[Congressional Record Volume 144, Number 79 (Wednesday, June 17, 1998)]
[Senate]
[Pages S6441-S6450]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT
Mr. GREGG. Mr. President, I ask unanimous consent that the Senate now
resume consideration of the tobacco legislation, S. 1415, for debate
only until the hour of 2 p.m. today.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The bill clerk read as follows:
A bill (S. 1415) to reform and restructure the processes by
which tobacco products are manufactured, marketed, and
distributed, to prevent the use of tobacco products by
minors, to redress the adverse health effects of tobacco use,
and for other purposes.
The Senate resumed consideration of the bill.
Pending:
Gregg/Leahy amendment No. 2433 (to amendment No. 2420), to
modify the provisions relating to civil liability for tobacco
manufacturers.
Gregg/Leahy amendment No. 2434 (to amendment No. 2433), in
the nature of a substitute.
Gramm motion to recommit the bill to the Committee on
Finance with instructions to report back forthwith, with
amendment No. 2436, to modify the provisions relating to
civil liability for tobacco manufacturers, and to eliminate
the marriage penalty reflected in the standard deduction and
to ensure the earned income credit takes into account the
elimination of such penalty.
Daschle (for Durbin) amendment No. 2437 (to amendment No.
2436), relating to reductions in underage tobacco usage.
Ford amendment No. 2707 (to amendment No. 2437), to provide
assistance for eligible producers experiencing losses of farm
income during the 1997 through 2004 crop years.
Mr. GREGG. I make a point of order that a quorum is not present.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. KERRY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FORD addressed the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Amendment No. 2707, As Modified
Mr. FORD. Mr. President, I send a modification of my amendment that
is pending at the desk. The only thing I am doing is changing a section
of reference.
The PRESIDING OFFICER. The amendment is so modified.
The amendment (No. 2707), as modified, 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
1012(3)(A), the Secretary 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.--The amount available in
section 1012(3)(A) for tobacco community economic development
grants under section 1023 shall be reduced by any amount
appropriated under this section. 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. I thank the Chair.
Mr. KERRY addressed the Chair.
The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
Mr. KERRY. Mr. President, let me speak for a moment to the question
of where we appear to be, although no final decision I know has been
made by leaders.
But it is clear that at some point today, if events flow the way they
have been discussed, the majority of the members of the Republican
Party are going to try to kill this bill. And they are going to try to
kill this bill either through a cloture motion--depending on what
decision is made as to when that vote might be able to take place--
[[Page S6442]]
or through a tricky little budget point of order parliamentary
procedure that should have, in fact, taken place at the outset when
this bill came on the floor. The notion that, 3 and a half weeks into a
debate, to try to reduce our kids from smoking, that all of a sudden
somebody thinks, ``Oh, my gosh, there is a budget point of order we
ought to bring,'' is rather extraordinary in and of itself. There is no
way to hide. The old saying is, ``You can run, but you can't hide.''
You can run from the tobacco bill, but you can't hide from the effect
of the vote.
The effect of the vote today, or tomorrow, or whenever it occurs,
will be either to side with children in order to reduce smoking in this
country or to side with the tobacco companies. I know that there are
colleagues on the other side of the aisle who are running around with
polls that have been taken, and those polls show, ``Gee whiz, some
people in the country are beginning to see this bill differently.'' And
that is because millions of dollars have been spent by the tobacco
companies to present a rather one-sided point of view.
But the fact is that most people in America understand that they want
their kids to be able to stop smoking. They want their kids to not be
exposed to the increasing number of pressures that are applied to young
people with respect to smoking, and they know that in States like
Massachusetts, Arizona, California, and others there are very effective
outreach efforts that are being made with young people that are
reducing smoking.
In the State of Massachusetts, we have seen a reduction of some 30
percent over the last few years because of a very intensive State
program which needs more help. The people in the State know that they
can change that 30 percent into 70 percent or 80 percent if they have
adequate capacity to be able to do that, adequate resources for
materials, for outreach, adequate cessation programs, and adequate
counteradvertising to the impact of the millions of dollars that the
tobacco companies spend. All of these things are critical to the
ability of kids to be able to make up their mind.
I think most of us in the Senate understand that kids are most
impressionable with respect to something like smoking at the ages of
11, 12, 13, all the way through their teens. No one here disputes the
fact that every single analysis shows that 86 percent of all the
smokers in America began when they were teenagers. Eighty-six percent
of the adults who today are hooked on nicotine, on tobacco, began as
teenagers. Ninety percent of the kids in America recognize Joe Camel
more than they do--or equivalent to--Mickey Mouse. And the statistics
show that of those cigarettes advertised, Newport, Marlboro, and so
forth, the brands that have the highest level of advertising, are the
brands that kids smoke but not the brands that adults smoke, which
tells you a story--that when they become adults, they make a different
set of choices than just the bombardment of advertising. But when they
are kids, the cigarette they pick up is the cigarette that is most put
and shoved in front of them by the advertising. There isn't anybody who
doesn't understand.
The Senator from Arizona has talked about the impact on his 13-year-
old daughter of movies--the ``Titanic,'' for instance, Leonardo
DiCaprio, who spends his whole time in the movie smoking when he isn't
fighting water. I mean that is basically the heart of what the Senator
from Arizona has said affected his child.
And all across this country, Mr. President, those are the kinds of
influences. There isn't a parent in America who doesn't understand
that. There isn't a person of reasonable common sense who doesn't
understand that.
So why don't we try to do something about affecting the impact of
those role models and the impact of the pressures of young people. We
have had testimony from a young woman--and she is not alone, this is
just one example--who talked about when she was a teenager, she thought
it was going to make her look older if she smoked. She thought it was
going to make her more acceptable to teenagers who were older than her;
she could run in a group that somehow made her feel better. So she
started smoking. Today she is in a wheelchair and raising a couple of
kids because she developed a smoking-related disease in her lungs. She
has had a lung transplant, and she looks older. She tells people of the
impact of smoking on her life.
Are we going to just ignore that in the Senate--all of the evidence
of what the tobacco companies have done through the years saying they
targeted kids? They know they have got to have replacement smokers.
Here we have an opportunity to vote, and our colleagues on the other
side of the aisle have decided they are going to side with the tobacco
companies.
That is what the vote before the Senate will be, plainly and clearly.
You cannot make it into some sort of subterfuge. You cannot run and
hide by a budget waiver. You cannot create some parliamentary trick.
And you certainly cannot duck with one cloture vote and suggest that
this issue, which we have spent 3\1/2\ weeks on, is going to go away.
Who is for this bill, Mr. President? Well, there are more than 40
Democrats prepared to vote for this bill now. So there will be no
question if this bill doesn't move forward as to why it can't move
forward. But every single public health group in America is for this
bill. The lung and cancer associations are for this bill. All of the
surgeon generals of our country are for this bill. Teachers are for
this bill. Child care and day care specialists are for this bill. Forty
attorneys general across the country want this bill.
Who is opposed? Who is opposed? The tobacco companies. The tobacco
companies and some number of Republicans who choose to be with them.
That is who is opposed to this bill--the tobacco companies. No one else
is spending millions of dollars trying to characterize this bill on a
daily basis in the Nation. No one else is out there suggesting that
somehow what the tobacco companies agreed to do, which is raise the
price of cigarettes, is a tax increase.
I hear these Senators who come to the floor and say, oh, this is a
tax increase; we can't do that. That is a phony argument, Mr.
President. That is looking for an umbrella to hide under. That is a way
of running around and trying to find something to hang your hat on, not
wanting to do what most health care advocates--teachers, child care
specialists, surgeon generals, attorneys general, and others of this
country--want to do. The only beneficiaries if this bill does not go
through are the tobacco companies, plain and simple.
The fact is that we have never heard anybody be able to dispute the
notion that of the 60,000-plus kids who in the course of this debate
have begun smoking, somewhere in the vicinity of 20,000 of them are
going to die early. And they are going to die at the expense of every
other citizen in America. We have heard a lot of concern by the people
who come to the floor and talk about how terrible the raising of a pack
of cigarettes is going to be for the blue-collar worker who is going to
buy the pack of cigarettes, but no one in the Government is telling
them they have to go buy the pack of cigarettes. But that very same
person who is buying the pack of cigarettes, or all of those families
who do not buy a pack of cigarettes are paying a lot more of their
hard-earned tax dollars to cover the costs of those people who get
sick-- Medicare and Medicaid, Government dollars paid, tax dollars paid
out to the tune of $25 billion a year because of people who are sick
because of smoking. The cost of smoking is far greater to the average
taxpayer than the cost of the rise in the price of cigarettes.
You cannot hide under that one. That is not what is happening here.
That is not what this is all about. What we are seeing is a fear by
some in the House of Representatives that they might have to actually
vote on this bill. What we are seeing here is that Newt Gingrich and
some of those in the House have put a contract out on this bill. They
do not want this bill. They want their friends in the Senate to kill
this bill so they do not have to vote on it.
But this bill will not go away. It will not go away for the next
months in the election. It will not go away even on the floor of the
Senate, because somewhere, sometime, somehow it is going to keep coming
back. You cannot run away from a bill that has most of the people in
this country believing it is a good bill, who believe it is an
important objective.
Now, if it isn't good--I heard one Senator say, ``I can't vote for
that bill;
[[Page S6443]]
it's all loaded up.'' Who loaded it up? Mostly Republican amendments
that have been passed for things that have nothing to do with smoking.
There were Republicans who came to the floor and said, ``We have to
have a bill that has a tax cut in it; we can't vote for a bill without
a tax cut.'' So almost one-third of the money of this bill has now been
voted to go to a tax cut. So the Republicans got their tax cut.
Then a Republican came to the floor and said, ``I can't vote for a
bill that doesn't have a drug plan in it.'' So we had a big debate and
now the bill has a drug plan in it.
And then we have three different attempts to try to curb attorneys'
fees. People said, ``I can't vote for a bill that is going to have a
whole lot of money that wasn't earned going out to attorneys,''
notwithstanding the fact that not one penny has been paid to attorneys,
nor will the money be paid out of the bill because it is being paid by
the companies.
But leaving that reality aside, the Senate nevertheless passed a curb
on attorneys' fees. So our friends on the Republican side of the aisle
are not going to say no to this bill because it does not have a tax
cut. They are not going to say no to this bill because it doesn't have
a fat and firm clamp on attorneys' fees. They are not going to say no
to this bill because it doesn't have a drug plan. They are going to
wind up saying no to this bill because that is what the tobacco
companies want them to do.
So that is the choice. That will be the choice today--very, very
clear--a choice between kids and the tobacco companies. And anybody who
suggests, oh, no, I am not for the tobacco companies; I just want to
make a good bill, let's make a good bill. Let's vote on the amendments
the way we have been doing to make a good bill. And there is not
anybody in the Senate who does not understand that this bill is going
to go to a conference committee if the House ever voted on it, and it
has the ability to be rewritten in that conference committee and to
come back to the Senate differently.
In the 14 years I have been here, I have seen plenty of legislation
leave this floor where one side or the other disagreed bitterly with
some component of it but everybody knew it would be fixed in conference
committee. Why is it suddenly they do not want this bill, of all the
bills, to go to the conference committee? They do not want to let it be
fixed. They do not want to give it the opportunity to come back to the
Senate in a shape that might be voted on, because that is not what the
tobacco companies want. They do not want a bill. They walked away from
all of this. It was fine.
I know there are Senators on the other side of the aisle who were
ready to vote for this bill only a few weeks ago, or even a few months
ago, when the tobacco companies were part of the process. It was a good
idea. Oh, yes, it is inevitable; we are going to do that; we are going
to fix it up for our kids.
But all of a sudden after the money has been spent, after all of the
flow of those tobacco dollars, there is a different attitude in the
Senate about what is possible and what is not possible. I respectfully
suggest that no one is able to pull a curtain down over that reality.
If people want to fix this bill, we can fix this bill.
Every piece of legislation that came to the floor this year came to
the floor with a Republican cloture motion attached to it--every bill.
Every bill has had limited debate, except for this bill. Every bill we
had to push through here rapidly, except for this bill. This is the one
bill where there is one identifiable group that does not want it, and
that identifiable group has enlisted soldiers in its army. The question
is going to be whether or not the Senate has the courage to stand up
and say: We are going to fix this bill; we are going to work on this
bill; we can bring this bill together.
We could have had any number of discussions about how to fix any
number of difficult components of the bill, but the bottom line reality
is that every study shows in order to keep kids from smoking, you have
to raise the price of cigarettes. Even the tobacco companies agreed to
that. Even the tobacco companies agreed to that.
They came to an agreement in a global settlement, where they agreed
to raise the price of cigarettes. But it is only when that rise in the
price of cigarettes was geared to be something meaningful, that would
actually have an impact on kids smoking, and only when they began to
see that there were still going to be some lawsuits they would have to
defend, that they began to see the balance differently.
Frankly, there were some of us in the Senate who thought we
understood that there was a legitimacy to trying to create that balance
and hold it differently. But I think most people in the Senate
understand that anything that is to go to the conference committee will
come back with an ability to try to find that balance again and find
the ability to pass a good piece of legislation.
I know there are some colleagues on the other side of the aisle who
are very uncomfortable with what is happening. There are friends of
mine, members of the Republican Party, who want to vote for a bill, who
want to do something for kids, who want to be able to help out. I know
there are some feeling the difficulty of what is happening right now.
My hope is that people will simply recognize the reality. This is not
an issue that grew up spontaneously within the Democratic caucus. This
is not an issue that became the brainchild of some political strategy
on behalf of Democrats. This is something that grew up out of kids and
parents and teachers and doctors and health care specialists and
surgeons general and scientific evidence, and even the tobacco
companies' own documents, which gave birth to the notion that raising
the price of cigarettes is a critical component of reducing teenage
smoking.
I read those documents on the floor of the Senate a number of weeks
ago--I guess maybe last week. It is all somewhat of a blur at this
point. But the Senate knows the tobacco companies have acknowledged
that they lost business when they raised the price of cigarettes. They
know, as all evidence shows, that no group in America is more price
sensitive, more subject to the pressures of how much cash they have in
their pockets and what they spend it on, than young people.
So we have the ability to make a difference. The choice before the
Senate is really going to be very clear. My hope, obviously, is that
the Senate will act responsibly. If we are not happy with the bill in
its current form, notwithstanding the fact that there are 40-plus
Democrats prepared to vote for it in its current form, then we should
continue to work and continue to be serious, rather than to continue an
effort that just wants to kill it for the victory for those individuals
and entities who want that victory, rather than putting together a
meaningful piece of legislation.
Mr. CONRAD addressed the Chair.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I thank my colleague from Massachusetts
for his remarks. I thought maybe it would be useful to come to the
floor and just review how we got to where we are, why this legislation
is important, and why it matters to American families.
Months ago, I was called by our leader, Senator Daschle, and he asked
me to head up the task force for Democratic Senators on the issue of
tobacco. He did so after the settlement was agreed to in June of last
year between the attorneys general, representing about 40 States, and
the tobacco industry. That settlement, which was advertised as a
settlement of close to $400 billion over a 25-year period, was also a
settlement which was designed to not only raise prices to discourage
consumption, but was also designed to have countertobacco advertising,
smoking cessation, smoking prevention programs--all of it designed,
really, to safeguard the public health and to reduce youth smoking.
The focus was on reducing youth smoking, because we all know the vast
majority of smokers take it up as teenagers; about 90 percent of
smokers start before they are age 19. Nearly half start smoking before
the age of 14. As the tobacco industry has revealed in the documents
that have come out in the court cases, if somebody is not hooked when
they are young, they do not get hooked. That is why the tobacco
industry has put such a focus on young people. That is why they have
marketed to young people. That is why they have advertised to young
people.
[[Page S6444]]
Because they know that is the future of their business.
I have read on the floor of the Senate quote after quote of the
industry itself that have demonstrated that was the rationale behind
the tobacco industry strategy. It was a business strategy: You target
young people because people don't start smoking when they are older.
They don't start smoking later in life because they have seen enough to
know that it is not a very pretty habit, and they also get a sense of
the health risk involved.
So this is really a question of trying to encourage young people not
to take up the habit. The industry has to get some people to be
replacement smokers because they are losing over 400,000 customers a
year. They are losing them to death. This is the only legal product
sold in America that, when used as intended by its manufacturers,
addicts and kills its customers. That is strong language. Those are
strong words. But they are the truth.
After accepting Senator Daschle's assignment to head up the task
force on tobacco, we held about 25 hearings across the country. Many of
them were here in Washington. We listened to every point of view from
any people who wanted to have a chance to express themselves. We
listened to the tobacco industry. We listened to those who are in the
distribution chain. We listened to the convenience store owners. We
listened to the vending machine operators. We listened to tobacco
farmers. We listened to Dr. Koop and Dr. Kessler. And we listened to
the public health community: The Cancer Society, the Lung Association,
and many more. We listened to those who are advocates of strong
legislation. We listened to those who said Government ought not to be
involved, let this go through the courts.
We concluded that it was best if the Government did take action, that
it was best not to leave it to a free-for-all in the courts that might
ultimately bankrupt these companies. Nobody is out here advocating that
we stop the use of tobacco products in this country. After all, there
are nearly 50 million smokers in America. We have had a bitter
experience with prohibition. It does not work. But what could we do
that would discourage youth smoking and protect public health?
In holding these hearings and listening to the experts and listening
to just common citizens all across the country, over and over they
said: Look, you need a comprehensive package. Don't just leave this to
the courts. If you do, you wind up perhaps bankrupting these companies.
That will not end the use of tobacco products in America. Simply, what
will happen is we will wind up with a circumstance in which new
companies come and fill in the gap, and the companies that are
bankrupted will have no capability to cover the costs that they have
imposed on society. Those are very, very significant costs. Those costs
are variously estimated at $130 billion of costs being imposed on this
society--$130 billion a year.
The legislation before us would require the industry to pay $18 or
$20 billion a year when fully phased in. That in no way covers the
costs they are imposing on society. But that is not all the people who
came before our task force told us. They said: You have to have a
comprehensive plan. Yes, you have to raise prices to discourage
consumption, but you need to do much more than that. You have to have
the Food and Drug Administration have regulatory authority over this
product, just like they have regulatory authority over other drugs in
this society. But you have to go further than that. You have to have a
comprehensive plan of public health. You have to have countertobacco
advertising, so people hear a message other than the message they get
from the tobacco industry, with the billions of dollars a year they
spend in advertising and marketing. And you also have to have smoking
cessation and smoking prevention programs to help those who are about
to start, to give them a chance not to be hooked; and for those who are
addicted, to give them every assistance in stopping.
(Mr. GREGG assumed the chair.)
Mr. CONRAD. Mr. President, obviously, there is more to the program
than those elements, because we have to remember how this all started.
It started with the States bringing legal actions against the tobacco
industry. They are the ones that had the initial settlement with the
tobacco industry. So, obviously, the States have to be compensated for
the legal actions that they have pending.
In addition, the Federal Government has potential actions against the
tobacco industry, because Federal taxpayers are paying for Medicare and
Medicaid and veterans' health programs, all of them that have had costs
imposed on them because of the use of tobacco products.
Mr. President, it was those concerns that led this Congress to take
action. It was those concerns that led the Commerce Committee to
consider the legislation sponsored by Senator McCain, and they reported
out a bill on a 19-to-1 vote, an overwhelming vote.
In the Senate, we have considered a series of amendments that have
somewhat altered the work that they did in the Commerce Committee. We
have considered amendments to provide a significant tax reduction in
addition to the other provisions that were in the bill. About a third
of the money now will go for a tax reduction.
But there is more than that. There has also been amendments added
that deal with the question of illegal drug use in this country. The
Coverdell amendment that was adopted here on a very strong vote is
included in this legislation.
What we now have before us is really a comprehensive package. A lot
of people say, ``Gee, this isn't my idea of a perfect bill.'' It is not
my idea of a perfect bill either, but we have not yet completed action
on it. That is the legislative process--to take a package, to work on
it, to offer amendments and to have the votes of Senators dictate the
outcome. That is the way it works. So far, that process has gone
reasonably well.
Again, we certainly don't have a perfect bill, but it is one which is
comprehensive in nature and does offer the prospects of protecting the
public health and reducing youth smoking. We have 420,000 people dying
every year in this country because of tobacco-related illness. That is
a statistic, but it is a statistic that has 420,000 different stories
behind it. In hearing after hearing, we heard those stories. We heard
the suffering of families and of individuals who have been hooked on
tobacco products and have suffered the consequences.
I remember so well a Pierce Fravenheim, big tough guy in Newark, NJ,
a former football player, football coach, assistant principal. When he
came to testify, you could barely hear him speak. You could barely hear
him speak because after a lifetime of smoking, he developed cancer of
the larynx. He had undergone a laryngectomy. He told us of the terror
he felt when the doctor told him he was going to die unless they did
this procedure, and even if they did it, he might not survive.
In a way, he is lucky because he did survive, and he is there to tell
the story. He told us how deeply he hoped that others could be
dissuaded from taking up the habit, how deeply he hoped that others
would not experience the terror he felt when the doctor told him he
might die.
There are hundreds and thousands of stories just like Pierce
Fravenheim's that we heard as we went around the country listening to
people, many of them begging us to pass legislation that would do
something to deter others from taking up a habit that would addict
them, that would create disease in them and that would ultimately kill
them.
Again, nobody is out here proposing that we have prohibition, make
the product illegal. Nobody is proposing that. But we are proposing
comprehensive legislation to try to do something to lessen the hurt,
the pain, the suffering and the loss of life that occurs directly
because of the use of these products.
Mr. President, there are those who will take this bill and flyspeck
it, and they will have 100 reasons to be against it, maybe several
hundred reasons to be against it. That is the nature of a comprehensive
bill. I could probably point to dozens of different provisions that I
don't particularly like in this bill, but that isn't the question.
The question before this body is whether or not we are going to
advance, whether or not we are going to move forward, whether or not we
are going to give this legislation a chance
[[Page S6445]]
or whether or not we are going to snuff it out right here today on the
floor of the U.S. Senate and say, ``No, we give in; the big tobacco
industry advocates and defenders win.''
I hope that is not the outcome here today, Mr. President. The tobacco
industry does not exactly come to this Chamber with its credibility
intact. The tobacco industry came before Congress and said, ``Oh, no,
our products don't cause health problems.'' At the time they said it,
they knew, and the documents reveal that their products cause serious
health problems. And that same industry came before this Congress and
said, ``Oh, no, we don't target children; we wouldn't do that. It is
illegal to sell to children.''
We now know from the documents of the industry itself that, in fact,
they have targeted children. In fact, they have targeted kids as young
as 12 years old, and I have shown the charts and the quotes day after
day on the floor of the Senate that demonstrate conclusively that they
have targeted our kids. This industry has come before the Congress and
said, ``We don't have nicotine in there to addict people. It is not
addictive.'' And yet, again, their own documents reveal that nicotine
is addictive. In fact, their own documents compare it to cocaine and to
morphine. These are their words, not my words.
This same industry has come before Congress, and they have told us,
``Look, we have not manipulated nicotine levels to further addict our
customers,'' and when you look at the record, when you look at the
documents, what you find is that is precisely what they have done.
This industry does not come with a great deal of credibility to this
Chamber in arguing on behalf of this legislation. Rather, I should say
in opposition to this legislation, because they have made it clear,
although they supported a version early on that would have basically
taken their settlement and made that into a legislative vehicle, they
supported that, but as soon as we started stripping away the special
protection that was in that proposed settlement, an amendment by the
occupant of the Chair, an amendment that was adopted overwhelmingly in
the U.S. Senate and stripped out all the special protection that this
industry was seeking, special protection that was unprecedented,
special protection never provided any other industry in the history of
our country, all of a sudden they said, ``Oh, no, we don't want
anything to do with this legislation. If we can't get special,
unprecedented protection, we're out of here.'' That is what the tobacco
industry said. Now the tobacco industry is in total opposition. And day
after day, hour after hour, we hear their adds in the national media
opposing this legislation, attacking this legislation.
Mr. President, it is important, I think, for us to understand what is
here and what is not. We have, I think, the best indication: The recent
polling that has been done that shows the American people strongly
support this bill. It is different than saying this legislation is
their top priority, because it is not.
The American people have lots of things to be concerned about. They
are concerned about their jobs; they are concerned about getting their
kids into college and paying for it; they are concerned about having
their families safe and secure in their neighborhoods; they are
concerned about the health care of their parents and of themselves and
of their children.
Mr. President, they are also concerned about doing something to
protect their kids from the addiction, disease, and death brought by
the use of tobacco products. Most recent polling shows very clearly the
American people support this legislation. When they are asked to choose
between this legislation and no legislation, they say, ``Pass this
bill.'' By 2-to-1 margins they say, ``Pass this bill.''
This is a poll that was just taken by the ENACT Coalition. It shows
the voters in the United States support this bill by 66 percent to 32
percent.
It is interesting, because we are going to have a vote, perhaps
today, on the question of whether or not we move forward. Some will
say, ``Let's just kill the bill.'' That is what the tobacco industry
wants. That is their argument. And their defenders and their apologists
will be making that argument. The American people say, ``Pass this
bill.'' Let us have a chance to protect the public health and reduce
youth smoking.
Mr. President, I am very hopeful that my colleagues will let us move
to conclusion on this legislation. We are now in the fourth week of
consideration on the floor of the Senate--4 weeks. We ought to complete
our work. We ought to send this bill to the House of Representatives,
give them a chance to do their work, and then go to the conference
committee to work out the differences and produce legislation that can
be brought back to both Chambers for a final decision. But we should
not end the process now. We should not kill this bill before it has
even cleared the first hurdle.
Mr. President, I hope my colleagues will say yes to protecting our
kids' health and say no to the tobacco industry that has waged a
campaign of deception and diversion in an attempt to delay and
ultimately derail this bill.
I yield the floor.
Mr. NICKLES addressed the Chair.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, I rise in opposition to this bill. And I
take offense to some of the comments that were made by some of our
colleagues on the other side of the aisle who said, that anybody who
wants to kill this bill is an instrument of big tobacco.
That s simply not true. I did not support this deal when the tobacco
industry and the administration and attorneys general got together and
made a deal. They didn't consult this Senator. I was never in favor of
the deal they were in favor of that some people have tried to promote
and some people have tried to push, including, this administration. So
let me just make that very clear.
Now, I have many reasons to oppose this bill, and I am going to
enumerate these. Not one of them has anything to do with the way the
tobacco industry wants this Senator to vote. And so people making
allegations--I wonder if that can be turned the other way around, but I
am not going to do that. I do not impugn people's motives or their
integrity. I think people have the right to make decisions on whether
or not legislation is good legislation or bad.
I spent a little bit of time studying this legislation. And everybody
is entitled to their own opinion. They can brag on the legislation;
they can be critical of it. I am going to be critical of it. I have
read the legislation.
First, let me just comment on a comment that the President made. It
was reported in the Washington Post recently, Monday June 15. This past
Monday, President Clinton said his critics contend that ``this [is a]
dark scheme in Washington to build some new federal bureaucracy, and
it's the biggest load of hooey I ever heard in my life.''
So President Clinton thinks that those of us who are critical of this
legislation, who say this is just a big bureaucracy, that that is just
a big bunch of hooey--as a matter of fact, ``the biggest load of hooey
I ever heard in my life.''
I told my colleagues this is one of the worst pieces of legislation I
have seen in my Senate career. The only thing I can think of that was
worse was the health care legislation promoted by President and Mrs.
Clinton.
Mr. President, this chart that was put together by the Budget
Committee, showing where the money was coming from, where the money
goes, on Commerce I--and that was the bill that was reported out of the
Commerce Committee--shows that the President was incorrect. This is a
lot of new government. There are about 30 new programs, spending
hundreds of billions of dollars, all above budget, all outside the
budget. So I just think the President is incorrect. And I wanted to
make that comment. He is entitled to his own opinion, but I think we
are entitled to look at the bill and we are entitled to look at the
facts.
This is Commerce II. This is the bill that the administration
basically had rewritten--the bill. And this is the bill that we have on
the floor, although it has been added to. And we have new mandates and
new spending, and a tax cut and a drug provision. I don't show those on
this chart. But this is the current bill that we have before us.
There is a lot of new government in this. So the President calls its
[[Page S6446]]
``hooey.'' My comment is, these just happen to be the facts. That is
what this bill has in it. This bill has a lot of money in it. It has a
lot of spending in it. And I want to get into that because a lot of
people have said, ``Well, this bill, it is really only a $65 billion
bill. It only raises taxes by $65 billion.'' And this Senator, for one,
has been saying, ``Wait a minute. It's a lot more than that.''
Where does this thing say in this bill, if you look at the bill and
look at the language of the bill--and I would encourage my colleagues
to do so, and anybody else. I had to ask unanimous consent to get the
bill printed. The committee printed the Commerce I. They did not print
Commerce II. This is the bill we have before us that is now printed on
the Senators' desks.
If they would look at the bill, maybe look at page 183 of the bill,
it talks about annual payments. The bill does not say anything about 65
cents a pack; it does not say anything about $1.10 a pack. It does say
consumers pay $10 billion the first year, $14 billion the second year,
$15 billion the third year, $17 billion the fourth year, and $21
billion in the fifth year, without even considering look-back
penalties.
So if you total that, that is all $102 billion. That is what the bill
says--$23.6 billion in the fifth year. And after that, those amounts
are adjusted by inflation. That is on page 183 of the bill.
If you put those figures in and you adjust them for inflation--it
says 3 percent or inflation, whichever is greater. I just plugged in 3
percent. You do that, and you come out with $755 billion over 25 years.
What is this nonsense we hear, ``Well, we think it's only $516
billion''? This is $755 billion. That is in the bill. That is what we
are considering, not $516 billion.
And then the look-back potential. I show $130 billion of look-back
potential. I say ``potential'' because it can be assessed. No one knows
exactly how much that will be. But evidently a lot of people felt it
should be much more, because this chart is obsolete.
My colleague from Illinois, Senator Durbin, had an amendment to
increase this to $7.7 billion and then index that for inflation. As a
matter of fact, if you put the new figures into the chart, this $130
billion goes to a maximum of $241 billion. So you add that to the $755
billion and you get really right at $1 trillion--$1 trillion potential
tax on consumers. And I say ``tax on consumers'' advisedly, because
this bill mandates that 100 percent of this money be paid for by
consumers. It does not say, ``Tobacco companies, you pay this.''
Basically, it says, ``Tobacco companies, you pass this cost on. You
pass every dime of this on.''
So I make the point we are talking about, President Clinton may think
it is a bunch of hooey, but this is a big government bill.
It has lots of new agencies and hundreds of billions of dollars of
new spending. With the new look-back potential, up to $1 trillion in
money transferred from consumers to government.
I make those points because I think it is important that we know the
facts. Some people say this is not a budget buster, this is
responsible, we are raising taxes. This bill doesn't say anything about
taxes. It says these funds shall be paid, and 100 percent of the funds
shall be passed on to consumers. It is not clear. It is not direct. It
is confusing. And it is hard to tell exactly who is taxed how much.
I will give an example. If a person looked at page 186 of the bill,
we find out there are exclusions for some companies. To give an
example--I looked this up--Marlboro, a Philip Morris brand, would have
to pay presumably a price per pack of $1.10 more; this brand,
Chesterfield, by the Ligget Group, pays zero. Now, both companies
presently pay 24 cents per pack. Both of them do. Under this bill,
supposedly, the price per pack on this item goes up $1.10; the price on
this item goes up zero. So they will have a $1.10 advantage over all
other competitors. Why? Because their sale volume isn't so large? Wait
a minute; is that good tax policy? They have the same excise taxes
today, but we are going to give a $1.10 advantage to one company versus
another company? We do that in this bill? That doesn't make sense.
We did the same thing in other tobacco products. Looking at smokeless
tobacco, again if a person looked at page 186, we find out some
companies have a significant differential. This product, Copenhagen, is
made by U.S. Tobacco Company. This product is Kodiak, made by Conwood
Company. Both have a current excise tax of 2.7 cents per product.
This product made by U.S. Tobacco, the new tax increase is 82.5
cents; that is a 3,056-percent increase. This product, the tax increase
is 57.8 cents; that is a 2,141-percent increase. This has a 25-cent
advantage under this bill. This product has a 25-cent advantage. Why
should we be choosing winners and losers in this bill? Is that good tax
policy? Is that good consumer policy? We will encourage some people to
buy this product over another product, but in the language in this bill
on page 186, it gives certain items a competitive advantage over their
competitors. Is that right? Is that in this bill? Sure it is in this
bill. It is on page 186. I mentioned it on the floor before, and at
some point I plan on addressing it if this bill stays on the floor.
So the President said it wasn't a bunch of new government and I
showed the charts. There is a lot of new government, tons of new
government. There are new taxes that run into almost $1 trillion over
25 years. The money is all off budget, and that bothers me.
Somebody was complaining Republicans may make a budget point of
order. We well should. If a person looked at page 181 of the bill,
talking about the national trust fund, it says, ``The amount of such
appropriations shall not be included in the estimates required under
section 251 of the act,'' talking about the Budget Act. So all the
appropriations that were mandated out of this trust fund shall not be
included in the budget, the budget that the President signed just last
year with both Houses, the House and the Senate, and I will say with
bipartisan support. We finally did get a budget that was supported by
Democrats and Republicans. The President said we will stay by these
caps. Even at the State of the Union, we will not spend one dime, not
one dime unless we don't cut taxes. We want to save Social Security.
But what he does in this bill is basically ignore the budget. The
budget makes no difference. All this spending, hundreds of billions of
dollars, are over and above the budget. They don't count towards the
cap. They don't count toward the budget. It is over and above. All the
taxes are above, all the expenditures are outside the budget realm. So
certainly a budget point of order lies against this bill. As a matter
of fact, if we don't make a budget point of order, I think we just
might as well say we don't have a budget. There is no need to have a
budget. There is not a budget.
Why should the conferees, and I am a conferee on the budget for this
year's budget, why should we worry about a budget if we are going to
pass a bill that has tax increases and expenditures larger than any tax
cut that anybody else is talking about in the budget that the President
signed last year or in the budget that we are talking about this year?
This has a larger tax increase, larger spending increase, than either
the budget that was passed last year or the one that is contemplated
for this year. So why have a budget, if it will all be outside the
budget as stipulated on page 181 of the bill?
So my colleague who earlier said we have taken a poll and now the
people by some majority support this bill--they don't know what is in
this bill. If you told the people that we are giving one brand of
cigarettes an advantage of at least $1.10 over another brand, would
they say that is fair? Don't we have a constitutional responsibility to
be fair? Or if you are giving one smokeless tobacco product a
competitive advantage over another one, does that make sense?
What about some of the other tax provisions--if a person looked at
page 104 of the bill, it talks about the look-back assessment. The
look-back penalties, which I mentioned in the earlier charts
originally, were $2 billion under the settlement, $4 billion under the
Commerce Committee bill, Commerce II, the last bill we had on the
floor, and then we had an amendment to increase the look-backs to $7.7
billion a year and index those for inflation. Who determines whether
there is a look-back penalty or assessment or tax? The Secretary of
Health and Human Services.
[[Page S6447]]
How does she determine it? She takes a poll; she does a survey. It is
in this legislation. She does a survey. I am talking about Secretary
Shalala, the Secretary of Health and Human Services. She does a survey,
and from the survey she has the power to assess fines, penalties or
taxes equal to $7.7 billion a year. That is an unbelievable transfer of
authority, of taxation authority, to the Secretary of Health and Human
Services.
In her survey, under the legislation, the survey-using methodology
required by this subsection is deemed ``conclusively to be proper,
correct, and accurate for purposes of this act.'' So her survey is
deemed by this act, deemed to be correct, deemed to be accurate. And
she has the capability to assess fines and penalties up to $7.7 billion
per year, an unbelievable power of taxation by her survey which
Congress is deeming to be correct. So they can assess companies $1,000
for whoever answered the survey wrong or inappropriately according to
her wishes. Unbelievable power.
Then we passed an amendment, I believe it is Senator Reed's
amendment, that said we will deny deductibility of advertising to
tobacco companies if they don't comply with FDA advertising
restrictions. That is now part of this bill. What does that mean? FDA
promulgated a long list of rules which, incidentally, I will comment on
in a minute. This legislation deems to be law. That is interesting. But
in the amendment Senator Reed says if they don't comply with FDA
advertising restrictions, then they will lose deductions of their
advertising. Basically, what we have done now is turned the power to
tax over to the FDA. Now, that is unconscionable for those who think
the power to tax belongs to Congress, not to a bureaucrat, a bureaucrat
that may or may not have an agenda.
And if one thinks that all the FDA regs are accurate and make sense,
one of the regs is that you can't have any tobacco sponsorship for
sporting events. The Indianapolis 500 comes to mind. An automobile runs
around with ``Marlboro'' painted on the side. If you had that, or the
driver had ``Marlboro'' on the side, it would be a violation. They
would lose deductibility of all their advertising expenses. Or even if
you had a hat that said ``Marlboro'' on it, or ``Winston'' or ``Salem''
or whatever, any tobacco product, if you had a hat or T-shirt or car
that had that emblem, you are violating the FDA advertising
restrictions and therefore you would lose your deductibility.
So we would have tax policy being set, one, by the Secretary of
Health and Human Services, and another by FDA. The combination of that
is probably the worst tax policy I can imagine. Unbelievable.
On page 99 of the bill, we do something else dealing with FDA
regulations, and Congress is a legislative body. We are supposed to
legislate. If we want to ban advertising of tobacco products, we should
do it. Somebody should introduce a bill to ban advertising. We didn't
do that. FDA promulgated some rules restricting tobacco sales, labeling
and advertising.
On page 99, it talks about the rules, and it says, ``The code of
Federal regulations dealing with tobacco are hereby deemed to be lawful
and to have been lawfully promulgated by the secretary under Chapter 9
in Section 701 of the Food and Drug Act.'' Here is a whole list of FDA
regulations. This bill deems them to be the law, makes them the law. I
am bothered by that. If somebody wants to make it the law, let them try
to pass a bill--we are the legislative body, not FDA--not taking a
whole section of FDA regs, some of which make no sense whatsoever, some
of which are not workable.
Here is one example. One reg deals with checking IDs, identification
on people when they purchase tobacco products. Every State in the
Nation has a law, and it is against the law to sell tobacco products to
teenagers, people less than 18. Some States have higher age limits.
They said we need to check that, and the rule said they are going to
check the identification of people up to age 27. And if a convenience
store, or something, doesn't comply, they are subjected to fines and
penalties, which range, for the fifth violation, up to $10,000. Wait a
minute, that isn't in the bill. But the bill says they are all deemed
to be lawful. So we are making it law by this one paragraph on page 99.
Now, if we stay on this bill, I am going to have an amendment saying,
wait a minute, should it be against the law for a convenience store not
to check the identification of people up to age 27? The law is 18. You
could have a combat veteran of the Persian Gulf who is 26 years old and
has four kids, and somebody could be fined up to $10,000 if they don't
check his ID. Obviously, he is older than 18. Yet, the FDA reg says you
check their identification, and if they are less than 26 or 27 and you
didn't check the ID, you are subject to fines and penalties up to
$10,000. And we are codifying that; we are deeming that to be lawful.
That bothers me. That is crummy legislating. That is not good
legislation.
We have another provision that I don't even know many of our
colleagues are aware of. They had better become aware of it if, Heaven
forbid, this becomes law. This bill prohibits smoking of cigarettes in
almost any building in the United States. I will read you the language.
It prohibits the ``smoking of cigarettes, cigars, pipes, and any other
combustion of tobacco within a facility or on a facility or property
within the immediate vicinity of the entrance to the facility.'' I
could go on. How is ``facility'' defined? It means ``any building used
for purposes that effect interstate or foreign commerce, regularly
entered by 10 or more individuals at least one day per week.''
Unbelievable. Unless you have a real small building, you are going to
be covered by this ban. So we are banning smoking on almost every
single building--certainly every business building in the United
States, or significant business building. Are people aware of that?
What kind of fines and penalties will be imposed if you don't comply
with that? I could go on and on.
My point is, when I heard my colleague say, ``We think the public
supports this bill,'' maybe a lot of the public really haven't looked
at what is in this bill. There are a couple of sections I will point
out just for the information of our colleagues. I heard somebody say,
``You can't be opposed to this bill now on attorney's fees,'' because
we passed an amendment by one vote that had a limitation on attorney's
fees. They can only make $4,000 an hour for the old cases and, for
future cases, $500 an hour. Well, Mr. President, there is language in
this bill that is an invitation for litigation that would not stop,
that would be probably the most expensive litigation piece I have ever
seen. There is a presumption. I will just read this part on page 233 of
the bill. It is just a couple of paragraphs, but the paragraphs would
cost consumers hundreds of billions of dollars.
General Causation Presumption. In any civil action to which
this title applies involving a tobacco claim, there shall be
evidentiary presumption that nicotine is addictive and that
the diseases identified as being caused by use of tobacco
products in the Centers for Disease Control and Prevention
Reducing the Health Consequences of Smoking: 25 Years of
Progress: A Report of the Surgeon General [back in 1989], The
Health Consequences of Smoking: Involuntary Smoking [done in
1986]; and The Health Consequences of Using Smokeless Tobacco
[Health Service in 1986], are caused in whole or in part by
the use of tobacco products . . .
There is an evidentiary presumption that nicotine is addictive and
diseases are identified as being caused by using tobacco products. In
other words: Come sue. Come sue for anything. There are three books,
and they touch on all kinds of diseases, including diabetes. It can
have some little relationship to smoking, and we made a presumption
that: tobacco is the fault; come sue. This is an invitation for
litigation. Here you go, the trial lawyers will love this. They came
out with a big one. They may have snuck it in, I don't know. This is a
big invitation to sue. I heard Senator Domenici talking about this. I
compliment him for raising it on the floor. Other people acted like
they didn't know it is in the bill. It is still in the bill. So I make
those comments.
I will make a couple of other comments. I see my friend from Kentucky
here. I have already related the inequity of some of the taxation
provisions in this bill dealing with either cigarettes or other tobacco
products. We have currently pending an amendment by my colleague to
strike out what some people have referred to as the Lugar provision,
and I expect that
[[Page S6448]]
there will be an amendment pending to strike out the Ford provision.
Both of them deal with compensation for tobacco farmers. I think both
are too generous. One has a total cost, over 25 years, of $28 billion;
one has a cost of $18 billion. Both would compensate tobacco farmers
far in excess of the value of the land--value of the land that you
could buy today on the open market, but we would pay several times the
value. I think that is a mistake. I am troubled by that provision.
Mr. President, I don't know if this has been entered into the Record.
I have a letter from the Governors urging opposition to this bill.
These are the Governors whose attorneys general originally put together
the package that said: Yes, we want to make a deal; we won't sue the
tobacco companies if you will give us a couple hundred billion dollars
over the next 25 years--about 8 billion a year. If you give us $8
billion a year, collectively, then we will drop our class action suits.
They have now looked at this bill and said: Don't pass it. It is not
acceptable in its current form.
I happen to agree with the Governors--maybe for different reasons--
but I don't think this bill is salvageable. I don't think we should
pass it. Does that mean I am against doing something to reduce the
teenage consumption and addiction of tobacco and drugs? Absolutely not.
I want to do something. I have indicated that I am willing to pass a
bill that would be directed, targeted, at reducing teenage consumption
and addiction to tobacco. Do you have to spend hundreds of billions to
do that, as we have in this legislation before us? The answer is no,
absolutely not. As a matter of fact, I think what we are doing is
funding an addiction of government to more government and doing very
little on tobacco.
If we want to do some things to reduce teenage consumption and
addiction to tobacco, let's do it. We have the HHS appropriation bill.
We can put in more money for NIH, for cancer research, for money to
have programs to discourage drug consumption, tobacco consumption.
Let's do that, increase it, and cancel some other programs. We are
spending now $1.7 trillion per year. Let's move some of that around and
put it into functions that would actually be targeted at our youth, to
reduce their addiction and consumption of tobacco. I think that would
be a giant step in the right direction.
I think passing this legislation is not really targeted to kids; it
is targeted more to government. The President was absolutely wrong when
he said those people who oppose this bill and think it is more
government, that is a bunch of hooey. I think we did something. We read
the bill. This bill is a bunch of hooey. This does not deserve to be
passed.
I think this bill is a serious, serious mistake. If our colleagues on
the other side of the aisle want to increase tobacco taxes, they can do
so. This bill is, in my opinion, one of the worst pieces of legislation
this Congress has considered in my legislative career. It should not
pass. We should defeat this bill. We should defeat it either in the
form of not agreeing to cloture--we have already had three cloture
votes. We may well have one more. I hope my colleagues will not vote
for cloture. I hope that a budget point of order, if that is made, will
be sustained.
This bill is clearly outside the budget. It says so in its language.
Do we agree with the budget that we passed last year, or are we just
going to ignore it on this issue? We ignored it on the urgent
supplemental. We violated the budget on those. There were some
emergencies. There were some floods and other emergencies required
funding and we have done that for before.
But to ignore the budget on these programs, all of which are in
governmental entities, or creating governmental entities for new
programs--for example, international tobacco control. That is $350
million a year for the first 5 years, and such sums as necessary for
the future years. That is a brand new program. I don't know that we
need to fund it. But if we do, let's fund it under the budget. Why have
it be outside the budget?
I look at a lot of these other programs. My colleagues were
successful in saying, let's spend a couple billion dollars more in
child care. We mandated that in this side of the equation. We have the
tobacco community grants; opportunity grants. We have got a lot of new
spending. I say that spending should be in the budget. It shouldn't be
outside the budget.
So I urge my colleagues, let's defeat this bill. Let's come back to
something that is responsible, something that is within the realm of
the budget agreement.
Mr. President, I ask unanimous consent that a letter from of
Governors' Association, as well as an article from the Washington Times
on Monday, June 15 that says the tobacco bill is packed with programs
and agencies be printed in the Record, as well as two charts that I
referred to in my speech, one of which is the national tobacco
settlement trust fund that shows the total cost of this bill could
easily well reach $997 billion. That is $745 billion under the annual
industry payments; maximum look-back. Maybe that would happen, part of
it would happen; maybe not.
There are some who would say, ``Wait a minute. You didn't take into
consideration the volume adjustment.'' The bill said, if volume comes
down below 20 percent, there will be some reduction in these industry
payments. Maybe tobacco consumption would fall by more than 20 percent.
Maybe it wouldn't. I don't know. It is hard to guess. There might be
some reduction on that figure. I don't know. For cost analysis
purposes, though, I note that the OMB did not figure volume adjustments
down within their original proposals. The attorneys general did not in
their original proposal. Since it is impossible to do, I haven't done
it in mine, either.
I make mention of that for the Record, and also ask to have included
a chart that shows the disparity between products of companies.
I absolute don't think it is right for us to have different excise
taxes on cigarette products because one company sells more than another
company. That doesn't make sense to me. We have that throughout this
bill. That needs to be remedied. If we stay on the bill, I will have an
amendment to do.
So I ask unanimous consent that two charts, a letter, and newspaper
articles be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
National Governors Association,
Washington, DC, June 11, 1998.
Hon. Trent Lott,
Majority Leader,
U.S. Senate, Washington, DC.
Hon. Thomas A. Daschle,
Minority Leader,
U.S. Senate, Washington, DC.
Dear Senators Lott and Daschle: When the Senate began floor
consideration of S. 1415, Senator McCain's tobacco settlement
legislation, the bill included $196.5 billion over twenty-
five years for the states and territories to settle their
lawsuits against the tobacco industry. Those state lawsuits
made possible the development of comprehensive federal
tobacco legislation.
Governors have made clear from the beginning of the
Senate's legislative debate that preserving and protecting
state settlement funds would be one of our highest
priorities. We agreed to support the state financing section
of the McCain-Lott manager's amendment, which included some
restrictions on the use of half of the state funds, in
exchange for a guarantee that the states would receive at
least $196.5 billion over twenty-five years This funding
level is consistent wit the amount negotiated between the
state attorneys general and the tobacco industry in the
original June 20, 1997, agreement. At the same time, the
amount of money available to the federal government through
the tobacco bill has expanded significantly.
Over the past few days, the Senate adopted several
amendments that dramatically reduce the amount of money
available to the states to settle state lawsuits and restrict
state flexibility related to the use of those funds that
remain. Some Governors support the goals of the amendments
that have been considered by the Senate, but federal
priorities should be financed through the federal portion of
the bill, rather than through state tobacco settlement funds.
The state funding pool has been reduced dramatically below
the level to which Governors agreed. At such low levels,
Governors must weight the potential of new state tobacco
settlement revenues against the reality that a federal
increase in the price per pack of cigarettes will result in
an offsetting decrease in state cigarette excise tax
revenues.
Accordingly, the nation's Governors are not able to support
the state financing section of S. 1415 as amended. Given the
experiences of the four states that have negotiated
settlements of their individual lawsuits and the original
state attorneys general agreement, the bill no longer places
appropriate
[[Page S6449]]
priority on successfully settling state lawsuits. We urge you
to restore the $196.5 billion reserved for the states while
the bill is still on the floor of the Senate.
In addition, the states must be free to continue to pursue
their own lawsuits against the tobacco industry. We strongly
urge the Senate to ensure that the language included in S.
1415, to clarify that state settlement funds are not subject
to federal recoupment, is applied to all states, including
those that choose not to participate in the federal
settlement.
If we, the Executive Committee of the National Governors'
Association, can provide you with clarification of our
position, please do not hesitate to let us know.
Sincerely,
Gov. George V. Voinovich, State of Ohio; Gov. Roy Romer,
State of Colorado; Gov. Bob Miller, State of Nevada;
Gov. Michael O. Leavitt, State of Utah; Gov. Howard
Dean, M.D., State of Vermont; Gov. Thomas R. Carper,
State of Delaware; Gov. Lawton Chiles, State of
Florida; Gov. David M. Beasley, State of South
Carolina; Gov. Tommy G. Thompson, State of Wisconsin.
____
[From the Washington Times, June 15, 1998]
Tobacco Bill Is Packed With Programs, Agencies
(By Nancy E. Roman)
The tobacco bill moving through Congress would spend $350
million per year for the first five years and as much ``as
may be necessary'' for each year after that to promote
smoking awareness abroad.
The foreign-aid program is one of many new government
functions created in a tobacco bill that raises $92 billion
over five years by taxing cigarettes by $1.10 per pack, and
uses about $65 billion of that over five years to pay for
things ranging from child care to college tuition.
The bill would also create new Medicare pilot projects, ban
smoking outside public entrances, create new causes for
litigation and spend up to $18,000 per American Indian to
help them stop smoking.
Under the latest printed version of the tobacco bill, a
whopping 480-page to me that few have read, the secretary of
health and human services is directed to ``promote efforts to
share information and provide education internationally about
the health, economic, social and other costs of tobacco use .
. .''
Part of the $350 million for each year through 2004 would
be used to ``support the development of appropriate
governmental control activities in foreign countries.''
The bill would also:
Ban smoking inside--and even outside--of public buildings
involved in interstate commerce, including almost all retail
facilities except restaurants. The bill prohibits smoking
``within the immediate vicinity of the entrance to the
facility.'' The only alternative is for facilities that set
up a separate smoking section where the air is ``directly
exhausted to the outside.''
Create a right to sue in federal court for individuals who
believe that owners of buildings where they work or live
violate this provision. Under the bill, individuals must
notify the building owner of his or her intention to sue.
After 60 days, if the owner has not corrected the situation,
the individual may sue. Civil penalties of up to $5,000 per
day may be awarded under the bill. That would be a $1.65
million fine for a one-year violation.
Provide up to $1,700 per year in college tuition for
tobacco farmers and their family members, including brothers,
sisters, stepbrother's, stepsisters, sons-in-law, and
daughters-in-law. There are currently two sections of the
bill dealing with farmers, and one will have to be struck.
Provide as much as $7.6 billion to help American Indians
stop smoking, or about $18,000 per American Indian smoker.
Under the bill, between 3 percent and 7 percent of the
public health trust fund, or as much as $7.6 billion, is set
aside for smoking-cessation programs for American Indians, as
defined by the Department of the Interior.
Under that definition, there are about 1.4 million American
Indians, about 406,000 of whom are adult smokers who would
qualify. Assuming 39.2 percent of them smoke (the average
rate of smoking among American Indians), that would be about
$18,800 for each.
The original tobacco bill created about 17 new agencies,
boards and commissions.
New functions for government include setting up a national
tobacco document depository, creating tobacco smuggling
prevention programs and countering advertising programs.
The bill would spend about $13.6 million over five years to
consider topics like the effects of smoke on pregnant women
and further research on second-hand smoke.
A Senate aide who helped draft the bill said research has
demonstrated that smoking damages fetuses and that secondhand
smoke is dangerous, but it has not shown how it damages
fetuses.
The bill would require states to license retailers that
sell tobacco and bar those retailers form selling cigarettes
to minors.
All 50 states have already out-lawed selling tobacco to
minors. However, this bill requires them to conduct ``monthly
random, unannounced inspections of sales or distribution
outlets in the state.''
The states must then submit annual reports to the federal
government detailing how it enforced the laws, the extent of
the success achieved, how the inspections were conducted and
the methods used to identify outlets.
One-quarter of the $24.6 billion the state receive under
the bill must be spent on child care programs, including
those for school-age children.
The bill sets targets to reduce teen smoking--by 15 percent
after four years, by 30 percent after six years, by 50
percent after eight years and by 60 percent after 10 years.
Tobacco companies are charged a surcharge if those targets
are not met and it is the government that determines whether
those targets are met, based on ``prevalence of tobacco
products for the industry.''
If the bill passes, the federal government will determine
whether the targets have been met.
____
NATIONAL TOBACCO SETTLEMENT TRUST FUND
[Gross tax increase on consumers in billions of nominal dollars]
----------------------------------------------------------------------------------------------------------------
Maximum
Initial Annual potential
Year payment industry lookback Grand total
payments assessments
----------------------------------------------------------------------------------------------------------------
1999........................................................ 10.00 14.40 ........... 24.40
2000........................................................ ........... 15.40 ........... 15.40
2001........................................................ ........... 17.70 7.70 25.40
2002........................................................ ........... 21.40 7.92 29.32
2003........................................................ ........... 23.60 8.13 31.73
2004........................................................ ........... 24.31 8.35 32.66
2005........................................................ ........... 25.04 8.57 33.61
2006........................................................ ........... 25.79 8.81 34.59
2007........................................................ ........... 26.56 9.04 35.61
2008........................................................ ........... 27.36 9.29 36.65
2009........................................................ ........... 28.18 9.54 37.72
2010........................................................ ........... 29.03 9.80 38.82
2011........................................................ ........... 29.90 10.06 39.96
2012........................................................ ........... 30.79 10.33 41.12
2013........................................................ ........... 31.72 10.61 42.33
2014........................................................ ........... 32.67 10.90 43.57
2015........................................................ ........... 33.65 11.19 44.84
2016........................................................ ........... 34.66 11.49 46.15
2017........................................................ ........... 35.70 11.80 47.50
2018........................................................ ........... 36.77 12.12 48.89
2019........................................................ ........... 37.87 12.45 50.32
2020........................................................ ........... 39.01 12.79 51.79
2021........................................................ ........... 40.18 13.13 53.31
2022........................................................ ........... 41.38 13.49 54.87
2023........................................................ ........... 42.62 13.85 56.47
---------------------------------------------------
Total 25 years.............................................. 10.00 745.67 241.36 997.02
===================================================
Total 5 years............................................... 10.00 92.50 23.74 126.24
===================================================
Total 10 years.............................................. 10.00 221.55 67.80 299.36
----------------------------------------------------------------------------------------------------------------
Source: S. 1415 as modified on the Senate floor.
Annual industry payments are adjusted for the greater of 3%
or CPI-U beginning in year 6. This estimate does not include
potential increases or reductions in industry payments
resulting from changes in the volume of tobacco sales.
Lookback assessments would be initiated after year 3 if
underage tobacco use is not reduced by specified percentages.
The maximum lookback assessment of $4.4 billion is adjusted
for inflation. Does not include an estimate for brand-
specific lookback assessment.
____
TOBACCO PRODUCT ANALYSIS
----------------------------------------------------------------------------------------------------------------
Share of U.S. Cigarette tax
Cigarette manufacturer Cigarette brands market (in increase under
percent) S. 1415 \1\
----------------------------------------------------------------------------------------------------------------
Philip Morris (USA)....................... Marlboro, Benson & Hedges, Merit, 49.1 $1.10
Virginia Slims, Parliament,
Basic, Cambridge.
R.J. Reynolds (USA)....................... Winston, Doral, Camel, Salem, 24.2 1.10
Vantage Monarch, More, Now, Best
Value, Sterling, Magna, Century.
Brown & Williamson (US subsidiary of BAT Lucky Strike, Carlton, Kool....... 16.1 1.10
Industries, UK).
Lorillard (USA)........................... Newport, Kent, Old Gold, True..... 8.7 1.10
Liggett Group (USA)....................... L&M, Eve, Chesterfield, Lark...... Less than 1 0.00
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Other smokeless
Share of U.S. Moist snuff tax tax increase
Smokeless manufacturer Smokeless brands market (in increase under under S. 1415
percent) S. 1415 \2\ \2\
----------------------------------------------------------------------------------------------------------------
U.S. Tobacco (USA)................ Copenhagen, Skoal, WB 37.9 $0.83 $0.39
Cut, and 13 other brands
of moist & dry snuff.
Conwood (USA)..................... Levi Garrett, Kodiak, 23.3 0.58 0.27
Taylor's Pride, and 34
other brands of chewing
tobacco and moist & dry
snuff.
Pinkerton (subsidiary of Swedish Red Man, Timber Wolf, and 22.0 0.58 0.27
Match, Sweden). 19 other brands of
chewing tobacco and
moist snuff.
[[Page S6450]]
National Tobacco (USA)............ Beech-Nut, Big Red, 9.2 0.58 0.27
Havana Blossom, Trophy.
Swisher (USA)..................... Mail Pouch, Silver Creek, 6.8 0.58 0.27
and 33 other brands of
chewing tobacco and
moist & dry snuff.
Brown & Williamson (US subsidiary Unknown.................. Less than 1 0.58 0.27
of BAT Industries UK).
R.C. Owen (USA)................... Unknown.................. Less than 1 0.58 0.27
----------------------------------------------------------------------------------------------------------------
\1\ S. 1415 purports to impose a $1.10 per pack cigarette tax by the year 2003. Subsection 402(f), page 186,
exempts cigarettes produced by the Liggett Group as long as their cigarette production does not exceed 3% of
the total U.S. production.
\2\ Subsection 402(d)(3)(A) provides that a 1.2 ounce package of moist snuff is taxed at 75% of the level of a
pack of cigarettes, and a 3 ounce package of other smokeless tobacco products is taxed at 35% of the level of
a pack of cigarettes. Further, subsection 402(d)(3)(B) provides the smokeless tobacco products by smaller
manufacturers (under 150 million units) are taxed at only 70% of the rate applied to other smokeless tobacco
products.
CURRENT LAW TAX RATES: Cigarette = 24 cents per packj; Snuff = 2.7 cents per 1.2 ounce can; Other smokeless
tobacco = 2.25 cents per 3 ounce package.
Mr. NICKLES. I yield the floor.
Mr. FORD. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ROCKEFELLER. Mr. President, I ask unanimous consent that the
order for the quorum call be rescinded, and I ask unanimous consent
that I might speak for about 10 minutes, probably less, as in morning
business.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________