[Congressional Record Volume 144, Number 65 (Wednesday, May 20, 1998)]
[Senate]
[Pages S5149-S5151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT

  The PRESIDENT pro tempore. The clerk will report the bill.
  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 resumed consideration of the bill.
  Pending:

       Kennedy/Lautenberg amendment No. 2422 (to amendment No. 
     2420), to modify those provisions relating to revenues from 
     payments made by participating tobacco companies.
       Ashcroft amendment No. 2427 (to amendment No. 2422), to 
     strike those provisions relating to consumer taxes.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDENT pro tempore. The distinguished Senator from Minnesota.
  Mr. WELLSTONE. I thank the Chair.
  Mr. President, I ask the manager that I may have 6 minutes to speak.


                           Amendment No. 2422

  Mr. WELLSTONE. Mr. President, when the Congress first conceived of 
comprehensive tobacco legislation, the primary goal was to deter youth 
smoking--I will say that again--the primary goal was, and is, to deter 
youth smoking.
  We have now discovered, through millions of documents--the State of 
Minnesota has led the way; my State, Minnesota, has led the way--that 
the industry has over the years intentionally marketed to our children, 
intentionally targeted our children. Our children, our sons and 
daughters--their profits. Our children's lives for their money. This is 
an unacceptable trade-off.
  Mr. President, do not take my words as a Senator from Minnesota as 
the final words on this matter. Let us just look at the tobacco 
companies' own documents.
  An R.J. Reynolds document penned in 1976:

       Evidence is now available to indicate that 14-18 year old 
     group is an increasing segment of the smoking population. 
     RJR-(tobacco) must soon establish a successful new brand in 
     this market if our position in the industry is to be 
     maintained in the long term.

  Philip Morris in 1981:

       Today's teenager is tomorrow's potential regular customer, 
     and the overwhelming majority of smokers first begin to smoke 
     while still in their teens . . . The smoking patterns of 
     teenagers are particularly important to Philip Morris.

  The 1998 report, ``Taking Action to Reduce Tobacco Use,'' published 
by the Institute of Medicine of the National Academy of Sciences, 
concluded--and I quote--

       . . . the single most direct and reliable method for 
     reducing consumption is to increase the price of tobacco 
     products, thus encouraging the cessation and reducing the 
     level of initiation of tobacco use.


[[Page S5150]]


  And, colleagues, we can look at tobacco to see what effect raising 
prices has.
  Between 1979 and 1991, real prices in Canada increased from $2.09 to 
$5.42. And when that happened, the smoking usage among 15- to 19-year-
olds fell from 42 percent to 16 percent. This is dramatic evidence; it 
is not a conjecture on my part. It is an important analysis.
  Now, colleagues, the tobacco industry has blitzed the Senate on this 
amendment. We have a second-degree amendment that doesn't want to do 
with any raise in price. And what are they saying? They are saying that 
this will bankrupt us. What are they saying? This will create a black 
market.
  But, Mr. President, Jeffrey Harris, who is a leading and impartial 
expert, talks about the tobacco industry making about $5 billion in 
profits in the year 2003. It does not sound like they are going to go 
under.
  And we can look at other countries--the United Kingdom, Ireland, 
Denmark, and Finland--all of which have added on taxes to reduce usage, 
none of which has had a problem with this black market which we are 
supposed to be faced with.
  Mr. President, let me just simply say again what my colleague Senator 
Kennedy has said. The $1.10 tax that we now have, the $1.10 increase in 
the price--Senator McCain deserves a tremendous amount of credit for 
his leadership. But the fact of the matter is, if we had $1.10, we 
could decrease youth smoking by about 34 percent; that would be $1.10. 
If we went to $1.50, we could decrease youth smoking close to 56 
percent.
  I say to my colleagues, even if the evidence is somewhat ambiguous, 
even if there are other studies suggesting that this might not happen, 
at least to this extent, what side do we want to err on? Do we want to 
err on the side of not jacking up the price and dramatically reducing 
the demand, especially among teenagers and young people, and getting to 
a 60 percent reduction? Or do we want to err on the side of not having 
the price high enough, combined with other smoking cessation programs 
that we need to put in effect, and continuing to see our children 
addicted, continuing to see our children take up smoking tobacco, and 
continuing to see our children die at an early age?
  Mr. President, let me conclude. Price increases will not bankrupt the 
industry. Price increases will not create a black market. What price 
increases will do is save lives. Let me repeat that one more time, 
because quite often what the tobacco industry has done over the years--
I think my State of Minnesota has proven this through the documents 
that we have unearthed--is what they do is what they know how to do 
best, which is they simply lie and distort the truth.
  So let me be clear about what this amendment is about. Colleagues, 
the price increase in the Kennedy amendment will not bankrupt the 
industry. The price increase that the Kennedy amendment calls for, 
$1.50, will not create a black market. What this price increase will do 
is save lives. It is for the lives of all Americans, it is for the 
lives of young people that should not die a premature death, that I ask 
my colleagues to support Senator Kennedy's amendment.

  Yesterday, my colleague from Massachusetts pointed out that an 
additional 40-percent increase will mean that 750,000 more children 
will not start smoking--750,000 children that won't start smoking. This 
is about saving lives. This is, I think, perhaps the most important 
public health amendment that we have, because if we want to 
dramatically decrease demand and stop smoking among teenagers, we have 
to get the price up there to lessen the demand. This amendment does 
that. I ask all of my colleagues to support this amendment.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Allard). The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I want to thank my friend and colleague 
from Minnesota for his excellent presentation and his compelling 
arguments and for the persuasiveness of his argument.
  The fact of the matter is on this issue the American people are on 
our side. The question is going to be in the next hour and a half or 2 
hours whether the Members of this body are going to be on the side of 
the children of this Nation and on the side of the parents of this 
Nation in taking the kind of important steps that are recommended 
virtually by every public health official that has studied this issue 
over a long period of time. We have placed in the Record the various 
studies and the various support material.
  The fact of the matter is, although there is some progress that will 
be made under the proposal that is before the Senate, what will happen 
if there is no change at all, if there is no change at all, is that we 
obviously will not see any reduction in youth smoking. With the 
proposal that is before the U.S. Senate now, we will see a 34-percent 
reduction in youth smoking as a result of the increase in the cost of 
cigarettes. With the $1.50 increase, a 56 reduction. The attorneys 
general established as a goal a 60-percent reduction. The Commerce 
Committee established as a goal a 60-percent reduction. Our particular 
proposal will go to 56 percent and with the kind of look-back 
provisions we will obviously be able to achieve this goal. That is what 
this issue is about.
  We will have the opportunity, as the Senator from Minnesota has 
stated, to save 750,000 American children from smoking, and we will 
have the opportunity to save some 250,000 to 300,000 lives of children. 
This is the most important public health issue.
  It is important for us to look at what is happening to the young 
children of this country over the period of the last 5 years. Look what 
has happened since 1991, 1993, 1995, 1997. Over this period of time, we 
have seen the absolute explosion in the utilization of cigarettes by 
young people in this country. The target of the tobacco industry, as 
demonstrated by their own material, has been with the youth of this 
country, and particularly with the minorities of this Nation. All you 
have to do is look at these statistics from 1991 through 1997. There is 
an 80-percent increase in black and non-Hispanic use of cigarettes, 80-
percent increase. This is what is happening in the United States of 
America. Among Hispanics, it has gone up some 34 percent over the 
period of these past 6 years. Among white, non-Hispanic young people in 
our country, some 28 percent. This is an average rise, since 1997, of 
32 percent--32-percent increase.

  What all of that means in terms of addiction, what all of that means 
in terms of the dangers with substance abuse, this is a gateway drug. 
Members of the Senate are talking about doing something about substance 
abuse. You have a chance to do it in an hour and a half by doing 
something about curtailing the use by our teenagers of these 
cigarettes. This is a national tragedy. We have an opportunity in an 
hour and a half to do something about it.
  You can have the various questions whether it really makes much of a 
difference if we move ahead with an increase in price or does it really 
make very much difference in terms of the young people of this country. 
Let's take a look at what the record has been from 1980 to the present 
time on the issues of price and the issues of teen smoking.
  We can have study after study after study, but, Mr. President, for 
those opposed to this amendment, I hope they would be able to refute 
what this chart demonstrates, and demonstrates very convincingly. Here 
we have in the early 1980s and 1982, we have a sharp increase in the 
costs, the real price of cigarettes, and a sharp decline, considerable 
sharp decline in teenagers smoking. This is what Philip Morris said 
about that, and we are not talking about an academic study. We are not 
talking about medical economists. We are not talking about Members of 
the Congress and the Senate who just want to see an decrease in smoking 
because we somehow think there might be some reduction in teenagers 
smoking.
  This is what the industry said in the Philip Morris memo from 1987 
that was in the Minnesota trial: ``The 1982, 1983 round of price 
increases prevented 500,000 from starting to smoke''--that is indicated 
in this line here--``500,000 teenagers from starting to smoke. This 
means 420,000 of the nonstarters would have been Philip Morris smokers. 
We were hit hard. We don't need that to happen again.''
  ``We don't need that to happen again.''

[[Page S5151]]

  No wonder out in the waiting room, in the reception room, I can't get 
in there because of the tobacco lobbyists--high-priced tobacco 
lobbyists. They don't want this to happen again. And it can happen. It 
can happen. It can happen in an hour and a half from now if the Members 
of this body are going to put the public health first in this debate on 
the issue that we have at hand.
  Here the chart shows the increase in the price and the reaction as a 
result of the statistic--the reduction in teenage smoking--and the 
tobacco industry acknowledging the relationship. So we have, as we went 
through the period of the 1980s, the increase in the real price, and we 
saw a rather significant increase in the real price going up during 
this period of time, and we see the corresponding reduction in terms of 
the teenage smoking. Until when? Until when? Until 1991. Then what 
happened to the real price? The real price went down and the real price 
went down on what they call Marlboro Friday, when the Nation's largest 
tobacco company, Philip Morris, fired the newest salvo which reversed 
the decade-long use in smoking. They slashed 40 cents off the brand of 
Marlboros, the most popular brand among children. The strategy was 
designed to protect prices. If Philip Morris reduced prices by 50 
percent in Massachusetts, and a month later, R.J. Reynolds--the second 
largest tobacco company, which manufactures Camels--had a corresponding 
reduction.
  So we have the major tobacco companies going down, the major price 
going down. Look on this chart what has happened in terms of youth 
smoking, escalating, going up dramatically. Price decline, youth 
smoking increases; price increase, youth smoking goes down. We have 
seen that continue over a long period of time.
  We could say what happened in here over the period for the last year 
or two, we have seen little blips going up, 10 cents, to cover the 
costs of various settlements they have had, an increase of 35 percent. 
It would not really reflect on this chart.
  Now what we have seen in here is $5 billion in tobacco industry 
advertising, an explosion in advertising. It makes our case, Mr. 
President.
  It makes our case for the proposal that we have at hand. Increase the 
cost and the price of cigarettes, do it in a significant time with a 
shock treatment of 3 years. The way that we saw it this time, it is 
going to have a dramatic impact on young people. Increase the 
antitobacco advertising, which is in this bill; develop the cessation 
programs, which are in this bill; strengthen the look-back provisions, 
which are in this bill; do the kind of prohibition on advertising that 
is in this bill, and you have the combination of elements that will 
work to bring a significant reduction in teenage smoking--a significant 
reduction in teenage smoking.
  Mr. President, we must have learned from the past. We have a pathway 
here that is outlined by the history of this industry, and the things 
that have been effective--not just studies, not just testimony, not 
just surmise, but real facts, Mr. President. Over that long period of 
time, we have the incontrovertible case that has been made here 
yesterday, last night, and this morning, again, that cannot be 
answered. We will hear answers like, oh, well, we will develop a 
smuggling industry; we can't do this because we don't know where the 
money is going to be expended; we can't do this because we will have 
this or that kind of a problem.
  There is an issue before the Senate: Can we do something with regard 
to seeing a significant, dramatic reduction in terms of teenage 
smoking? The answer to that is, yes, by supporting our amendment that 
virtually every public health official in this country supports--not 
only Dr. Koop, not only Dr. Kessler, but the Cancer Society, the Lung 
Society, and every public health group across the Nation, Republican 
and Democrat alike. That is the issue that we have. Now is the time to 
make that judgment. We will have the opportunity to do that in a short 
period of time.
  Mr. President, I see others who want to address the Senate. I yield 
at this time.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, although we haven't established an exact 
time for the tabling motion, as I mentioned last night, we will try to 
do them sometime around 11 o'clock. But I do want the proponents and 
opponents of these amendments to have ample time to discuss and debate. 
I think we are working on an informal agreement that we will go from 
side to side. I see the Senator from Missouri here. If it is agreeable, 
I would like for him to have recognition next. I will just comment 
briefly, if I could.
  If the Ashcroft amendment is agreed to, smokers won't be relieved of 
any price increase in this bill. Quite the contrary. If the amendment 
prevails, the States, at an enormous time and expense, will resume 
their suits, as we all know. There have been four settlements already, 
and 36 other States are in line. As we know from the other four States, 
they will prevail. There were four suits, four settlements. Minnesota 
is receiving twice--double--what they would have received as a result 
of the June 20 agreement between the attorneys general in the industry.
  So let's not have any mistake. This amendment won't eliminate an 
increase in cigarette prices, because when the tobacco companies agree 
to pay the State of Minnesota a certain amount of money, they increase 
the price for a pack of cigarettes in order to be able to make a 
settlement. That is  how it computes. Make no mistake, its passage will 
delay getting about the business at hand, and 3,000 kids a day will 
begin to smoke and a thousand will die substantially earlier as a 
result.

  Mr. President, I will make more comments later. Have no doubt about 
the effect of the Ashcroft amendment, which would be simply to delay 
price increases and delay our ability to attack the issue of kids 
smoking, because there will be added expenses passed on to the consumer 
as a result of these settlements. In case the Senator from Missouri 
missed it, Minnesota and the tobacco companies just settled for double 
what had been in the original settlement. Those costs will be passed on 
to the person who purchases a pack of cigarettes. Economics work that 
way.
  Mr. President, I yield the floor.
  Mr. KERRY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KERRY. Mr. President, I wanted to indicate to my friend from 
Arizona that the Senator from Missouri indicates to me that he intends 
to speak for a relative period of time. It was agreeable to him as a 
result of that to try to accommodate a couple of Members over here, 
unless they want to wait until afterwards. I am just trying to balance 
it. Could the Senator perhaps give us some indication of the length of 
time, so we can try to pin this down?
  Mr. ASHCROFT. Mr. President, I can't give a specific time. I would be 
pleased to let a couple of your folks go ahead, and I will follow them 
if that would be the understanding.
  Mr. McCAIN. We have to go back and forth.
  Mr. KERRY. Mr. President, that is fine.
  Mr. McCAIN. He is going to talk sooner or later. I am sorry he can't 
determine how much time he is going to talk.
  Mr. KERRY. Fine, Mr. President. We will try to stick with that.

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