[Congressional Record Volume 144, Number 77 (Monday, June 15, 1998)]
[Senate]
[Pages S6314-S6323]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT

  The PRESIDING OFFICER. The clerk will report the pending business.
  The legislative clerk read as follows:

       A bill (S. 1415) to reform and restructure the processes by 
     which tobacco products are manufactured, marketed, and 
     distributed, to prevent the use of tobacco products by 
     minors, to redress the adverse health effects of tobacco use, 
     and for other purposes.

  The Senate resumed consideration of the bill.
  Pending:
       Gregg/Leahy amendment No. 2433 (to amendment No. 2420), to 
     modify the provisions relating to civil liability for tobacco 
     manufacturers.
       Gregg/Leahy amendment No. 2434 (to amendment No. 2433), in 
     the nature of a substitute.
       Gramm motion to recommit the bill to the Committee on 
     Finance with instructions to report back forthwith, with 
     amendment No. 2436, to modify the provisions relating to 
     civil liability for tobacco manufacturers, and to eliminate 
     the marriage penalty reflected in the standard deduction and 
     to ensure the earned income credit takes into account the 
     elimination of such penalty.
       Daschle (for Durbin) amendment No. 2437 (to amendment No. 
     2436), relating to reductions in underage tobacco usage.
       Reed amendment No. 2702 (to amendment No. 2437), to 
     disallow tax deductions for advertising, promotional, and 
     marketing expenses relating to tobacco product use unless 
     certain requirements are met.
  Mr. MURKOWSKI. Mr. President, I ask unanimous consent, on behalf of 
the leader, that at 5 p.m. today the Senate proceed to a vote on or in 
relation to the Reed amendment No. 2702 regarding tobacco advertising. 
I further ask unanimous consent that Senator McCain have 5 minutes and 
Senator Reed have 5 minutes for closing remarks just prior to the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, a couple of weeks ago a couple of Members 
of Congress came to the floor of the Congress to announce Bob Hope's 
death. Bob Hope was having breakfast in California at the time. This 
weekend, we had some legislators talking about the tobacco bill and 
predicting that the tobacco bill was dead. Well, the tobacco bill, or 
the tobacco legislation, that is being debated by the U.S. Senate is 
not exactly having breakfast--clearly, this has been a struggle to get 
a piece of legislation through the Senate dealing with the tobacco 
issue--but, the tobacco bill is not dead by any means. I hope that 
those who tell the American people that the Senate cannot pass a 
tobacco bill will understand that the Senate fully intends to pass 
legislation dealing with tobacco.
  I want to describe just for a moment why I think those who predict 
its death are wrong, and why those who call this a bad bill are wrong, 
and why those who believe that Congress will eventually not act on 
tobacco are wrong.
  Let me go back to the start of this issue. Why are we debating a 
tobacco bill? Why tobacco legislation? Simply put, it is because we now 
know things we did not know 25, 50, and 100 years ago about tobacco. We 
know that tobacco can kill you. The use of tobacco, we know, causes 
from 300,000 to 400,000 Americans a year to die from smoking and 
smoking-related causes.
  Tobacco is a legal product and will remain a legal product. But we 
also know that it is illegal for kids to smoke, and we know that 
tobacco companies have targeted our children to addict them to 
nicotine.
  The majority leader this weekend said, ``Well, the tobacco bill is so 
bad that it should not be passed in its current form,'' and so on and 
so forth, and ``If we can't get to a conclusion on it this week, we've 
got to move on.'' That is another way of saying, ``We're going to leave 
this carcass in the middle of the road and just drive forward.''
  Fortunately, we learn a lot as we go along here in this country and 
in life. One of the things we ought to learn is, this piece of 
legislation dealing with tobacco, and especially dealing with the 
tobacco industry targeting America's children--we must resolve this 
issue; we must pass this legislation.
  Let me describe for my colleagues some of the evidence that has been 
unearthed from depositions and from court suits, and so on, in recent 
months.
  A 1972 document by a tobacco company, Brown & Williamson. It says:

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

  Talking about sweetening cigarettes because teenagers like sweeter 
products--does that sound like a company that is interested in 
addicting kids to their product?
  How about Kool--the cigarette Kool?

       KOOL has shown little or no growth in share of users in the 
     26 [and up] age group.

  This was written by a Brown & Williamson person. It is a memo from 
1973. It says:

       . . . at the present rate, a smoker in the 16-25 year age 
     group will soon be three times as important to KOOL as a 
     prospect in any other . . . age category.

  Talking about their 16-year-old customers for Kool cigarettes.

       Marlboro's phenomenal growth rate in the past has been 
     attributable in large part to our high market penetration 
     among young smokers . . . 15 to 19 years old . . .

  This is according to a report by a Philip Morris researcher.
  You say that they are not targeting kids?
  1974, R.J. Reynolds. A marketing plan submitted to the board of 
directors of the company says:

       As this 14-24 age group matures, they will account for a 
     key share of the total cigarette volume--[in the] next 25 
     years.


[[Page S6315]]


  Or if you are still unconvinced--that there is no need here; that the 
industry has not targeted our children--how about a Lorillard 
executive, a cigarette company executive, in 1978:

       The base of our business is the high-school student.

  A cigarette company executive saying, ``The base of our business is 
the high-school student.''
  Philip Morris, 1979, says:

       Marlboro dominates in the 17 and younger category, 
     capturing over 50 percent of this market.

  It is like they should have a fiesta here. They capture over 50 
percent of the 17-year-old and under market. And you say the industry 
isn't targeting kids?
  Well, cigarette smoking is addictive. It is legal but addictive.
  Here is something that was picked up this morning. It is actually a 
piece from Marlboro. It talks about river rafting, cookouts, fly-
fishing, bonfires, mountain biking, and bands. And it is advertising, 
of course, cigarettes. It has the warning, as we require by law, 
``Surgeon General's warning: Smoking causes lung cancer, heart disease, 
emphysema, and may complicate pregnancy.''
  The question for the Congress is: Do we want an industry to try to 
addict our children to this product? And the answer is no. And if not, 
if we do not want the industry to continue to do that--and they have in 
the past; the evidence is quite clear--if we do not want them to 
continue to do that, if it is our position that it is wrong for the 
industry to target children--and that is our position--then the 
question is, What are we going to do about that? Is the Congress going 
to pass a piece of legislation that prohibits this industry from 
targeting our children? And that is the legislation that is on the 
floor of the Senate.
  Some do not like it; and some, for their own reasons, want to kill 
it. But they will be on the wrong side of history if they succeed in 
killing this legislation.
  Oh, we have done a lot of things over the years that were 
controversial at the time we did them. Even things like giving women 
the right to vote in this country was controversial, wasn't it? For 
more than half of this country's history, women were not allowed to 
vote. Or skip forward to the Civil Rights Act of the early 1960s. Who 
in this Chamber now would decide that the things that we provided for 
in the Civil Rights Act in the early 1960s they would now support? A 
good number of them opposed it back then.

  Things like requiring labels on food--that was controversial. 
Requiring companies that produce our food in the grocery store to 
actually put something on the label that states the fat content, the 
sodium content, or the carbohydrates--that was big government intruding 
on those who manufacture the food. How could we require that someone 
put on the can of peas what is in that can of peas? We did it.
  Now you can go down the grocery store aisle and see traffic jams of 
people, taking that can or package, and trying to figure out what is in 
it, how much fat it contains, how much sodium is in a product. It was 
controversial at the time.
  A lot of things that were controversial at the time turned out to 
have been the right thing. The tobacco bill will turn out to be the 
right piece of legislation for this country.
  How many in this Chamber who spend a lot of time on airplanes 
remember, going back 10 or 20 years, getting in the middle seat of a 
727 and as the airplane takes off, the person in the seats on the 
right-hand side and the left-hand side light up their cigarettes. 
Because then there were no restrictions on smoking anywhere on 
airplanes? Eventually they put the smokers in the back of the plane. 
That meant everybody breathed the same smoke, although they were 
separated by distance. Then, finally, you shall not smoke on airplanes 
in this country. It was controversial at the time. I voted for that. It 
was the right thing to do.
  This piece of legislation on the floor of the Senate talks of a range 
of issues, most especially the issue of teen smoking. In an industry 
that knows the only customers it has access to are kids--because almost 
no one reaches adult age in this country and tries to figure out what 
they have missed in life and comes up with the idea of smoking; nobody 
30 or 40 years old says what will really enrich my life is if I started 
smoking--kids are the only source of new customers for tobacco 
companies. The tobacco companies say it themselves in the research 
material we have provided.
  This legislation provides a range of programs, including providing 
smoking cessation programs, trying to help people who are now addicted 
to quit; prohibits advertising that targets our children; provides for 
counteradvertising, that actually tells our kids that smoking is not 
cool and that smoking can cause lung cancer, heart disease, emphysema 
and so on.
  The resources in this bill help us invest in the National Institutes 
of Health to continue to develop the breathtaking achievements in 
medical research that we see day after day and month after month in the 
National Institutes of Health. It seems to me this is a remarkable 
bargain for the American people.
  This legislation, I think viewed 10 years from now, will be seen as 
something that was right for the time. Ten years from now, those who 
vote against this legislation will say, ``How on Earth did I ever come 
to that conclusion?'' Of course it made sense for us as a country to 
decide cigarette companies cannot target our children. Of course it 
made sense for us to have counteradvertising and smoking cessation 
programs and more investment in the National Institutes of Health to 
deal with the range of medical problems caused by smoking. Of course 
that made sense.
  So let me conclude by saying that those who this weekend were on the 
talk shows and were speaking to the press about what will happen to 
this tobacco bill, they have prematurely announced its death. This 
tobacco bill is not dead. There are some who wish it were dead. There 
are some who this week will work against it and will try with every bit 
of energy they have to kill it, but they will not succeed because this 
is the right thing to do. We have made the case effectively that at 
this time in this country we ought not allow the tobacco industry to 
target our kids to the addiction of cigarettes. This piece of 
legislation moves us in that direction in a very, very significant way.
  The majority leader and others who speak about this legislation need 
now, I think, to provide some leadership to help us pass this 
legislation. A bipartisan group of Senators, including Senator McCain, 
who has spent a great deal of time on this legislation and someone for 
whom I have great admiration and I commend him for his work, Senator 
Conrad on our side and others, a great many people have spent a lot of 
time crafting this in a bipartisan way. Now we need this week to finish 
a job and pass it through the Senate and get it to a conference with 
the House so that the American people can look at the job the Congress 
has done. And then make the judgment that they have done a good job on 
behalf of our children, they have stood up for our children and have 
told an industry that addicted our children, you can't do that anymore; 
we are not going to let you do that anymore. That is the right position 
for our country.

  I know that the Senator from Rhode Island is about to talk about an 
amendment, I think, that he has pending in the Senate. Let me, as I 
conclude, also commend him for the work he has done. The Senator from 
Rhode Island, the Senator from Illinois, Senator Durbin, and a number 
of others have worked a great deal on this legislation, including the 
Senator from Massachusetts, and I mentioned the Senator from Arizona, 
Senator McCain.
  This is a tough piece of legislation. The toughest thing in the world 
is to propose. The easiest thing in the world is to oppose. It doesn't 
take any skill to oppose. I think it was Mark Twain who once was asked 
if he would be involved in a debate and he immediately accepted, 
``provided I can take the opposing side.'' They said, ``You don't even 
know the subject of the debate,'' and he says, ``I don't have to, as 
long as I am on the opposing side.''
  It takes no time to prepare. We are proposing a piece of legislation 
in the Senate dealing with smoking, tobacco and children that is right 
for the time. Those who stand in its way will be on the wrong side of 
history. Those who predict its death are dead wrong, because we fully 
aim, this week or next

[[Page S6316]]

week, to pass this legislation through the U.S. Senate.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Gorton). The Senator from Rhode Island.
  Mr. REED. As an initial point, I ask unanimous consent to add Senator 
Tim Johnson as a cosponsor of the Reed amendment, amendment numbered 
2702.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REED. Mr. President, first let me commend my colleague, the 
Senator from North Dakota, for his fine words and also for his 
commendation. He has been, also, a leader in this effort to try to pass 
a balanced, yet very effective, tobacco legislation.


                           Amendment No. 2702

  Mr. REED. Mr. President, before this body today is my amendment which 
would deny the deductibility of advertising expenses to the tobacco 
industry if they did not follow the FDA rules with respect to 
advertising.
  The FDA, after very careful rulemaking, promulgated a series of rules 
which would proscribe advertising directed at children. Among these 
rules are limiting tobacco billboards to a distance further than 1,000 
feet from a school. It will require the publication of advertisements 
in youth-oriented magazines to be in black and white text only. It 
would dispense with some of the other staples of advertising that the 
industry is using.
  As the Senator from North Dakota has pointed out and as I pointed out 
in my remarks last Friday, there is clear, convincing, overwhelming 
evidence that for decades the tobacco industry has deliberately, 
relentlessly, and ruthlessly targeted children in their advertising. It 
is not an accident. It is not a coincidence. It is not the collateral 
effect of trying to reach the 21- to 25-year-old market. It is very 
purposeful, very deliberate, and, regrettably, very effective.
  In the course of the debate over the last several weeks we have taken 
diversions through many different areas. We are talking about tax 
policy. We are talking about child care policy. We are talking about 
how we spend these resources, whether this is an inappropriate tax. I 
think it is helpful to refocus why we are here. We are here because the 
tobacco industry, as I mentioned before, has, over decades, targeted 
young people for their advertising. They are attempting, and succeeding 
too well, to literally entice young people as young as 12 and 13 years 
old into smoking cigarettes and using other tobacco products.
  I think that is wrong. I think the vast majority of the Americans 
think that is wrong. I think the vast majority of my colleagues in the 
Senate feel it is wrong. We can do something about it. As we have 
discussed all of these different issues of tax policy, fiscal policy, 
regulatory policy, it sometimes helps to remind all of us what the 
industry is doing.
  I had a very graphic reminder sent to me by one of my constituents 
from Rhode Island. I mentioned this last week. This is a very slick, 
sophisticated, mailing piece, sent to his son, a 16-year-old junior in 
high school. I have blown it up here so the audience can see in larger 
detail what I am talking about. Again, this was sent to a 16-year-old. 
It was sent addressed to him, personally. It wasn't ``occupant,'' or 
``resident.'' It was addressed to him.
  As a first point, I can recall as a youngster when I ever got mail it 
was a big occasion. To think that someone would actually want to send 
me a letter, particularly a big company like the Brown & Williamson 
Tobacco company was a big occasion.
  The first part of it grabs your attention: ``We know you like it 
loud.'' How do they know they like it loud? Because he essentially was 
contacted and solicited because this young man went to a rock concert 
which Brown & Williamson sponsored the preceding summer. This is not 
coincidence, either. Their decision to sponsor a rock concert that 
attracts, as the father said in the letter, a majority of the audience 
being 18 or younger, much younger in some cases, was very 
deliberate. It wasn't spur of the moment. They sat around a conference 
room on Wall Street and Madison Avenue saying, ``How do we get our 
target population? How do we reach them and make contact with them? 
And, oh, by the way, how do we draw them into this addiction of 
smoking?''

  So he received this mailing at home. You open it up. It is three 
dimensional. I know in the course of some of my campaigns I have used 
them in mailings to my constituents. This is a very expensive, very 
professional, and very sophisticated mailing. It is a very targeted 
mailing.
  Then you read the narrative. ``You like it loud''; and ``very, very 
smooth.'' ``Kick back today and enjoy a bold treat. Refreshing menthol, 
and a coupon to save you some change. Relax with Kool, and slip into 
something smooth.''
  You are overwhelmed by this message. The message is not about the 
statistics, or the smoking, or the dangers of smoking, the information 
he or she would want as a rationale consumer if he or she were making a 
decision to smoke. You are being overwhelmed by I would argue 
misinformation. Oh, yes, there is the required Surgeon General warning 
here. ``Warning: Smoking greatly increases serious risk to your 
health.''
  If you are 16 years old, do you really believe that, when everything 
else is talking about your favorite rock group, talking about how ``we 
support'' that rock group in the concert, how you are part of this 
``loud'' generation, how you like it ``smooth'' personally directed to 
you? I don't think so. And the most ironic part of all of this is this 
message says ``quitting smoking'' will help your health. This message 
down here says, ``We will give you a buck, kid, if you buy two packs of 
our cigarettes.'' What a deal.
  This is what we are talking about in this tobacco bill. We are 
talking about an industry that has deliberately, repeatedly attempted 
to market the kid shamelessly; without shame.
  This took place 6 months ago at the same time they were talking about 
their arrangement with the attorneys general; at the same time they 
knew we were going to be debating tobacco legislation on the floor of 
the U.S. Senate. And yet they continued to try to sell their ware to 
kids.
  You know, people get addicted to cigarettes. I think the industry is 
addicted to children. They just can't leave them alone. They just have 
to keep selling to them, even when common sense would say let off while 
the smoke clears. No pun intended. They can't stop because their 
customer base is hooking these kids. You hook a 16-year-old child, and 
that is 10, 20, 30 years of customer for your brand. Of course, we know 
that one out of three of these children will die prematurely. We know 
that 5 million people under 18 years of age today will die prematurely 
because they are addicted to cigarettes and other tobacco. But they 
don't want you to know that. They want you to think this is cool, this 
is smooth, and there is the whole adult world opening up for you. ``You 
can be as successful and as attractive and as desirable as any rock 
star. You just have to smoke our cigarettes.'' That is wrong.
  This is just one example of what goes on. It is ubiquitous 
throughout. This is a promotion by Winston. Winston's, by the way, are 
the new health food of America. You see their ads. Smoking it is like 
eating health food; no additives; no anything; it is macrobiological; 
whatever. Again, they are taking an approach now with their campaign, 
which is making their product look like it is healthy for you; it is 
what you would buy if you were a research scientist trying to develop 
the best diet in the world. But they have sponsorship for NASCAR 
racing, which is a venerable tradition in this country. For the Winston 
Cup, they are sponsoring it. Not all; you could not argue that all of 
the people who attend these races are young people. But we also must 
recognize that this is a very attractive event for young people. There 
must be something here.
  I read a few weeks ago in the New York Times that Mattel, Inc., is 
thinking of creating a NASCAR Barbie doll, the most popular toy in the 
world, because they figured it out, too. There are lots of young girls 
who are attracted to this whole scene of NASCAR racing and a NASCAR 
Barbie is going to be a very popular toy. The same type of calculations 
that are going on at Mattel are going on in some cases up in the 
cigarette headquarters of the world. But one should say, of course,

[[Page S6317]]

that the Barbie doll is a much more benign figure in American life than 
cigarettes. But this is ubiquitous. Our children are being subjected to 
this constantly.
  My amendment simply says, listen, the FDA, after rulemaking at 
length, has come up with very reasonable restraints on tobacco 
advertising. If you follow those restraints, you will receive your full 
deduction. But if you violate them, you will lose your deduction. I 
believe most of my constituents would say the same thing, that we 
should not be subsidizing the tobacco industry as they attempt to lure 
our children into smoking. The industry spends about $5.9 billion a 
year on advertising. We kick back, if you will, about $1.6 billion 
through the deduction. That is money that, I think, is poorly spent. 
But as long as the industry is willing to refrain from targeting 
children I don't think we can object because it is available to other 
industries. But if they persist in targeting children and not following 
FDA regulations, then I believe we should act very strongly, very 
vigorously, and deny them this deduction.
  By the way, too, independently, my amendment would not restrict 
speech whatsoever. Of course we have tobacco concerned any time the 
Government attempts to invoke any type of restriction on speech. But 
taken by itself, my amendment would simply say you can say anything you 
want. You can even promote your product using this. But don't charge 
the Government for your deduction. You can do it on your own money.
  My amendment has been criticized on a couple of points, which I would 
like to respond to. First, there are many of my colleagues who say we 
shouldn't really do anything unless it is voluntary, because, if we do, 
the tobacco industry will sue us and we will be tied up in court for 10 
years.
  The reality is the tobacco industry is already suing the FDA, and not 
just the tobacco industry, but the advertising interests are all there, 
and it is absolutely their right. They feel strongly that not only 
commercial interests are at stake but also constitutional interests. 
But to deflect or defer from doing something today vigorously about 
tobacco access to children simply because we might be sued is 
absolutely, I think, an implausible and inappropriate comment. We will 
be sued perhaps, but we have to act to ensure that we do what is right 
for the children of America.
  The other approach is suggesting that the Supreme Court decisions 
place a much higher standard when you come to restricting commercial 
speech. Specifically, the case of 44 Liquormart, Inc. versus Rhode 
Island. I feel somewhat familiar with the case. It originated in my 
home State. Actually it originated and the legislation was passed in 
1956 in Rhode Island. Although I served in the assembly in Rhode 
Island, I was not there in 1956. I was in grammar school in 1956. But 
this legislation that Rhode Island passed prevented the publication of 
price information with respect to liquor advertising.
  Stepping back a bit, I think the judges probably got the same sense 
that I did when I read the statute in this case and realized what might 
be afoot; that it is equally likely that this legislation was passed 40 
years ago not so much to increase temperance in Rhode Island but simply 
to prevent discount liquor stores from encroaching on established 
liquor stores. So right away, there is a suspicion about the underlying 
statute in 44 Liquormart.
  But, first, let me say something about that case. The Supreme Court 
reaffirmed the doctrine associated with Central Hudson, which is the 
leading case on commercial speech, and they said essentially one may 
restrict commercial speech, first, if it is unlawful; or, it 
misrepresents significantly the product. Even if it doesn't do so, one 
may restrict it if there is a substantial governmental interest at 
stake. The legislation directly affects that interest. And the means 
are no more restrictive than necessary to accomplish the governmental 
interests. So the Central Hudson test is in place and remains.
  In 44 Liquormart, the Court found essentially that the State of Rhode 
Island made no showing that their proposed legislation materially and 
directly advanced the goal of decreasing the consumption of alcohol. In 
fact, there was no evidence submitted in the record to show that this 
would have any effect at all on alcohol consumption in the State of 
Rhode Island. Alternatively, the Court discussed the fact that there 
were other means possibly available that had not even been used. On 
those factual bases, together with the Central Hudson doctrine, they 
declared that the statute was impermissible encroachment on commercial 
speech.
  The case is much different here. The FDA has established a record 
that advertising decisively affects children's choices to begin to 
smoke cigarettes, and by maintaining appropriate restrictions on 
advertising, we can, in fact, directly affect the behavior of children 
with respect to cigarettes. This is not based upon whimsy. The FDA 
relied on at least two major studies: a study at the Institute of 
Medicine in 1994, and the Surgeon General's report in 1994. Both 
concluded that advertising was an important factor in young people's 
tobacco use. Moreover, these reports indicated that advertising 
restrictions must be a part of any meaningful approach to reduce 
underage smoking.
  So this is not a situation of trying something that has not been 
tested or has not been tried by other means. Their conclusion 
authoritatively is that these types of restrictions must be in place.
  I should also remind you that we have tried other ways to moderate 
the consumption of tobacco products in this country. In the early 
1970s, we banned television advertising of tobacco products.
  But as Robert Pitofsky, the Chairman of the Federal Trade Commission, 
pointed out, what happened is the industry simply shifted to other 
forms of advertising. When I was a kid back in the 1950s and the 1960s, 
you would see TV advertising, but you would be very, very shocked if 
you could have a record of direct mail pieces sent to 16-year-olds, as 
happens today. And the sponsorship of NASCAR racing--all of these 
things are a direct result. In fact, cigarette advertising has 
exploded. From 1975 to 1995, 20 years, it has increased manyfold--going 
into not only these types of promotions, but also all the gadgets and 
all the other rigmarole that the industry is promoting.
  This is a Camel cash collectible. Now you can get Joe Camel T-shirts, 
and Joe Camel lighters, and Joe Camel dart boards, and Joe Camel 
posters, and Joe Camel everything--wristwatches, you name it. That, 
too, is part of the ubiquitous promotion of tobacco. And although it 
says very precisely, ``Offer restricted to smokers 18 years of age or 
older,'' I dare say I see more kids with Joe Camel T-shirts and bicycle 
caps and things like that than I do 40-year-olds, 30-year-olds, or even 
20-year-olds.
  So what the intent is, we will let the consumer decide.
  Furthermore, when the FDA promulgated its regulations, they went on 
very clearly to state what was happening here.

       Collectively, the studies show that children and 
     adolescents are widely exposed to, aware of, respond 
     favorably to, and are influenced by cigarette advertising. 
     One study found that 30 percent of 3-year-olds and 91 percent 
     of 6-year-olds identified Joe Camel as a symbol of smoking.

  Thirty percent of 3-year-old toddlers knew that Joe Camel, that 
cuddly cartoon character, was associated with smoking. Ninety-one 
percent of 6-year-olds, in the first grade of school, might not know 
their ABCs, but they know that Joe Camel and smoking go together.
  That is not good. That is what we are talking about here, and that is 
why, unless we effectively and dramatically affect the advertising of 
tobacco products to children, we will never turn the table on this 
epidemic of smoking among young people.
  Mr. President, I have other comments I wish to make, but I notice 
that my colleague, the Senator from South Dakota, is here, and I yield 
the floor.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. JOHNSON. I thank the Chair.
  I thank the Senator from Rhode Island, my friend and colleague, Mr. 
Reed. I commend him for this particular amendment. I am proud to be a 
cosponsor of this amendment.
  If you were to talk to a typical South Dakotan and say, ``You know, 
the Federal budget is tight this year; we may

[[Page S6318]]

not have the resources we need to do all we would like to do in terms 
of cancer or heart research at the National Institutes of Health; we 
may not be able to do all we would like to do for education, for health 
care; we may not be able to do all that we want for child care; and, 
oh, by the way, we do have some $1.6 billion of your tax money we are 
going to turn back to the tobacco industry as a subsidy for their 
marketing messages to our children,'' I guarantee you, the typical 
South Dakotan would be appalled. He would be amazed that any 
institution could possibly have come up with a priority as wrong-headed 
as that.
  And so, Mr. President, I rise today to express my support for the 
Reed amendment which would deny tobacco companies any tax deduction for 
their advertising and promotional expenses when those ads are aimed at 
America's most impressionable group, its children. This amendment has 
the overwhelming support of the public health community, and it would 
greatly strengthen the underlying McCain bill. I congratulate my 
colleague from Rhode Island on this amendment.

  It is almost incomprehensible to me that taxpayers actually subsidize 
the tobacco industry's promotional efforts even as we go about forming 
a consensus on the dangers of smoking and the problems created by the 
industry's efforts to target children.
  Numerous studies have implicated the tobacco industry's advertising 
and promotional activities as the cause of continued increases in youth 
smoking rates in recent years. Research on smoking demonstrates that 
increases in youth smoking directly coincide with effective tobacco 
promotional campaigns.
  We simply have to address the industry's ceaseless efforts to market 
to children. It is time for this Congress to put a stop to the 
industry's practice of luring children into what is an untimely 
progression of disease and death.
  Under this amendment, if the tobacco manufacturers do not comply with 
the advertising restrictions as promulgated by the FDA, the 
manufacturer's ability to deduct the cost of tobacco advertising and 
promotional expenses will then be disallowed for that particular year. 
This approach has overwhelming support of the public health community, 
supported by Dr. C. Everett Koop, the American Lung Association, the 
Center for Tobacco-Free Kids, and ENACT Coalition, a coalition 
comprised of leading public health groups including the American Cancer 
Society, American Heart Association, and many others.
  Mr. President, the importance of this issue is simply enormous. The 
facts speak for themselves. Today, some 50 million Americans are 
addicted to tobacco. One of every three long-term users of tobacco will 
die from a disease related to their tobacco use. About three-quarters, 
70 percent, of smokers want to quit, but fewer than one-quarter are 
successful in doing so. Tobacco addiction is clearly a problem that 
begins with children. Almost 90 percent of adult smokers started using 
tobacco at or before the age of 18. The average youth smoker begins at 
age 13 and becomes a daily smoker by 14\1/2\.
  Each year, 1 million children in our Nation become regular smokers. 
One-third of them will die prematurely of lung cancer, emphysema, and 
similar tobacco-caused diseases. Unless current trends are reversed, 5 
million kids currently under 18 will die prematurely from tobacco-
related disease.
  So, Mr. President, this is a public health crisis. A recent survey by 
the University of Michigan found that daily smoking among 12th graders 
increased from 17.2 percent in 1992 to 22.2 percent in 1996 and 
continued to climb in 1997 to 24.4 percent. This represents a 
cumulative 43-percent increase in daily smoking among our Nation's high 
school seniors just over these past 5 years.
  One of the advertising campaigns most markedly aimed at young people 
is the now notorious Joe Camel campaign that my colleague has alluded 
to. After R.J. Reynolds introduced this campaign, Camel's market share 
among underage smokers jumped from 3 percent to over 13 percent in just 
3 years. Although Congress had banned cigarette advertising on TV in 
1970, tobacco companies routinely circumvented this restriction through 
sponsorship of sporting events that gave their products exposure 
through television.
  The Federal Government subsidizes advertising through a tax 
deduction, generally a 35-percent deduction, for advertising expenses. 
In 1995, this subsidy cost the American taxpayers approximately $1.6 
billion. In terms of lost revenue to the Federal Treasury, this is a 
very significant sum of money. In effect, the Federal Government is 
subsidizing industry's advertising costs. For example, in 1995 the cost 
of the cigarette advertising deduction covered the total amount spent 
by the industry on coupons, multipack promotions, and retail value-
added items such as key chains and other point-of-sale advertising, the 
kind of items that are most attractive to children.

  In 1995, the tobacco industry spent $4.9 billion on advertising, 
double the total Federal Government appropriation for the National 
Cancer Institute in fiscal year 1995, $2.1 billion, and almost four 
times the National Heart, Lung and Blood Institute appropriation, which 
totaled $1.3 billion that year. In 1995, the tobacco industry spent 
this $4.9 billion on advertising, 40 times the amount spent by the NIH 
on lung cancer research during that year.
  It is certain that Congress has authority over the Tax Code. We 
understand the first amendment, free speech rights of any individual, 
and even in the case of commercial speech. We are very much aware of 
that. But there is no constitutional right to have the expense of a 
corporation's speech subsidized by the taxpayers. So, while I concur 
that within some limits, which the Senator from Rhode Island has 
outlined relative to commercial speech, there is a first amendment 
right that is at the heart of all of our concern about advertising, 
that certainly there is no constitutional right to taxpayer subsidy. 
When a message is designed to addict vulnerable youth to a deadly 
product, it is absolutely imperative for Congress to act with great 
urgency.
  So, again, I commend the Senator from Rhode Island for this 
amendment, for his excellent outline of the legal history of how we 
have arrived at where we are today. But it would seem in the course of 
all the contentious amendments that we have dealt with on this floor 
over the last several weeks, and will still in the week to come, that 
this ought to be an amendment around which there would be great 
bipartisan, commonsense support. I challenge any Member of this body to 
go home to his or her State and explain to constituents that at the 
same time we are trying to come up with ways to reduce youth addiction 
to tobacco products, that we continue to spend in the range of $1.5 
billion of the taxpayers' dollars--dollars that could be better used 
for medical research, for education, that could go back into the 
pockets of the taxpayers in the form of tax cuts, for that matter. 
Almost any other use would be more productive than to use it in such a 
negative way as a subsidy for marketing techniques directed at our 
youth.
  Again, I commend the Senator from Rhode Island. I commend this 
amendment to my colleagues and yield my time back to the Senator from 
Rhode Island.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. REED. Mr. President, first I thank the Senator from South Dakota 
for his fine words and support of this amendment and also for his 
effort in this legislative process. He has been there every step of the 
way, working very closely to ensure that we develop legislation that 
will work for the children of this country, their parents, and for all 
Americans. I thank him for that and for his kind words today.
  Again, continuing to respond to some of the issues that were raised 
today with respect to my amendment, there are suggestions that under 
the latest case, 44 Liquormart, there has to be a material showing that 
the regulation proposed, the proposed restriction on speech, will 
significantly and materially advance the underlying Government 
objective. Once again, in that particular case they do not find such 
significance. In this situation, the significance is obvious and 
compelling. The FDA, after its extensive rulemaking, concluded that 
limits on advertising will avert the addiction of anywhere between 25 
percent and 50 percent of the children at risk. So, literally, we have 
within our power the

[[Page S6319]]

ability to save 250,000 a year from the ravages of smoking. That is not 
hypothetical. That is not conjecture. That is based upon sound analysis 
by the FDA. And that is material and significant.
  Consequently, all the criticism directed to the amendment with 
respect to the first amendment, and particularly with respect to 44 
Liquormart, failed, I believe, and we are left with legislation that is 
focused, that deals with a very substantial national interest--the 
reduction of teen smoking--that directly affects that interest, that 
will produce significant material beneficial results, and also one that 
is used now after several other attempts have failed--noticeably 
warning labels, noticeably banning certain types of advertising, 
television advertising.
  So I believe we are on sound constitutional grounds and very, very 
sound policy grounds, because intuitively I think we all grasp that 
this barrage of advertising images has an overwhelming and upsetting 
effect on children. If 90 percent of 6-year-olds recognize Joe Camel 
and smoking, then that is pretty compelling evidence that we have to do 
something to restrain the way cigarettes are advertised and marketed in 
this country. That is what this amendment proposes to do.
  Let me also suggest that within the FDA regulations there are 
provisions which are not particularly novel. All of these discussions 
about restricting speech, I think, fail to recognize the fact that many 
States already put significant restrictions on cigarette advertising. 
For example, in California the State prohibits advertising of tobacco 
products within 1,000 feet of any public or private school playground. 
The statute also allows local ordinances to be more restrictive.
  A second statute makes it clear that one cannot sell, lease, rent, 
provide any video game which will primarily be used by minors if the 
game contains any paid commercial advertisement for tobacco products.
  In Indiana, the State prevents non-point-of-sale advertisements for 
tobacco within 200 feet of a school. In Kentucky, the State has banned 
tobacco billboard advertising within 500 feet of a school. In Texas, 
the State prevents tobacco advertising within 1,000 feet of a school or 
church. In Utah, the State law bans all tobacco advertising on ``any 
billboard, street car, sign, bus placard or any other object or place 
of display.'' In fact, the Utah statute originates from 1929.
  All of these States have, by their State laws, imposed restrictions 
on tobacco advertising. The justification, of course, is that they are 
protecting children. They have been on the books, in some cases, as in 
the case of Utah, for 60-plus years. So we are not breaking new ground. 
What we are doing, finally, is assembling a coherent set of rational 
regulations based on extensive findings by the FDA which will, we hope, 
for the first time ensure that children are not the objects of tobacco 
advertising.
  The other aspect or complaint that has been made about the amendment 
is that it might not work out well, it is using the Tax Code to enforce 
a public policy.
  Lately, this body has been preoccupied with using the Tax Code to 
enforce public policy positions of the various parties, so that is not 
a novel idea. But one aspect of this legislation which I think is very 
commendable is that essentially what will happen is that the industry 
itself will have to police itself. Today, the FTC, the Federal Trade 
Commission, could come in and take any one of these ads and say, ``This 
is false and misleading. You have no evidence to say it's smooth. This 
is just totally misleading.'' They can do that.
  It will take 2 years of administrative procedures to work through the 
administrative law judge level. And at the end of those 2 years, if the 
company is distressed with the outcome, they will simply sue and go to 
the court of appeals, claiming that the ALJ's decision was arbitrary, 
capricious, et cetera, and that appeal will be stretched out.
  In the world of advertising, the product life of an advertising 
campaign is measured probably in a month, maybe a year; there are 
perennials that last a long time. But that particular advertising will 
be old hat in a matter of months, so there is every incentive, when 
there is a question about whether they are pushing across the line or 
not, to go ahead and advertise, because, remember, if you hook that 16-
year-old, you have a faithful customer for 30 years maybe.
  In this situation, they are going to have to look very carefully, 
because the consequence of violating this amendment is that they lose 
their tax deduction, it goes right to the bottom line, and it is 
something that if they choose to litigate for years or months and, at 
the end, they are found liable, not only do they pay the taxes owed, 
but also interest and penalties. They are very much concerned, as they 
should be.
  This is an effective enforcement device. I believe we need effective 
enforcement devices. We have tried other approaches--the advertising 
ban on television, the warning labels, even FTC jurisdiction to ferret 
out individual ads--but still we are seeing our young people deluged by 
these advertisements and, again, remarkably, 90 percent of 6-year-olds 
being able to recognize Joe Camel as a symbol for cigarette smoking in 
the United States. So I believe we need this amendment very, very much.
  Let me suggest also there has been another general argument against 
the amendment, and that argument has essentially been: Well, the sky's 
falling, the slippery slope; if you do this, you will enforce every 
Federal regulatory policy with the Tax Code, and that will be a 
terrible thing. Again, I think that is more alarmism than rational.
  The reason I am here today is that central to the business of tobacco 
is the business of promoting it through advertising. People smoke 
cigarettes like this not because they have, I think, some need to do 
it, but they have been subjected to this type of advertising over many, 
many years. Advertising and cigarette promotions have been hand in hand 
for as long as anyone can remember.
  If you go back far enough, the industry was much more aggressive in 
some respects, and blatant. They put in magazines pictures of doctors 
smoking away, suggesting that cigarette smoking was really good for 
them; they put in photographs, pictures, drawings of very attractive, 
sophisticated young women, suggesting that smoking was good to control 
weight--none of which, of course, was buttressed by the fact that 
smoking is an addiction that ultimately prematurely kills people.
  There is such a logical connection, an inextricable connection, 
between advertising, the way they do it, and the promotion of a tobacco 
product that it is logical to take this step. It is not logical to 
suggest that FDA regulations will be enforced by denying deductibility 
or any other type of regulatory policy. So the whole issue of, this is 
just the first step on a very slippery slope is, I think, refutable on 
its face.
  We have before us the opportunity to pass significant legislation 
which will materially, effectively improve the public health of this 
country. We have to recognize--I think so many of us do--that 
cigarettes probably are the No. 1 pediatric disease in the country. It 
affects kids adversely. It takes it a while to catch up with them, but 
it affects kids adversely. Ninety percent of smokers begin before they 
are 18 years old. This is a pediatric health crisis, and we are 
responding.
  The fear I have is, if we don't respond in this manner, that we 
really won't be able to effectively accomplish what we want to do. Even 
if we pass this legislation--and Senator McCain has done a remarkable 
thing moving this legislation through; his perseverance and strength, 
along with Senator Kerry and along with so many of my colleagues, has 
been remarkable--even if we pass legislation that has increases on the 
price of cigarettes, that has effective funding for a public health 
program, if we do that and yet we still have no real check on 
advertisements like this aimed at young people, I believe we will end 
up not doing what we are setting out to do: to restrict smoking among 
underage Americans.
  I think we should do it, I think we must do it, and I urge careful 
consideration and support for this amendment.
  Mr. President, I yield the floor.
  Mr. ABRAHAM. Mr. President, I rise to raise concerns about the Reed 
amendment to the pending tobacco legislation. The amendment offered by 
the Senator from Rhode Island may sound appealing on first impression, 
but

[[Page S6320]]

could have some harmful consequences. While I believe that the 
amendment is offered in all sincerity, in my view it would be wrong for 
us to take this approach to tobacco use. In particular, this amendment 
would establish a dangerous precedent by using federal tax policy as 
the primary enforcement penalty for federal agency rules issued by an 
agency other than the IRS.
  Let me give a few examples to highlight the concerns I have:
  First, imagine that General Motors has announced its fall line of new 
Chevrolets, but that the Department of Transportation determines that 
the cars fail to meet the minimum fuel consumption standards. Now 
imagine that the Department of Transportation could instruct the 
Internal Revenue Service to disallow as a business deduction the cost 
of all General Motors advertising for 1998. That could be devastating, 
and it would place tremendous and potentially destructive power in the 
hands of the federal government.
  Another example: Say the Department of Agriculture conducts a routine 
inspection of one of the nation's largest food processing facilities in 
the Midwest. Upon finding unsanitary conditions, the Secretary of 
Agriculture might announce under a similar regulation that the food 
processing company that operates the plant and every company that 
markets its products will be punished by losing the entire deduction 
for 1998 of all of their food product marketing and advertising costs. 
Again, the result could be disastrous.
  The pending amendment would make such scenarios all the more likely.
  Under the Reed amendment, if the FDA found that one advertisement of 
a tobacco product failed to comply with marketing and advertising rules 
issued by the FDA nearly two years ago and still under litigation, the 
offending company would lose the entire business expense deduction for 
all of its advertising. This is unsound public policy, unsound tax 
policy, and an unwise expansion of federal regulatory authority.
  Federal agency rules are generally enforced with other fines or 
penalties that are tailored to the violation. The Reed amendment would 
allow the same result--a higher tax payment, which could in some cases 
be quite substantial--regardless of whether a violation was inadvertent 
or inconsequential.
  In addition, the financial impact could itself be tremendous and 
could get into the hundreds of millions of dollars. The Congress should 
not be giving the FDA such expansive and punitive authority. The 
possibility of such a penalty could chill advertising and deter 
legitimate, protected speech. In my view, this raises constitutional 
concerns and liberty interests that should at a minimum be seriously 
considered in the appropriate committees, including the Finance and 
Judiciary Committees, before we consider placing such an unprecedented 
and potentially damaging provision in the pending legislation.
  We should be especially careful about creating a precedent that will 
not only distort the Tax Code but will lead to more expansive and 
intrusive authority on the part of regulatory agencies. Mr. President, 
I ask unanimous consent to have printed in the Record a letter by 
Grover Norquist, President of Americans for Tax Reform, expressing 
strong concerns about the tax implications of the Reed amendment and 
about the significant increase in governmental authority contemplated 
by that amendment as well.
  While I believe Senator Reed to be well-intentioned, I urge my 
colleagues to oppose the amendment.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                     Americans For Tax Reform,

                                    Washington, DC, June 12, 1998.
     Hon. Spencer Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Senator Abraham: I am writing to express my strong 
     opposition to an amendment that Senator Jack Reed (D-RI) is 
     offering to the anti-tobacco legislation (S. 1415). This 
     fatally flawed amendment would for the first time in our 
     nation's history link the denial of a necessary and ordinary 
     business expense deduction to complying with rules issued by 
     a federal regulatory agency. It is my understanding the Reed 
     amendment will be debated today and possibly voted on next 
     Monday evening.
       The Reed amendment, which would eliminate the ability of 
     tobacco companies to deduct all advertising, marketing, and 
     promotion costs if only one advertisement violates 
     regulations promulgated by the Food and Drug Administration, 
     is a reckless attempt to use the Tax Code for a purpose for 
     which it was never intended. I can find no sound public 
     policy reason to start using the Tax Code to help enforce FDA 
     regulation, which by the way have been declared illegal by a 
     Federal District Court.
       This amendment, if adopted, could establish an unacceptable 
     precedent of granting power to such agencies as the 
     Environmental Protection Agency (EPA), the Occupational 
     Safety and Health Administration (OSHA), the Equal Employment 
     Opportunity Commission (EEOC), the Federal Trade Commission 
     (FTC), or any other government agency that issues regulations 
     to increase taxes on businesses by millions of dollars for 
     technical violations of rules that are highly complex and 
     confusing.
       For example, would it be proper to allow OSHA to deny the 
     ability of a large consumer product manufacturer from 
     deducting its advertising costs simply because a building 
     among its many facilities around the country violates one 
     OSHA standard? Or another example, should EPA be permitted to 
     use the Tax Code against a small business, which greatly 
     depends on advertising to stay in business, because the small 
     businessperson inadvertently violates an EPA regulation 
     because of a technical misunderstanding?
       This is exactly what the Reed amendment, if approved, puts 
     in motion as every anti-business group in the country will 
     attempt to enlist the Tax Code to fulfill their agenda.
       In short, the utilization of the federal government's 
     taxing authority for regulatory enforcement may represent one 
     of the largest expansions of the federal government's power 
     since enactment of the Great Society programs of the 1960's. 
     Therefore, I strongly urge you to vote against this ill-
     conceived proposal.
           Sincerely,
                                               Grover G. Norquist,
                                                        President.

  Mr. McCAIN. Mr. President, I wish I could support the Reed amendment. 
If this amendment simply disallowed the tax deductibility of any 
advertising deemed in violation of FDA rules, I believe we might be in 
the ballpark.
  However, this amendment goes well beyond. It says that if a company 
advertises in any way, even unintentionally, that violates FDA rules, 
then that company may not deduct any advertising expenses incurred that 
year which are otherwise legal and deductible under current law.
  Mr. President, concerns have been expressed about the advertising 
deduction as generally applied. In fact, both the CATO and the 
Progressive Policy Institutes have identified this deduction as one 
that should be reformed. Perhaps that is something we should do in a 
manner that treats all taxpayers the same. But, this amendment is not a 
general reform, it is specific and I believe goes too far.
  I appreciate the motives of the Senator from Rhode Island but I will 
not vote for this amendment.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GORTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Roberts). Without objection, it is so 
ordered.
  The Chair advises the Senator, under the previous order, the Senate 
is to proceed to the amendment by the Senator from Rhode Island, No. 
2702, with 10 minutes allowed for debate, 5 minutes each, and then a 
vote no later than 5 o'clock on or in relation to the amendment, unless 
consent is granted otherwise.
  Mr. REED. Mr. President, I propose a unanimous consent that we begin 
the debate on my amendment at 5 o'clock, to conclude at 10 minutes 
past, and to begin the vote at 5:10.
  Mr. GORTON. Unfortunately, I must object on behalf of the majority 
leader. He wishes the vote take place then. Then I will yield the 
floor.
  The PRESIDING OFFICER. The objection is heard.
  Mr. REED. Mr. President, at 5 p.m. the Senate will vote on my 
amendment, which would deny advertising deductions to the tobacco 
industry if they do not follow the FDA rules and regulations with 
respect to advertising to children.
  We are here debating a large, comprehensive tobacco bill because our 
major goal, our overriding interest, is to prevent children from being 
enticed into smoking. We know from the industry's own records that they 
have relentlessly, over decades, deliberately

[[Page S6321]]

mounted promotional advertising campaigns aimed at children as young as 
12 or 13 years old. We know from the effects of this record that in a 
survey of 3-year-old children, 60 percent or so recognize Joe Camel as 
a symbol of smoking; 6-year-old children, first grade, 91 percent 
recognize Joe Camel as a symbol of smoking.
  Advertising and the promotion of cigarettes are inextricably linked. 
My amendment goes to the heart of that. The FDA has proposed narrowly 
based and narrowly focused regulations. The amendment would say if the 
tobacco industry does not want to abide by these regulations, they lose 
their tax deductions for advertising. Taken by itself, my amendment 
does not even preclude them from saying anything or doing anything. 
What it simply says is they will do it on their own nickel.
  Now, we have a great support from the public health community. The 
following organizations and individuals are supporting it: C. Everett 
Koop, the former Surgeon General, the American Lung Association, the 
Center for Tobacco-Free Kids, ENACT Coalition, and many others. 
Cosponsors of this legislation include my colleagues Senator Boxer, 
Senator Wyden, Senator Kennedy, Senator Daschle, Senator Durbin, 
Senator Wellstone, Senator Feinstein, Senator Bingaman, Senator Conrad, 
and Senator Johnson.
  This amendment is a logical way to strengthen and make effective the 
major goal of this legislation. It also is constitutionally permissible 
under the Central Hudson test, the Supreme Court case that outlined 
permissible limits on commercial speech. It meets that test. First of 
all, we are advancing a substantial national interest. According to the 
FDA documents and their research and the rulemaking, if we have 
effective controls on advertising to children, we can save 
approximately 250,000 children a year from becoming addicted to 
nicotine.
  It is also directly related to the substantial national interest. In 
fact, the industry itself is the best evidence of this. They spend $6 
billion a year on advertising. We are subsidizing them to the tune of 
$1.6 billion, but they know and they have demonstrated that advertising 
is the way they entice young people to smoke. If we stop this linkage, 
we will do more than anything else to ensure that we protect the 
children of America.
  The final aspect of the Central Hudson test is that this legislation 
is narrowly constructed and focused. As I mentioned before, it does not 
absolutely forbid any ban on speech. What it does do, however, it 
essentially restricts their ability to put posters near schools and to 
do many other things.
  This legislation is both constitutionally sound and is a public 
policy which will support what we are here to do--to prevent children 
from smoking.
  The PRESIDING OFFICER. All time has expired.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The distinguished Senator from Washington is 
recognized.
  Mr. GORTON. How much time is available to the opponents?
  The PRESIDING OFFICER. There is approximately 2 minutes 45 seconds 
allotted to the majority.
  Mr. GORTON. Mr. President, in the absence of any other person here, I 
yield myself that time to say that during 2 years when I was not in the 
Senate, between 1987 and 1989, I had the privilege of being a partner 
in a Seattle firm, Davis, Wright and Tremaine, the senior partner of 
which, Cameron DeVore, is one of the most distinguished first amendment 
lawyers in the United States. He informed me in no uncertain terms, and 
I agree with him, that this proposal is clearly and blatantly 
unconstitutional. You cannot condition a right, a privilege, available 
to everyone else in the United States, on its abandonment of its first 
amendment rights--a highly simple proposition.
  We can and we should limit advertising of cigarettes. We can only do 
that constitutionally, Mr. President, if we come up with a bill like 
the proposal made by the State attorneys general that has the agreement 
of those who are asked to give up their first amendment rights to 
advertising. Therefore, this amendment should be defeated.
  On another matter, Mr. President, on Thursday, for the second time, I 
voted against limitations on attorney's fees in these cases, because in 
both cases I thought they were unfair. I will soon introduce an 
amendment that allows higher attorney's fees for those who began these 
cases early, when they were greatly at risk and ask for lower 
attorney's fees for those attorneys who got in late, when winning cases 
of the nature that have been discussed here is like shooting fish in a 
barrel.
  I think we should be fair. I think we also have the right to propose 
and propound such limitations to those who have come before the 
Congress asking us to intervene in what previously was litigation 
outside of the scope of the Congress at all.
  I am sorry I have no more time at this point to discuss that 
proposal, but it is both nuanced in favor of those attorneys who really 
did the yeomen's work in this connection and much less favorable to 
those who got in essentially after the fact and who will be engaged in 
such litigation in the future.

  Mr. President, I move to table the Reed amendment, and I ask for the 
yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion of 
the Senator from Washington to lay on the table the amendment of the 
Senator from Rhode Island.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Mr. GORTON. Mr. President, I am now informed that the leaders of both 
sides are willing to postpone this vote for approximately 10 minutes. I 
ask unanimous consent that the vote on the motion to table take place 
at 5:10.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. REED addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Mr. President, again, the vote before us is a vote on my 
amendment which would restrict the deduction of advertising expenses 
for tobacco companies which do not choose to follow FDA rules and 
regulations. There are many reasons why this is appropriate. The most 
compelling reason is simply the record of tobacco itself. It is a 
record that has shown over many, many decades a consistent attempt to 
market to children.
  There have been some objectives with respect to the first amendment. 
Let me suggest, first, that commercial speech under the doctrine of the 
Supreme Court is not afforded the same level of protection as pure 
political speech. This is clearly a case of commercial speech.
  Second, the test of the leading case, Central Hudson, clearly states 
that if there is a substantial governmental interest, if the proposed 
legislation addresses directly that interest, and if it is done by 
means that are narrowly focused and no more than is necessary, that it 
would pass the test. I submit that this legislation does that. There 
can be no more compelling national interest than curbing teenage 
smoking.
  Under the record of the FDA, they have demonstrated that if we take 
effective advertising restrictions and put them in place, we could on 
an annual basis save 250,000 children from addiction to nicotine. That 
is a direct, material, significant correlation between the substantial 
national interest and this legislation.
  Finally, this legislation is narrowly focused.
  I also submit that this legislation does not spring up de nova. We 
have had a long record of trying to constrain access to tobacco 
products to children. In the 1970s and 1960s, we put warning labels on 
cigarettes. That has proven ineffective. In the early 1970s, we banned 
TV advertising on tobacco products. That has proved ineffective. We 
have reached an intellectual consensus that in order to get the job 
done--that is what we are here to do--in order to effectively prevent 
the children from the addiction of nicotine, we have to have reasonable 
constraints on advertising. This legislation does it.
  I should also point out that many States in the United States already 
impose certain restrictions on advertising to children. For example, 
the State of Utah precludes the placement of billboards or other types 
of visible advertising for cigarettes within that State.
  To point out that in many other jurisdictions--Texas, for example--
there

[[Page S6322]]

are limits on how close one can place a billboard within a school. All 
of these have been in effect for many, many years. They have been 
tested. They are constitutionally permissible. We can do it. And, 
indeed, we must do it.
  We have literally within our power the opportunity to save 250,000 
children a year from the ravages of smoking. That is the conclusion of 
the FDA after their extensive, detailed rulemaking process. We can and 
we must insist on this type of regulatory authority. I think it will 
provide a device that will lead the companies to do what they have yet 
been unable to do; that is, stop marketing cigarette products to 
children.
  We see it in every manner in every form. I have been for the last 
several days pointing out an advertisement, a mail solicitation that a 
16-year-old junior high school student received in Providence, RI. It 
was slick. It was sophisticated. It was based upon a rock concert that 
he attended several months before, a concert attended by many people 
under 18 years of age. It was not coincidental. It was a deliberate, 
calculated, focused attempt by the industry using the talents of 
advertising executives, focus group directors, people who understand 
psychology and the dynamics of youth addiction, to figure out how they 
could get the message right in the hands of a 16-year-old that smoking 
is good; not only good, it is socially desirable.
  We shouldn't stand for that. We don't have to stand for it. We know 
that for years and years and years the tobacco industry has been 
misleading the American public. That is objectionable. But when we 
discover, as we do from all of these documents and all of this 
litigation, that their target has been young children as young as 12 
and 13 years old, that becomes unconscionable. And the conscious of 
this country and the conscious of this Senate will be tested today. 
Will we take effective steps to preclude access to tobacco products of 
children?
  This amendment is constitutionally sound. This amendment will, in 
fact, provide decisive and effective controls on tobacco access by 
young people in this country. We shouldn't shrink from this 
responsibility. We should pass this legislation to ensure that when we 
finish this great debate, and as we look ahead, we will be confident 
that we have taken effective, practical steps to prevent children from 
being addicted to nicotine and tobacco. If we don't do that, many, many 
young people--the estimate is 5 million young people under 18--will die 
prematurely. We can stop that if we vote today to support this 
amendment.
  I retain the remainder of my time.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Grams). The Senator from Oklahoma is 
recognized.
  Mr. NICKLES. Mr. President, how much time is in opposition to the 
amendment?
  The PRESIDING OFFICER. The Senator from Oklahoma has 3 minutes 
remaining.
  Mr. NICKLES. Mr. President, I urge my colleagues to vote against this 
amendment.
  First, let me say to the proponents that if they want to have an 
amendment to ban advertising, or deduction of advertising, for tobacco 
products, they can do so. But to turn it over to the FDA, I think, may 
be some of the worst tax policy we have seen. This bill already has 
some of the worst tax policy we have seen. The look-back penalties, as 
I have stated a couple of times, are clearly not working. But if I read 
this amendment right, advertising is deductible, unless it doesn't 
comply with FDA regulations.
  What are the FDA regulations? You are in violation of FDA regulations 
if you have a ball cap that says ``Marlboro'' on it. If I have a staff 
member who went to a car race, or something, that has a ball cap that 
says ``Marlboro,'' they would be in violation. I don't know if a ball 
cap under FDA regulations would be in violation of advertising 
restrictions. They would lose deductibility of their advertising 
expenses.
  Again, if people want to be more direct, let's be more direct. Just 
say, I have an amendment to disallow all advertising expenses for 
tobacco products. I expect some may have that. They probably will have 
it on this bill. But to say you cannot have the deduction unless you 
comply with FDA regulations, and treating FDA regulations as 
sacrosanct, as if they make sense--some of them don't make sense. For 
example, there is an FDA regulation that says people selling tobacco 
must check IDs up to age 27. A lot of people aren't aware of it. But 
that is part of the same FDA regulation that we are talking about. I 
don't think that is workable. It is legal to buy cigarettes if you are 
over 18. But if you are 18, and they come up with a regulation that 
says we are going to mandate that you check identification of people up 
to age 27--they also have restrictions on advertising that says you 
can't have a T-shirt, a ball cap, or tobacco companies--you can't 
advertise during the races. This is auto racing time--Indianapolis 500. 
My friend from Indiana is here. My guess is there was a car running 
around the track that had ``Marlboro'' on it. Somebody probably said, 
``Wait a minute. That is directed at youth.'' I don't know if it is 
directed at youth or not.
  If they did it, if they sponsored a sporting event, they would be in 
violation of this provision and they would lose deductibility of 
advertising.
  I just do not think we should have FDA making tax policy. I do not 
think we should have FDA deciding what is compliance or whether a 
company is allowed to take the deduction. If Senators do not want to 
have tobacco advertising, they want to ban it, let them introduce that 
on a tax bill, but let's not turn that kind of authority over to FDA. I 
think this bill has already granted FDA too much authority, including 
the authority to totally ban nicotine without prior congressional 
approval, which I think is a mistake, and I think the ID check up to 
age 27 is a mistake. I think that is FDA overreaching. I think their 
ban on ball caps and T-shirts, again, is overreaching.
  Now, I do not want them targeting teenagers either, but I think to 
turn over tax policy to FDA would be a serious mistake. So I urge my 
colleagues to vote no on this amendment.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. REED. Mr. President, in whatever time I have remaining, I would 
like to respond.
  First of all, I do not want to let stand the suggestion that this has 
anything to do with checking IDs at a retail store. That is not part of 
the FDA regulation.
  The PRESIDING OFFICER. The time of the Senator from Rhode Island has 
expired.
  Mr. REED. I thank the Chair.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table the Reed amendment No. 2702. The yeas and nays have been ordered. 
The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. NICKLES. I announce that the Senator from Montana (Mr. Burns) and 
the Senator from Oklahoma (Mr. Inhofe) are absent on official business.
   I also announce that the Senator from Pennsylvania (Mr. Specter) is 
absent because of illness.
  Mr. FORD. I announce that the Senator from Illinois (Mr. Durbin), the 
Senator from Nebraska (Mr. Kerrey), and the Senator from Illinois (Ms. 
Moseley-Braun) are necessarily absent.
  The result was announced--yeas 47, nays 47, as follows:

                      [Rollcall Vote No. 159 Leg.]

                                YEAS--47

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Campbell
     Coats
     Cochran
     Craig
     Domenici
     Enzi
     Faircloth
     Feingold
     Ford
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hollings
     Hutchinson
     Kempthorne
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Moynihan
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--47

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Bumpers
     Byrd
     Chafee
     Cleland
     Collins
     Conrad
     Coverdell
     D'Amato
     Daschle
     DeWine
     Dodd
     Dorgan
     Feinstein
     Glenn
     Graham
     Harkin
     Hutchison
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Murray
     Reed
     Reid
     Robb
     Rockefeller

[[Page S6323]]


     Roth
     Sarbanes
     Snowe
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--6

     Burns
     Durbin
     Inhofe
     Kerrey
     Moseley-Braun
     Specter
  The motion to table the amendment (No. 2702) was rejected.
  The PRESIDING OFFICER. The question now occurs on the amendment of 
the Senator from Rhode Island.
  The amendment (No. 2702) was agreed to.
  Mr. REED. Mr. President, I move to reconsider the vote by which the 
amendment was agreed to.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, I enter the motion to reconsider the vote 
by which the Reed amendment was adopted.
  The PRESIDING OFFICER. The motion to reconsider has been entered.
  Mr. SARBANES. Mr. President, I rise to voice my hopes that the Senate 
will this week have the opportunity, after several weeks of debate, to 
vote on the pending tobacco bill.
  The course that this bill has taken is in marked contrast to the 
course taken by many other important bills that we have considered in 
the 105th Congress. Whereas the Republican leadership has severely 
truncated debate on such important matters as campaign finance reform 
and education policy, we have been on the tobacco bill for several 
weeks, have engaged in hours of debate, and have considered a wide 
range of amendments. I have no doubt that when the Republican 
leadership has wanted quick resolution of an issue during the 105th 
Congress, it has understood how to accomplish that goal, and worked 
toward it. A similar commitment has not been apparent in the area of 
tobacco legislation.
  Let me be clear, Mr. President. I support the idea of full and 
considered debate on an issue as important as this one. I also believe, 
however, that once an issue has been fully vetted, once Senators have 
had a chance to listen to the debate and vote on amendments, it becomes 
time for the Senate to step up to the plate and vote on the legislation 
before us. That is what we are paid to do, and it is what the American 
people expect us to do.
  This is the fourth week of the tobacco debate. We have debated and 
voted on germane amendments and non-germane amendments; we have 
consumed dozens of hours of floor time and hundreds of pages in the 
Congressional Record. I worry, Mr. President, that the delays we are 
now facing on this bill are not designed to allow further thoughtful 
consideration of tobacco legislation, but rather to delay and obfuscate 
that legislation, to add to tobacco legislation layer upon layer of 
unrelated measures, to divide supporters of action in this area, and to 
run the clock in a legislative session that is evaporating before our 
eyes. The American people deserve better than that.
  Now I do not support everything in this bill. I have voted for some 
of the amendments the Senate has considered and against others. I have 
found the wide-ranging discussion on the Senate floor to be valuable 
and enlightening in some instances and irrelevant and repetitive in 
others. I do believe, however, that by the end of this week, after the 
Senate has had the chance to consider the handful of remaining 
outstanding issues, we will be ready to take a stand on how to deal 
with the problems of smoking--especially the problem of teen smoking--
in our nation.
  Mr. McCAIN. Mr. President, it is my understanding the Senator from 
Texas is waiting to speak, and the Senator from Minnesota. I ask both 
of them if they would like to begin and would ask their indulgence of 
Senator Gorton, who is going to come over for a brief time to lay down 
an amendment--very briefly, if they would allow him to interrupt for a 
few minutes upon his arrival.
  Several Senators addressed the Chair.
  Mr. McCAIN. 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. McCAIN. 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. Mr. President, I ask unanimous consent that the Senator 
from Texas be allowed to go into morning business, followed by the 
Senator from Minnesota, and at some time the Senator from Washington be 
recognized to interrupt for morning business to lay down an amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, before you finish, let me make sure 
that I will be able to ask for a resolution to be unanimously passed 
and if I can do that in morning business. I want to be sure that I can 
do that. It has been cleared.
  The PRESIDING OFFICER. Repeat the request.
  Mrs. HUTCHISON. I have a resolution that has been entered by both 
sides. I wanted to be able to bring it up, read the resolution, and 
speak for about 5 minutes, and ask unanimous consent that it be passed. 
So I didn't want to be prohibited from doing that in morning business.
  The PRESIDING OFFICER. Will the Senator from Arizona make that part 
of his request?
  Mr. McCAIN. I do.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mrs. HUTCHISON. I thank the Chair. I thank the Senator from Arizona.

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