[Congressional Record Volume 144, Number 78 (Tuesday, June 16, 1998)]
[Senate]
[Pages S6381-S6398]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT
The Senate continued with the consideration of the bill.
Amendment No. 2705, As Modified
The PRESIDING OFFICER. The pending question is the Gorton amendment,
No. 2705, as modified.
Mr. LOTT. Mr. President, have the yeas and nays been ordered?
The PRESIDING OFFICER. They have not.
Mr. LOTT. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays are ordered and the clerk will call the roll.
The legislative clerk called the roll.
Mrs. BOXER (when her name was called). Present.
Mr. LOTT (when his name was called.) Present.
Mr. NICKLES. I announce that the Senator from Pennsylvania (Mr.
Specter) is absent because of illness.
The result was announced--yeas 49, nays 48, as follows:
YEAS--49
Abraham
Allard
Ashcroft
Bond
Brownback
Burns
Byrd
Campbell
Chafee
Coats
Collins
Coverdell
Craig
Dodd
Domenici
Dorgan
Enzi
Faircloth
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Helms
Hutchinson
Hutchison
Inhofe
Kempthorne
Kyl
Lieberman
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Roberts
Santorum
Sessions
Smith (NH)
Smith (OR)
Snowe
Stevens
Thomas
Thompson
Thurmond
Warner
NAYS--48
Akaka
Baucus
Bennett
Biden
Bingaman
Breaux
Bryan
Bumpers
Cleland
Cochran
Conrad
D'Amato
Daschle
DeWine
Durbin
Feingold
Feinstein
Ford
Glenn
Graham
Harkin
Hatch
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Mikulski
Moseley-Braun
Moynihan
Murray
Reed
Reid
Robb
Rockefeller
Roth
Sarbanes
Shelby
Torricelli
Wellstone
Wyden
ANSWERED ``PRESENT''--2
Boxer
Lott
NOT VOTING--1
Specter
The amendment (No. 2705), as modified, was agreed to.
Mr. McCAIN. I move to reconsider the vote.
Mr. KERRY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
explanation of vote
Mrs. BOXER. Mr. President, I wish to inform the Senate of the reason
I voted ``present'' on the Gorton amendment related to limits on
attorneys' fees in tobacco cases.
I abstained on this vote because my husband's law firm is co-counsel
in several lawsuits against tobacco companies filed in California state
court by health and welfare trust funds.
The Ethics Committee has advised me that voting on an amendment such
as this ``would not pose an actual conflict of interest'' under the
Senate Code of Conduct.
However, I decided that this vote could create the appearance of a
conflict of interest and therefore I abstained by voting ``present.''
explanation of absence
Mr. DURBIN. Mr. President, I would like to take a moment to explain
my absence during vote number 159 last night. I was returning to
Washington from Chicago when the airplane I was on was delayed by
weather problems. While the vote was going on, the plane was in the air
over the Washington area as we waited for the airport to reopen so that
we could land.
Had I been present, I would have voted `nay' on the motion to table
the Reed amendment to the tobacco bill. I am a cosponsor of the Reed
amendment and I believe it should be part of the final tobacco
legislation.
The tobacco industry has been targeting kids with its advertisements
and marketing gimmicks for far too long. The tobacco bill would re-
promulgate the FDA's regulations, currently on hold, that seek to
restrict tobacco advertising and marketing that appeals to children.
The Reed amendment adds new teeth to the restrictions by linking each
tobacco company's tax deduction for advertising expenses to its
compliance
[[Page S6382]]
with the regulations. As long as a tobacco company obeys the law and
complies with the FDA regulations, the company can continue to deduct
its expenses for permissible advertising. But, under the Reed
amendment, if a tobacco company violates these restrictions, the
company's privilege of deducting its advertising expenses for tax
purposes would be lifted for all of its advertising expenses for the
year in which the violation occurred.
This amendment, as with the look-back amendment, is about
accountability. If a tobacco company decides to try to skirt the FDA
regulations, to keep advertising or marketing in ways that appeal to
children, that company will face not just a regulatory action by the
loss of its advertising deduction. With this amendment, taxpayers will
no longer help foot the advertising bill for companies that continue to
market to children. Tobacco companies will no longer get a tax break
for advertising expenses if any of the company's advertising violates
the FDA's regulations for protecting children.
It's a simple amendment with a simple point. Its message is that we
are serious when we say to the tobacco companies: no more advertising
to children. This amendment deserves the support of the Senate.
Mr. McCAIN addressed the Chair.
The PRESIDING OFFICER (Mr. Hutchinson). The Senator from Arizona.
Mr. McCAIN. Mr. President, the Senator from Kentucky has been waiting
very patiently to propose his amendment. I just want to sum up what we
just passed here, and I think it is very important.
We passed limits on attorneys' fees of $4,000 per hour for actions
filed before 12-31-94; $2,000 per hour for actions filed between 12-31-
94 and 4-1-97; $1,000 per hour for actions filed between 4-1-97 and 6-
15-98; and $500 per hour for actions filed after 6-15-98.
Before the Senator from Washington leaves the floor, I would like to
thank him for his amendment. I thank him for his persuasive arguments
in a very close vote. Obviously, it was the effort of the Senator from
Washington that tilted the vote in favor of this amendment, albeit by
one vote. So I express my appreciation to the Senator from Washington.
Mr. President, I just go on to say, it does not apply to any fees
paid to attorneys that are defending tobacco companies. It does not
apply to any fees actually remitted and received by an attorney before
6-15-98, nor to reimbursement of actual out-of-pocket expenses approved
by a court in such actions.
It applies to all actions brought on behalf of a State or political
subdivision, the Castano civil actions, and all tobacco actions brought
on behalf of private litigants that are settled or ``finally resolved''
after June 15, 1998.
It directs the courts to consider the following factors in
determining an attorney's fee as: likelihood of success; time and labor
invested; expenses incurred; novelty of the legal issues involved;
skill required to prosecute the action; and results obtained.
It permits the tobacco companies to petition to reduce fees that they
had already agreed to pay to plaintiffs' attorneys in the States that
have already settled.
Mr. President, I think it is an important amendment. I do believe
that my friend from Massachusetts would agree with me that really it is
as outstanding as the agricultural issue, the farmers issue.
We can go through iterations--and there are maybe hundreds of
amendments filed--but except for the agriculture issue, we have pretty
well resolved the outstanding issues that are associated with this
legislation. And I would like to first express optimism that we can
address that issue. I still hope we can reach a compromise between the
two--the LEAF Act and the so-called Lugar Act. But in addition to that,
I believe that we can invoke cloture and dispense with this bill this
week.
I thank my colleagues for their cooperation, and I yield the floor.
Mr. KERRY addressed the Chair.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KERRY. Mr. President, let me say on behalf of my colleagues, that
with respect to the last amendment, their vote was a reflection, I
know, of grave concerns on our side of the aisle about the Senate
putting its stamp of approval on a $4,000-per-hour fee.
Some may think that is a fee that they are willing to attach
automatically based on a date, but I think a lot of people felt very
strongly that the independence of the judiciary and its capacity to be
able to analyze according to the very same standards in the Gorton
amendment--the Gorton amendment borrowed from our bill each of the
categories of evaluation that would be applied by the courts. So in
effect, they are really mandating an outcome which may or may not fit
for one case or another case.
I know I heard colleague after colleague suggest to me that, as a
Senator, they did not want to approve of a $4,000-an-hour fee. So that
is the distinction here. Some were willing to put their approval on it;
some were not. But the fact is, the amendment carried by one vote, and
that is the will of the Senate.
We now find ourselves--I want to express my agreement with the
Senator from Arizona--we have traveled a 3-week journey, and we have
waded through the most difficult issues. The closeness of the votes on
some of them clearly indicates the difficulty of trying to come to
agreement, but nevertheless, the Senate has spoken on those.
We have resolved the most significant issues--the liability issue,
the question of look-back amendments. The bill was strengthened in
those regards. We resolved the marriage penalty. Again, for some, the
bill was strengthened by providing a certain component of a tax cut and
a drug program. So those are the fundamental components of this
legislation--together with an FDA regulatory process that is essential
to the capacity to deal with tobacco.
Therefore, that brings us to the point now where the Senator from
Kentucky is about to tackle the really last tough issue with respect to
this legislation. Speaking on behalf of the Senators on our side of the
aisle, there are more than 40 Senators that I know of prepared to vote
for this legislation now. More than 40 Senators are prepared to vote to
end debate now, and more than 40 Senators are prepared to vote for the
legislation in order that we can move it to the House and ultimately to
a conference.
So the real test before the Senate this week is the test of whether
or not the members of the Republican Party are going to join those 40
to create the critical mass necessary to pass tobacco legislation. If
we pass it, it will be because we come together as a Senate. If we fail
to pass it, it will be because the Republicans decided they did not
want to pass it. Given the number of Democrats in our caucus--45--to
have more than 40 prepared to vote now on a bill is significant.
So that is where we find ourselves. I hope that in the next hours we
will resolve the farm issue satisfactorily. To the degree there are any
amendments left on the Democrat side, we are prepared to enter very
short time agreements if indeed there will be those amendments. So we
have the ability on this side of the aisle to move rapidly; not to tie
up the Senate in knots, but to pass competent tobacco legislation. And
it is my fervent hope that in the interests of the last 3\1/2\ or 3
weeks-plus, and the several years of labor that has been engaged in by
a number of different people in the Senate before this bill ever came
to the Commerce Committee, that we would be able to do that. I think
the Senator from Arizona shares that hope.
Mr. CONRAD addressed the Chair.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I say very briefly that what the Senator
from Arizona and the Senator from Massachusetts have said is exactly on
point. We really now have one major outstanding issue, and that is the
question of how tobacco farmers are treated in this legislation.
Hopefully, that could be resolved in a way that would be acceptable to
both sides.
We understand discussions are under way, and we hope that they could
be concluded. But really that is the one major issue left. Then we get
on to a whole series of amendments that many Senators would like to
offer. I can say for myself I have a number of amendments pending that
I am willing to
[[Page S6383]]
withhold in the interest of advancing this legislation.
I have had lots of colleagues come to me this morning and say they,
too, would be willing to withhold their amendments if that would
advance actually reaching conclusion on this bill. We are in the fourth
week. We have dealt with contentious issue after contentious issue. Now
is the time to reach conclusion. I urge our colleagues on both sides,
if they can, withhold amendments that they have pending so that after
the farmer issue is resolved we can move to final passage.
I thank the Chair, and I thank my colleagues who have been so
patient.
The PRESIDING OFFICER. The Senator from Kentucky.
Amendment No. 2707 to Amendment No. 2437
Mr. FORD. Mr. President, I send an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Kentucky [Mr. Ford] proposes an amendment
numbered 2707 to amendment No. 2437.
Mr. FORD. I ask unanimous consent reading of the amendment be
dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the end of the amendment, insert the following:
SEC. . INAPPLICABILITY OF TITLE XV.
The provisions of Title XV shall have no force and effect.
SEC. . ASSISTANCE FOR PRODUCERS EXPERIENCING LOSSES OF FARM
INCOME.
(a) In General.--Notwithstanding any other provision of
this Act, from amounts made available under section 451(d),
the Secretary of Agriculture shall use up to $250,000,000 for
each of fiscal years 1999 through 2004 to establish a program
to indemnify eligible producers that have experienced, or are
experiencing, catastrophic losses in farm income during any
of the 1997 through 2004 crop years, as determined by the
Secretary.
(b) Gross Income and Payment Limitations.--In carrying out
this section, the Secretary shall, to the maximum extent
practicable, use gross income and payment limitations
established for the Disaster Reserve Assistance Program under
section 813 of the Agricultural Act of 1970 (7 U.S.C. 1427a).
(c) Effect on Other Payments.--None of the payments made
under this section shall limit or alter in any manner the
payments authorized under section 1021 of this Act.
Mr. FORD. Mr. President, we will discuss this amendment, I am sure,
at great length. We have here a system for producers who are
experiencing farm income loss which we feel is only fair and will help
farmers all across the country.
Members have heard two of our distinguished colleagues and the
chairman of the Commerce Committee saying that they hope we can move
forward with passage of this bill this week. I do, too.
I also want to say I have a lot to say about this amendment I have
just offered because it goes to the heart of this bill for me and for
my constituents and it deals directly, it deals most directly, with how
my constituents are treated. Very briefly, if the quota is removed, you
make the tobacco companies another $1 billion a year. If you remove the
tobacco quota, the value of the land in Kentucky to my farmers is
reduced up to $7 billion. A farmer could go to bed tonight having a
mortgage that was completely covered by the land he owned or had
mortgaged, and we take the tobacco quota away from him and he wakes up
the next morning and he doesn't have enough value for that land to
cover his mortgage, and his mortgage is called.
So I think it is important that we begin to look at the ramifications
of losing the tobacco program as we know it. We have tried to put into
this amendment the transition from where we are today as it relates to
the tobacco program to what might come in the future if we reduce
underage smoking. I am very much for the reduction of underage smoking.
Let's put that up front. I have no problem with that. But in the fact
of reducing teen smoking or underage smoking, it is pretty tough to put
people out of business.
So we will be discussing this amendment for some time. My colleague
and friend from Virginia, Senator Robb--and there will be other
Senators on our side--will be supporting this amendment, and I think
there will be some Senators on the other side of the aisle who may want
to speak, who will be supporting this amendment.
What I do under this amendment is to strike title XV, and that is
doing away with the tobacco program and using 69 percent of all the
moneys in this bill for health programs, for research, and for child
care. It is very, very important not only to the farmers of my State
but those health groups. We have 24 health groups in this country that
have endorsed the LEAF program. The smoke-free kids--there is a letter
on your desk that shows that they support the LEAF Act. ENACT supports
the LEAF Act. All farmer organizations, practically, that have some
longevity to them support the LEAF Act.
Let me summarize the main reasons why title XV must not remain in
this bill. Now, title XV is designed, whether on purpose or not, to
save tobacco companies $1 billion a year. So you get down and the vote
ultimately will be: Are you going to vote for the farmers? Are you
going to vote for the cigarette manufacturers? Are you going to take $1
billion off the backs of the tobacco farmers and give that saving to
the cigarette manufacturers? Make no mistake, title XV forces Senators
to choose between the tobacco companies and the tobacco farmers. Unless
we want to save tobacco companies $1 billion per year at the expense of
the tobacco farmer, the motion to strike must be supported.
Now, title X, not title XV, is supported overwhelmingly by a majority
of tobacco farm organizations. I have a list of all those and probably
will insert those in the Record or read them later. Title XV is not
supported by the public health community. The public health community
supports the LEAF Act. They support retaining the program. They support
keeping control over the growth of tobacco and the prices high. So, it
is heartening that the health groups and the tobacco groups have gotten
together and signed the core principles. Those core principles are to
reduce underage smoking, to keep the tobacco program. All these
principles are out there.
If this motion passes, the public health programs and health research
programs in this bill, if my amendment passes, we save 69 percent of
all the moneys that would go into the health research and development.
Title XV eats up 47 percent of the funds in the bill over the first 3
years. Title XV, known as the Lugar-McConnell amendment, already has an
amendment at the desk, and that amendment says that all the money in
this bill, up to 47 percent, will go to that program in the first 3
years. So 40 percent to the States, 47 percent to this program; that is
87 percent of all the money. Where are you going to get the marriage
penalty? How are you going to do the drug amendment that Senator
Coverdell put up?
So, we will talk about how title X was developed. I think my
colleague from Virginia wishes to make some remarks.
Privilege of the Floor
Mr. FORD. Mr. President, I ask unanimous consent that Rob Mangas and
Dave Regan be admitted to the floor during debate and vote of this
amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ROBB addressed the Chair.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. ROBB. Mr. President, I rise in strong support of the motion to
strike the amendment offered by the Senator from Indiana, title XV. I
have a very high regard for Senator Lugar. He and I have worked closely
together on the Foreign Relations Committee, and we have fought to open
foreign markets and to promote free trade. I share his tenacious belief
in the free market. Harnessing the drive that motivates individuals to
succeed yields the benefits of a free market. But government has a role
in checking the excesses that can flow from an unfettered free market.
The market won't educate children. The market won't protect workers.
The market won't check monopolies. And the market won't safeguard our
natural resources. Left completely unchecked, the free market will
always seek the lowest cost, even at the expense of other social goals.
So our charge, as policymakers in a capitalist economy, is to allow
individuals and entrepreneurs and businesses the freest rein possible
while safeguarding society's other concerns.
[[Page S6384]]
Defining those concerns and implementing those safeguards without
destroying the benefits we achieve from the free market is one of the
most difficult tasks we face. The Lugar-McConnell provision eliminates
the Federal program that limits the amount of tobacco that can be
produced in the United States.
Arguments advanced for killing the supply-limiting program center on
the desire to see a free market in tobacco. Since the argument is to
create a free market, we ought to examine just what benefits we would
gain from such a system. Economists estimate that going to a system
allowing unlimited production of tobacco would likely increase the
amount of tobacco grown in the United States by 50 percent.
This increased supply would cause the price of tobacco to decrease by
approximately 30 percent. Without a tobacco program, tobacco could be
grown anywhere in the United States, so it is likely that tobacco would
be grown in many more States than it is grown in today. That production
would migrate from where it exists in many areas today with hilly
terrain and small farms to larger, flatter farms.
So the benefits to be gained from going to a free market would be
cheaper tobacco, more tobacco production, dislocated communities, and
unregulated production. The small farmer would not be able to produce
enough volume at the lower price to make the farming operation
economical. Without some certainty as to price, it is unlikely that any
financial institution would extend the credit so necessary for small
farming operations to survive. Therefore, if the tobacco program were
to be wiped away, the only true beneficiaries would be large corporate
farms and tobacco companies, because tobacco would then become cheaper.
The public health community has increasingly focused on what would
happen if we eliminated a program to restrict the amount of tobacco
production in the United States and has concluded that the benefits are
simply not worth the costs. They note that it would be the height of
irony if--in the same bill where we increased the regulation of the
manufacture, marketing, advertising and retailing of tobacco--we
deregulated the production of tobacco, which is why the public health
community, including the Campaign for Tobacco-Free Kids, the American
Heart Association, the American Cancer Society, the American Public
Health Association, and the American College of Preventive Medicine all
support retaining a supply-limiting program.
In fact, these public health groups, and a number of tobacco grower
associations, have been meeting for a number of years, which has
admittedly intensified since June 20 of last year, to see whether they
could find common ground.
I am proud to say that these discussions have been under the auspices
of the University of Virginia and involved a number of growers from
Virginia.
From these discussions, the groups were able to agree on a set of
core principles. The first of these core principles is that a tobacco
production control program, which limits supply and which sets minimum
purchase prices, is in the best interests of the public health
community and the tobacco producer community.
The public health groups support controls on production because they
cannot support what would happen without them: Uncontrolled tobacco
production, plummeting tobacco prices, devastated farm families and
farming communities, and enormous benefits for the tobacco companies.
Despite the opposition of both the grower community and the public
health community, there are those who continue to insist that the
market in tobacco must be unfettered and uncontrolled.
The argument for eliminating the supply-limiting program is a
philosophical one, focusing on the natural benefits of a free market
regardless of the consequences. But the aim of a free market system is
to insure that the consumer efficiently gets the lowest-cost product.
We want consumers to be able to get the highest quality, lowest-cost
products, like cotton shirts and cereal, and anything else you can
think of.
The argument for a free market in cotton, wheat, corn, or any other
commodity, is to lower cost to benefit consumers and increase exports.
This tobacco legislation, however, is seeking exactly the opposite
goal. The very heart of this legislation is to have the Government
interfere in the free market by raising prices to reduce consumption.
It is highly ironic that some of those calling for a free market for
tobacco voted a couple of weeks ago to have the Government add the cost
of $1.50 to the price of a pack of cigarettes. That is not a free
market, Mr. President. In fact, the entire aim of the comprehensive
tobacco legislation is to increase the cost to consumers, not decrease
them.
Eliminating a tobacco program to achieve a free market system would
destroy existing communities and the livelihood of existing farmers
without realizing the goal of a free market, which is to increase
efficiency and lower costs to the consumer.
There is no other agricultural product that faces this unique
situation, where the Government's policy is to increase the costs to
the consumer, not decrease them.
Tobacco is simply unlike any other commodity covered by the Freedom
to Farm Act. The Freedom to Farm Act did not authorize the Government
to run advertisements telling people not to use the farmers' products.
The Freedom to Farm Act did not tax cotton shirts, or cereal, or
ethanol to raise the revenues that went to make the payments to
farmers. The Freedom to Farm Act did not limit the Government's ability
to open foreign markets.
In short, there are few parallels that can be drawn between the
commodities covered by the Freedom to Farm and tobacco, other than that
the commodities are all grown by decent, hard-working, dedicated people
whose lives are profoundly affected by what we do.
Tobacco is also different in another crucial respect, which bears
directly on the question of whether eliminating the tobacco program
would in fact produce a free market, which is the stated aim of the
proponents of the Lugar-McConnell provision.
A market that is dominated by a limited number of buyers, by
definition, is not a free market. And that is the situation with
tobacco. There are four buyers in the marketplace who purchase 98
percent of the tobacco produced by our Nation's 124,000 tobacco
farmers.
The economists, of course, have a name for such a controlled market.
It is called an ``oligopsony.'' According to the Encyclopedia of
Economics, ``oligopsony exists when a few buyers of a commodity or
service deal with a large number of sellers.'' According to this text,
this ``situation can lead to tacit collusion among buyers to depress
their buying prices generally at the expense of the sellers who supply
them.'' One of the examples they give for an oligopsony is ``markets
for leaf tobacco.''
Webster's New Collegiate Dictionary defines oligopsony as ``a market
situation in which each of a few buyers exerts a disproportionate
influence on the market.''
So that is the market that these farmers would face if they had to
deal individually with each of the four major buyers. This would not be
a free market. This would be a market where the buyers would dictate
the price to the sellers and reap the rewards.
In fact, the USDA estimates that by ``terminating quotas and phasing
out price supports, cigarette manufacturers and leaf exporters are
projected to have windfall gains of about $800 million annually . . .
The cigarette manufacturers would continue to receive this windfall
over time once the price support system is phased out. Over 25 years,
this windfall could amount to $20 billion or more.''
The money the companies save would be money that formerly went to
tobacco farmers. Eliminating the program would result in a transfer of
money from farm families to cigarette manufacturers of about $800
million annually.
In the face of all this, why do some still want to eliminate a
production controlling program?
One of the arguments I have heard is that tobacco is bad and so the
Government shouldn't be involved in it.
Mr. President, this whole bill, however, is about Government
involvement in tobacco. It makes little sense to
[[Page S6385]]
have the Government involved in controlling every aspect of cigarette
making and selling except the production of the key ingredient. The
Government is not promoting tobacco, it is restricting it.
A supply-limiting program limits supply. That does not promote
tobacco. The fact that farm families benefit from that restriction, in
my view, is not a reason to abolish the program, because without the
program, it is not the public's health that would benefit, it is the
companies'.
There are those who advocate reducing the number of tobacco farmers
in this country. Under the LEAF Act, we provide a voluntary buyout,
which we believe will encourage but not force tobacco farmers to move
to other pursuits. We believe that is a sounder and much more humane
approach than the one advocated by proponents of the Lugar-McConnell
bill which simply pulls the rug out from under farm families after 3
years and forces them to scramble for survival.
In fact, the comprehensive legislation we are considering is likely
to be incentive enough for many farmers to make a transition out of
tobacco farming. As consumption falls over time, as counteradvertising
mounts, and as economic development funds start creating infrastructure
in tobacco communities, there will be migration out of the tobacco
fields.
Tobacco farming is hard work, and while it is more lucrative than
growing other crops, it does not make the average tobacco farmer rich.
In fact, the average farm income of a tobacco farmer is less than
$22,000 a year. If we can create opportunities in tobacco growing
communities for children to pursue other paths, that is what we need to
do. But that cannot be done in 3 years, and I believe it would be cruel
to try.
There are those who support the Lugar-McConnell provision because
they foresee the death of the tobacco program. Programs, however, do
not die of natural causes. They have to be killed. And those who vote
for the Lugar-McConnell provision are voting to kill the program. So do
not be fooled by those who vote for the Lugar-McConnell provision
saying they support the program while voting to kill it.
Finally, I strongly oppose the Lugar-McConnell provision because I
believe it holds out false hope. Under the provision, farmer
compensation would be paid out over 3 years. Under the LEAF Act, farmer
payments would be paid out over 10 years. In order to make the payout
over 3 years, we would have to dedicate over 40 percent of the proceeds
from the legislation to farmers during those first 3 years. That 40
percent is more than the share to the States, more than the share to
medical research, and more than the share to public health. And when
you consider that we have already diverted funds away from these
accounts, with the addition of the Coverdell amendment and the Gramm
amendment, the addition of a mandatory 3-year buyout under the Lugar-
McConnell provision would collapse this bill's budget.
I urge my colleagues to look at the numbers. In the first year after
this bill is approved, the National Tobacco Trust Fund would receive
total revenues of $14.4 billion. Yet, to make the payout over 3 years,
as the Lugar-McConnell provision mandates, we would have to spend over
$17.2 billion in the first year. And that is without spending a single
dime on medical research or public health programs.
Are those who support the Lugar-McConnell provision willing to take
away money from medical research and public health programs to finance
a 3-year buyout? Are they willing to eliminate the so-called marriage
penalty tax cut or the antidrug programs offered by Senator Coverdell
to pay for this plan? Because voting to retain the Lugar-McConnell
provision will make it impossible to fund each of these other programs
contained in this bill.
The LEAF Act, in contrast, recognizes the funding constraints of the
underlying legislation and would not take funds away from the other
programs contained in this bill. This is not to say that I wouldn't
very much like to be able to pay the growers over 3 years, and, in
fact, a number of us tried to figure a way to get compensation to
growers in less than 10 years. Unfortunately, there were simply too
many other competing demands on the funds.
In conclusion, Mr. President, I oppose in the strongest terms
elimination of controls on the production of tobacco. It would destroy
small family farms, decrease tobacco prices, increase tobacco
production, and transfer wealth from growers to the companies, all
without any discernible benefit to the people.
For these reasons, Mr. President, I urge my colleagues to support the
motion made by the Senator from Kentucky, Senator Ford, to strike the
Lugar-McConnell amendment and to support the LEAF Act.
Mr. President, I yield the floor.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Mr. President, I ask unanimous consent that my name be
added as a cosponsor to the Ford amendment striking title XV.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HOLLINGS. Mr. President, let me harken how we began June a year
ago and explain my objection to the procedure.
With respect to a year ago, what really occurred was that the tobacco
companies were spending a goodly fortune defending class actions and
individual causes of action due to tobacco smoking causing certain
injury and death.
These are very responsible companies. They have very responsible
boards of directors. Right to the point, they had the urge to try to
regain credibility for their overall operation. Philip Morris, for
example, sells not only tobacco cigarettes but, of course, it is into
Kraft foods and many other allied endeavors. R.J. Reynolds down in
North Carolina is in the Ritz cracker business, plus other different
businesses. They were getting pilloried, so to speak, in the courtrooms
of America. They were successful. They weren't losing. They had won
every case. There was not a jury verdict against a tobacco company. But
looking at the bottom line, as good businessmen and operators, they
were spending around $500 million to $600 million a year in legal fees.
This crowd up here in Washington is worried about trial lawyers. If
you really want to get taken to the cleaners, get one of these
corporate lawyers. I suggest to the distinguished Chair that if he ever
gets into trouble, for gosh sakes, don't get General Motors's lawyer or
IBM's lawyer. You had better get a real lawyer who is used to getting
in the courtrooms.
This crowd sort of works with themselves on billable hours. That is
the ailment that has taken over. The billable hours, the defenses, and
all were costing them about $500 million to $600 million. More than
anything else, it was depressing their stock.
The lawyers themselves had not won any cases. They were moving with
the States' attorneys general. So, with the States' attorneys general,
they got together. They had been meeting on opposite sides of the table
in courtrooms all over America. As I understand it, they got together
on an agreed settlement. The agreed settlement would, No. 1, increase
taxes.
The reason I emphasize this, Mr. President, is if you go home and
turn on your television or listen to the radio, the ``scoundrel
Congress'' up here is the one that is trying to increase taxes on poor
America, middle America, and whatever America. There is no suggestion
that this idea came from the tobacco companies, the ones who are paying
for the advertising, and in a luxurious amount. But this is the
reality. The idea of increasing taxes originated with the tobacco
companies themselves, in the so-called Global Tobacco Settlement.
I worked with the defense appropriations bill. And that amounts to
$250 billion. When I heard on TV and then later read in the newspaper
$368 billion, I still thought it was a mistake--$368 billion. I said,
``Where in the world would they get all of that money?'' Well, if you
reasoned out 25 years and so much per year as it goes up, yes, you can
get to that amount, or get to $1.10, as the present Commerce Committee
bill now envisions. You get around $500 billion.
But the real initiative of raising taxes was by the companies
themselves--not the squealing, crying, moaning, and groaning on
national TV
[[Page S6386]]
about, ``This terrible Congress is going awry.'' Not so. They came up
and said, ``All right, we will put this money up, and for you States
and States' attorneys general, what we will do is, we will pay in a
good 40 percent of it to the States to take care of the Medicaid costs,
the health costs, and everything, as an incidence, a result, of tobacco
smoking and ailments and death that was caused by tobacco smoking.'' So
that would take care of the States. The States' attorneys general got
together and agreed on that.
Another part of the agreement, of course, was to try to control
tobacco smoking and discourage young people from smoking. The children,
instead of getting Joe Camel, were getting the adverse ads, the
warnings, not just on the pack of cigarettes but on national TV--how
injurious to health it could be. We found out in the early 1970s that
these negative-type ads worked. We tried it before. I don't know
whether the price increase would work. They say in downtown London,
where they have a pack of cigarettes at $4.30 and up, it has not worked
with respect to deterring children from starting to smoke.
But in any event, it was good intent, a good purpose, and a good
provision that they would do it, and do it in all honesty and
sincerity. In fact, to back up their pledge, they hit on the unique
``look-back provision.'' I had never heard of that before in all the
years I have been up here. But they had a look-back provision whereby
they said, ``We will measure it each year with the diminution of
tobacco smoking with respect to children,'' and if they don't comply
with a certain percentage decrease each year, they will pay more
multimillion-dollar, almost billion dollars, or maybe over a billion
dollars, in penalties, penalizing themselves.
There was not any question about the sincerity of the purpose. They
had it all worked out. The White House agreed to it. The health
community was in conference from time to time on this particular
agreement. And it was announced. The first thing that hit this Senator
when it was announced was not only the $368 billion, an enormous
amount, but what is in there for the man who is making a living--
namely, the tobacco farmer. When the Pilgrims landed here in the
earliest of days, they found the Indians, who were smoking tobacco. Are
we now going to really have prohibition? No. We tried that once before
with alcoholic beverages, and it corrupted the entire society and crime
went through the roof. So we learned the hard lesson and repealed that
18th amendment.
Certainly with respect to tobacco smoking and everything else of that
kind, we realize there are certain realistic considerations: One, that
we are not going to have an embargo or prohibit the production itself;
two, that when it comes to advertising, there is that First Amendment
right and we are not going to be able to force-feed--the companies have
to agree with respect to the limitation on advertising or the agreement
to negatively advertise against smoking, those kinds of things, and
then the allocation of the money to have to come about with respect to
the matter of the States, and not only that, but with respect to the
health community. Necessarily, we all want to increase the research out
at the National Institutes of Health on the injurious effect of tobacco
smoking.
I have had hearings over 30-some years now with the doctors out there
at the Cancer Institute, not only on how cancer is caused but how a
pack-a-day smoker can rejuvenate the health of his lungs after 5 years
and really recover from it if he stops.
I might add, Mr. President, that more people have stopped smoking
than are smoking today. I repeat: There are more people who have
stopped smoking than are smoking today. So when they get to the victims
and the matter of habit forming and addictiveness and everything else,
that is a jury question that the jurors of America have never gone
along with. They have never gone along with it until this recent
verdict down here of a little six-man jury in Florida, and we don't
know what will happen with that on appeal. But that is a pretty solid
record. We have Senators running up and down knocking over the chairs
and desks saying, ``Why give this industry immunity?''
Well, Mr. President, the jurors of America, far more savvy with
respect to the actual facts before them, have given the tobacco
companies immunity--not the distinguished Presiding Officer, not this
Senator from South Carolina, but over the many, many years, the jurors,
the people of America, have given them immunity because for 33 years we
have had an advertisement that they are injurious to your health.
Now, I looked in that global tobacco settlement, and I said wait a
minute--something is wrong here. We don't have any provision in there
for a large segment of the economy of South Carolina. We have over
2,000 tobacco farms in South Carolina involving some 40,000 jobs with
the warehousemen, the equipment dealers and everything else of that
kind, with a $1 billion impact on the communities, veritable tobacco
towns. If you want to start Tobacco Road, which we have seen in the
Depression, pass this title XV that the distinguished Senator from
Kentucky, Mr. Ford, wants to strike. I commend his leadership on this
score because he has been in the forefront looking out for an important
segment of our society and important communities in my State and his
and in the several surrounding States.
How they could get together on an agreement and not even consider
tobacco farmers is beyond me. But we were told immediately, oh, no, no,
no, no, don't worry about that; we will take care of the farmers. I
wondered in October when the distinguished Senator from Indiana put in
the Lugar, what he called transition bill, which is a bankruptcy act--
an elimination bill is what it was because in just a 3-year period bam,
bam, bam, the farmers would be gone. Nothing for the warehousemen,
nothing for the fertilizer dealer, nothing for the community with
respect to the bank making the loan or the automobile loan, nothing for
various other parts of the society itself, the families to adjust and
take care of themselves.
Under the leadership of Senator Ford, the LEAF Act was developed when
we saw this particular Indiana initiative. I remember recently seeing
where the Attorney General of Indiana, who, incidentally, was in on the
original agreement, said, ``We had no idea of taking care of the
farmer.''
Well, that is not what they told us. Everybody said, on both sides of
the aisle, in a bipartisan fashion, ``Of course, we have got to take
care of the farmer,'' and the White House, along with the Congress
itself, said, ``Yes, we have got to take care of the farmer.''
So the LEAF Act was developed in a studied fashion with respect not
only to the holder of the particular quota but the actual farmer who
farmed the crop. It took care of the warehousemen. It took care of the
fertilizer and equipment dealer. It took care of the communities. And
we put it out at the very beginning of the year as an amendment, the
LEAF Act.
Of course, when the distinguished Senator from Arizona, the chairman
of our Commerce Committee, came to me, he said, ``Now, the majority
leader has suggested that our committee put out the tobacco agreement
as a commerce bill. And I would like it to be bipartisan.'' I told
Senator McCain I would like it to be bipartisan also, but, of course,
we had to take care of the farmer. Well, that is the first time I
really began to doubt about this ``take care of the farmer'' because
the distinguished chairman of the committee turned to me and he said,
``No, we can't put that on.'' I was wondering why. That was the first
time I had ever heard that nobody wanted to take care of the farmer.
When he told me that, I said, ``Well, it's going to be very partisan,
because I am not going to stand by and let this go through committee,
without bringing up this important segment of the economy.'' Yes, we
are trying to stop little children from smoking. Yes, we are trying to
take care of those who have been injured from smoking. Yes, we are
trying to get research. And, yes, we are trying to control the
advertising. But everybody, from the word go in June of last year,
said, ``We are going to take care of the farmer,'' and the LEAF Act
did. The Senator from Arizona said no, he didn't think he could do
that. Several days later, he came back and said, ``Yes, you are right,
we ought to make it bipartisan, and we will take care of the farmer.''
[[Page S6387]]
As a result, we spent a marathon session with the staffs of all the
Senators involved on both sides of the aisle in the Commerce Committee,
the White House, Dr. Koop, Dr. Kessler, and the various entities
against children smoking, checking back and forth. There is no question
that the distinguished Senator from Arizona did an outstanding job to
get a bill that we could all agree upon by a vote of 19 to 1. We did
agree on the tobacco bill, and it included the LEAF Act.
As we were ready to bring this bill to the floor, we were given
notice that what we ought to do in order to get this bill passed was
not to spend too much time with respect to amendments; let's see what
amendments are going to carry immediate and recognizable weight and see
if we can't agree to put those on now, cut the time involved, because
the leader wants to handle this in a couple of days, at the most 3
days, and we have to get together with the White House. We don't want
to put in a bill without knowing that it will be approved.
So we did. We had five sessions with the White House--Senator McCain
and Senator Mack on that side of the aisle and Senator Kerrey and
myself on our side of the aisle. We kept meeting with them, and I kept
checking with them to guarantee the LEAF Act was intact. I kept asking
everybody--not to worry, they told me.
We had those five sessions, the last one being in my own office here
in the Nation's Capital. At 4 o'clock it broke up, and about an hour or
so later, about 6 o'clock, I heard a rumor about the Lugar bill. I
said, ``Come on, somebody is way off. They might want to put it on, but
it can't be on our Commerce bill.''
They said, ``No; that's what the leader is going to do.''
I said, ``How does that occur?''
The bill itself, which is title XV, had one hearing, according to the
best check I have made on it. It had one hearing last fall and has not
had any hearings since that time, has not had any markup, no committee
report, no report out of the committee. It was just an individual
Senator's bill--we all will agree, one of the most respected Senators
and one of the most powerful in that he is the chairman of our
Agriculture Committee.
I knew if there was any real intent or force behind it or interest,
that he long since would have had that bill reported out of his
committee and we could have studied it, and if there had been any
differences with the LEAF Act, they could have been reconciled.
But, Mr. President, it was the most dastardly procedure I have ever
seen when the majority leader stood up and said, ``Oh, no, I'm putting
the Lugar bill on your committee bill.''
I said, ``You can't do that without the committee.''
He said, ``Well, the committee is on here; we have a majority.''
I said, ``You can't have a majority without the distinguished Senator
from Arizona.''
The Senator from Arizona and I had traveled together to Florence, SC.
We notified every quota holder, every equipment dealer, and we had
around 2,500 or 3,000 who met in the hockey arena there. We both made
our little pitches. The Congressmen made their talks. We answered
questions for over an hour's time, and we met with the press for over a
half-hour and reaffirmed again and again our support for the LEAF Act.
We explained it, why it was there, how it was worded, the difference
between burley tobacco and flue-cured tobacco and why we worded
different things. Because of this effort, and the Senator's sincerity,
I just couldn't believe anyone could make representations then changing
the tobacco bill, putting the bill just summarily on another bill.
I am not sure that the committee met, but you have to take the
majority leader's word. He said they met and that they voted, 11
Senators; it was under the rules. That is the procedure that I object
to. If for no other reason, this ought to be voted down. We ought not
to sanction this kind of conduct on the working arrangements. Everybody
is talking about the confrontational nature and how the club is
breaking up and how we are just all politics. We have to trust each
other, Mr. President, and we can't endanger that trust by having an
understanding throughout 10 days of a heated markup, through five
separate sessions with the White House, through a gathering of our
tobacco farmers in our backyard, and being assured again and again in
explaining the bill was it, and then to put this up and fix the vote on
the other side of the aisle. That is what I understand has occurred.
That is my first and foremost reason for opposing the Lugar
amendment. My foremost reason was to take care of the farmers. My
foremost reason now is to take care of the Senate. If that is the way
we are going to conduct business, so be it. We can all play that game,
with rule and ruin and trickery and everything else of that kind.
Let me show you exactly where we are now and take stock with respect
to this Lugar amendment.
What we have done with this kind of handling of the bill is, we have
added on the payments to the States of 40 percent. Of course, that is
$5.76 billion. We have added on the marriage penalty of $3.1 billion
and the Coverdell drug provision--that is $2 billion--for a total of
$10.86 billion. The cost of the Lugar amendment, title XV--to be
stricken, I hope--is $6.4 billion. That is a sum total of $17.26
billion the first year, whereas a total estimation for the first year
in the bill we have before us--and I raise it for the Senators to see--
this S. 1415 allocates $14.4 billion to the National Tobacco Trust
Fund, but we have already spent $17.26 billion.
Unless you strike--I wish this was a session of the Budget Committee,
because we could have a budget point of order. This is totally without
the budget, but it has gotten to be a habit where it is getting into
all committees now. If you go along with title XV, you have then
expended $2.86 billion--$2,860,000,000--more than what the bill will
bring in. Yet, the tobacco companies are talking about how they are
being devastated. They haven't seen anything yet. If they don't adopt
this amendment and go forward with ideas on the House side, they will
learn just exactly what has happened.
But, of course, the tobacco companies said, ``Let the Senator from
South Carolina talk along, because here under Senator Lugar's proposal
there's a real winner for us companies,'' because in 1999 Senator
Lugar's plan cuts the price support for tobacco by 25 percent, from
$1.68 a pound to $1.22 a pound. ``This equates to a savings for us
tobacco companies''--now I am posturing myself so you will understand
it. If I am a tobacco company, I love this title XV, because the first
year I really make $987 million, just out a billion bucks. So I am a
billion bucks to the good with this Lugar amendment.
And then in 2000, this proposal cuts the price support by another 10
percent, from $1.22 a pound to $1.10 a pound. ``This equates to a
savings to us tobacco companies now. We are in business. And we know
how to get amendments passed--sneak them on at the last minute. Don't
ever debate them. Don't ever have a committee report it out one way or
the other. Just forget about the bill last year, but get the majority
leader to sneak the bill on''--$1.276 billion.
And then in the year 2001--a 3-year program--what happens in that
third year? This proposal cuts the price support by another 10 percent,
from $1.10 to 99 cents a pound. This equates to a savings by the
company of another $1,543,500,000.
So the total savings--total savings, Mr. President--by the tobacco
companies on this title XV, if it is not stricken over the next 3
years, is $3,804,500,000. I did not realize it was that much--
$3,804,500,000.
Of course, that leaves nothing for health care, not a thing for
public health, nothing for health research or anything else of that
kind.
To come in with this at the last minute and take all this money is
like when they used to organize the insurance companies when I was
Governor down there in South Carolina. And they had one company--
Capital Life was looking for a new slogan, and they finally came up
with the winning slogan, after considering all their friends'
suggestions. They said, ``Capital Life will surely pay if the small
print on the back doesn't take it away.''
I know that is exactly what has happened. They said that we are going
to have all this money to do the various programs--health care,
research, and what-have-you, moneys for the attorneys general, and
everything else like that--and the tobacco companies, with a last
minute strike, come up with
[[Page S6388]]
$3,804,500,000, and the farmers are left high and dry.
If you want to see the Tobacco Road that we had during the days of
the Depression, with the dust and the filth and the desperation and the
despair, keep the Lugar amendment in here, and not Senator Ford's LEAF
amendment, and we are goners--we are goners. There is no question in my
mind.
Now, there has been some confusion. The tobacco companies, like to
put the spin that we in the Congress are raising taxes when it was
their idea just a year ago--no Congressman was at the table; no Senator
was at the table--it was the tobacco companies at the table that came
out with this scheme, and now they are putting the twist on that we are
raising taxes. They are the ones who raised the tax.
Now they are trying to put on here the twist that the farmers are
going to be taken care of, and at the last minute put on the Lugar
amendment, fix the vote, and leave them high and dry. I do not like it.
And you can tell by the tone of my voice it should not be liked.
I have been around. I have worked with everybody throughout the years
here and have had good bipartisan support. We handled the
Telecommunications Act, got 95 votes for it. I handled Gramm-Rudman-
Hollings on this side of the aisle on 14 votes up and down, and got a
majority of the Democrats, over the objection of the leader at that
time and the chairman of the Budget Committee. But we got the majority
of Democrats to support that particular budget initiative.
I have had success over the years working in a bipartisan fashion.
This is in the most treacherous fashion I can possibly think of, to
take a matter that had not completed the hearings--yet to be reported,
yet to have a vote on, no committee report to read or study, no
conversation on the contrary--all conversation, all representations:
``Don't worry, the LEAF Act is fine.'' We go down, even before the
farmers, and tell them that, and everything else like that, and then go
along at the last minute with this ambush.
This is ambushing my farmers, Mr. President. And we will have more to
say about it. But I think that the Record ought to show exactly what
has occurred here. We have a studied bill. We have the tobacco farmers
taken care of with respect through the payments that are made now on
the average yield for those in flue-cured tobacco, for the quota
holders, because the existing system is eliminated. What we have is a
system of permits to do away with the quotas. And, incidentally, they
wanted to argue--and you are going to hear this ad infinitum--that with
all the other farm programs gone, why should we support this? This is
the one crop that has had its production limited. And it is a very
sensitive crop, and it was here when we landed over 200-some years ago.
So we have been handling it over the years in a clean, responsible,
productive fashion. And we have created the communities, we have
created the fertilizer dealers, we have created the warehouses and the
warehousing, as well as the farmers.
So in order to be sure that we do not just turn them over to welfare
and say that in 2 years they can come and get retraining, we must not
abandon them. Incidentally, Mr. President, let me talk about that
retraining just one moment. We had down in my backyard the Oneida
knitting mills that made nothing but little T-shirts. Anybody could
make them, but at one time they had 487 there. The age average was 47
years. They were a very productive company, complying, if you please,
with all the requirements--clean air, clean water, Social Security,
Medicare, Medicaid, minimum wage, safe working place, safe machinery,
plant closing notice, parental leave, on and on and on --that
Republicans and Democrats said before you open up you have to comply
with. That goes into the cost of production. So the plant moved to
Mexico, for 58 cents an hour and none of those requirements.
So Washington is so keen on how to get things done, they say:
``Retrain, global economy, global competition. We're moving into the
age of technology, retrain, skills.''
Well, don't tell this Senator about it. I am the author of the
Advanced Technology Program. I am the author of the manufacturing
extension centers known as Hollings Centers. I fought to keep those
programs going. I instituted technical colleges and special schools
back 38 years ago in my own home State. So I am appreciative of
technology and its needs.
But assume the 487 are immediately retrained the Washington way
tomorrow morning, and you have 487 computer operators. Are you going to
hire the 47-year-old computer operator or the 21-year-old computer
operator? It is quite obvious, Mr. President, that their community of
Andrews will be high and dry and out of luck. And that has happened all
over the U.S. since NAFTA was passed. And we have lost a fell sum of
24,000 textile and apparel jobs in my State alone. So that next sum,
while we have gotten in the BMWs, the Fujis, the Hoffmann-La Roches,
and the Hondas--and we are proud of it--the net loss is this, that we
have lost 12,400 jobs since NAFTA was passed.
Now we are coming up with a very ``wise,'' as they would call it,
``assault,'' I call it, upon the tobacco farmer to put him out of
business in a studied fashion over 3 years: take all the money and run
with it, devastate the health program and the research program, and the
several States are not going to get their money and everything else.
And yet it is on there and it hasn't been discussed.
I see now the distinguished Senator from Indiana is with us and I am
delighted to hear from him. I yield the floor.
Privilege of the Floor
Mr. LUGAR. Mr. President, I ask unanimous consent that Mary Dietrich,
a detailee to the Agriculture Committee from the General Accounting
Office, be granted privilege of the floor during the pendency of the
tobacco farmer amendment.
The PRESIDING OFFICER (Mr. Gorton). Without objection, it is so
ordered.
Mr. LUGAR. Mr. President, I rise to support a program that will end
tobacco subsidies, give fair compensation to farmers now rather than
many years from now, make an extra $10 billion available for public
health and other worthy purposes, and provide some degree of certainty
for tobacco farmers, for agricultural America, with regard to our
policies that would pertain with greater fairness to all farmers.
Let me simply cite, at the outset my discussion of these issues, what
I perceive to be the significant differences between the Lugar
amendment, which I favor and which the distinguished senior Senator
from Kentucky has chosen through his amendment now to strike from the
bill, and, in fact, the amendment provided by the distinguished Senator
from Kentucky, the distinguished Senator from South Carolina and others
who have supported their point of view.
The basic differences come down to, first of all, should the U.S.
Government support tobacco? That is a very fundamental issue. The
debate, which now is in its third week on this subject, suggests that
the American people are not prepared for their Federal Government to
support a crop, a set of products, which they find injurious to health.
Indeed, much of our debate has been about how we can protect the health
of children, how we can pay for the difficulties in health that
citizens of all ages have experienced.
If it were not for these health issues which are serious for tens of
millions of Americans and prospectively for many more, this debate
would not be so intense; clearly, the remedy suggested would not be so
severe. It really begs understanding of this issue as to how the same
government that may legislate severely with regard to tobacco, could at
the same time decide to support the price of tobacco, to support the
industry, the warehousing, the infrastructure, as the current tobacco
program does and has done for almost six decades.
That is the first issue. Do we want the U.S. Government to support
tobacco? And my judgment is we should not support tobacco. The
legislation that I have suggested does not give prioritization to
tobacco. Rather, it says that tobacco, so long as it is a legal crop,
can be produced in America on the same terms as corn, wheat, soybeans,
same freedom to farm that all other farmers have, same tests of the
market, same tests of efficiency, of production.
That, it seems to me, is the only way this can be rationalized, with
those in
[[Page S6389]]
agricultural America asking, Why special treatment for tobacco? Why
specific situations that support that price, to support those farmers?
There is no good answer to that. I understand the constituency problems
of the distinguished Senators who have many tobacco farmers, and I am
certainly mindful of approximately 10,000 farms in Indiana, albeit
smaller ones than in Kentucky and in North Carolina and some other
States, but nevertheless tobacco farmers who are impacted significantly
by this debate. I have visited with them extensively. They support my
amendment for good reason.
Why would they support my amendment if I am prepared to say the
Federal Government ought not to support tobacco? They do so because the
Lugar amendment provides payment to those who hold tobacco quota, the
certificates distributed principally in the 1930s, that allow people in
this country to produce tobacco. We are prepared in my amendment to
purchase those rights in a 3-year period of time.
My amendment is attractive because the money comes to the tobacco
farmers, but even more importantly, to the holders of quota
certificates who are frequently elderly people, people no longer
involved in production. They lease and rent the certificates to others.
They really have no desire to continue in the tobacco business. On a
one-time basis they can receive capital for pensions, for scholarships,
money in the communities that are impacted--substantial money--and they
can receive it quickly in a 3-year period of time. That is why tobacco
growers in most States have indicated through their organizations that
they support the Lugar approach.
The Senate as a whole has to ask which of the two approaches, the
Ford-Hollings or the Lugar approach, costs more. Clearly, the Ford-
Hollings costs at least $10 billion more than the Lugar approach. It
has a great deal more in it in terms of community development for
States and localities that have tobacco farmers over the years. It is
simply a very different approach which retains the tobacco program and
some of the apparatus that has been associated with it over the years.
I make that point because in the course of these remarks the
statement has been made that somehow or other the Lugar approach will
subtract money from health causes or other important objectives of the
legislation, but in fact it will subtract $10 billion less than the
Ford-Hollings amendment. There is no getting around that.
I simply say, finally, that to argue--I believe almost
disingenuously--that health groups would prefer a situation where $10
billion less is left in the general fund of this bill for health or
anything else is to, I suppose, deny common sense. Many health groups
perhaps were misled by the thought that in the event we went to
freedom-to-farm tobacco, the price of tobacco would go down. The price
of tobacco probably will go down.
We have had testimony before the Senate Agriculture Committee and we
have had extensive hearings, as a matter of fact, on tobacco issues
from which the Lugar amendment came. Essentially, the testimony was
that the price of tobacco might fall by as much as 25 percent, perhaps
more, depending upon how competitive American tobacco is in the world
markets, and competitive abilities have been in decline. Most Americans
are not aware that 40 percent of the tobacco now used in the production
of American cigarettes comes from abroad, not from here. It comes from
abroad because of questions of price and quality, normal economic
questions. That deterioration of the American tobacco demand has been
continuing at a fairly rapid pace.
So, Mr. President, let me just state it fairly simply. If a pack of
cigarettes now costs $2 before this bill, it will cost a great deal
more after this bill. Approximately 6 cents of that $2 might be
attributed to the tobacco in the package. If in fact that goes down by
a quarter, maybe a cent or a cent and a half is at stake. To suggest
that somehow this brings either unconscionable profits to tobacco
companies or enormous new demands by young people taking up smoking is,
I think, to defy both economics and logic in the midst of our raising
the price of a pack of cigarettes by at least $1 or $2, or whatever the
bill finally comes out to be with the overhead and all the economic
costs associated.
As a matter of fact, Mr. President, health groups for a long time
have centered in on the fundamental issue I began with: Should the
Federal Government be supporting tobacco at all? What kind of a signal
does that give when we give official sponsorship and economic support
to the price and warehousing and infrastructure of tobacco? I don't
think the signal is very good. As a matter of fact, it is so ambiguous
that it borders upon hypocrisy. At some stage, we will have to make a
choice as to which of these two general thrusts in life we are for--
health or support of tobacco.
Mr. President, let me just say, finally, that we are going to have to
come to grips with the issue that is posed by the distinguished Senator
from Kentucky in his striking of my amendment. I appreciate that. The
parliamentary situation is that the Ford-Hollings approach and the
Lugar approach are both in the bill. I suggested that one or the other
of us might, at some point in this debate, move to strike the other,
and the Senator from Kentucky, my good friend, has decided he would
move to strike my situation.
So that is the issue before us. Members have to make a choice. I
simply say to the distinguished Senator from Kentucky, who is on the
floor, that it would not be my purpose to delay the choice. My feeling
is, essentially, by this time, if Members are not aware of the issues,
they never will be. My feeling is that we ought to get on with it and
resolve it. I stated up front that this will not be a long speech and,
if there are not many more, we might come to a conclusion.
Let me say that in defense of what we have been doing in the
Agriculture Committee, in my own point of view, I rise to affirmatively
support the Lugar approach, which has been moved by the Senator from
Kentucky to be stricken. I believe that it is important to adopt my
approach, to keep it alive by voting ``no'' on the motion to strike,
because we will end tobacco subsidies, we will end the tobacco program.
Mr. President, to be quite frank, this is the major point that I
make, the reason I am in this debate. I believe that agricultural
policy ought to be based upon supply and demand. I believe that all
farmers producing crops in this country ought to be treated equally. We
had a revolution in agriculture in 1996 in which we said freedom to
farm means that a farmer may decide to plant whatever he or she wants
to plant on their land, have full control of that, without the Federal
Government dictating how many pounds, how many acres, how many bushels.
The only signals would be market signals, and they are now world market
signals. They are important to America because agriculture is the thing
we do best, and our surplus and balance of trade is the greatest in
that area.
But freedom to farm also means taking risks. It means there is no
warehouse for wheat, or for corn, or for soybeans, no props, no passing
on from one generation to the next the right to grow corn or wheat. We
really have to get over that, Mr. President. I understand why it came
about in the 1930s because essentially people felt that if you let
farmers have freedom, they would inevitably plant too much, they would
do too much, they would be too ingenious, and, as a result, supplies
would be horrendous, prices would fall, agricultural communities would
fail. The New Deal policy was one of killing little pigs, knocking out
rows of corn, to dramatically change the supply and to bring the price
up. Whatever may have been the rationalization in those days, it was
convenient to carry this on for about six more decades.
Many people in America would still like the idea of being guaranteed
a price for a bushel of whatever they are producing. They would like to
be guaranteed that their neighbor could not do more. But at the same
time, most farmers in agricultural America resent the Federal
Government's control. They resent the fly-overs, the measurement of
fields, the endless sign-ups--and rightly so. So we came to a
revolution of sorts, Mr. President, and we went to freedom to farm,
except in the area of tobacco, for example, where persons in that
industry said that, ``Notwithstanding everything else going on in
agricultural America, we want to retain the same program we have had.''
[[Page S6390]]
Now, Mr. President, my own view is that the program is deteriorating.
I am not one who would predict the month, the year, or even the decade
where it will finally collapse. I just say that tobacco farmers coming
to my office from my State, and also from Kentucky, North Carolina,
Georgia, and from South Carolina, I have said during the past year,
although we had quota and the right to produce tobacco and to sell it
and to have a price, we were cut back 10 percent in what we could do.
Furthermore, they believe they are going to be cut back 15 percent this
coming year regardless of what we do on this bill. That is a big cut.
That is a deteriorating program. No wonder they were attracted by my
thought that they might receive $8 per pound for quota, so many of them
could get out of the business altogether. Now, a good number said they
want to stay in the business, but they realize they are going to have
to do so on the basis of supply and demand. That is the way the world
works--without all the apparatus, the warehousemen, and so forth. That
is fair enough.
My bill provides that you continue right on producing, if you want
to, and take money for quota, if you had it. If you are renting, fair
enough, you have a transition of 3 years with some payments in support,
the same as do corn farmers, wheat farmers, rice and cotton farmers, in
the freedom to farm bill. It is a transition period. I think that is
important, Mr. President. But at least we bring to an end an era that,
I think, is coming to an end anyway.
Now, what if we don't pass the tobacco bill? What if, in fact, the
idea of the Senator from Kentucky, or mine--either one--is not a part
of the final picture? That is a real problem for tobacco farmers. It is
a problem that should have been contemplated by the attorneys general
when they were working this situation out last year. But, as a matter
of fact, at that time they left the whole grower issue aside. That is
why we had hearings in the Agriculture Committee and why Senator Ford
and others have been working in the Commerce Committee--to say, what do
we do about this very important group of people; namely, growers,
holders of quota, holders of equity property out there in at least 10
States in substantial numbers?
Now, Mr. President, my guess is that one or the other of our
amendments may prevail, but I am not confident of that. It could very
well be that the Senate will decide they don't want either one. It
could be that if we argue this long enough, people will begin to raise
questions. What is an acre of tobacco worth? In some cases, 10 times
what an acre of corn might be worth on this same farm, as is the case
in my home State of Indiana. One reason is because it is a very special
privilege. And as Americans take a look at this, they won't like what
they have to see.
In the Agriculture Committee for years, I witnessed--at least during
the 21-plus years that I have been a member of the committee--people
protecting each other. There were a lot of special deals. People got on
the committee often to make certain they protected their deal and their
farmers in their State. I understand that. Most did a good job of it.
Now there are fewer special deals. There really is a very short list of
situations that need to be tidied up, and this is one of them.
So I come, Mr. President, to the floor to suggest that this is a good
time, while there is a general settlement going on, money on the table,
lots of money. The question has been raised, Does the grower money
subtract from health? No. The Senate doesn't want to subtract. They
simply provided any sequence of years we wanted. But when Members come
to the floor and they talk about $300 billion, $400 billion, $500
billion, $600 billion, the $18 billion I am talking about in the Lugar
bill is a very small part of that money. If people are worried about
whether it comes upfront, my advice would be to provide money upfront.
If you want to provide more money for health at the same time, do it.
This bill is as fluid as any piece of legislation I have ever seen.
Nothing is engraved in stone as to which dollar comes where.
All I am saying is if you are serious about tobacco farmers and their
plight, you give them their money upfront. You do it promptly, and
those that want to leave, leave. Those that want to stay, stay, and
react like farmers in almost any other sphere, including sometime the
same farmers are producing corn as well as tobacco on the same farm.
Mr. President, that is the first big issue: The end of the tobacco
program, the end of official U.S. Government sponsorship of all of
this.
Let me say, secondly, that my plan costs less. One could argue that
in the course of all of this we have bandied about these hundreds of
billions of dollars that perhaps we have lost track altogether as to
how money is going to be spent. But I hope not. If there are any
Members who are interested in cost, they will vote for an $18 billion
bill, the Lugar bill, as opposed to a $28 billion Ford bill.
In addition, I am advised that the bill of the Senator from Kentucky
now includes special relief for problems in North Dakota, or perhaps
other States that have been afflicted by unusual weather problems. I am
hopeful that in the course of the debate all of that will be explained.
But it is another unusual addition to an already belabored situation.
All I am saying is that if you are interested in cost, you will be
for the Lugar alternative. It is less. Obviously, Mr. President, the
money gets to the tobacco farmers sooner. If you are a tobacco farmer,
the Lugar bill gets money to you more rapidly. Time is money--money
upfront, money that could be used for capital for other farming, for
pension, for scholarships, for other things that people have a quota
for, or who are farmers where that quota can be utilized, and I think
that is an important issue.
Finally, let's be very clear on the health issues. I go back over
that again.
The fact is that the health groups of the United States--major
proponents of this legislation--have analyzed these bills, and some
have come out one way and some another. But I would just say simply
that the money for health is finally going to be the determination of
this Senate in this bill in whatever amounts that we want to provide
for.
Some have accused the President of the United States for asking for a
number of things in the health area. He cited some in the State of the
Union Address, and on this side of the aisle many of us have said we
ought not to be funding the State of the Union Address in the tobacco
bill. But having said that, we are funding a good number of proposals
that the President or the administration and its various Secretaries
have made at some point. We do so because the problems of health
attributed to tobacco have badly afflicted tens of millions of
Americans. These problems have created enormous public costs in the
Medicare Program, Medicaid, and various other ways, and compounded
black lung disease and other difficult health problems in our country.
Mr. President, the logic has been that if we are going to have a
tobacco bill, there ought to be some compensation to States. In fact,
some States have not waited for compensation. Lawsuits have been
proposed and some have been successful. Thus, the attorneys general
came together and said perhaps we can have a comprehensive settlement.
Many in the Congress found that to be intriguing. It would have been
helpful if the President of the United States, last fall, had offered a
bill as opposed to general guidelines. It might have been helpful, as a
matter of fact, if there had been a comprehensive bill here that had
embraced at least what I know have been seemingly contradictory strains
on occasion. I certainly do not fault the managers of the bill. They
have had a difficult time.
But we have come now to a point where the one item, one significant
item mentioned by everybody that was omitted--namely the growers, the
farmers--has to be addressed. I believe it should be addressed. I don't
believe it should be omitted. It is not specifically a health issue,
and one can argue it competes with health issues. But inequity to
farmers in these 10 States, and to tobacco farmers in particular, my
intent and that of the Senators from Kentucky and South Carolina has
been to take that very seriously. Although we may differ upon the
amounts of money and the continuation of the tobacco program and
various particulars in terms of expenditures in the States for
community development and other aspects, we do not
[[Page S6391]]
differ on very serious equity problems for farmers and for holders of
quota.
So we must address that issue. I am simply hopeful that this issue
will not be seen as a subtraction or addition to health per se. It is a
narrow issue of compensation to farmers and to their communities.
I hope the Senate will accept the fact that there is equity in doing
that. The so-called narrow version of the tobacco legislation--that
principle--might not be accepted.
So we are expanding today what the attorneys general and the State
governments in their wisdom tried to negotiate last year. We are doing
it so deliberately. Testimony before the Senate Agriculture Committee
said essentially the attorneys general, health groups, and everyone
else anticipated the Senate at some point would act in behalf of
growers, as we are doing, and, in fact, explicitly or implicitly
endorsed that activity.
Mr. President, I will rest my case for the time simply on the basis
that I believe I have outlined why the Lugar approach is the best.
Members will have a choice, either shortly or in the long term,
depending upon how much debate Members wish to hear or endure on this
subject. But I will not stymie progress of the bill. This is an issue
that needs to be resolved. Members will have to make an overall
judgment, I believe, on the bill on the basis of all factors, this one
included.
I hope at least in the course of this debate that we eliminate those
issues that Members want to grasp, want to hear, and will be helpful in
reaching a conclusion.
I thank the Chair.
Mr. CLELAND addressed the Chair.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. CLELAND. Mr. President, I rise in support of Senator Ford's
amendment to strike title XV of the Lugar-McConnell tobacco farming
provision and to express my support for the Long-term Economic
Assistance for Farmers Act, or LEAF Act.
First, I would like to thank my distinguished colleagues, the
chairman, Senator McCain, and ranking member, Senator Hollings, for
their superb leadership of this bill, the principal aim of which is the
vitally important objective of curbing youth smoking. Also, I would
like to extend my sincerest appreciation to Senator Ford for his time
and energy in crafting a bill that effectively looks out for the
interests of the tobacco farmers and their communities' interests,
which were all ignored until he spoke out so forcefully and
effectively. Senator Ford's integrity and honesty and courage will be
sorely missed when he leaves this Chamber, and I, like many of my
Senate colleagues, will deeply miss the opportunity to seek his counsel
on the important issues about which the Senator has tremendous
knowledge and passion. Certainly there has been no finer, more
consistent friend of family tobacco farmers than the distinguished
senior Senator from Kentucky. I ask my colleagues to remember this fact
as we debate on this matter.
In my personal review of the tobacco settlement legislation, I have
had two main objectives--to prevent our children from smoking and to
ensure that tobacco farmers and their communities are taken care of.
Now, I am sure that all of my colleagues are committed to this first
objective, but I want to make sure that the second objective of
promoting and protecting tobacco farmers is actually provided for in
this bill. I fully support the LEAF Act and, indeed, was an original
cosponsor, and I want to state my reasons for favoring the LEAF
approach over the proposal offered by the distinguished Senator from
Indiana, Mr. Lugar.
First, I do not support Senator Lugar's proposal, because I think it
provides for quick termination of the Federal tobacco program. I have a
concern about who the actual beneficiaries of this action will be. Is
it tobacco farmers, is it the taxpayer, or is it the tobacco industry?
According to an Agriculture Department analysis, if the tobacco price
support program ends, as it would under the Lugar plan, the price of
flue-cured tobacco would drop from $1.72 per pound to $1.15 while
burley tobacco would drop from $1.89 to $1.15. Accordingly, if these
estimates prove to be accurate, this would save cigarette companies
approximately $1 billion every year; that is, $1 billion annually, Mr.
President.
Considering the fact that the tobacco program is a no-net-cost
program to taxpayers and tobacco farmers will be receiving a 35 percent
reduction in farm income, I think it is pretty obvious who will be
benefiting under Senator Lugar's proposal--the tobacco industry,
period. Then where are we? What have we accomplished? What good will be
our efforts to eliminate underage smoking by raising the price of
cigarettes if the tobacco companies receive a $1 billion windfall every
year at the expense of tobacco farmers? This is a crucial question that
I believe must be answered before the Senate contemplates letting the
Lugar proposal remain in the legislation.
Second, while it provides more in buyout payments over a shorter
timeframe, the Lugar proposal provides for substantially less in
assistance for farm families and community assistance than the LEAF
bill. Senator Lugar's proposal eliminates nearly $10 billion in funds
for this type of transitional aid. It eliminates funding earmarked to
provide higher education opportunities for tobacco farmers and their
families, for transition payments to tobacco industry workers who lose
jobs, as well as billions of dollars in funds to provide grants to
communities for agricultural and economic development in tobacco-
producing counties.
I can understand the appeal that a quick buyout for tobacco quota
might have for a tobacco farmer, but I am extremely concerned that the
buyout proposal included in the Lugar bill is actually nonattainable.
The funding level contemplated in Senator Lugar's bill is $18 billion
over 3 years. At this level, it would require Congress to provide $6
billion a year for this one purpose, which is three times--three
times--the amount available under this bill during this period.
So what happens if this money is not fully delivered? I will tell
you, Mr. President, what I think could happen. We will have left the
tobacco farmer and their communities with an unfulfilled promise. In my
home State of Georgia, farmers, including those who grow tobacco, have
experienced extremely hard times over the last few years and are
anxious to hear any good news. Then they hear about something called a
buyout with large payments over 3 years, and understandably some get
excited. But in order to deliver this amount of funds in
this timeframe, we would have to cut the amount of funds available for
public health programs and research by almost 75 percent.
Now, I ask you, Mr. President, is this likely? Can we legitimately
expect that we are going to eliminate 75 percent of the funding for
counteradvertising, child care, NIH research, and cancer clinical
trials? Can we honestly believe that these buyout funds will be
available? In this Senator's opinion, the answer is clearly no. Let us
not make false promises to tobacco farmers and their communities. Let
us be honest. I implore my colleagues to carefully review the impact of
each of these proposals as well as our ability to achieve them.
I urge you to oppose the proposal offered by Senator Lugar and
support the LEAF Act.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. FORD. Mr. President, I thank my friend from Georgia for his
eloquent remarks and hope that our colleagues were listening and they
understand well what drives us who are more familiar maybe with the
tobacco farmer, the small farmer.
The distinguished Senator from Indiana laid out how he arrived at
where he is as it relates to his position on the tobacco farmer. It is
ideology with him more than it is fact for the farmer. He just does not
believe that Government ought to help people, and so therefore he
thinks everybody ought to be out there scratching on their own. And
maybe that is the correct way. But I have always thought that
government is here to serve people, and if it does not serve people,
then we do not need government.
I guess the Senator from Indiana understands that what he is about to
do is just put people out of business. Under the Freedom to Farm Act,
we are paying for millions of acres--millions of acres--and under the
tobacco program there are less than a million total.
[[Page S6392]]
Under the Freedom to Farm Act, the purpose there was to increase
production. What Senator Lugar will do, if his amendment is agreed to,
will be to put people out of business.
I have sat on a good many front porches, Mr. President; I have been
in many kitchens having a cup of coffee with the farmer, his wife, and
family; I have been in seven States talking to farmers--as we would
say, to the people who put the tobacco on the stick. I think I
understand their hopes and their dreams and their aspirations, and all
have been based on history and what they expect the future to bring.
I have a statement here from the National Commission on Small Farms.
The National Commission on Small Farms said:
The tobacco program for more than 50 years has cushioned
small farmers, African American farmers, new and beginning
farmers, by providing them a degree of economic certainty.
It's not the tobacco crop for which there is no alternative
but the tobacco program itself.
There is a strange thing in the Lugar amendment that was put on after
the committee had met and sent the bill to the floor. The Lugar
amendment does away with the program. That means the tobacco farmer can
grow all the tobacco he wants to grow from year 1, but the Lugar
amendment keeps the price support in for 3 years.
Now, think about that. Here I am, a farmer growing 10,000 pounds of
tobacco. They do away with the program. I can grow all the tobacco I
want, as we would say at home, fencerow to fencerow. They keep the
tobacco support program in place for 3 years, and so I grow twice the
amount of tobacco, get the price support, and nobody wants my tobacco,
so it goes to the so-called pool or into surplus. You do that for 3
years. At the end of 3 years, it is all gone. The pool is lying there
with hundreds of millions of pounds of tobacco. Then what happens? The
general fund will pick up that tab. Oh, there is a provision in here
that says we will pay so much to try to offset that, but it doesn't
work.
And you know something that didn't happen as a result of the Freedom
to Farm Act that we hear Senator Lugar was a strong supporter of. In my
State, if we lose the tobacco program, it will reduce the value of the
farmland up to $7 billion.
If you take the program away from the farmers, you have four
companies that control 98 percent of tobacco, and the farmers don't
have a thing to fight with, other than the program. What do you think
the price of tobacco is going to do? It is going to decline rapidly,
and it will make a minimum, under this bill--well, beginning the first
year--a minimum average to the tobacco manufacturers of $1 billion a
year off the backs of a few farmers. All we are talking about is
124,000.
So the vote comes down to: Are you going to vote to support the
farmer, or are you going to support Senator Lugar's bill that gives $1
billion a year to the tobacco manufacturers?
(Mr. HAGEL assumed the Chair.)
Mr. FORD. Mr. President, it is pretty tough when you have gone to the
bank and borrowed money based on the value of your property, your farm,
and overnight--overnight--the value of your property is reduced several
hundred dollars per acre because you have lost your tobacco program
that is of value.
You go to bed tonight with a loan from the bank and your property
will cover that loan, and in the morning, you have no program; the
price of your property has been reduced and your mortgage is called.
This is what I call a taking, Mr. President. We hear a lot about
takings around here, about taking property, but you are taking the
value of the land of this small farmer.
As we say down in West Kentucky where I come from, ``Something about
that ain't right.''
What do we do? We hear a lot about the buyout and money upfront and
the older people who would like to sell out. Under the LEAF Act, that
occurs. Anyone who wants to buy out at $8 a pound, the tenant, the
lessee can sell. They can offer their crop for a buyout, and it will be
done. It also says that one quota holder can sell to another quota
holder. But it also says that if you want to continue under the present
program, you can't.
All agricultural economies--and I am sure a lot of folks here
understands it--agribusiness says that it takes 10 to 15 years, and
leans toward the 15 years, for a community to transform from one
economic aspect to the other.
We see under Senator Lugar's amendment--which was never voted on by
the committee while the hearings were going on or when we had the
regular markup; it was done here on the Senate floor by checking the
majority on the Commerce Committee and the majority leader putting it
in. I thought I had helped the chairman, Senator Hollings, and others
get this bill out of the Commerce, Science and Transportation Committee
and on to the Senate floor.
If you wonder how much money the Lugar amendment will take, they have
submitted an amendment which is at the desk which will take 47 percent
of all the money. If that amendment to this bill, which is at the desk
and has not been called up yet, is adopted, I believe it is 47 percent,
maybe 48 percent of all the money will go to this one project. If 40
percent of the money goes to the States, that is 88 percent of all the
money. What we find is that those health programs that we want to fund
have become discretionary. They are not part of the budget process;
they are not part of the estimated amount coming in under this bill.
They will be discretionary, and they will be subject to appropriations.
When you live with these people, having been one of them, having been
a farmer, and you see them every day, it seems a little bit ironic that
we are telling them what is good for them, because this year they voted
97 and 98 percent to keep the program. Yet, we are saying to them,
``You don't know what you are talking about; you don't know what you
voted for; we're going to change it; we're going to do away with that
program that 98 percent of the farmers said they want to keep.''
We say to them, ``You don't know, we know better than you do,'' and
that is what I said earlier. One of the reasons this place isn't liked
is because we get 98 percent of a group of people who say we want to
keep this, and we say, ``No, we know better than you do, so we're going
to take it away from you.''
Oh, you can go out there and get all kinds of polls. You can get the
fellow who grows 600,000 pounds of tobacco a year, and he sure would
like to have 4.8 million. They say under the Lugar bill you can keep
growing. Sure, but at what price?
My Agriculture Department estimates that the 65,000 farm families in
Kentucky will be reduced to less than 10 percent. Only the big farmers
can contract with the manufacturers who will be getting $1 billion more
a year. Do you want to vote for the farmer, or do you want to vote for
the tobacco manufacturers? It comes down to that.
Just think, you will be reducing farm values in my State by up to $7
billion. I have heard a lot from the other side of the aisle and some
on this side about property rights. I have talked to my home builders
and others who worry about takings. Under this one amendment, if this
one amendment is adopted, up to $7 billion in farm value will be lost.
That is almost one-third of the farm value in my State. Approximately
$20 billion is the assessed value of the farm property in Kentucky. So
we are reducing the value of that land and the ability of that farmer
to secure a loan.
It doesn't make any difference how much money you give him. Our
average is about 3,000 pounds, and you want to pay it over 3 years.
That is $24,000. Then, you are going to pay tax on it. Boy, that is
really going to be great. Only the large farmers are the ones who have
the voice. The small farmer down there working depends on others. But
Hamilton said in these Halls, meaning the House and the Senate, ``The
people's voice shall be heard by their immediate representative.'' I am
that immediate representative. And I am trying to bring the voice of
the small farmer to the attention of my colleagues here in the Senate.
Is this emotional for me? Of course it is. In my last few months here
in the Senate, I ought to be over there taking care of constituents,
packing up my papers, getting them to the university, getting ready to
go home and spend some time with my family. But, no; the worst
political question of my career, the toughest one I have ever had, is
now in the last 6 months of my service in the U.S. Senate.
You sit on the front porch with these farmers. You sit in the kitchen
and
[[Page S6393]]
drink coffee with them and their families. From back in June of 1997,
last year, June 20, the farmers have been on a roller coaster ever
since.
Let me try to describe a little better where I come from with my LEAF
Act. Tobacco farmers tried to get in on the negotiations between the
Attorney General, the tobacco companies, and public health groups. They
were not let in the room. They were not even let in the room. I tried
to find out what was going on. It was private. It was quiet. It was
closed. But the White House was there. The health groups were there.
The attorneys general were there. The tobacco companies were there. But
the ones who are going to get hurt the most were not there. Now we are
trying to hurt them even more.
The June 20 settlement did not include one dime for the tobacco
farmer. But there is $750 million in there for NASCAR and rodeos. And I
didn't hear anybody say, ``Take that out.'' No. ``Take it away from the
farmer. Don't take it away from NASCAR. Don't take it away from rodeos.
Let them advertise at rodeos. Let them advertise at NASCAR.''
I am for the Winston 500. I do not have any problem with that. But I
have not heard a word in here, or from the other side, that they gave
too much to NASCAR, that they gave too much to rodeos. But, boy, you
sure are taking away from the farmer down there who has labored all his
life and has produced a superior product.
Alben Barkley, on this floor in 1939, put in the tobacco program. It
took him 3 years--1936 through 1939. Alben Barkley was a pretty good
legislator. He was a mighty fine Vice President. I think he understood
his people as well as anybody. And it hasn't changed. I wish I had the
ability that Alben Barkley had to speak and to convince people that
what I am trying to do is right.
But sitting on those front porches, sitting in the kitchens and
talking to the farm families, I told them to get to work and come up
with something that they felt would be acceptable. And to work they
went. They developed a comprehensive plan not just for individual
tobacco farms but for their communities as well. We have not thought
about Russellville or Horse Cave or Glasgow or Springfield or
Carrollton. They are small farm communities that depend on tobacco. And
their banks depend on tobacco. Their businesses depend on tobacco.
Fifty percent of their income comes from tobacco.
The average, in my State, is 25 percent is farm income. There are
loans because the value of the property is there. The banker
understands as long as the program is there, it gives them financial
stability.
And so last October, after months and weeks of work, we introduced
the Long-Term Economic Assistance for Farmers Act, what we call the
LEAF Act. And, you know, even the night before I introduced that--and
we all sat around, made one change--we all shook hands and got up and
left, that this is what we are going to support. And it was cosponsored
by nine tobacco State Senators--myself, Senator Helms, Senator
Faircloth, Senator McConnell, Senator Hollings, Senator Thurmond,
Senator Frist, Senator Cleland, and Senator Coverdell. All of us agreed
that this was in the best interest of the tobacco farmers and the
communities and the welfare of our States.
Since that time, we have worked hard to broaden our consensus,
including changes sought by Senators Robb and Warner of Virginia and
their tobacco growers. We made those changes. We accepted a broader
consensus. This modified version of the LEAF Act is now included in the
bill before the Senate in title X. Title XV, on the other hand, was
inserted into the bill at the last minute after we got to the floor. It
was never debated in the Commerce Committee. It was never debated
during the markup. And all of a sudden here it comes--after we had an
agreement. And the chairman went and explained the bill to farmers and
what was in it.
It provides buyout payments for tobacco farmers who want to leave the
program. And they keep using, against this bill, that, ``You take our
money and you can keep on growing.'' Well, if you keep the program and
you sell out, that reduces--you no longer can grow, you don't want to
grow. It may be the widow who has the quota. It may be the elderly
couple who can no longer perform. But remember this: 69 percent of all
the farmers in Kentucky, 69 percent of all the quota holders in
Kentucky, have another job. This is a husband, wife, and family
operation; 3,000 pounds, 3,100 pounds. Instead of hiring help, they do
it themselves. And that money is theirs. They buy a major appliance.
They paint the house. They get a new truck, pay on the mortgage, help
send the kids to school.
What are we saying to those families now? ``In 36 months you're
gone.'' Three thousand pounds is the average. That is $24,000; $8,000 a
year. And you are going to pay tax on it. Hasn't anybody said whether
there is going to be capital gains or regular taxes? If it is capital
gains, it is 20 percent. So you take $1,600 out of that right off the
top. I have not heard whether it is going to be capital gains or
regular taxes. Maybe some people who understand the tax program better
than I do can come up here and say how great it is going to be, and
they will not have to pay any.
There are buyout payments for tobacco farmers who want to leave the
program. But under the Lugar amendment, the program is gone. And for 3
years you still pay them so much per pound, and they can grow all they
want to. So it costs the taxpayers lots and lots of money, and nothing
will go to the farmer, it will go to the pool. And then after the 3
years, there is nothing. And who owns it? Who is going to pay for it? I
think I know, and I think the Senator from Indiana knows.
It reforms and maintains a tobacco-supplied management program. We
have a core principle statement by about 24 health groups and the
tobacco groups that they support--whatever--to reduce youth smoking.
But they also support keeping the program. It maintains a tobacco-
supplied management program. Without a tobacco-supplied management
program, the 124,000 tobacco farm families in this country--which their
average tobacco growing in various States varies, the amounts--have
absolutely no bargaining power to deal with the four largest tobacco
corporations.
We are getting to a point where everybody is getting down to just a
small group controlling everything. Four tobacco manufacturers control
98 percent of the tobacco grown in this country. The Senator from
Indiana says about 40 percent of the tobacco in cigarettes now are
foreign. I think that is a little high. Of course, if you are for
something it is less, and if you are against something it is higher. I
find somewhere in the middle might be about right. We do have GATT and
GATT limits the amount of tobacco that can be imported into this
country. I know that was about 150,000 metric tons and the tobacco
companies have first choice.
So when you are going up against the small group of companies that
control the 98 percent of everything, you don't have much bargaining
power unless you have a program. So we say as you reduce the quota
based on 1995, 1996 and 1997, that we will take the difference in that
as we transition out into the future. Most agricultural economists say
that it takes 10 to 15 years, and closer to 15 years, to transition
into a new economic stream.
So as we look here at the bill itself we are under what the bill says
will go to agriculture. What the Senator from Indiana has to do with
his amendment, if passed and accepted, he has to correct the bill to
say he will get almost 48 percent of all money for the next 4 years,
where we will only get 16. At the end of 10, we only get 4. Talk about
saving money--it costs $10 billion more. The bill is for 25 years. My
amendment is for 25 years. If you want to shorten it some, that is all
right. If you are willing to talk, I am willing to talk, too, but I am
not willing to give up what the farmers have earned.
The Campaign for Tobacco-Free Kids--they have been very active in
this--supports a continuation of the tobacco program. They said the
following:
Legitimate concerns have been raised that in the absence of
some sort of a program, tobacco production may, in fact,
increase; that tobacco will be grown in other States that
presently do not produce tobacco and the tobacco companies
and the tobacco leaf dealer will gain control over the
production and move to contract production, keeping tobacco
farmers and their communities at risk.
The Senator from Indiana knows that. He knows that. But no, he wants
to say here is the money, you get it upfront, you pay your taxes on it,
you get
[[Page S6394]]
it over 3 years and I will only get 48 percent of all money for the
next 3 years. I am not sure he can get that. When you have the marriage
penalty in here, you have Senator Coverdell and his drugs, vouchers and
the veterans --we have done a lot of work here. To do everything but
take care of the farmer and to try to stop underage smoking does not
make sense. What is going to stop underage smoking in this act?
I think you lose control of the production of tobacco under the Lugar
amendment. You have no way of controlling it except by price. When
prices go down and tobacco companies make $1 billion more a year, you
will vote for the farmer; you will vote for the manufacturer. I hope
you will vote for that hard-working family, hard-working, God-fearing
family.
Under the LEAF Act, it requires that tobacco companies pay all the
administrative costs associated with the tobacco program, assuring that
no general taxpayer funds will be used for the tobacco program. Right
now, the only cost to the Federal Government under the tobacco program
is the administration of the program and the poor old tobacco farmer
out there pays a deficit budget fee. I doubt if anybody here has ever
heard of a deficit budget fee paid by a farmer who grows a legitimate
crop. Last season they paid in over $30 million, about $32-34 million.
The tobacco farmer pays a deficit reduction fee before he gets his
check from the warehouse. Think about that now. You have assessed him
out there about everything you can assess him for and he has paid
everything but the administrative fee, and now we are willing to take
care of that. Somehow or another that poor tobacco farmer down there
has been beat on and beat on and beat on. Somebody has got to stand up
for him against the big manufacturers.
Whether Senator Lugar knows it or not, he is playing into the hands
of the tobacco manufacturers by saving them $1 billion a year. When you
take the controls off, they are then in control of how much tobacco
they want and what they will pay for it. If we don't deal with this, if
we want to get around GATT, I am sure that will be the next one--they
want to increase the amount of imports from 150,000 metric tons to
whatever so they can bring foreign tobacco in here that has no control
over pesticides or anything else, no environmental control and bring
those on in, so it will be 100 percent. You are going to get it coming
up from Mexico, you are going to get it coming down from Canada. I
understand Marlboro Lights in Mexico are around 90 cents. We have tens
of thousands of cartons of cigarettes being made every month on Indian
reservations. This is playing into their hands --they don't want to pay
State taxes. All these things are happening, but there is no control
under Senator Lugar's amendment of the growth of tobacco.
The LEAF Act, or title X of the bill provides economic development
funding to tobacco-growing States which must deal with the impact of
settlement legislation. We understand that if this bill ever becomes
law, and the way it is going now and what the House says and Speaker
Gingrich says, we are just flipping our lips here because it isn't
going anywhere when it gets there. We are spinning our wheels. There
hasn't been anything added to this piece of legislation to stop
underage smoking--maybe $1.10. But you get a $185 pair of Nike shoes
and some kind of jacket with all the designs on it and all that, and $3
or $4 for a pack of cigarettes, I don't think it bothers anybody too
much. But then you ruin the farmer. You ruin the farmer.
So we try somehow as we reduce the use of tobacco, and hopefully we
do, we just try to say to that community--and I can go down community
after community and say to them that we are going to try to help you
with infrastructure, with economic development, with loans for new
business, to try to make up for the loss. And it all comes out of the
tobacco company. It is not a taxpayer fund. It is not coming out of the
general fund anyhow, but it comes out of the money developed from the
tobacco companies.
One thing I found, that the love of the tobacco farmer or the farmer
for his family is hard to improve upon. They are out there in the
country and they get up early, work hard, go to school, come back, work
hard, study.
One thing that a farm family wants is to see that their children have
a good education. If we put him out of business--and 90 percent of
them, my university estimates, will be--and there is no income, how do
they do it? We keep the program and we say, then, that as the time goes
by, and in a certain period, in a certain amount, we will give the
tobacco-growing families who wish to provide our* education assistance
for their children. What is wrong with that? I don't see anything wrong
with it. Others may. They say, well, you are trying to do too much.
Well, if you are going to put somebody out of business and that is not
his or her choice, something has to be done.
Everybody around here voted for NAFTA--I didn't, but most of them
did. What do you do about dislocated workers? I had about 25,000 in my
State in the textile industry, and all of those jobs have gone to
Mexico after NAFTA. What do you do with 25,000 idle workers? Under the
law, you try to train them and get them prepared for another job. That
is what we said here. We provide assistance for dislocated workers from
tobacco warehouses, processing and manufacturing facilities, who lose
their jobs as a result of this tobacco legislation. What is wrong with
that? We do it every place else. You say you don't want to do it for
this industry. Well, not a farmer had a document, not a farmer was in
on the advertising, and not a farmer did anything except try to support
the tobacco program.
I think that we have developed an approach that looks not just at the
farmer, but at the entire community that will be impacted by this
legislation. This approach is included in title X of what we call the
McCain bill. I can understand the large farmers wanting their money and
then being allowed to grow all they want. They will be the only ones
that can contract with the manufacturers. They will be the ones that
will get the big money and membership on the board of some outfit down
there. Not one of them grow less than 200,000 pounds of tobacco a year,
and so they get anywhere from $1.6 million to around $4.8 million--just
those four people. So they will get around maybe $10 million, $11
million, or $12 million. No wonder. Those four who raised about 1.2
million pounds are big enough. They are big enough to deal with the
manufacturers. But we have just paid them a good deal of money and told
them ``you are out on your own.'' They like that. They have money. But
you are going to pay it over 3 years, and they are going to have to pay
tax on it, so it is going to stick them a little bit.
Title XV, on the other hand, promises tobacco farmers the same amount
of money, but over 3 years instead of 9. It would allow for the
unlimited and largely unregulated production of tobacco. Title XV saves
tobacco companies $1 billion per year for the next 25 years. Title XV
requires somewhere between 46--I wanted to look at the amendment, and I
am sure the Senator will correct me. It is 46 or 48 percent of all the
money--that is in the amendment at the desk--to pay for the Lugar
amendment in the next 3 years, where under the bill it says it can only
have 16 percent. At the end of 9 years, we only get 4 percent.
Something about that in the transition, it seems to me, ought to be
done.
So let's remember that title XV is a billion dollars per year
windfall for the tobacco companies. It is $1 billion a year windfall
for the tobacco companies. Are you going to vote for the farmer or the
tobacco companies? I think that question is pretty clear. Each year,
tobacco companies pay based on the program. Most of the time, they pay
above the average. So we take the average and knock 70 cents a pound
off. That is going in. You can't pay people to grow it, fertilize it,
for the equipment and all that, and come out as a small farmer. So
roughly one-third will be reduced. Over the course of 25 years, the
Lugar amendment saves the tobacco manufacturers a minimum of $25
billion. Do you want to take the manufacturers over the farmers? I hope
not.
And the Lugar amendment takes away the money that the Leaf Act would
spend to try to spur economic development, to try to give them
technical advice, to go from one crop to the other, which is not in the
Lugar
[[Page S6395]]
amendment. It takes away the education. It doesn't even talk about
educating kids. We are just going to put you out of business and give
you some money and let you go on your own. We are going to reduce the
value of your land--in my State, $7 billion. How is that going to
reflect on the taxes that are paid in the counties and the cities and
the State? Are they going to raise taxes on a smaller amount of value?
You know, this thing has ripples.
I don't believe the Senator from Indiana has thought all these
through. If he has, I don't believe he would be this harsh on tobacco
farmers. I am sure there would be a rebuttal, but you can't rebut if
you take the quota away and it reduces the value of the land. That is a
taking. You go to bed with the value of the land, and you wake up and
the program is gone; tomorrow the value of your land is gone. They can
foreclose on you because you don't have enough value to cover your
mortgage.
Mr. LUGAR. Will the Senator yield for a question?
Mr. FORD. I will be glad to yield. I wondered how long you were going
to sit there and take all this.
Mr. LUGAR. I respect the Senator from Kentucky. I wanted to inquire
of the Senator. The discussion is very important.
Mr. FORD. I respect the Senator from Indiana, also.
Mr. LUGAR. I wonder if the Senator planned to continue his discussion
until the end of the session, or whether at some point I might seek
recognition to speak.
Mr. FORD. I will be glad to give the Senator an opportunity to speak
as long as he doesn't make a motion. When we get to a vote on this, I
would like to have some agreement, if we could, as it relates to a
vote.
Mr. LUGAR. If the Senator would consider allowing me to speak, I
pledge to the Senator not to make a motion with regard to disposition
of this bill during today's session.
Mr. FORD. The Senator's word is as good as gold. I have no problem
with that. All I want to do is, after you get through, I imagine I will
have something else to say, and then it will probably be dinnertime.
I yield the floor, Mr. President.
Mr. LUGAR addressed the Chair.
The PRESIDING OFFICER. The Senator from Indiana is recognized.
Mr. LUGAR. Mr. President, I hope the Senator will understand this
observation. Clearly, the strongest thing going for the Ford amendment
is the Senator himself. As he has pointed out, he has long service to
the people of Kentucky and his arguments on behalf of farm families
with whom he has visited, and clearly all Senators have affection for
the distinguished senior Senator from Kentucky. It is my hope and had
been my hope that I could persuade him that it is in the best interest
of these farmers--the people with whom he has visited on the porches,
who really have very real needs--and that is true of any tobacco
farmers in the communities--and we want to support them.
I know they are not as numerous as those in the Senator's State, but
it is still very important to me. Our argument is really over what the
future holds for them. I come into this business having conducted
hearings, not claiming extensive knowledge like the Senator from
Kentucky, but nevertheless understanding the predicament, it seems to
me, of the tobacco program. I believe that it is a deteriorating and
failing program. To give any other impression is not to give a very
good forecast of the future. I hope the Senator from Kentucky agrees
with me that, given that predicament, this particular piece of
comprehensive legislation is almost a heaven-sent opportunity and has a
lot to do with farmers who are tobacco farmers and those in those
communities. I believe that if the opportunity passes, so will the
opportunity for many of those families. That concerns both of us.
Let me just say for the record that the Senator from Kentucky
mentioned that an amendment I had planned to offer at the desk would
provide for 46 percent of the farmers' money coming in the first year.
That is correct. Let me point out, this is 46 percent of the money
dedicated to farmers, not 46 percent of all of the money in the bill.
Mr. FORD. Will the Senator yield for a question at that point?
Mr. LUGAR. Certainly.
Mr. FORD. Is that 46 percent of 16 percent?
Mr. LUGAR. Yes.
Mr. FORD. You only take 8 percent of the tobacco money.
Mr. LUGAR. No. The amount of money in the Lugar bill for farmers is
about, as I recall, $16 billion or $17 billion. And 46 percent of that
would come in the first year.
Mr. FORD. Then you have to get the money from somewhere. As I read
the amendment, I say to my friend, that would take 46 percent of the
money raised by the tobacco bill. So the States get 40 percent and you
get 46 percent. That is 86 percent of all the money.
Mr. LUGAR. I will not argue with the Senator's arithmetic. I suggest
there is even a worse predicament; namely, as the Senator has pointed
out, a marriage penalty, and the drug program. Other things have been
added in since we started the argument. My thought--this was at least
in the working with the health community--was to try to stake out the
farmers' claims before various other claims of the health community and
various others that might come along. Clearly, the amounts of money in
the amendment of the Senator from Kentucky in this bill will have to be
expanded. And in conference they surely will be expanded. It appeared
to me to stake out the farmers' interest in this way was prudent. The
amendment has not been offered. The Senator has an amendment on the
floor to strike my section which is the pending business. So we may
never come to that point.
Mr. FORD. I hope.
Mr. LUGAR. That was my motivation. My general logic still is about
the same--that we have a very crowded situation up front. But that is
not precluding either one of us from arguing for the farmers' interests
up front as opposed to downstream, and a long way down the stream in
the case of the Senator's amendment.
Let me just try to clarify another point that has arisen along the
way; namely, that the Lugar plan would be of great benefit to cigarette
companies. The distinguished Senator from Kentucky has frequently said,
``Are you for the companies, or the farmers?'' I am for the farmer. I
have made no mistake about that for years. The distinguished Senator
from Kentucky will recall that I have been attempting to wrap up the
tobacco program for many years--it is not a new endeavor--because I
don't believe it is good agricultural policy. But leaving that aside,
the charge is made that under the Lugar plan the tobacco prices would
drop dramatically and the companies would, therefore, make more profit
on each pack of cigarettes. Let me try to address that as carefully as
I can.
Dr. Blake Brown of North Carolina State University, one of the
Nation's most respected tobacco economists, studied what would happen
if cigarette prices rose $1.50 cents a pack and the tobacco program
were ended. As we know, the amendment to raise the price to $1.50 a
pack failed. It is $1.10 a pack. So, to that extent, we have a problem
with Dr. Brown's analysis. But, nevertheless, follow me if you will. He
said that prices would not fall as much as opponents of the Lugar
amendment assert. He projected a decline of 20 percent to 25 percent at
around 35 cents to 40 cents, not the 60 cents or 70 cents claimed by
some. Notwithstanding that, he said the price would fall but production
would increase.
The Senator from Kentucky has made that point--and he is correct,
according to Dr. Brown--that, in fact, a more efficient tobacco
industry is likely to arise under the Lugar amendment. This should not
be surprising.
Essentially, the tobacco program now brings about a very inefficient
tobacco situation in the United States. I am not a proponent of
tobacco, but I would say freedom to farm would be good for tobacco. In
essence, the price will fall, more will be produced, exports will
increase because price-wise--I would argue quality-wise--and it would
be more competitive. Revenue is not simply price; it is price
multiplied by volume. As a matter of fact, Dr. Brown estimates the
total dollar value of tobacco sales would fall by just 2.8 percent, or
$74 million, a year. By contrast, the Commerce Committee bill raises
about $500 billion from the tobacco companies.
[[Page S6396]]
Mr. President, it is my analysis that, in fact, the tobacco companies
conceivably have $74 million of economy a year, not a billion a year
that the Senator from Kentucky has mentioned. You multiply that by 25--
I am asserting it is more like $74 million perhaps, and conceivably
less than that, as a matter of fact.
That is a very different ball park to argue the situation one way or
another for the tobacco companies. But I would simply say that the
tobacco companies are more likely to buy American tobacco under this
situation. It is unlikely to lead to a GATT crisis, simply because the
market works. One reason the tobacco companies do not buy as much
American tobacco now is that normally the quality of much of it is not
very good. The price of it is abnormally high. They have substituted
purchases from abroad.
There are so many mixed motivations in this bill that some Senators
might argue we do not want a more efficient tobacco industry. As a
matter of fact, we want to make it as inefficient as possible, as few
sales as possible of American tobacco, the least rationalization
economically of it all. But you can't carry water on both shoulders on
this issue.
I am suggesting that this is a good time simply to get the
governmental apparatus out of it, which, in my judgment, is not very
helpful either to the tobacco farmers, or the tobacco companies, or to
anybody involved, and clearly it leads to a balance of trade problem
for America generally.
Let me get into the health and research question again, because some
Senators may be tempted to support the amendment of the Senator from
Kentucky because they believe that health programs might be disturbed
in the redistribution of these funds.
Let me just point out that the technical details of Senator Ford's
proposal are important to know. For example, in the amendment that he
has presented--and it is part of this bill now--the Ford plan costs
will immediately explode by design, because payments are accelerated if
the tobacco program ends. These costs could be over $10 billion in a
single year.
Why do I mention this? I mention it because I would guess, having
witnessed action on the floor for several years, that in some year some
Senator is going to propose the end of the tobacco program. That may
not occur tonight or tomorrow. It could, if the Senate passes my
amendment. But for some reason, because of sentiment for the
distinguished Senator from Kentucky to continue this process, after the
distinguished Senator has left the floor and left the Senate, my
prediction is that some Senator will say this doesn't make sense, for
the Federal Government to be prescriptive with regard to tobacco and
here we are supporting tobacco in this way by governmental fiat.
So at some point in a farm bill, or without a farm bill, my guess is
the program will come to an end. The Senator has thought of that and
says if that should be the case, immediately payments of all sorts come
to tobacco farmers. In other words, there is a ticking time bomb there
to suggest it is very expensive for anybody to try to end the tobacco
program. Members need to understand that. They are buying not only a
continuation of the tobacco program but a rather huge payment, if
anyone should dare to tamper with the program.
The health community people need to understand that. This is not a
benign amendment with regard to the health of the American people.
Let me point out, Mr. President, that the charge that we will give a
$1 billion gift to cigarette manufacturers, taking it out of the
farmers' pockets, just simply does not hold water. We have cited Dr.
Brown of North Carolina State before. I cite Dr. Brown again. He
estimates, as we have suggested, that farmers' total revenue might
decline by 15 percent. He said this decline assumed a $1.50-a-pack
price, but even at the $1.10 we finally adopted, the increase in their
loss of revenue could still be severe--maybe not 15 percent but
something in that neighborhood. Keeping the current program means lower
total revenues for American tobacco farmers because noncompetitive U.S.
prices well encourage a continued uptrend in imports and reduce exports
while domestic demand is stagnant or falling.
I made the point, Mr. President, that it is conceivable through
protectionist legislation on top of this that Senators might decide to
try to keep foreign tobacco out of the country, might try to amend the
GATT at the World Trade Organization meetings when they come along next
year. That would add, I suppose, double jeopardy to the whole
situation--Federal sponsorship of tobacco, compounded by protectionist
legislation enveloping even that.
That does not make sense. This is not the way the world works. It is
not the way the policies of this country are headed. Why in the
particular instance of tobacco is there a blind spot with regard to the
successful economic operation of our country including this specific
industry? In fact, I would suggest that the families who, under the
Lugar amendment, will be collecting $8 a pound for quota will use that
money, many of them, to make investments and to earn money on them that
are substantially more sound and more lucrative than the investments
they have in tobacco. The tobacco industry is not a winner in terms of
current investment either as a farmer, warehouseman or a manufacturing
concern. It is not a winner because this legislation is in the Chamber
and the impact of this legislation is going to be very depressing to
tobacco people wherever they are.
The intent of the distinguished Senator from Kentucky and myself is
to not only cushion that blow for farmers and those communities, but it
is to provide, upfront and quickly, capital for those farmers to have a
pension or money to invest in other operations, agricultural or
otherwise, or money for scholarships. And I share the enthusiasm of the
distinguished Senator from Kentucky for education of young people in
those areas where tobacco is produced, as well as elsewhere. But I
would seriously question whether the educational opportunities of those
students are going to be enhanced by continuation of the tobacco
program, a program that will mean less income for their families
annually as far as the eye can see, from an industry and a general
area, that of tobacco, in which demand will be depressed, in which
sales and the amount of quota given annually will be depressed and in
which, one after another, these families will in fact leave the
business.
I am not trying to legislate anyone out of business. I am as
sensitive as the distinguished Senator from Kentucky that in a
deteriorating situation people are leaving farming in general, but they
are leaving tobacco farming in particular because it is particularly
depressed and does not have even the liberation of freedom to farm, the
ability to farm or to plant what he wants to maximize his or her
production in this country.
If, in fact, we are talking about the health and welfare of tobacco
farmers--and that is our intent today--and the distinguished Senator
from Kentucky is correct, that we were not at the table when the
attorneys general of the various States met with the tobacco
companies--and, in fact, testimony before the Agriculture Committee by
at least one witness was that settlement for growers was deliberately
left out. It was, to quote one of them, a deal breaker. Others have
said that all along they expected Congress would act, and, indeed, we
are attempting to do that.
Mr. President, if we do not act or if we had not acted by bringing
these amendments to the floor, I think it is clear to the tobacco
farmers in my State they will be on a losing course with tobacco for
the rest of their lives without any recourse or any particular funds.
Finally, Mr. President, I would suggest as to the critical issue that
has been suggested; namely, is there credible evidence that farmers
will receive their money, the distinguished Senator from Kentucky has
pointed out that certainly my plan looks attractive to farmers who
anticipate receiving $8 per pound of quota in the first 3 years after
enactment; that my plan looks attractive to farmers who want to
continue on and receive transition payments comparable to those of
freedom to farm for corn and beans and wheat and cotton and rice, and
my plan looks attractive, as a matter of fact, to communities that
receive at least modest amounts of community development funds. The
Senator from Kentucky has pointed out the value of these funds.
[[Page S6397]]
I believe my amendment is attractive for all of these reasons, and
this is why it is attractive to grower organizations in most States
that have a lot of tobacco--a great deal of support, resolutions of
support directly, editorial support in newspapers. It is not because
people in those States necessarily favored my desire to end the tobacco
program. It is because they came to a recognition the program is
ending. It will be gone. This is the one opportunity in which some
compensation might occur. It is an opportunity not to be missed.
Now, if it is to be ceased in terms of the family, the money upfront
makes sense. It is very important to understand that and to understand
why that injection of capital and expenditure and buying power into
tobacco communities is important in the short run. It is important to
understand why, when a conference occurs with the House, if they pass a
bill, growers need to have a strong position at the table, which our
bill gives them. I think it is very important, as a matter of fact, to
the success of this legislation as a whole that there be a provision
such as the one I have suggested and which the distinguished Senator
from Kentucky has now moved to strike--that my provision be there. It
is a strong reason for Senators to vote for the overall legislation.
I would say correspondingly, if in fact the tobacco program is to
continue on forever, and if the expenditures the distinguished Senator
from Kentucky has pointed out are very generous to his State and a few
others are to be a part of that, many Senators will raise the question
as to why the rest of the United States of America ought to subsidize
these few States or these few counties. What equity is there, as a
matter of fact, in such a transfer of money over the course of time?
And Americans will clearly ask, Is it not hypocritical to maintain that
entire apparatus if the point of tobacco legislation is to discourage
smoking, discourage consumption, to help improve the health of the
American people and the desire of young people to become committed to
smoking at all.
For these reasons, I am hopeful that as Members ponder their
decision--and it may be a decision they will have to ponder throughout
the evening or will make at some point in the morning, because I have
pledged to the distinguished Senator now to make a motion. I had
indicated earlier in the afternoon I was perfectly willing for a quick
vote, and that situation did not materialize.
There is no one here stopping progress. I will just simply say, at
some point this has to be resolved, and I hope the Senators will
resolve it in favor of the Lugar amendment, because I believe this is
the best course for tobacco farmers, for tobacco communities, and for
our national policy.
I thank the Chair, and I yield the floor.
Mr. FORD addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. FORD. Mr. President, it has been a good debate, and I have
enjoyed it. I am not learned in debate. Whatever skills I might have
come from experience. I have been around here a little longer than the
Senator from Indiana. This is my 24th year, and I believe this is maybe
his 21st or 22nd. Of course, he was mayor of Indianapolis; I believe,
one of the favorite mayors at that time. He said after I leave the
Senate, the tobacco program is gone. Can you believe one Senator can be
that strong? The first thing I learned when I came here was that every
Senator is independent. Every Senator has one vote. He controls that
out here and nobody controls him. I just can't believe it, but it is in
the Record, and I might cut it out of the Record and frame that
statement from a Member of the other side.
I was sitting here thinking about the money and how much is
available. If the Senator's amendment stays in, this amendment will
have to go beyond the 16 percent. But, if you get 46 percent in the
first year, that is where you need 60 percent of the first year's
money. That is $8 billion that you will have to pay out the first year.
That is 60 percent. I suggest it will be close to 60 percent in the
second year and the third year. If the Senator wins, he might want to
change the percentage on that amendment.
The Senator says that public health groups say regulation of tobacco
will be less efficient. I believe that is his statement. On the one
hand, he says funding is not important; on the other hand, he says
there is a ticking time bomb of explosion. I don't quite understand
that money is not important. He says funding is not important but, on
the other hand, there is a ticking time bomb.
Senators should know that Senator Lugar is promoting his proposal
because it would increase tobacco production. He said that--increase
tobacco production, going to make it more efficient, all those good
things. But he is promoting the increase in tobacco production.
Ask the public health groups what they think about that. Ask a small
farmer what he thinks about that: a production increase for big
farmers, fine, while the small ones are out of business. I don't
believe the Senator would like it if he was back in his home in
Indiana, and he has value of land--they talk about the money up front
and they can make an investment, but when you lose hundreds of dollars
per acre in value of your farm, I am not sure how well you come out in
this, and they put them out of business. At least 90 percent of my
small farmers in Kentucky are gone, and that is a conservative
estimate, not a liberal estimate, but a conservative estimate.
We are getting to the point where it is very difficult for me to
understand, and I think the Senator is having a hard time defending his
position when he is wanting to increase the growth of tobacco, reduce
the price and save the tobacco companies a billion dollars. I say to
the Senator, that is true, and it may be even more than that, because
four companies control 98 percent of the growth of tobacco. We have a
hard time exporting tobacco because other countries are growing it, and
companies have promoted some of that. So we limit it. Like everybody
else, we limit it, and it is a pretty large limit on imports, to
150,000 metric tons or more.
Somebody has to be thinking through all of this as much as we are,
and those people who are thinking through this are the health groups
that have been fighting so long as it relates to reducing the use of
tobacco by underage children.
Something quite remarkable, I say to the Senator from Indiana,
occurred on March 16 of this year. Remember that date, March 16. On
that day, March 16, 16 tobacco farming groups and 24 public health
groups came together to agree on a common set of core principles. You
talk about health groups now. Here are 16 tobacco farm groups and 24
public health groups that came together to agree on a common set of
core principles to guide the debate--to guide the debate--on tobacco
legislation. Both sides and all 40 groups agreed that ``a tobacco
control program which limits supply and which sets a minimum purchase
price is in the best interest of the public health community.''
That is a pretty strong statement by the health groups, and in
conjunction with the tobacco interests. According to the Campaign for
Tobacco-Free Kids in a letter dated May 13, ``those public health
groups who signed the core principles remain committed to the
principles outlined in them, including maintenance of a supply limiting
tobacco program.''
What we are doing here is--I believe it is under title IV of the
bill, and I am sure the Senator knows what title IV is, but that limits
the amount of money that can be spent for agricultural purposes under
this bill. The LEAF Act is under that limit. The Senator's amendment is
about three times or four times over that limit. But we are within that
limit. This is approved by the health groups. Instead of cutting them
off at the knees in 36 months, we give them a little more time to
phaseout. They can sell out, they can buy out.
I have a list of all of the groups that signed the core principles,
such as the American Heart Association, the American Cancer Society,
Americans for Nonsmokers Rights, American College of Chest Physicians,
Association of Schools of Public Health, the Oncology Nursing Society,
Partnership for Prevention, National Hispanic Medical Association--I
can go down all these groups that think keeping the program is the
right thing to do and saving $18
[[Page S6398]]
billion. I might say to my colleagues, saving $18 billion for the use
for research and health care and all these other things.
Mr. President, I ask unanimous consent that a list of the public
health groups that signed the core principles be printed in the Record.
There being no objection, the list was ordered to be printed in the
Record, as follows:
The following public health groups signed the ``Core
Principles'':
American Heart Association
American Public Health Association
American Cancer Society
Americans for Nonsmokers Rights
American Association for Respiratory Care
American College of Cardiology
American College of Chest Physicians
American School Health Association
American College of Preventative Medicine
Association of Schools of Public Health
Interreligious Coalition on Smoking OR Health
Campaign for Tobacco Free Kids
Oncology Nursing Society
Family Voices
Partnership for Prevention
National Hispanic Medical Association
Coalition for Health and Agriculture Development (KY)
Kentucky Action
American Cancer Society (KY)
American Heart Association (KY)
American Lung Association (KY)
Kentucky Dental Association (KY)
Kentucky Medical Association
Kentucky Parent Teachers Association
Kentucky Society for Respiratory Care
American Heart Association
American Lung Association
Kentucky Smokeless States Project
Albermarle County (VA) Medical Society
Virginia Public Health Association
Georgia Public Health Association
Mr. FORD. I thank the Chair.
Mr. President, I understand that the distinguished Senator from South
Carolina wishes to make a statement. And I am more than willing to
yield to him.
Mr. THURMOND. Thank you.
Mr. FORD. I understand he needs about 5 minutes.
Mr. THURMOND. About 6 or 7.
Mr. FORD. Well, that is pretty close. So, Mr. President, I ask
unanimous consent that the distinguished President pro tempore be
recognized for what time is necessary, and that after he has completed
his statement, that I be recognized.
The PRESIDING OFFICER (Mr. Brownback). Without objection, it is so
ordered.
Mr. THURMOND addressed the Chair.
The PRESIDING OFFICER. The distinguished Senator from South Carolina.
Mr. THURMOND. I wish to thank the distinguished Senator for his
courtesy.
Mr. FORD. I appreciate you being a cosponsor on my LEAF Act, too.
Mr. THURMOND. Mr. President, thank you.
(The remarks of Mr. Thurmond pertaining to the introduction of S.
2176 are located in today's Record under ``Statements on Introduced
Bills and Joint Resolutions.'')
Mr. THURMOND. Mr. President, I yield the floor.
Again, I wish to thank the able Senator from Kentucky.
Mr. FORD. I thank the Senator.
The PRESIDING OFFICER. Under the previous order, the Senator from
Kentucky is recognized.
Mr. FORD. I do not know that there are a great deal of additional
thoughts that we need to discuss. I could go down--one of the things
that I want people to understand is that we are not just doing away
with the tobacco quota. Oh, we are paying them some money, but the
average, I don't think, is going to be much over $20,000, divided by 3
years. And the taxes are paid.
Anywhere from 15 to 20 percent of the value of Kentucky farmland is
based on the tobacco quota. In rural Kentucky, banks will not lend to
farmers unless they know the value of their tobacco quota. Real estate
does not sell without disclosing the amount of tobacco quota on a farm.
You can't sell a farm without disclosing that. That is an important
feature.
If you read the real estate section of the Kentucky newspapers, you
will see the amount of tobacco quota advertised with the sale of the
farmland. So if the program is done away with, then the value of the
land is reduced anywhere from 15 to 20 percent, and that is up to $7
billion. So we are not only taking away the livelihood, we are also
reducing the value of the product this farmer has worked all his life
to hold.
There is something here that I believe is fundamental--fairness. And
under the Lugar bill, that is not fair. So this will have major,
devastating consequences on the tax base in rural Kentucky--all because
of the hostility of title XV toward the small tobacco farm.
The Lugar alternative is really no alternative at all when you look
at what happens to that tobacco farmer. It gives him a little money,
and he is out. And we reduce the value of his land. He pays big sums of
tax on it. If it is 20 percent, fine, but he has to figure some way.
So, Mr. President, I do not know what the majority leader or the
Democratic leader would like to do. I understand we have a joint
meeting tonight, with both sides, beginning at 6:30. We are getting
reasonably close to that. So in order to find out if it is all right
with the Senator from Indiana, 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. LUGAR. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________