this matter to ensure that the FDA
has the authority it needs to protect kids and to promote public
health.
What we have before the Senate is not perfect legislation. None of us
has ever known a perfect piece, I think, to come to the floor of the
Senate. We will have a critical debate in the days ahead about whether
or not we can find room for improvement. There are many ideas that
different Senators will offer. I look forward to that debate with
respect to children, with respect to farmers, with respect to
liability, attorney's fees, and other issues.
Finally, we owe a great deal to the leadership and hard work of our
colleague, Senator Kent Conrad, who has spoken out on tobacco with a
great deal of passion, but more importantly, who helped, through a long
process of working with the task force, to shape and fold what is in
front of the Senate today. I appreciate how sensitive Senator Conrad
has been toward passing legislation in this Congress and how seriously
he has fought to make certain that Congress will find a middle ground
place where all of us can, hopefully, ultimately come to agreement.
In the managers' amendment there are several improvements that
reflect Senator Conrad's priorities and the great work that he has
performed as leader of the Democratic task force on tobacco.
So now the full Senate has the opportunity to work its will, to pass
this bill with the managers' amendment, to send America into the next
century with the knowledge that we are a Nation not just with a
responsible policy toward an addictive substance, not just with a
responsible policy toward our children, but that we know how to
translate our conscience into public legislation, that we can reach
beyond partisanship in order to find the common ground.
To my colleagues, I say simply that history has finally put this
legislation on the floor of the Senate in a decade-long fight to
protect our children. We weren't fighting for party. No one in this
fight ought to have an ideological ax to grind.
In the final analysis, the one priority that will bring us together
is fundamental: This debate is about our children and it is about our
responsibility of raising a generation of healthy children who will
live up to their potential, free from the grasp of a dangerous drug.
That is our challenge, and I believe that the Senate can meet it.
I join with my colleague, the Senator from Arizona, in suggesting
that this is the moment for the Senate to break away from the
mendacity, the deception and willful effort to try to undercut the
health of our kids over such a long period of time. I hope we are going
to do that.
I yield the floor.
Mr. FRIST addressed the Chair.
The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Tennessee is
recognized.
Mr. FRIST. Mr. President, over the next several days, we will be
discussing a comprehensive piece of legislation that many of us have
participated in drafting over the last really 9, 10 months--a piece of
legislation, which I think is a superb start to accomplishing the goal
on which I hope we will continue to focus. I think we are going to see,
over the next several days, a lot of debate and probably a number of
amendments. We will see a lot of arguing back and forth and a lot of
turf wars will be expressed here on the floor.
I just make a plea to my colleagues that, throughout that period of
time, we keep coming back to what our true focus is, the reason for
having this bill. It really goes back to some of the data and
statistics that have already been mentioned, which I am sure we will
mention again and again. But we are here in order to reduce the number
of kids smoking, teen smoking, under-age smoking.
We have heard over the last several months about the number of kids
who start smoking every day; 3,000 kids start smoking every day. And
1,000, or
[[Page S5012]]
1 out of every 3 of those kids who start today, will die prematurely.
That means they will die earlier than they would if they had never
started smoking. That means a thousand children today, over the last 24
hours, have started smoking and will die before their time because they
started smoking today. Ninety percent of all adult smokers began
smoking at or before age 18. In fact, 50 percent of all adults smoking
today started under the age of 14--maybe 8, 10, 12, or 13 years of age.
The problem we face today--and, of course, I speak as a Senator now,
but I also speak as a physician who has taken an oath to dedicate my
life to improving the quality of life of others--is that of premature
death. It is as simple as that. However, the problem is not getting
better, it is actually getting worse. In fact, the percentage of teens
smoking every day has increased by 40 percent--these are teenagers,
children--from 17 percent of 12th graders smoking in 1992 to 24 percent
in 1997. If you look at the teenagers smoking from the 8th grade to the
12th grade, it climbed from 13 percent in 1992 to 18 percent in 1997.
So this problem right now is becoming worse.
Really, the statement I want to make and urge all my colleagues to
keep in mind is that our focus has to be on the health of the next
generation and to keep in mind the challenges that youngsters face as
they travel from that very tricky path from childhood to adulthood,
surrounded by these temptations. Really, what we need to do is address
over the next several days, using the template of this bill now on the
floor, and ask the question: What can we do to make it more likely that
these children will arrive at adulthood without crippling addictions?
Mr. President, I would like to briefly comment on one aspect of this
bill, on which I have spent a great deal of time. I want to comment on
it this evening, as this bill is introduced. It is a part of the bill
that is greatly misunderstood by many because they haven't yet read the
bill or had it presented to them. It has to do with the Food and Drug
Administration authority in this bill. I am not going to walk through
the provisions, but I want to briefly explain what we set out to do and
what is in the bill.
Right now, drugs and medical devices are regulated by the FDA in a
single chapter. An attempt has been made by the current administration
to regulate tobacco through this chapter, chapter 5 of FDA law, with
the authorities given the devices. How and why? It basically is a way,
through existing regulation, existing statute or authority, to regulate
tobacco as a drug delivery device; but to me it is like taking a round
peg and trying to put it in a square hole or taking a square peg and
trying to put it in a round hole--it just doesn't fit. It just doesn t
fit to try and say that tobacco should be regulated as a drug delivery
device. The attempt has been made to regulate tobacco by using the
restrictive device authority in chapter V. I point this out because it
is the reason we have created a whole new chapter for the regulation of
tobacco. This new chapter reflects that tobacco is a unique product,
very different from drugs and very different from devices.
Chapter 5 of the Federal Food, Drug and Cosmetic Act is that chapter
that, heretofore, an attempt has been made to regulate tobacco through.
It is the drug and device chapter. Tobacco just does not fit there.
Here is one brief example, so that people will understand why we
created a new chapter. Chapter 5 calls on the Secretary to determine
whether the regulatory actions taken will ``provide reasonable
assurance of the safety and effectiveness'' of the drug or the device.
Well, clearly, tobacco is not safe or effective; we know that. It is
dangerous to one's health. That has clearly been demonstrated over the
last 20, 25 years. You can talk about the effectiveness of a pacemaker
or a heart valve or an artificial heart; you can talk about those
devices as being safe and effective. You really cannot apply that to
tobacco. Therefore, instead of taking tobacco and ramming it through
the drug and device provisions, we felt it was important to look at the
unique nature of tobacco, write a separate chapter, and that is what is
in the bill today. It is called chapter 9. This gave us the flexibility
to create a new standard that was appropriate for tobacco products. The
bill states that the Secretary may find that regulations and other
requirements imposed on tobacco products ``are appropriate for the
protection of public health.'' This is the standard we use instead of
the safety and effectiveness standard found in chapter 5.
There are a number of other provisions in the device section that are
duplicative or not well-suited when you are attempting to regulate
tobacco. Yes, they are appropriate for drugs and devices, but not for
tobacco. This chapter 9, which is in the underlying bill, the managers'
amendment, contains certain new provisions that grant the secretary
explicit authority to undertake regulatory measures particularly
relevant to tobacco. It requires manufacturers to submit to the
secretary information about the ingredients, components and substances
in their products. It requires reporting of the content delivery and
form of nicotine in their products. It requires reporting of their
research on the health, behavioral, and physiological effects of
tobacco products. It requires reporting on the reductions in risks
associated with available technology, as well as research on the
marketing of tobacco products. Yes, this bill does create a new,
separate chapter for regulation of tobacco products. But the reason it
is important is because it does not fit, it does not make sense to
regulate tobacco as safe or effective.
With that, Mr. President, the only primary change made to the FDA
provisions in the underlying McCain bill is a revision which I support.
In the managers' amendment there is a prohibition of the FDA from
banning tobacco sales from a particular type of retail outlet such as
convenience stores. In the managers' amendment, we limit the FDA
authority to the removal of the license of individual operators for
failure to comply with a licensing agreement. This addresses the
concerns by many of the retailers who came forward concerned that the
FDA could ban sales from good operators who are not selling to kids
because of a few bad actors. I support that revision in the initial FDA
provisions of the bill.
In closing, Mr. President, I do have concerns with the McCain bill. I
will be open minded when considering amendments to it. I think it is a
very good starting point. But it is a starting point. We can and should
work on improving it over the next several days as long as we do not
lose sight of our ultimate objective. And that is a comprehensive
approach that looks at public health initiatives, that looks at youth
access issues, that looks at the advertising and marketing, because, I
believe, that it is only by having a comprehensive approach that we
will achieve the objective of preventing teen smoking.
I will be employing one criterion as I look at each of the amendments
as they come forward. And that is, Is this amendment likely to
complement a comprehensive campaign to prevent youth smoking? In other
words, does it help restrict advertising, promote public health, and
address youth access to tobacco with the end result of a reduction in
youth smoking?
Mr. President, I yield the floor.
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