[Congressional Record Volume 144, Number 69 (Tuesday, June 2, 1998)]
[Senate]
[Pages S5541-S5551]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT

  The Senate resumed consideration of the bill.
  Mr. McCAIN. Mr. President, as we resume debate on the issue of the 
tobacco bill, I want to discuss a very serious issue that arose 
concerning veterans and smoking and has to do with the highway bill, 
which some may think a little strange but probably has a lot to do with 
how we juggle numbers around around here and the way we ``pay'' for 
things and not ``pay'' for things.

[[Page S5542]]

  Let me quote from an article that was in the Washington Post on 
Saturday, ``Veterans Livid About `Willful Misconduct' Tag on Smokers.''

       Veterans groups were furious last week when Congress voted 
     to finance the pending highway bill by denying billions of 
     dollars to veterans suffering from tobacco-related illnesses. 
     This week, the groups were stunned to discover that the 
     lawmakers actually went further than that and declared any 
     veteran who smoked on active duty could be considered to have 
     engaged in ``willful misconduct.''
       That is the same standard that the Department of Veterans 
     Affairs uses to deny benefits to alcoholics and drug abusers. 
     The comparison has made veterans groups livid and yesterday 
     they vowed to force a second vote on the issue.
       ``We're hoping to get one more shot at it,'' said Bob 
     Wallace, deputy executive director of the Veterans of Foreign 
     Wars. The groups have sent messages out to their memberships 
     hoping to flood Capitol Hill with protests from the nation's 
     26 million veterans.
       The veterans groups delivered their complaints to President 
     Clinton at a Memorial Day breakfast. . . .
       A spokesman for the House Transportation and Infrastructure 
     Committee said Congress will consider the technical 
     corrections bill soon but many members may be unhappy to have 
     to vote directly on the veterans issue.
       Besides denying compensation, the highway bill also may 
     have gone so far as to block the VA from taking care of 
     veterans who become ill on active duty with tobacco-related 
     illnesses, such as lung cancer and heart ailments, a VA 
     official suggested. The VA long has accepted those 
     individuals for care and benefits, but a spokesman said VA 
     lawyers are now debating whether the new law will allow their 
     continued care.

  That is pretty remarkable, Mr. President. That is pretty remarkable.

       What the Congress has done is to ``retroactively redefine 
     conduct that was not only legal but it was also encouraged by 
     the military,'' said Phil Budahn, a spokesman for the 
     American Legion, the Nation's largest veterans organization. 
     He and other veterans noted that the military provided free 
     cigarettes to service personnel as recently as the Vietnam 
     War.
       Until the highway bill came along, Congress had avoided the 
     issue. Because denying the tobacco benefits would create a 
     budgetary savings of as much as $23.8 billion over five 
     years, promoters of the highway bill latched on to the idea 
     as a way to pay for increased highway spending.
       PVA's Fuller said Congress simply saw the VA as a ``cash 
     cow'' and used the veterans' money for bridges and highways.
       ``They saw the money, and that's all they wanted to do,'' 
     said Dave Autry, associate national director of Disabled 
     American Veterans.

  Mr. President, I will not read further. I ask unanimous consent that 
the article be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the Washington Post, May 30, 1998]

       Veterans Livid About ``Willful Misconduct'' Tag on Smokers

                          (By Bill McAllister)

       Veterans groups were furious last week when Congress voted 
     to finance the pending highway bill by denying billions of 
     dollars to veterans suffering from tobacco-related illnesses. 
     This week, the groups were stunned to discover that the 
     lawmakers actually went further than that and declared any 
     veteran who smoked on active duty could be considered to have 
     engaged in ``willful misconduct.''
       That is the same standard that the Department of Veterans 
     Affairs uses to deny benefits to alcoholics and drug abusers. 
     The comparison has made veterans groups livid and yesterday 
     they vowed to force a second vote on the issue.
       ``We're hoping we get one more shot at it,'' said Bob 
     Wallace, deputy executive director of the Veterans of Foreign 
     Wars. The groups have sent messages out to their memberships, 
     hoping to flood Capitol Hill with protests from the nation's 
     26 million veterans.
       ``This battle isn't over until it's over,'' said Richard 
     Fuller, chief lobbyist for Paralyzed Veterans of America. 
     ``We've got a lot of members who got bamboozled on this.''
       The veterans groups delivered their complaints to President 
     Clinton at a Memorial Day breakfast, but they acknowledged 
     yesterday were is little likelihood that he will veto the 
     highway measure. As a result, the groups are trying to stir 
     up their members enough to lobby Congress and force major 
     changes through a ``technical corrections'' bill, which 
     normally is designed to make uncontroversial fixes in 
     legislation.
       A spokesman for the House Transportation and Infrastructure 
     Committee said Congress will consider the technical 
     corrections bill soon. But many members may be unhappy to 
     have to vote directly on the veterans issue.
       Besides denying compensation, the highway bill also may 
     have gone so far as to block the VA from taking care of 
     veterans who become ill on active duty with tobacco-related 
     illnesses, such as lung cancer and heart ailments, a VA 
     official suggested. The VA long has accepted those 
     individuals for care and benefits, but a spokesman said VA 
     lawyers are now debating whether the new law will allow their 
     continued care.
       Despite rulings by VA lawyers that say the department must 
     consider tobacco-related illnesses service-connected, the 
     department has rejected virtually all the claims it has 
     processed for compensation for smoking-related ailments.
       The VA has approved only 299 claims of the 8,391 claims it 
     has received, officials said. Thus far, 4,290 claims were 
     rejected, but a spokesman said many of those rejections were 
     considered ``temporary'' and likely to be reversed after the 
     veterans submit additional information.
       The VA is processing another 3,802 claims. But under the 
     highway legislation, the VA would be blocked from approving 
     any more claims.
       What the Congress has done is to ``retroactively redefine 
     conduct that was not only legal but was also encouraged by 
     the military,'' said Phil Budahn, a spokesman for the 
     American Legion, the nation's largest veterans organization. 
     He and other veterans noted that the military provided free 
     cigarettes to service personnel as recently as the Vietnam 
     War.
       In late 1992, a Bush administration appointee declared that 
     the VA should pay for veterans' smoking-related illnesses. 
     But the Clinton Administration has sought to distance itself 
     from that position, because of the expected cost of billions 
     of dollars. Instead, it called for legislation to overturn 
     that ruling by the VA's general counsel and a subsequent 
     ruling by its own appointees that made it easier for veterans 
     to file tobacco claims.
       Until the highway bill came along, Congress had avoided the 
     issue. Because denying the tobacco benefits would create a 
     budgetary savings of as much as $23.8 billion over five 
     years, promoters of the highway bill latched on to the idea 
     as a way to pay for increased highway spending.
       PVA's Fuller said Congress simply saw the VA as ``a cash 
     cow'' and used the veterans' money for bridges and highways.
       ``They saw the money and that's all they wanted to do,'' 
     said Dave Autry, associate national director of Disabled 
     American Veterans.
       Veterans groups, renowned for their Capitol Hill clout, 
     mounted a massive campaign to derail the legislation, urging 
     their members to write and call lawmakers to demand their 
     benefits. So far, the effort has been unsuccessful.
       In the recent past, such congressional actions would have 
     been unlikely. Some said the response from Capitol Hill may 
     reflect the smaller number of veterans in Congress and the 
     fact that the overall veterans population is declining. 
     Lawmakers apparently don't fear their wrath as they once did.
       The veterans said House Speaker Newt Gingrich (R-GA.) did 
     convene a meeting of veterans groups last week in an effort 
     to end their opposition by promising to increase payments for 
     education under the Montgomery G.I. Bill.
       ``The answer was `no.' We would not cut benefits for one 
     veteran to provide benefits for another,'' said Fuller. The 
     bill contained the education increases, nonetheless.
       VA officials said the administration's proposed legislation 
     on the veterans tobacco issue would not have classified 
     smoking as ``willful misconduct'' and would have allowed the 
     VA to continue processing and paying any pending claims for 
     tobacco-related illnesses. It would, however, block the 
     filing of new claims as soon as the law was enacted.
       In letters of Gingrich, VA Secretary Togo D. West Jr. said 
     the administration believed that use of tobacco ``like the 
     consumption of alcohol . . . is not a requirement of military 
     service'' and that any veterans who becomes sick as a result 
     of smoking should not be given government compensation.
       Sen. John D. ``Jay'' Rockefeller IV (D-W.VA.), ranking 
     Democrat on the Senate Veterans Affairs Committee, said 
     yesterday he will offer an amendment to the tobacco 
     settlement legislation to earmark $2.7 billion over five 
     years for improved VA health care. That would be a small 
     step, he said, toward compensating the VA for the cost of 
     caring for smoking-related illnesses.

  Mr. McCAIN. Mr. President, shortly I intend to ask unanimous consent 
to have the pending amendment set aside in order to propose an 
amendment.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. AKAKA. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, shortly, after some consultation, we would 
like to propose an amendment concerning veterans and tobacco. I expect 
to have that agreement shortly.
  While we are waiting, I want to quote from some letters that we have 
received from some of the veterans organizations in America.

[[Page S5543]]

  This one is from the Disabled American Veterans:
       Dear Senator McCain: On behalf of the more than one million 
     members of the Disabled American Veterans (DAV), I write to 
     express our extreme disappointment that Congress chose to 
     raid veterans' disability compensation to pay for an already 
     bloated transportation bill. This action was particularly 
     egregious because it also came on the eve of Memorial Day, a 
     day set aside by a grateful Nation to pay tribute and honor 
     to those men and women of our Armed Forces who made the 
     ultimate sacrifice so that all Americans, and many others 
     around the world, could savor the freedoms we so richly 
     enjoy.
       What I find so amazing is the willingness of the leadership 
     and many others in Congress to debase the legislative process 
     to ensure an offset for huge spending increases for 
     transportation. Congress pulled out all the stops to 
     guarantee that the end justified the means. Clearly, the 
     American public, and particularly veterans, were the losers 
     in this battle.
       To reach the unjustified end--robbing veterans' disability 
     compensation to pay for transportation programs--this 
     Congress took the unprecedented action of usurping the 
     authorizing committee's jurisdiction. As the authorizing 
     committee was considering the merits of the issue of paying 
     disability compensation for tobacco-related illnesses, the 
     Congressional leadership laid claim to all of the so-called 
     ``savings'' from veterans' disability compensation, $10.5 
     billion, for transportation programs during the Senate Budget 
     Committee deliberations. Further, the Senate's vote to take 
     away this benefit was based on gross inaccuracies and 
     misrepresentations contained in the Republican Policy 
     Committee's talking points.
       The Congressional Budget Office (CBO) estimated the 
     ``savings'' from veterans' disability compensation at $10.5 
     billion. Although that figure was used by the Senate Budget 
     Committee and passed by the full Senate by a margin of 6 
     votes, the transportation conference report on H.R. 2400 used 
     the Administration's higher figure of $15.5 billion. This was 
     done behind closed doors and without the knowledge of many of 
     the transportation bill conferees. It was also accomplished 
     with total disregard for the sense of the Congress, passed by 
     an overwhelming majority in the House, and the motion to 
     instruct the conferees not to use veterans' disability 
     compensation to fund transportation.
       It was appalling to watch how quickly the Administration 
     lent its support to this misguided effort to plunder 
     veterans' programs when the Congressional leadership chose to 
     use the Administration's higher cost-savings estimate, 
     thereby guaranteeing fewer cuts in the Administration's 
     favorite programs.
       Even worse was how quickly the leadership moved the 
     transportation bill conference report to a vote to ensure 
     that members would not defect after going home and meeting 
     with their constituents on Memorial Day.
       The vote is now a part of history, as is what Congress has 
     done to veterans. However, as Congress focuses on the 
     appropriation process in the upcoming weeks, I call upon you 
     to make your voice heard to ensure that veterans' programs 
     receive adequate funding.
       While Congress can never make up for the injustice it 
     recently perpetrated against veterans, it can ensure that the 
     Department of Veterans Affairs (VA) health care system 
     receives at least $1.1 billion in appropriations above the 
     Administration's proposed budget to allow VA to provide 
     necessary medical care to our Nation's sick and disabled 
     veterans. Congress must also provide sufficient funding for 
     VA to increase its employment levels in Compensation and 
     Pension above the 7 new employees provided in the 
     Administration's proposed budget. Too many veterans die 
     before their claims can be properly adjudicated and too many 
     dependents and survivors are forced to accept a small 
     fraction of what the veteran would have been entitled to had 
     he or she survived the enormous delays encountered in an 
     understaffed adjudication division.
       Instead of the patriotic speeches that veterans hear twice 
     a year, on Memorial Day and Veterans' Day, and during tough 
     debates on the floors of Congress, I call upon you to get 
     involved, in a meaningful way, and make your voice heard to 
     ensure that VA receives adequate funding. Please do not sit 
     back and wait for others to do what is right. Let your 
     colleagues know that you support adequate funding levels for 
     VA.
       Thank you for your support of our efforts to obtain 
     adequate resources to substantially improve the quality and 
     timeliness of the VA benefits delivery and health care 
     systems.
  Mr. President, I ask unanimous consent that this letter and letters 
from the Paralyzed Veterans of America, the Veterans of Foreign Wars of 
America and the Vietnam Veterans of America be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                          Veterans of Foreign Wars


                                         of the United States,

                                    Washington, DC, April 9, 1998.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: On behalf of the 2.1 million members 
     of the Veterans of Foreign Wars and all of America's 27 
     million veterans, I am writing to express our dismay 
     regarding your recent support of the Craig/Domenici amendment 
     to the Budget Resolution to deny VA compensation for smoking 
     related disabilities to pay for excessive spending in the 
     Transportation Bill. This amendment represented a raid on 
     veteran's entitlements.
       The VFW views this proposal as being an egregious affront 
     to this nation's veterans. It is a matter of fact and record 
     that the government bears significant culpability for the 
     tobacco-related health conditions of many veterans. In the 
     midst of Congress's vigorous effort to hold the tobacco 
     industry accountable for the cost and disabilities brought 
     about by smoking, we would ask you why the Government is to 
     be held to a lesser standard? Prohibiting VA compensation for 
     smoking related disabilities effectively grants an 
     unwarranted pardon at the expense of ill veterans.
       Another point, the Craig/Domenci amendment assumes such a 
     prohibition will, in fact, be enacted into law to cover the 
     cost of $10.5 billion for highway and transportation projects 
     in violation of the Budget Agreement. If this does not come 
     about, VA may be forced to make drastic cuts in the area of 
     veterans health care (funded with discretionary dollars) in 
     order to meet this obligation. This would be an absolutely 
     unconscionable assault on veterans in need.
       We urge you to consider your position on this matter. The 
     upcoming House/Senate Conference on the budget presents a 
     clear opportunity to correct this injustice. The VFW strongly 
     believes that sick and disabled veterans should be top 
     priority and should not take a back seat to road paving.
           Sincerely,
                                                     John E. Moon,
     Commander-in-Chief.
                                  ____



                                Paralyzed Veterans of America,

                                Washington, DC, February 25, 1998.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: On behalf of the members of Paralyzed 
     Veterans of America (PVA), I must express our outrage at the 
     egregious proposal to restrict the payment of certain 
     benefits for service-connected disabilities in the name of 
     fiscal responsibility and at the same time to using the 
     accrued ``savings'' for other programs. The Administration 
     has proposed legislation that would deny benefits to veterans 
     for disabilities relating to tobacco use in the military. The 
     rationale for slashing these benefits is that to live up to 
     its commitments will be too expensive for the federal 
     government. This alone is cause for outrage in light of the 
     years of government promoted and fostered tobacco use by 
     military personnel.
       Compounding this travesty is the fact that we now hear of 
     members of Congress proposing to use these monies, saved in 
     the name of fiscal responsibility, to fund other programs and 
     projects including highway construction. For too long 
     veterans' benefits and programs have been cash cows for other 
     federal programs. Veterans have contributed billions of 
     dollars for deficit reduction through reduced or eliminated 
     benefits, and every year veterans are asked to do more. 
     Veterans' health care is in crisis with appropriations being 
     frozen over the five-year term of the Balanced Budget Act, 
     and in fact the requested appropriation for FY 1999 is a cut 
     even below the freeze level. It is intolerable to propose 
     cutting benefits for service-connected disabled veterans and 
     using this money for non-veteran, pork barrel, programs.
       We strongly oppose the Administration's proposal and find 
     any attempts to use this money for programs that do not 
     benefit veterans to be duplicitous at best.
           Sincerely,
                                                 Kenneth C. Huber,
     National President.
                                  ____



                                   Disabled American Veterans,

                                     Washington, DC, May 29, 1998.
     Hon. John McCain,
     U.S. Senate, Russell Office Building, Washington, DC.
       Dear Senator McCain: On behalf of the more than one million 
     members of the Disabled American Veterans (DAV), I write to 
     express our extreme disappointment that Congress chose to 
     raid veterans' disability compensation to pay for an already 
     bloated transportation bill. This action was particularly 
     egregious because it also came on the eve of Memorial Day, a 
     day set aside by a grateful Nation to pay tribute and honor 
     to those men and women of our Armed Forces who made the 
     ultimate sacrifice so that all Americans, and many others 
     around the world, could savor the freedoms we so richly 
     enjoy.
       What I find so amazing is the willingness of the leadership 
     and many others in Congress to debase the legislative process 
     to ensure an offset for huge spending increases for 
     transportation. Congress pulled out all the stops to 
     guarantee that the end justified the means. Clearly, the 
     American public, and particularly veterans, were the losers 
     in this battle.
       To reach the unjustified end--robbing veterans' disability 
     compensation to pay for transportation programs--this 
     Congress took the unprecedented action of usurping the 
     authorizing committee's jurisdiction. As the authorizing 
     committee was considering the merits of the issue of paying 
     disability compensation for tobacco-related illnesses, the 
     Congressional leadership laid claim to all of

[[Page S5544]]

     the so-called ``savings'' from veterans' disability 
     compensation, $10.5 billion, for transportation programs 
     during the Senate Budget Committee deliberations. Further, 
     the Senate's vote to take away this benefit was based on 
     gross inaccuracies and misrepresentations contained in the 
     Republican Policy Committee's talking points.
       The Congressional Budget Office (CBO) estimated the 
     ``savings'' from veterans' disability compensation at $10.5 
     billion. Although that figure was used by the Senate Budget 
     Committee and passed by the full Senate by a margin of 6 
     votes, the transportation conference report on H.R. 2400 used 
     the Administration's higher figure of $15.5 billion. This was 
     done behind closed doors and without the knowledge of many of 
     the transportation bill conferees. It was also accomplished 
     with total disregard for the sense of the Congress, passed by 
     an overwhelming majority in the House, and the motion to 
     instruct the conferees not to use veterans' disability 
     compensation to fund transportation.
       It was appalling to watch how quickly the Administration 
     lent its support to this misguided effort to plunder 
     veterans' programs when the Congressional leadership chose to 
     use the Administration's higher cost-savings estimate, 
     thereby guaranteeing fewer cuts in the Administration's 
     favorite programs.
       Even worse was how quickly the leadership moved the 
     transportation bill conference report to a vote to ensure 
     that members would not defect after going home and meeting 
     with their constituents on Memorial Day.
       The vote is now a part of history, as is what Congress has 
     done to veterans. However, as Congress focuses on the 
     appropriation process in the upcoming weeks, I call upon you 
     to make your voice heard to ensure that veterans' programs 
     receive adequate funding.
       While Congress can never make up for the injustice it 
     recently perpetrated against veterans, it can ensure that the 
     Department of Veterans Affairs (VA) health care system 
     receives at least $1.1 billion in appropriations above the 
     Administration's proposed budget to allow VA to provide 
     necessary medical care to our Nation's sick and disabled 
     veterans. Congress must also provide sufficient funding for 
     VA to increase its employment levels in Compensation and 
     Pension above the 7 new employees provided in the 
     Administration's proposed budget. Too many veterans die 
     before their claims can be properly adjudicated and too many 
     dependents and survivors are forced to accept a small 
     fraction of what the veteran would have been entitled to had 
     he or she survived the enormous delays encountered in an 
     understaffed adjudication division.
       Instead of the patriotic speeches that veterans hear twice 
     a year, on Memorial Day and Veterans' Day, and during tough 
     debates on the floors of Congress, I call upon you to get 
     involved, in a meaningful way, and make your voice heard to 
     ensure that VA receives adequate funding. Please do not sit 
     back and wait for others to do what is right. Let your 
     colleagues know that you support adequate funding levels for 
     VA.
       Thank you for your support of our efforts to obtain 
     adequate resources to substantially improve the quality and 
     timeliness of the VA benefits delivery and health care 
     systems.
           Sincerely,
                                           Harry R. McDonald, Jr.,
                                               National Commander.

  Mr. McCAIN. Mr. President, before I yield the floor, I thank Senator 
Bond and Senator Specter, as well as Senator Rockefeller and Senator 
Campbell, for their advocacy on this issue. I believe the amendment 
that we are proposing, which will provide $3 billion--$600 million a 
year--taken out of all four of the funds that are funded by this bill 
is appropriate. I don't believe it is enough, given the number of 
veterans who are afflicted by tobacco-related illnesses, but I think it 
is a step in the right direction. I hope it will provide some solace 
and comfort to the obviously outraged and injured veterans community in 
America.
  I understand that everybody has their priorities around here. 
Highways are important. Bridges and subways are important. I was up in 
Massachusetts recently, I say to the Senator from Massachusetts, and 
the ``Big Dig'' in Boston Harbor, which may never be completed--it may 
be one of the ongoing projects in history--is important. But I have to 
ask a question that I think deserves an answer: Are our priorities such 
that the men and women who served in the military, who we encouraged to 
smoke up to and including the Vietnam conflict, are to have a lower 
priority than a highway or a bridge?
  I am puzzled and obviously somewhat angered that the procedure 
happened as it did where a veteran who incurs a tobacco-related illness 
is now labeled ``malicious conduct.'' That is just something I do not 
understand nor, frankly, do most of my colleagues. I hope it can be 
fixed. I understand there may be a technical corrections bill to the 
highway bill, and I hope it can be fixed. But at the same time, I feel 
in the strongest terms that we ought to address this issue of tobacco-
related illness as it applies to veterans.


                      Unanimous Consent Agreement

  Mr. McCAIN. Mr. President, I ask unanimous consent that the pending 
amendments and motion be laid aside to consider the McCain-Kerry-
Rockefeller-Bond-Campbell-Specter amendment relative to veterans and 
that no further amendments or motions be in order prior to the vote. I 
further ask unanimous consent that the vote occur on, or in relation 
to, the amendment on Thursday morning, notwithstanding rule XXII.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.


        Amendment No. 2446 to the Modified Committee Substitute

 (Purpose: To ensure funding for Veterans' Administration treatment of 
           tobacco-related illnesses, and for other purposes)

  Mr. McCAIN. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain], for himself, Mr. 
     Kerry, Mr. Bond, Mr. Campbell, Mr. Rockefeller and Mr. 
     Specter, proposes an amendment numbered 2446 to the modified 
     committee substitute.

  Mr. McCAIN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 403, beginning with line 3, strike through line 19 
     on page 407, and insert the following:

     SEC. 1301. VETERANS' ADMINISTRATION TOBACCO-RELATED 
                   HEALTHCARE AND COMPENSATION PROGRAMS.

       (a) In General.--The Secretary of the Veterans' 
     Administration shall use amounts under subsection (b) to 
     carry out tobacco-related healthcare activities under chapter 
     17 of title 38, United States Code, and to provide other 
     appropriate assistance for tobacco-related veterans' health 
     care illnesses and disability under such title.
       (b) Funding.--From amounts in the trust fund established 
     under section 400, not less than $600,000,000 per year are to 
     be used to carry out Veterans' Administration tobacco-related 
     healthcare activities under subsection (a) to the extent and 
     only in the amounts provided in advance in appropriations 
     Acts, to remain available until expended.
       (c) Public Health Service Act Amendments.--Section 1981C of 
     the Public Health Service Act (as added by section 261 of 
     this Act) is amended--
       (1) by inserting ``veterans,'' after ``uninsured 
     individuals,'' in subsection (a)(1)(D); and
       (2) by inserting ``veterans,'' in subsection (b)(1)(H) 
     after ``low-income,''.

  Mr. McCAIN. Mr. President, before I yield the floor, I want to say a 
word about Senator Bond especially who has done hard work on this 
issue.
  He defended the issue in the Veterans' Affairs Committee, along with 
Senator Specter, Senator Rockefeller, and Senator Campbell. I am very 
grateful for his efforts. And I know the veterans of Missouri as well 
as this Nation are deeply appreciative of his efforts. I also know that 
the Senator from Missouri, and perhaps the Senator from Pennsylvania, 
and the Senator from West Virginia, Senator Rockefeller, may have 
additional requirements in order to address this issue. And as he and I 
know, this is just a beginning to try to address this problem.
  Mr. President, I yield the floor.
  Mr. KERRY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, I thank my colleague from Arizona. I am 
delighted to join with him, with Senator Rockefeller, and with others, 
in proposing this fix, which in our judgment is compelling beyond 
description. I think the reactions that we received from members of the 
veterans community were to be expected and, frankly, were really an 
unfortunate consequence of some of the things that happen around here.
  I think the veterans community had every right in the world to 
question whether people here had lost all sense of priority and all 
sense of connection to the kinds of commitments that we make along the 
way and certainly the good faith relationship between those who have 
served their country and had a certain set of promises made to them--I 
might add, not things that they requested originally, not things that 
were the conditions automatically

[[Page S5545]]

of their service, but were, in a sense, the rewards to that service 
given at a time later on. And all of a sudden to find that, in the 
hurly-burly of the moment, people are so little connected to the 
meaning of that service, that there is sort of a grab that takes place 
for money for bridges and roads in the transit bill, to the exclusion 
of legitimately rightfully earned benefits that come as a consequence 
of serving the country, is really quite extraordinary. I think their 
anger was well placed and understandable.
  I am pleased that this afternoon we are going to take sort of the 
largest step we can take, in the context at least of this bill, but 
which will have a significant impact in redressing that by providing 
about $600 million available each year over a 5-year basis to the 
Veterans' Administration for the use for smoking-related disease, 
compensation and health care. I think that that is most appropriate.
  I am delighted that the Senator from Arizona and I were able to get 
sort of a consensus to be able to immediately move to send a very clear 
message to the veterans community that the Senate recognizes what 
occurred and does not concur with that particular action and is moving 
now to try to address it.
  As we do that, Mr. President, I also--and I know my colleague from 
Missouri wants to speak, so I will not take a long time here--but I do 
want to also highlight that the entire purpose of this legislation is 
geared towards children and towards reducing the level of smoking in 
our society. I will have more to say about that in the course of the 
afternoon.
  But I think it is critical that we remain focused on the smoking-
related aspects of this legislation rather than some of the other 
attempts to sort of grab some of the revenue and use it for worthy but 
nevertheless nonrelated causes. And I think it is critical that we try 
to maintain the fundamental purpose of the legislation.

  This morning, out on the swamp, we met with a young group of kids who 
were part of Smoke-Free Efforts in America. Some 18 kids joined with a 
bipartisan group of Senators--Senator DeWine, Senator Chafee, Senator 
McCain, Senator Kennedy, Senator Conrad, and other Democrats--and, 
together with these kids, the point that was trying to be made was that 
there is only one reason that the U.S. Senate has come to the point of 
considering this tobacco legislation. That single point is to try to do 
the best job we can to reduce the level of teenage smoking and 
ultimately reducing the number of children who, when they become 
adults, will die early as a consequence of learning how and becoming 
addicted to smoking as teenagers, realizing that, of the 45 million 
Americans who smoke and are fundamentally addicted to smoking, 86 
percent of them started as teenagers.
  That is the purpose that brings us to the floor. And for those who 
have been concerned about costs, we will reiterate again and again and 
again, the true tax on America is not the voluntary tax paid by 
somebody who picks up a pack of cigarettes, it is the involuntary tax 
paid by millions of Americans to pay for the $80 billion a year of 
medical costs for those who are smoking, and to pay for the 420,000 
people a year who die as a consequence of smoking-related diseases, and 
the $25 billion of health care, under Medicaid and Medicare, that is 
picked up by everybody in the United States involuntarily in order to 
pay for the results of a narcotic, killing substance that we allow to 
be sold across the counter.
  While we are not, obviously, prepared to stop that altogether, we 
know enough about the addiction and enough about the downside of the 
disease that we are prepared to have the FDA finally regulate it and we 
are prepared to try to minimize the exposure of our children to this 
killer substance.
  That is what this debate is about. It is not about some concoction on 
the Senate floor to try to find additional revenue. Dr. Koop, Dr. 
Kessler, the American Cancer Society, the American Lung Association, 
the Treasury Department, a host of entities, have all agreed, the 
single best way to reduce the level of teenage smoking is to raise the 
price. And, most importantly, the tobacco companies themselves have 
made that statement clear in their own memoranda, in their own 
documents.
  So that is what we are here for. That is what I hope the U.S. Senate 
will accomplish.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I rise in support of the amendment by 
Senator McCain and my colleague from Massachusetts, Senator Kerry.
  I ask unanimous consent that Senator Coverdell be added as a 
cosponsor of this amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. He sent a message in asking to be listed as a cosponsor.
  I want to follow up on the comments of my distinguished friend from 
Massachusetts, a distinguished veteran himself. He talks about the 
purpose of this bill being to deter teenage smoking. And I believe that 
we must keep our focus on that as the principal goal.
  Personally, I believe that raising the price of cigarettes alone is 
not going to be enough. I think we have to have advertising 
restrictions and a counteradvertising campaign. But we also must have 
sanctions on teenagers. If it is illegal, and if they purchase--
knowingly purchase--cigarettes in violation of the law, there ought to 
be sanctions; there ought to be graduated sanctions. There ought to be 
sanctions that apply to their parents as well, because just raising the 
price and putting burdens only on the sellers may make this a thrill-
seeking opportunity for some teenagers. I believe that among the 
amendments, we need to adopt that there be tougher sanctions on 
teenagers.

  Let me address this amendment that Senator McCain and others have 
presented. I was one who strongly objected to the use of the particular 
offset from the veterans smoking program for the highway measure. I was 
joined in that by my colleague, Senator Specter, the chairman of the 
Veterans' Affairs Committee. And as I think all our colleagues know, 
Senator Specter has been temporarily sidetracked with an operation. Our 
thoughts and prayers are with him and his family. We expect him to be 
back very shortly.
  Before he left, he and I discussed the need to offer an amendment on 
this measure to provide adequately for veterans health care issues. And 
this is a very good start. I will want to confer with Senator Specter's 
staff and others to find out what else we can do to make sure that the 
veterans of this country are adequately cared for in terms of their 
health care.
  Let me go back and tell people where this came from, because a lot of 
people were surprised when this became the offset. Well, this was the 
offset because it was insisted upon by the administration in its 
negotiations with the Congress. The smoking program for veterans came 
about as a result of an official in the Veterans' Administration, and 
yet the OMB and the White House said, ``We're not going to pursue this 
program.''
  I have the pleasure and the responsibility of appropriating money for 
the Veterans' Administration. And over the last several years, I have 
routinely put more money in, with the support of my ranking member, 
Senator Mikulski. The committee, and the full committee, put in more 
money than has been recommended for veterans health care by the 
administration to make sure we keep our word to the veterans to take 
care of their health care needs. And in this instance, the White House 
has told the Veterans' Administration not to proceed with the program. 
When the VA officials came before our committee, I asked them if they 
were prepared to implement the program. They said they were not.
  I asked what they needed. They suggested hundreds of millions of 
dollars in administrative costs to handle the claims. They said they 
were not planning on administering the program.
  So they started the program through the action of an official in the 
Veterans' Administration, and then the higher political authority said 
it was time to cut it off. In negotiations with the relevant committees 
in the House and the Senate, they said this must be the offset for the 
highway bill. The highway bill was passed by both Houses and it was 
time that we spent highway money on highways and transportation needs.
  I do oppose the use of spending offsets from the veterans health care 
to pay for it under the budget rules, but

[[Page S5546]]

in this amendment, and perhaps in additional amendments, we will have 
an opportunity to restore from the proceeds of the tobacco taxes money 
badly needed for veterans health care programs. We have met with the 
veterans budget group, the representatives of veterans who have 
suggested about a billion a year in addition is needed for veterans 
health care programs. That is the target that Senator Specter and I 
have. We will work to see if we can, through this piece of legislation, 
restore funding for veterans health care to make sure that we do care 
for our veterans.
  Our veterans are going through a time of change. The veterans' needs 
are different. There is more need for outpatient facilities, more need 
for veterans homes, more need for long-term care rather than acute 
care. I commend Dr. Kizer, the head of the veterans health side, for 
his extraordinarily strong efforts in spite of the difficulties posed 
in reforming the Veterans' Administration health care to make sure that 
the health care being provided to the veterans is what they need.
  There have been some tough measures taken. In my State, they cut off 
the surgery center in one community on our southern border because they 
said they weren't doing enough surgeries to maintain proficiency. 
Frankly, this was not popular when you looked at it from the community 
as a whole. But I can tell you, the veterans who were to receive 
surgery, and their families, are certainly better served if those 
veterans can be given that service in an area where they perform 
frequent operations and maintain their proficiency. We have opened, 
instead, veterans primary health care facilities around the State so 
veterans don't have to travel 100 or 150 miles one way to get primary 
health care.
  I commend the Veterans' Administration for moving in the right 
direction to make health care readily accessible to those veterans who 
are entitled to health care programs. We need to continue on that path. 
We need to continue to see that we are providing the kind of health 
care services in the location and in the format where they are most 
needed. This amendment by Senator McCain is an excellent step in the 
right direction.
  I will go back to work in an hour with the Environment and Public 
Works Committee, which is having a meeting on the technical 
corrections, because I agree with the comments of Senator McCain that 
putting phraseology about willful misconduct as it relates to cigarette 
smoking is totally uncalled for. At this point, no one seems to be able 
to pinpoint the draftsmanship of it. But wherever it came from, it was 
wrong. I think it was wrong to take the money as an offset in the first 
place. But it is certainly unacceptable for us to have a policy 
statement saying that veterans who smoked the cigarettes that were 
given to them by the military--at smoking times designated by the 
military when they turned the smoking light on, when they provided 
cigarettes, the C rations, when they provided cigarettes in smoking 
areas--to say they were doing something wrong when they took advantage 
of the cigarettes and smoked is not only nonsensical, it is outrageous. 
We apologize to the veterans of America. We need to change that. That 
is totally unacceptable.

  We hope by passing this amendment that we will begin to get the 
resources that are needed to the Veterans' Administration to provide 
for the health care needs of our veteran population. The Veterans' 
Administration is doing some wonderful things. They have made great 
advances, treating injuries that came out of wartime. They are now 
becoming more and more experienced and more skillful in dealing with 
problems that aging veterans have. We do have a significant aging 
veterans population. That makes the localized, primary care facilities, 
privately contracted health care clinics for veterans much more 
accessible and therefore convenient to veterans. We need to have these 
additional resources available to the Veterans' Administration so we 
can meet our commitment to the veterans and make sure that they receive 
the kind of health care they have a right to expect and which we think 
they have earned.
  I appreciate very much the leadership that Senator McCain has 
provided on this. With all of the other cosponsors, I am confident we 
will have an opportunity to get a good, strong vote on behalf of this 
measure. I urge my colleagues to support the amendment when it comes 
before the Senate on Thursday. As I indicated, we will be conferring 
with Senator Specter as he recuperates. I know he has strongly 
supported veterans and wanted to be here for this amendment. We are 
doing this in his behalf and will continue to work with him to provide 
additional resources for veterans as and where we can find them and 
they are necessary.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KERRY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kempthorne). Without objection, it is so 
ordered.
  Mr. KERRY. Mr. President, I know the Senator from North Dakota, 
Senator Conrad, is coming to the floor to take a few minutes to share 
some thoughts with colleagues. But before he arrives, I just wanted to 
take a minute to refocus some of the discussion that we had earlier 
this morning, and perhaps in the waning hours of a week ago, and that 
is to address this question that has been raised by a number of 
opponents to the bill.
  The tobacco industry is now spending multimillions of dollars across 
the country. A number of colleagues heard in their home States their 
names being mentioned in radio ads as opponents are being ginned up to 
try to stop this bill. Americans should understand as they listen to 
these advertisements.
  I heard one of the advertisements that Dr. Koop is doing. Dr. Koop 
wisely asks every American to stop and consider the source of the 
advertising against the bill. When you hear people talk about big tax 
or big Government, or to stop the big hand of Washington from reaching 
in, all of these things try to elicit a kind of primal response that 
most of us have in America about politics and Washington and being told 
what to do, and so forth. It is all a very legitimate feeling, but the 
tobacco companies are trying to once again fake it with Americans. They 
are trying to once again cloak the reality of what is happening here. 
They are, ironically, doing so even as they settle lawsuits in certain 
parts of the country that have them doing the very things that they are 
fighting us doing on a national basis.
  Let me be more specific. In Minnesota, they have just come to a 
settlement for literally billions of dollars over a number of years. 
They have agreed to most of the terms that the attorney general was 
fighting for. They are going to engage in many of the programs that we 
are hearing colleagues come to the floor saying, no, no, no, don't do 
that. But the tobacco companies are actually entering into agreements 
with the attorneys general to do these very things. If you take the 
amount of money that the tobacco companies have agreed to in these 
States individually and you extrapolate that and apply it to the 
concept of a national settlement, you in fact wind up with more money 
being raised and dispensed than we are trying to do in this 
legislation.
  So there is an enormous amount of duplicity--both duplicity, I 
suppose, and hypocrisy in what the big tobacco companies are trying to 
do. Dr. Koop says, ``Be wary of who is sponsoring these ads.'' When you 
hear the list of sponsors, you know that the very same people who told 
America that they weren't selling an addictive substance, the very same 
people who said to America, ``Oh no, no, no, we are not targeting young 
people,'' are back again with a series of advertisements to try to 
distort the debate.
  The fact is that we have also heard a lot of focus about the cost of 
raising the tax on a pack of cigarettes, raising the fee on cigarettes, 
a tax, or whatever you want to call it. The price of cigarettes go up; 
that is the bottom line. The bottom line is that the cigarette 
companies themselves signed onto an agreement earlier in the summer, 
last year, that would have wound up doing exactly that. They agreed to 
raise the price. And the reason they agreed to raise the price was 
because

[[Page S5547]]

everybody agreed that by raising the price, we would reduce the numbers 
of young people who would access cigarettes. We also know, according to 
every analysis, that the more you raise the price--every 10 cents that 
you raise the price, there is a 5 to 7-percent reduction in the numbers 
of kids who are smoking. So these are not pennies of taxes, these are 
lives of children that you are saving because we know that every 3,000 
kids who get hooked on smoking every day, 1,000 of them are going to 
die early.

  We know that from the statistics. We know that 420,000 people die 
every year of tobacco-related diseases. It is a phenomenal, staggering 
number of people. It is phenomenal enough that we lose something like 
58,000, I think it is, in traffic accidents, or due to driving under 
the influence, and so forth, over a year in America. We are talking 
about, five, six times that now that we lose, as a consequence, or six 
or seven times that that we lose as a consequence of smoking--every 
year. And every one of those people don't just suddenly die without any 
cost, except in the case, I suppose, of those who have heart disease 
related to smoking and suffer a massive coronary. But for those 
suffering from cancer of the larynx, or cancer of the throat, or cancer 
of the pancreas, or any of the forms of cancer, or kidney disease, 
which come from smoking, those are prolonged and very expensive 
diseases.
  We know to a certainty that people with those diseases are paying 
many tens of thousands of dollars more than people who aren't suffering 
from those smoking-related diseases. The truth is also that many of 
those people don't have health insurance, or many exhaust their health 
insurance. Then what happens? Mr. President, then every single American 
is taxed. It is the tobacco tax; it is the unwanted, unasked-for 
tobacco tax in America that every single one of our citizens pays to 
cover the cost of the deaths, the cost in the loss of productivity, the 
cost of the health care--$80 billion a year--and the Medicare costs of 
tobacco-related disease alone, which is $24 billion; $24 billion is 
parceled out by Americans, right out of their pockets, to cover the 
costs of other Americans smoking.
  So we need to stay focused and understand that all of the 98.5 
million American households are each paying the unwanted tobacco tax of 
$1,370 a year for smoking. That is the cost of not passing a tobacco 
bill. That is the cost of leaving the situation the way it is today.
  America, if you want a tax cut, you want this bill passed because 
this bill offers tax relief by reducing the numbers of young people who 
will become smokers and, ultimately, the amount of our hospital and 
health care costs in this country. This is a tax cut bill. The only 
people who pay an additional tax are voluntary. If you go and buy a 
pack of cigarettes, which nobody is forcing you to do, you pay an 
additional amount for that pack of cigarettes.
  Now, they pay that amount in Canada. They pay that amount in Europe. 
When we finish raising the price of a pack of cigarettes in the United 
States by the $1.10 that is in this bill, we will still be lower in the 
cost of a pack of cigarettes than some European countries. We will be 
at the mean, at the average of most European countries. That will 
reduce smuggling between the United States and Europe. It will equalize 
our payments, and it will allow us to do the other things that the 
Senator from Missouri, Mr. Bond, just said we need to do--the outreach 
programs, the cessation programs, the counteradvertising programs, all 
of the things that buttress the raising of the price and help us create 
a compliance rate in this country that is significant.
  I must say also it is a known fact that cigarettes are a gateway 
drug, and they are a gateway to marijuana or to other drugs. It is a 
known fact, just as marijuana is a gateway drug to other drugs. So if 
you want to deal with the drug problem that we have heard a number of 
colleagues come to the floor and talk about, if you want to reduce the 
dramatic increase in the number of our young people smoking marijuana, 
then this is a way to also begin. This is not just an anticigarette 
program. This is an antinarcotic substance program. It is an antidrug 
program. And the way you provide a comprehensive drug program--just ask 
Gen. Barry McCafrey--is by having a comprehensive program on the demand 
side.
  I saw today that Admiral Kramek, Commandant of the Coast Guard, just 
retired, and I have dealt with Admiral Kramek over the last years 
through the Commerce Committee on the Oceans Subcommittee. Year after 
year, he would come before our committee as the Coast Guard has been 
charged more and more with the responsibilities for dealing with drugs 
but less and less money has been going to them, less and less capacity 
to do the greater amount of work on the demand side and interdiction 
side.
  So here is an opportunity for us to do something further with respect 
to the overall drug policy of this country. If our young people can be 
the beneficiaries of the kind of cessation and self-esteem programs 
that are part of this effort and part of our States' efforts now, we 
have a much greater hope of having young people who will be able to say 
no--not just say no to this narcotic, smoke that goes into their lungs, 
but say no to the other narcotic smoke that goes into their lungs.
  So this is a program that in our best estimate is a very significant 
tax reduction, long-term investment in the young people of our country. 
It is a way to reduce the overall costs of smoking to our Nation. It is 
time for the Senate to take that action which hopefully can resolve 
some of the remaining issues that we have on this legislation.
  I am very hopeful that we can work out an approach in a number of 
those difficult areas that still remain so that we could rapidly move 
forward. I think there is a capacity to do that if Senators are 
determined to try to act in good faith, and that will obviously be the 
test of the next days.
  I see the Senator from North Dakota is now here, and I yield the 
floor.
  Mr. CONRAD. Mr. President, I thank the Senator from Massachusetts for 
the extraordinary leadership he has brought to this issue. The Commerce 
Committee was given jurisdiction over this matter, and the Commerce 
Committee reported out a good beginning, a bill that provided a floor 
from which we could move in this Chamber to strengthen the provisions 
that were reported out of the Commerce Committee. Indeed, over a series 
of weeks, there was a negotiation between members of the Commerce 
Committee and representatives of the White House, and others, to 
improve what was reported out of the Commerce Committee, and, indeed, 
this bill was improved and improved dramatically, and in no small 
measure because of the leadership of the Senator from Massachusetts, 
Mr. Kerry. I want to recognize the tremendous contribution he has made 
to this legislation.
  Mr. President, sometimes I think we get lost around here as to what 
this bill is about. Some of our colleagues talk about this as a tax 
bill. They talk about it as every other kind of legislation other than 
what it really intends to do. This legislation is intended to protect 
the public health and to reduce youth smoking. That is the fundamental 
reason for this bill.
  I know it gets confusing because we have had some of our colleagues 
who really are the apologists for the tobacco industry who are out here 
trying to confuse the issue, and they are talking about every subject 
under the sun other than protecting the public health and reducing 
youth smoking. They are talking about all kinds of issues that are 
really sideshows, and they are doing it to try to distract attention 
from the fundamental question: are we going to protect the public 
health? Are we going to do something serious about reducing youth 
smoking? I think it is very simple. This debate is about kids, and it 
is about health. It is about stopping the tobacco industry's cynical 
attempt to hook our kids on a deadly and addictive product.
  At the end of the day, the hard reality is this is the only legal 
product sold in this country when used as intended by the manufacturer 
that addicts and kills its customers. That is harsh language, and I am 
not somebody who is given to harsh language. I am a Scandanavian. We 
Scandanavians typically do not talk in harsh terms. But after chairing 
the task force on tobacco on our side of the aisle for 6 months, I must 
say I have developed a very strong view about what this industry is 
doing to our country and

[[Page S5548]]

what it is doing to our kids. That impression was indelibly changed by 
the release of what had been secret documents, documents we had never 
seen before. Document after document after document, that were the 
industry's own documents, revealed what they have been up to--what they 
knew and what they told the American people. And the two are at very 
great variance.
  We all remember when the executives of the tobacco industry came 
before Congress and swore under oath that their products did not cause 
serious disease problems. They swore under oath that their products 
were not addictive. They swore under oath that they had not targeted 
our children. And they asserted that they had never manipulated 
nicotine levels to further addict our kids.
  Now, with the release of their documents, we now know that each and 
every one of those claims, each and every one of those statements, was 
false. I do not know how else to say it. It is just as clear as it can 
be. They did not tell the truth. The fact is they knew at the time they 
were here swearing under oath that their products caused serious health 
problems. They knew that they were targeting our kids. They knew that 
their products were addictive. In fact, in their internal memos they 
talked about how important that was to the effectiveness of their 
various campaigns to children. The fact that their products were 
addictive strengthened their position financially. And it is now 
absolutely clear from reading their documents that they knew they were 
manipulating nicotine levels to further hook kids.
  All these things are very clear. Let me just show you one chart. I 
developed, after the work on this task force, the ``Top Ten Tobacco 
Tall Tales,'' and the corresponding truths. No. 10, the tall tale told 
by the tobacco companies was they do not market to children. That is 
what they said. They came to my office and said, ``Oh, no, Senator, we 
don't market to children; it is illegal to sell to children. There is 
no way we would condone marketing to kids.''
  Well, the truth is from their own documents. This is from a Brown & 
Williamson document that was released in the court actions, and I 
quote:

       The studies reported on youngsters' motivation for 
     starting, their brand preferences, as well as the starting 
     behavior of children as young as 5 years old . . . the 
     studies examined . . . young smokers' attitudes towards 
     addiction, and contained multiple references to how very 
     young smokers at first believe they cannot become addicted, 
     only to later discover, to their regret, that they are.

  These are their documents. I could speak a whole afternoon just from 
their documents. They are the most damning things that could be 
presented in this debate, because one document after another indicts 
this industry. They have lied to the American people, and their own 
words reveal it.
  Why is it important to take on this battle and win it now? Let me 
just review a few of the facts on tobacco use and its cost to society. 
Despite decades of misinformation, there can be no question that 
tobacco imposes enormous costs on society. Some of our colleagues have 
said: Look, you are going to impose a regressive price increase on 
those who are the customers. Mr. President, this industry has been 
imposing costs on all of us, and they have been doing it for a long 
time. That is the hard reality.
  First, there are the human costs. Obviously, they are the most 
important. Tobacco is the No. 1 preventable cause of death in America 
today. Mr. President, 425,000 of our fellow citizens die every year 
from tobacco-related illness. That is a fact. That is one tobacco-
related death every 75 seconds. Every 75 seconds, somebody dies in this 
country because of tobacco-related illnesses. That is a fact. For each 
of those deaths, there are dozens of Americans who are struggling with 
terrifying illnesses and terrifying diagnoses from their habits and 
their lifetime of smoking addiction. There are dozens of friends and 
relatives and loved ones who must also pay the price and experience the 
pain caused by tobacco products.
  Second, there are future costs. Three thousand children start smoking 
every day in this country. One thousand of them will die prematurely 
from smoking-related illnesses. If we don't act to stop kids from 
starting to smoke, we condemn those children to a future painful death. 
They are not adults making a decision fully informed; they are subject 
to a massive advertising and marketing campaign by this industry, 
targeted directly to them.
  Make no mistake, that is precisely what this industry has done. 
Again, their documents reveal that they have targeted teenagers, and 
they have targeted them because they have understood they have to have 
replacement smokers for the 425,000 of their customers who die every 
year. They know it is best to get them when they are young. That is 
when kids are looking to rebel, looking to make a statement as to their 
maturity. What better way than to take up the habit of smoking? That 
has been the message of the tobacco industry, and they have done it 
knowingly. Make no mistake about it, they have done it absolutely 
knowing what they were doing, and the documents reveal it.
  Third, there are the financial costs. The Treasury Department reports 
that tobacco use costs American taxpayers $130 billion a year. We hear 
from our friends, some who are on the other side, who say: Wait a 
minute, if we increase the prices, it is going to impose a regressive 
tax on those who are the customers. How about all the folks in this 
country who are having costs imposed on them, $130 billion a year? They 
didn't choose to have these costs. They didn't choose to pick up the 
tab for somebody's lung cancer. They didn't choose to pick up the tab 
to cover the cost because of lost productivity in this society. Those 
costs are being imposed on them, and those are regressive, and they are 
far higher than the health fee that we would be imposing here to 
redress the imbalance of $130 billion a year. That is what this 
industry is costing America, and we are asking $18 billion or $20 
billion as a balancing mechanism, imposing a health fee to start to ask 
this industry to bear a fairer share of the costs they are imposing on 
all the rest of us. That is not unreasonable or unfair.

  Of the $130 billion a year of costs being imposed on American 
taxpayers by this industry, $60 billion is direct health care costs--
higher costs for Medicare, higher costs for Medicaid, and for private 
health insurance. When we hear them say: Gee, you are going to raise 
the prices, and that is going to be regressive and have an adverse 
effect on low-income people in this country--nothing could have a more 
regressive effect, nothing could have a more unfair result than 
sticking $130 billion in costs onto the American taxpayer, costs that 
are borne disproportionately by those with low incomes, because they 
are the ones who smoke the most. They are the ones who have most of the 
health-related disease. They are the ones who are disproportionately 
picking up the tab. These are costs that are borne by all taxpayers, 
and, as I say, it is time to redress the imbalance.
  As I headed this task force, we heard from the victims. We had 
hearings all across the country, and we listened to the victims. I can 
remember so well a young woman named Gina Seagraves, who testified in 
New Jersey about her mother dying at a young age, and what it did to 
their family, how devastating it was when her mother died, how it 
really disrupted their entire family.
  I remember very well a big, tough football coach who came and 
testified. When he testified, you could barely hear him. He spoke in a 
very raspy voice, and he spoke that way because, as he told the 
committee, he had developed cancer of the larynx, and when it was 
diagnosed the doctor said, ``We have one chance to save your life, and 
that's for you to undergo a laryngectomy and have your larynx taken 
out. And if we do not do it now, you are going to die.''
  This big, tough football coach told us of the terror he felt when the 
doctor looked across the examining table from him and told him, ``If we 
don't operate, and operate now, you are going to die.'' He told us 
about how he feels now when he goes back to the high school where he is 
also the assistant principal, and he sees kids lighting up. He thinks 
to himself how much he had hoped that his story could prevent some of 
them from taking up the habit, because he started when he was 14 or 15 
years old, was unable to quit, was addicted. He said: ``You know, if I 
could just convince a few of these young people that they are going to 
suffer the same fate

[[Page S5549]]

I did, maybe I could make a difference. Maybe I could prevent some of 
the suffering that I have experienced.''
  Those were not the only victims we heard from. We heard from a Mr. 
Harold Taylor, who testified that he began smoking when he was 15, 
eventually developed cancer of the throat. His larynx and his vocal 
cords were removed, much like Mr. Fravenheim. The operation left a hole 
in his neck, and he will have to live with that for the rest of his 
life. Because of that hole in his neck, he can never again breathe 
through his nose or mouth. He told what it is like to have this 
particular disability. He has lost his sense of smell. He can no longer 
enjoy the smells that we take for granted. He said he always loved to 
walk into his wife's kitchen and smell whatever was cooking there.
  He walks in now and doesn't smell a thing. He has also lost his sense 
of taste. He has told us he is unable to distinguish between a bowl of 
spaghetti and a bowl of beans.
  We also had the opportunity to hear from a Ms. Janet Sackman from 
Long Island, NY. Ms. Sackman had a successful modeling career. 
Ironically, she was a model for the tobacco industry. That success had 
a tremendous price. In 1983, she was diagnosed with cancer of the 
larynx and had her vocal cord and larynx removed. She completely lost 
her ability to talk. She was only able to testify because she learned 
esophagal speech, which is very, very difficult.
  She was encouraged by the company that hired her to take up smoking. 
In fact, it was in her contract. They required her to take up smoking 
in order to be paid to be a model for the tobacco company for which she 
worked.
  To listen to these victims is a powerful experience. This particular 
woman's suffering has continued. In 1990, after being diagnosed with 
lung cancer, she had one-third of her lung removed. Again, this was a 
woman who took up smoking not because she wanted to, but because she 
was a Lucky Strike model, and Lucky Strike in her contract required her 
to take up smoking. She did, became addicted, and now has suffered 
these incredible health threats.
  A third witness, Mr. Alan Landers, was a Winston man, Winston 
cigarettes. He was a representative of the company. He was told to 
portray smoking as stylish, pleasurable, and attractive. Indeed, he is 
a very handsome man, a very stylish man. He was required to smoke on 
the set to achieve the correct appearance.
  The tobacco industry did not tell Mr. Landers what they knew at the 
time, because as early as the 1950s, tobacco industry scientists had 
already established from their own research that smoking caused very 
serious health risks.
  In 1987, Mr. Landers learned the true danger of cigarette smoking 
when he was diagnosed with lung cancer. Although 95 percent of lung 
cancer victims do not survive, Mr. Landers has had large sections of 
both lungs removed and is suffering from emphysema, while he waits for 
his day in court. I can tell you, Mr. Landers knows that his chances of 
ever getting to court are limited because he is under a death sentence.
  I could go on and on talking about the victims from whom we heard. 
Everyplace we went, every community we visited, people came up to us 
and said, ``You know, my father died of a tobacco-related illness;'' 
``my mother,'' ``my aunt,'' ``my brother,'' ``my sister''--the 
emotional pain that is out there brought on by the use of these 
products is staggering.
  I grew up in a family where virtually nobody smoked. My grandfather 
did. He died at a ripe old age. I don't know if a tobacco-related 
illness was a part of his death, although I wouldn't be surprised if it 
was. He was a heavy smoker. Of the others in my family, very few ever 
took up the habit. But in traveling around the country, holding the 
hearings of this task force, we heard over and over and over of the 
addiction, disease, and death caused by these products.
  Some have said, ``What are you going to do about it? What business 
does the Government have to do anything about this? The Government 
ought to stay out of it. This is a personal decision whether somebody 
smokes or not.'' That is true, it is a personal decision. But you know 
what? There is more than the individual involved, because this 
industry, as I have described, is imposing enormous costs on all the 
rest of us. I chose not to smoke, but I am picking up the tab for those 
who have chosen to smoke. Mr. President, $130 billion a year are the 
costs that are being imposed by this industry--$130 billion, $60 
billion in direct health care costs every year--$60 billion; Medicare, 
$20 billion; Medicaid, $12 billion, $13 billion a year. We are paying 
for costs imposed by that industry, and they are not covering the tab, 
make no mistake about that.

  That is the hard reality of what is occurring. If we want to do 
something about it--every witness who came before our committee said 
there is no silver bullet, you have to have a comprehensive approach. 
You have to do all kinds of different things to reduce the level of 
youth smoking.
  Why is youth smoking so important? Because we know that 90 percent of 
smokers take up the habit before they are 19, about half before they 
are age 14. When somebody is not hooked when they are young, they 
probably are not going to get hooked. That is in the tobacco industry 
documents. They knew they had to get people when they were young. They 
knew when somebody didn't start when they were young, they probably 
were not going to take up the habit.
  Some of the comments in the tobacco industry documents are startling. 
I remember one is: How are you going to get somebody to take up what is 
really a dirty habit and unpleasant? You have to convince them that it 
is cool, you have to convince them that it shows maturity, that it is 
stylish.
  The cynicism of this industry in trying to hook kids is really 
incredible. Here is a 1972 Brown and Williamson document:

       It's a well-known fact that teenagers like sweet products. 
     Honey might be considered.

  They are thinking about putting honey in cigarettes to attract 
teenagers.

       Smoking a cigarette for the beginner is a symbolic act. I'm 
     no longer my mother's child. I'm tough. I'm an adventurer. 
     I'm not square. As the force from the psychological symbolism 
     subsides, the pharmacological effect takes over to sustain 
     the habit.

  That was from a 1969 draft report to the board of directors of Philip 
Morris.
  Here is a good one. When the industry comes up here and says, ``We 
never targeted kids,'' this is a quote from a 1973 RJR marketing memo:

       Comic-strip-type copy might get a much higher readership 
     among younger people than any other type of copy.

  Talk about cynical; talk about people who are thinking about 
themselves and didn't give a hoot what the effect was on somebody else. 
And they say they didn't target kids?
  I have read the documents. Document after document shows they 
directly targeted kids as young as 12 years old. That is who they are 
going after. These Joe Camel ads, do you think they designed those to 
go after adults? No, no, no. They designed those ads because they knew 
that they were slipping among the youth market, and they were trying to 
figure out a way to get to the kids. So they said comic-strip-type 
might get a much higher readership among young people. That is where 
Joe Camel came from. How brilliant that strategy was. It really worked 
to hook kids.
  Here is another 1973 Brown and Williamson memo:

       Kool--

  That is a brand--

       Kool has shown little or no growth in the share of users in 
     the 26-plus-age group. Growth is from 16 to 25-year-olds. At 
     the present rate, a smoker in the 16 to 25-year-age group 
     will soon be three times as important to Kool as a prospect 
     in any other broad-age category.

  You have to wonder what these people thought when they went home at 
night after writing these memos, after coming up with these strategies, 
after coming up with these marketing schemes to hook kids. I wonder if 
they were proud of themselves when they went home at night.
  Here is another 1973 memo from an RJR assistant director of research 
and development. And I quote:

       Because brands of the new type continue to show vigorous 
     growth in sales; because a high proportion of beginning 
     smokers are learning to like Marlboro, the leading brand of 
     the new type; and because we have no current brand in this 
     newly identified, major

[[Page S5550]]

     segment of the market; it has become appropriate for us to 
     consider moving our present brands in the direction of the 
     new type of cigarette.

  And why? Because they needed to hook beginning smokers. Well, it goes 
on and on and on. The documents are so overwhelmingly clear.

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

  That is a 1976 draft report, ``Planning Assumptions and Forecast for 
the Period 1977-1986 for R.J. Reynolds Tobacco Company.''
  ``Evidence is now available to indicate that the 14- to 18-year-old 
[age] group is an increasing segment of the smoking population'' and 
they have to establish a successful brand there if they are going to be 
successful.
  Mr. President, I go back to the basic question: What do we do? We 
know we have a problem. We know people are suffering from addiction, 
disease and death. As I said earlier, every witness that came before us 
said you have to have a comprehensive approach. No single thing will 
address this health threat, and that is what the McCain bill does. It 
pursues exactly the sort of comprehensive approach that every public 
health expert has testified is necessary.
  Yes, it contains price increases. And why? Because every study, every 
public health expert has told us that price increases are the most 
effective thing to reduce consumption and use, especially important 
among young people. The studies indicate that for every 10-percent 
increase in price, you get a corresponding 5- to 7-percent reduction in 
consumption among youth.
  These studies are consistent. They are clear. They are not done by 
the tobacco companies. They are not done by the apologists for the 
tobacco companies. They are done by the scientific community. They are 
done by the Congressional Research Service. They are done by the 
National Institutes of Health. They are done by the American Cancer 
Society, the American Lung Association. Those are the people that I 
intend to listen to in this debate.
  I am not going to be listening to the sweet swan song of the tobacco 
lobby who, by the way, have hired virtually every lobbying firm in this 
town. In fact, I am told they have hired a lobbying firm for every U.S. 
Senator. And I would not be surprised if it is true.
  As you look at the list, they are spending hundreds of millions of 
dollars on this attempt--hundreds of millions of dollars to mislead the 
American people; hundreds of millions of dollars to influence public 
opinion; hundreds of millions of dollars to try to fool people here in 
the Congress of the United States.
  I had a man call me from North Dakota the other day. He got on the 
phone with me, and he said, ``Senator, I'm against that tax bill.'' I 
said, ``What tax bill are you talking about?'' He said, ``I don't 
know.'' He said, ``I had somebody call me and ask me if I was against 
taxes. I told them I was, and he said, `I'll connect you with your 
Senator right away.' '' He said, ``I didn't even have to call. They 
connected me to your office.'' And he did not even know what the bill 
was about, but he knew he was against it because they asked him if he 
was against taxes.

  I tell you, these guys are shameless. They are shameless in what they 
have said up here. They are shameless in the negotiating strategy they 
pursued on this legislation, and they are shameless in what they are 
saying to people trying to mislead them about this legislation.
  This bill, sponsored by Senator McCain--yes, it contains price 
increases because that is central to any strategy to actually reduce 
consumption and to save people's lives. But it does much more than 
that. It clarifies the Food and Drug Administration's authority to 
regulate advertising targeted to children. It gives the Food and Drug 
Administration authority to regulate the manufacture and distribution 
of tobacco products, to protect children and reduce the ill-health 
effects associated with tobacco use. It includes provisions to reduce 
youth access to tobacco products, including a requirement that States 
enact laws to make it illegal for minors to purchase or possess tobacco 
products.
  It provides look-back surcharges to create an incentive for companies 
to stop targeting children and to hold those companies accountable that 
fail to reduce youth smoking of their brands. It requires document 
disclosure.
  Mr. President, an awful lot of what we have learned we have learned 
only because of the Minnesota trial. I want to commend Attorney General 
Humphrey of Minnesota who was tough and determined and who won a 
massive lawsuit against the tobacco industry. In winning that suit, he 
was able to release millions of documents that formed the basis of our 
knowledge of what this industry has been doing. Thank goodness for what 
he has accomplished because, as I say, I could read from these 
documents for days on end, these documents that indict this industry, 
because this industry knew that their products were killing people. 
They absolutely knew their products were addictive. They absolutely 
knew that they were targeting kids and they absolutely knew that they 
were manipulating nicotine levels to further--to further--hook 
customers.
  It was written across the pages of these documents time after time 
after time. There is no question, none, about what these guys were 
doing. It was cynical. It was manipulative. And it was targeted at 
kids.
  I have nothing against anybody that seeks to engage in a legal 
business and make a profit. That is the American way. I am proud of 
people that do that. I come from a business family myself. I am 
educated in business. But I tell you, to make your livelihood targeting 
kids for addiction and disease is not a very proud way to conduct 
oneself. This industry was so incredibly cynical in the way they 
operated. They ought to be ashamed of themselves. They say now, well, 
they have a new culture. Well, I tell you, I do not see it. I do not 
see their new culture. I see them operating just as they have in the 
past.
  I have indicated some of the provisions of this bill. There are 
others, as well, that are important. Because this legislation also 
funds tobacco control programs, including smoking cessation, 
countertobacco advertising, smoking prevention, education and health 
research. You know, if there is nothing else that comes out of this--I 
hope we are able to discourage people from smoking--but I hope we are 
also able to fund medical research to help the victims of the past. I 
hope we are able to do some things that will be positive for those that 
have already suffered. I hope we are able to find the cure for cancer. 
I hope we are able to find a cure for emphysema or at least treatments 
that can reduce the suffering of people who are inflicted.
  But this bill does more than that. It also includes environmental 
tobacco smoke provisions to protect nonsmokers in public buildings 
because one of the things we have learned from the research of the 
industry itself is that secondhand smokers also suffer. And what they 
suffer is irreversible. We did not know that before. We used to think, 
well, not just the smoker is going to be affected and be affected 
adversely. I think all of us knew for a long time that was the case. 
But we probably did not realize that those of us who are around smokers 
also are affected, and the way we are affected is irreversible. It 
cannot be improved. That is what the latest scientific evidence tells 
us.

  So it is important to do something about limiting where smoking can 
occur so nonsmokers are not having imposed on them the health risks 
because somebody else has made a choice that they are going to smoke. 
That is fine. That is their business. But it is not their business to 
have an adverse effect on somebody else's health, and certainly not on 
a child.
  This legislation also provides generous assistance to tobacco farmers 
and their communities for the effect they will experience. Clearly, 
this is a comprehensive approach. It is multifaceted because that is 
what the experts say is necessary. We don't need experts to tell us 
what will be effective here. I have heard from all the experts. They 
came before our task force. We heard from hundreds of them. I respect 
them. This is a matter of common sense. We don't need an expert to tell 
us if you raise the price, consumption goes down. That is Economics 
101. We don't need an expert to tell us if you do

[[Page S5551]]

countertobacco advertising that warns people of the health risks of 
tobacco products, that will have an effect. Why else would the industry 
spend billions of dollars a year advertising tobacco products? Because 
they know advertising works. Countertobacco advertising, we also know, 
will be effective. And we also know you have to fund smoking cessation 
and smoking prevention programs, because that helps people.
  Now, it is true that very few people are able to quit. Seventy 
percent of the smokers in America today say they want to quit. Only 2 
or 3 percent a year are actually able to. That is because smoking is 
addictive. In fact, the testimony of the experts told us that smoking 
addiction is in the same class as cocaine addiction. We went to Brown 
University and had a hearing there. We had an addiction expert come 
before us. He said, if you think a smoking addiction is something easy 
to escape, but you think cocaine addiction is hard, don't be fooled, 
don't be misled. Because the fact is the one is as difficult as the 
other.
  I will talk a little more about the look-back provisions because that 
is the pending business before the U.S. Senate. We may have forgotten 
that around here, but that is the pending business. That is the 
business before this body, the look-back provisions of this bill.
  Before I go into that, I want to talk about an issue that has been 
raised several times by the opponents of this legislation. That is the 
effect of the bill on low-income people. It is very interesting around 
here to hear those who are the chief defenders of the tobacco industry 
all of a sudden develop a new-found concern for lower-income Americans. 
I must say, I would be more persuaded by their concern if many of those 
same people had not spent most of their Senate careers opposing the 
minimum wages, opposing the earned-income tax credit, and opposing 
other measures that would help low-income, working Americans. I would 
be more persuaded if these same Senators had not spent much of their 
time in the Senate pushing for special tax breaks, tax giveaways and 
tax loopholes for the wealthiest among us at the expense of programs 
that benefit lower-income Americans.
  Before I talk further about the so-called regressive impact of this 
legislation, I just want to point out that inaction imposes a cruel tax 
on low-income Americans. The tobacco industry has deliberately targeted 
lower-income Americans as its customers. In fact, they are 
disproportionately the customers of the tobacco industry. They have 
gone after that low-income market. They have succeeded. And this 
industry that all of a sudden is so concerned about low-income 
Americans has charged them rates of profit that are three times the 
level of profit in the consumer goods industry in America today. The 
profit margins in tobacco are 30 percent--triple the profit margins of 
other consumer goods industries in America today. If they are so 
concerned about low-income Americans in the tobacco industry, why don't 
they cut their profits if that is their concern. That is not their 
concern. Who are they kidding? Their concern is their bottom line. That 
is their children. And it comes out in every document that has been 
revealed in these court proceedings. They aren't concerned about low-
income Americans other than trying to hook them, addict them, and let 
them suffer the consequences of disease and death that accompany the 
use of these products.

  The simple fact is that a failure to act will kill low-income 
Americans and their children in disproportionate numbers. The Senators 
who now say they are concerned for low-income Americans are nowhere to 
be found when we talk about protecting children or providing cessation 
programs for low-income Americans. Instead, they spend their time 
talking about the costs that this legislation will impose on lower-
income Americans. They completely leave out the rest of the story--the 
fact that lower-income Americans will disproportionately benefit from 
this legislation.
  The facts are that this legislation will reduce costs on low-income 
Americans more than it will increase costs on them. First, the 
nonpartisan Congressional Budget Office has concluded that the income 
distribution tables our opponents have been using exaggerate the 
effects on lower-income people. The fact is that people's incomes are 
not the same throughout their lives, and their expenditure patterns 
reflect that. Opponents also count on what we see as a claim that this 
legislation will hurt lower-income people because study after study has 
shown that lower-income smokers are much more likely to respond to a 
price increase by quitting or reducing their use of tobacco products.
  The Congressional Budget Office has estimated the price increase will 
reduce average consumption of tobacco products by about a third. That 
means that lower-income Americans will reduce their consumption by even 
more than a third. So they will actually reduce their overall spending 
on tobacco products, and for every dollar they pay in increased costs 
for each pack of cigarettes, they will save more than $1 by purchasing 
fewer packs.
  Third, the health benefits of reduction in smoking will be largest 
for low-income populations. By not smoking, lower-income Americans can 
reduce their lifetime health costs by $14,000, on average, because 
lower-income people are the least likely to have health insurance. The 
direct health cost benefits to reducing smoking will go 
disproportionately to lower-income Americans.
  Finally, the main focus is, and should be, on our children. Lower-
income Americans love their children just like every other American 
loves theirs. They want to make certain that their children get a 
healthy start in life. I don't believe they will say that a few hundred 
dollars is too much to pay to ensure that their kids don't get addicted 
to these deadly products.
  The bottom line, nobody is going to pay the increased fees associated 
with this bill unless they decide to go to the counter and buy these 
products. There is nobody saying you have to buy cigarettes in America. 
Nobody has to pay this additional fee unless they decide they want to, 
unless they decide they are going to buy cigarette products. You only 
pay it if you buy the product. Frankly, if you buy the product, you 
ought to pay it because otherwise you are imposing costs on everybody 
else in society. Mr. President, $130 billion a year is what is being 
taken out of this society by the use of these products.
  I will, at a later time, talk about the pending amendment, the 
Durbin-DeWine amendment, but I think at this point I am going to turn 
it back to the Senator from Arizona, Senator McCain, and again thank 
him for his leadership. His courage and his character shine through in 
this entire debate. I want to thank him very much for his leadership.
  Mr. McCAIN. Mr. President, again, I thank my friend from North Dakota 
for his kind remarks and for all his effort on behalf of the young 
people of America. I am very appreciative. I tell my friend from North 
Dakota that I think we will prevail on this issue.


                    Amendment No. 2446, As Modified

  Mr. McCAIN. Mr. President, I send a modification to the desk.
  The PRESIDING OFFICER. The amendment will be so modified.
  The amendment (No. 2446), as modified, is as follows:

       On page 407, insert the following:

     SEC. 1302. VETERANS' ADMINISTRATION TOBACCO-RELATED 
                   HEALTHCARE AND COMPENSATION PROGRAMS.

       (a) In General.--The Secretary of the Veterans' 
     Administration shall use amounts under subsection (b) to 
     carry out tobacco-related healthcare activities under chapter 
     17 of title 38, United States Code, and to provide other 
     appropriate assistance for tobacco-related veterans' health 
     care illnesses and disability under such title.
       (b) Funding.--From amounts in the trust fund established 
     under section 400, not less than $600,000 per year are to be 
     used to carry out Veterans' Administration tobacco-related 
     healthcare activities under subsection (a) to the extent and 
     only in the amounts provided in advance in appropriations 
     Acts, to remain available until expended.
       (c) Public Health Service Act Amendments.--Section 1981C of 
     the Public Health Service Act (as added by section 261 of 
     this Act) is amended--
       (1) by inserting ``veterans,'' after ``uninsured 
     individuals,'' in subsection (a)(1)(D); and
       (2) by inserting ``veterans,'' in subsection (b)(1)(H) 
     after ``low-income,''.

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