[Congressional Record Volume 144, Number 79 (Wednesday, June 17, 1998)]
[Senate]
[Pages S6465-S6470]
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.
  Mr. HARKIN. Madam President, I hear all kinds of rumblings that the 
Republican side of the aisle, at some time today, is going to try to 
kill or will effectively kill the tobacco bill. I want to take a few 
minutes to talk about that and try to recap, if I can, why we are here 
and why we have spent so much time on the tobacco bill.
  Three thousand kids every day take up smoking; 1,000 of them will die 
prematurely. Teenage use of tobacco products is at a 17-year high. And 
42.7 percent of high school kids are now using some form of tobacco 
products. Ninety-one percent of 3-year-olds in this country recognize 
Joe Camel, and recognize him in a friendly manner. And thanks to the 
court cases that we have had in several States, we now have the 
industry documents that reveal years and years and years of lying and 
deception by the tobacco companies.
  That is why we are here. That is why we have a tobacco bill--to put 
an end to teen smoking, to put an end to the lies and deceptions of the 
tobacco companies, to save kids' lives.
  The Republican leader was on the floor here a week and a half or so 
ago. I happened to be on the floor at the same time. And Senator Lott 
of Mississippi, why, he said, we have to remember what the end game is. 
Well, I got to the floor shortly after, and I said, yes, we do have to 
remember what the end game is. The end game is to put an end to what I 
just talked about and to reduce teen smoking. That is the end game. 
That is why we are here--to cut down on teen smoking.
  But Senators on the other side of the aisle here today, and in the 
past 4 weeks, have had another agenda. They have had tax cuts, drug 
money, and limits on attorneys' fees, et cetera, et cetera, and on and 
on.
  Let us look at the Record. On Friday, June 5, the majority leader, 
Senator Lott, said, and I quote, ``If we don't add something on 
marriage penalty, tax relief, and on drugs, there won't be a bill. 
There will not be a bill.'' In other words, the majority leader is 
saying, if we do not load a lot of stuff onto this bill--marriage 
penalty, tax relief, drugs--there will not be a bill. That is what he 
said on June 5.
  On June 7, on one of the talk shows, CNN's Sunday Night ``Late 
Edition'' interview with Wolf Blitzer, here is Senator Lott again, 2 
days afterward:

       Instead of focusing on trying to get something constructive 
     done, what we have now is game playing and rhetoric. What we 
     need is leadership.

  Mr. Blitzer said, ``When will there be a vote''--talking about the 
McCain bill.
  Senator Lott, 2 days before on June 5--Senator Lott had said, ``. . . 
there won't be a bill until we add the marriage penalty, tax relief and 
drugs.''
  Now, two days later, Mr. Lott says:

       Well, at this point, it is dead in the water and there may 
     never be a vote on the McCain bill. The problem is greed has 
     set in. It is the usual addiction in Washington to taxes and 
     spend. This has gone way beyond trying to do something about 
     teenage smoking. This is now about money grubbing. This is 
     about taxing people and spending on a myriad of programs. . 
     ..We have lost our focus.

  What kind of brave new world are we living in around here? On June 5, 
the majority leader says there won't be a bill unless we load it up. 
Two days later, he says we have loaded the bill up, we can't have a 
bill because we have lost our focus, because it ought to be about teen 
smoking.
  Game playing. You want game playing? That is where the game playing 
is coming from. It is coming from the leadership in the Senate. That is 
where the game playing is coming from.
  I will say it loud and clear right here. The leadership has never 
wanted this bill, and they want to kill it. What we want--and I don't 
just mean Democrats, I mean a lot of Republicans, too, we want to put 
an end to teen smoking, and we want this bill. But, unfortunately, the 
Republican leadership and some on that side are going to try to make 
good on their threats to kill the bill.
  I understand the Senator from Texas, Senator Gramm, was on the floor 
a few minutes ago sort of crowing about killing the bill. Well, I hope 
those reports are wrong. I hope we have the bipartisan support to pass 
the bill.
  But it seems to me at this point in time the choice is very clear: 
You are either for tobacco company profits or you are for our kids. You 
are either for cutting down on the lies and deceptions of the tobacco 
companies, or you are for saving our kids' lives and keeping them from 
smoking. That is what it has come down to. Don't let anybody kid you.
  Now I heard the Senator from Kentucky, Senator McConnell, a while 
ago--I happened to be listening--talking about all the taxes, all the 
taxes the people are going to have to spend if we raise the price of 
cigarettes. I got to thinking about that. Guess what. Not one person in 
this country has to pay those taxes. What an interesting set of taxes--
taxes you don't have to pay. If you don't smoke, you don't pay the 
taxes--simple as that. It doesn't tax everybody. You have the freedom 
to choose. If you want to pay the taxes, smoke; if you don't want to 
pay the taxes, don't smoke. Yet to listen to the other side talk about 
it, why, you would think that everyone in this country was going to 
have to pay taxes. Absolutely not true. Only if you want to smoke. Then 
you ought to be more than happy to help pay for those who get sick and 
to help do something about keeping teenagers from smoking.
  I don't think I yet have met one adult who has smoked a long time--
10, 15, 20 years--I haven't met one yet who has said, ``I would 
recommend a young person take up smoking.'' I haven't met one yet. 
Every single one of them says, ``Don't do what I did. Don't get in the 
habit. Don't become an addict like I am.''
  That is what this bill is about--keeping kids from becoming addicts, 
addicts every bit as bad as if they took up cocaine or heroin--nicotine 
addiction. And it is the gateway drug to the others. You want to cut 
down on marijuana? Cut down on teen smoking of cigarettes. You want to 
cut down on teen use of smoking crack? Cut down on their smoking 
cigarettes first. You want to cut down on kids who get into the drug 
culture? Go after cigarettes first. It is a gateway drug. It is a drug, 
make no mistake about it, and a highly addictive drug. And it just so 
happens to be legal.

  But we know from industry documents today that they have known for 
years that nicotine is addictive. They have known for years that it is 
carcinogenic. They have known for years about the medical costs of 
addiction to tobacco. Yet through all their advertising, they have lied 
about it. All this fancy advertising of Joe Camel and that rugged 
Marlboro Man on that horse and all these young people--do you ever see 
a tobacco ad that has a lot of old people hacking and smoking and 
spitting in it? No. All the tobacco ads have nice young people, and 
they are healthy, and they are vibrant. They look like they are having 
a great time, and if it weren't for tobacco, they probably wouldn't be 
having a great time. That is the kind of deception used by the tobacco 
companies. That is what we are trying to put an end to.
  Taxes? No one has to pay these taxes. I see the Senator from Kentucky 
is on the floor. No one has to pay these taxes, not one single person, 
if they choose not to smoke. But if they do, then, yes, we want you to 
pay more for cigarettes, because we want to use that money to stop kids 
from smoking, which is what you want, too.
  Every adult I have known who is addicted to nicotine says kids 
shouldn't take it up. But these tobacco companies will continue to hook 
kids because they know that is their replacement smoker. They know that 
90 percent of adult smokers who are hooked on nicotine start smoking 
before the age of 18. If they don't start smoking by that time, chances 
are they will never take it up and become addicted. That is why we are 
here. That is the end game--to keep our kids from smoking.
  Killing this bill is a death sentence for millions of kids. Killing 
this bill would be a historic cave-in to the special interests of this 
country. It would be a historic cave-in to the $40 million in deceptive 
ads that the tobacco companies have put out across this land over the 
last month. It would be a historic cave-in to an industry that has 
deceived and lied to the American people for the last half century.

[[Page S6466]]

  Make no mistake about it, tobacco executives and all of their PAC 
directors who have all of that money to start giving out to campaigns, 
they are watching. They are watching, and they are rubbing their hands 
together, and they are saying, ``Oh, boy, they are going to kill that 
tobacco bill.'' And they are going to know who their friends are. They 
are going to know who their friends are--the ones who killed this bill. 
And I am sure they will be helpful to their friends.
  Well, I hope we can send a message to our kids that these well-funded 
special interests, no matter what they have done and how much money 
they have spent, that they can't win today, that they can't win in this 
body, that this body still represents the rank and file of American 
people and not just those with a lot of money and a lot of power.
  If the Republican leadership and those on that side kill this bill 
today, we will be back, time and time and time again. We will be back. 
We will be back with amendment after amendment after amendment on bills 
that come up to this floor. We will not back down. We have come too far 
to rein in the tobacco companies, we have come too far to stop our kids 
from smoking, to back off now.
  If the Republican leadership and the Republicans succeed in killing 
this bill today, it might be the end of the debate on the tobacco bill, 
but it will not be the end of tobacco debate on the Senate floor and it 
will not be the end of amendments and bills that we will bring up to 
try to get to the end game to keep our teenagers from smoking.
  If the Republican leadership succeeds in killing this bill, I predict 
that there will be a major public backlash--a major public backlash. 
Why do I say that? A little bit of history.
  Last year, about this time--actually toward the end of July--Senator 
Chafee, a Republican, and I, a Democrat, offered an amendment on the 
floor of the Senate to provide the necessary money to the FDA to 
enforce the ID checks in stores and outlets, wherever cigarettes were 
sold across the country. We offered the amendment and we had a vote. We 
lost. That was in July. Well, I used a parliamentary maneuver to ensure 
that we could have one more vote on it when we came back after the 
August recess of last year. So I filed my parliamentary appeal on that. 
We broke here in August and we went home.
  We came back in September, and the first vote we had when we came 
back in September was the same vote of Senator Chafee and Senator 
Harkin on providing the money to the FDA for the ID checks--the same 
vote that had lost in July. Guess what. This time it carried 
overwhelmingly. I submit that a large part of that was because a lot of 
people went home in August and a lot of the groups--I am talking about 
all of the public health groups, such as the American Heart 
Association, The Lung Association, the American Cancer Society, and a 
host of others--got to people and said, wait a minute, we want to 
enforce these ID checks. We don't want young people buying cigarettes 
and tobacco products. There was a public backlash. I predict the same 
thing will happen if this bill is killed today.
  Despite over $40 million in ads that have dominated the airwaves over 
the last month by the tobacco companies--despite all that--the public 
still supports this bill by over 2 to 1. This was a survey taken June 
12 through June 15 by Market Facts TeleNation, an independent polling 
firm, of 924 adults. Margin of error, plus or minus, is 3.2 percent.
  The question was:

       As you may know, the Congress is currently considering the 
     McCain tobacco bill, which creates a national tobacco policy 
     to reduce tobacco use among kids. Based on what you know 
     about the bill, do you favor or oppose Congress passing the 
     McCain bill?

  Those who favored, 62 percent; opposed, 31 percent.
  That was June 12 to June 15. This is the 17th, so that was earlier 
this week. That is after $40 million was spent by the tobacco companies 
to persuade the public that what we are doing is raising these huge 
taxes and spending all of their money on a variety of nonsense 
programs. I am sure we have all seen the ads. How can you miss them? 
Turn on the TV and there is another ad. And still, through it all, the 
American people are seeing through it. They have caught on to the 
tobacco companies. They know they have been lying to them for 50 years. 
Ask any older adult today--I am talking about somebody in their 
sixties, seventies, or eighties--who has been addicted to nicotine. Ask 
them if they believe the tobacco companies told them the truth 30 or 40 
years ago when they took up tobacco. They know the tobacco companies 
lied to them through their slick advertising, ads that show doctors 
smoking and nurses smoking, and all kinds of things, saying that Camels 
were better for your throat than other cigarettes. Still, the American 
people, 2 to 1, want this bill.
  That is why I predict that if this bill is killed, there is going to 
be a tremendous public backlash. The public is going to know who killed 
this bill: the Republican leadership in the U.S. Senate. Make no 
mistake about it.
  I yield the floor.
  Mr. AKAKA. Mr. President, the Senate is engaged in an historic debate 
over tobacco control legislation. This bill is the most important 
public health issue of the decade. Yet, it appears that we are losing 
sight of the foremost purpose of the bill. If this bill was a Christmas 
tree, its branches would be drooping to the floor because of the weight 
of the unrelated amendments. These extraneous amendments were added at 
the insistence of the majority to broaden the appeal of the 
legislation. Yet, critics of the bill cite these amendments as reasons 
to topple the tree.
  First, a majority of Senators voted to strip the liability provisions 
from the tobacco bill. With this vote, we lost a powerful incentive for 
the tobacco companies to accept provisions of the bill that require 
their consent. Industry cooperation is critically important to a 
comprehensive national tobacco policy, and to obtain voluntary 
acceptance of the sweeping advertising restrictions.
  As my colleagues know, advertising is one of the most important 
factors in attracting young people to tobacco products, and 
restrictions on advertising must be a central component of the efforts 
to reduce youth tobacco consumption. Industry acceptance will also be 
essential to the lock-back provisions that will penalize companies that 
fail to meet youth tobacco reduction targets.
  The majority then passed an amendment to divert $2 billion from 
public health initiatives into programs having nothing to do with 
tobacco. This amendment takes money allocated to public health and puts 
it into drug interdiction, the Coast Guard, education vouchers, and a 
multitude of other items. We have abandoned the fundamental objective 
of this public health legislation.
  The Senate then approved an amendment providing a massive tax cut to 
reduce the marriage penalty and increase the deductibility of health 
insurance for the self-employed. These provisions not only strip huge 
sums from the bill, but also take funds from the general treasury in 
future years. As a result, the majority of my colleagues voted to 
weaken the Social Security system for future generations. Money that 
would have been used to reduce the incidence of youth smoking will 
instead be used to finance a tax cut. Make no mistake about it, this 
action severely hampers the effectiveness of the programs designed to 
reduce tobacco use. The money stripped from the bill would have paid 
for core public health initiatives such as health research, counter 
advertising, and smoking cessation and education programs.
  We are losing sight of the grim statistics on youth tobacco 
consumption that have been repeated here on a daily basis. Every day, 
3,000 kids become smokers. One third will die to tobacco related 
diseases. We have an obligation to act.
  Despite my strong objections to these changes, we must pass a measure 
out of the Senate and allow the process to continue. The bill retains 
provisions that address the problems of youth tobacco consumption. For 
example, the tobacco price increase in the bill should dramatically 
reduce the number of kids who begin smoking and who may ultimately die 
from smoking related diseases. Statistics show that for every ten cents 
added to the price of cigarettes, approximately 700,000 fewer teens 
will being smoking and more than 200,000 premature deaths will be 
avoided. The bill also provides for a national counter-advertising 
campaign

[[Page S6467]]

aimed at discouraging young people from using tobacco products. It also 
funds health research at the National Institutes of Health and the 
Centers for Disease Control and state and local tobacco education and 
prevention programs.
  Two other components of the bill that will have a large impact on our 
efforts were added during floor consideration. The first is the 
increased investment of funds into early childhood development and 
after-school activities. The second is the strengthening of the look-
back provisions which hold individual tobacco companies responsible for 
their portion of the youth market.
  Mr. President, the Senate still has a landmark opportunity to save 
the lives of future generations. If this effort is defeated it will 
show that the majority bowed to the tobacco industry and sold out the 
youth of America.


                           tobacco warehouse

  Mr. FAIRCLOTH. Mr. President, I would like to engage in a colloquy 
with the Chairman of the Agriculture Committee regarding the role of 
warehouseman in the tobacco debate. There are 356 tobacco quota 
warehouses in eleven states. For over 60 years tobacco auction 
warehouses have played a role in the federal government's tobacco 
program. By law, warehousemen collect specified fees, supervise 
inspections, keep records and otherwise act on behalf of the U.S. 
Department of Agriculture.
  In 1935, the Tobacco Inspection Act was passed under the jurisdiction 
of the Agriculture Committee to designate approved auction warehouses 
and to protect growers by providing standards of classification and 
inspection of tobacco. In fact, from the onset of North America's 
tobacco commerce in 1619 successive governments have used tobacco 
warehouses as the primary channel for regulating the leaf tobacco 
trade. According to Professor Allan C. Fisher, Jr., between 1619 and 
1731, various colonial governments in North America passed a total of 
eight legislative acts pertaining to tobacco warehouses. In effect, 
these laws made tobacco warehouses the agents of government for 
ensuring that the inspection and sale of leaf tobacco remained fair to 
growers.
  Even now, by law, warehousemen collect specified fees, supervise 
inspections, keep records and otherwise act on behalf of the U.S. 
Department of Agriculture. The Supreme Court, in a 1939 case upholding 
the inspection law, state that warehousemen and auctioneers act as 
agents for growers and the government.
  In summary, tobacco warehouses were established by and are regulated 
by the federal government. Therefore, assistance to warehousemen is a 
necessary component of any legislative action that effects federal 
tobacco policy.
  Mr. LUGAR. I acknowledge the importance of warehousemen under the 
current tobacco program and that some of those warehousemen may be 
adversely affected when the current program is eliminated. That is why 
I have made it clear in my amendment that warehousemen may be 
considered as recipients of some of the $1 billion in economic 
assistance grants to states. I believe that it will be important for 
state and local governments to determine the level of assistance to 
individual warehousemen in their localities. Local officials will be 
better able to assess the economic impact on individual warehousemen 
and can make adequate compensation accordingly.
  Mr. FAIRCLOTH. I appreciate the Chairman's recognition of the 
importance of warehousemen and his efforts to include them in this 
amendment. The Senator is correct. Tobacco warehouses have no other 
business than operating as agents for the growers and the government. 
They are as integrally tied to the tobacco program as are farmers and 
quota holders.
  For these reasons I believe that comprehensive tobacco legislation 
must provide compensation for tobacco warehousemen--and that such 
compensation should be specific, certain and equitable.
  By the term ``specific,'' I mean that the legislation should denote 
warehousemen as individuals who shall rightfully receive a measure of 
compensation, just as it provides for a measure of compensation for 
growers and quota holders.
  By the term ``certain,'' I mean that the legislation should provide 
for a procedure to ensure that such compensation is a definite Federal 
responsibility calculated by Federal authority according to factors 
that Congress establishes in the statute.
  By the term ``equitable,'' I mean that the compensation should be 
based upon an appreciation for a warehouseman's equity investment in 
his business and that the formula for determining the appropriate 
compensation should be related to the volumes of tobacco that each 
warehouse has historically handled.
  It is essential that three elements are thoroughly addressed. It is 
my judgment that the managers' amendment in its current form falls 
short in meeting these criteria.
  My question to the distinguished Chairman is this: will you work with 
me and other Senators, as the legislative progress continues, to ensure 
that warehousemen are not left out of my comprehensive tobacco 
legislation?
  Mr. LUGAR. Indeed, it is always a pleasure to work with the Senator 
from North Carolina, I will do what I can to ensure that warehousemen 
who are adversely affected by comprehensive tobacco legislation are not 
forgotten as the tobacco legislation proceeds through the legislative 
process.
  Mr. WARNER. Mr. President, I rise today to express my strong 
opposition to the tobacco bill that is currently before the Senate.
  As you know, on June 20, 1997, a group of state attorneys general, 
plaintiffs' lawyers, public health advocates, and representatives of 
the major cigarette manufacturers announced a sweeping settlement that 
would restructure the tobacco industry and revolutionize the nation's 
tobacco control efforts. The agreement, reached in good faith among the 
parties, would settle lawsuits brought by forty states seeking to 
recoup Medicaid spending for smoking-related illnesses and ban certain 
class-action lawsuits against the tobacco industry.
  The only reason that the Senate is even considering the current bill 
is because the proposed settlement required the approval of Congress 
and the President before taking effect. This measure differs 
significantly, however, from the terms of the original settlement. 
Although the bill makes some progress toward the important goal of 
eliminating youth smoking, it has also become a vehicle for regressive 
higher taxes and a creation of more federal government. In fact, the 
attorneys general who negotiated the original settlement are opposed to 
this bill in its current form.
  Mr. President, S. 1415 contains over $500 billion in new taxes. By 
some estimates, as much as $800 billion in new taxes could be imposed 
on the American people as a result of this bill. But even more alarming 
than the sheer size of this tax increase is the fact that two-thirds of 
the tax burden would fall on Americans earning less than $35,000 per 
year.
  Indirectly, the bill ``deputizes'' tobacco firms as tax collectors.
  In view of our country's current economic prosperity and budgetary 
surpluses, I believe that the American people are entitled to forms of 
tax relief, not increases in taxes.
  The total result of the bill's proposed tax could, in my view, be 
disastrous. It would primarily burden lower-income Americans. It could 
create a new black market for cigarettes similar to the underground 
market that currently exists for illegal drugs. Canada has experienced 
this terrible problem as a result of its high taxes on cigarettes. 
Further, it could tempt children to obtain cigarettes illegally or to 
illegally or improperly obtain the funds to purchase cigarettes. There 
is simply no justification for imposing over half a trillion dollars in 
new regressive taxes on the American people.
  Traditionally, families and the states have been responsible for 
dealing with the legitimate and important objective of deterring youth 
smoking. Indeed, every state in the country has enacted laws making 
youth smoking and selling tobacco products to minors illegal. I believe 
that these laws should be vigorously enforced, both against adults who 
sell tobacco products to minors and against children who illegally 
attempt to purchase these products. Congress should not intrude on a 
responsibility that is properly and legitimately under the purview of 
the citizens of a state and their state governments.

[[Page S6468]]

  Many small family firms, indeed many businesses and communities 
throughout Virginia, depend on the cultivation, sale, and taxation of 
tobacco. They do so legally. In addition, Virginia's ports depend 
heavily on the shipment of tobacco and related products. The industry 
directly employs over 12,800 Virginians and supports over 150,000 
additional jobs indirectly, generating more than $2.2 billion in 
payroll taxes annually. The bill before us would have unfair 
consequences on all of these thousands of honest, hard-working 
Virginians.
  I would remind my colleagues, however, that one need not represent a 
tobacco-producing state to represent a large number of constituents who 
would be adversely effected by this legislation. Indeed, thousands of 
Americans across the country work in other industries that interact 
with the tobacco industry, such as convenience stores, shippers, 
packers, suppliers of agricultural products and equipment and vendors. 
Each of these industries, and many others, are likely to suffer 
tremendously if this bill is enacted. Most of these enterprises, 
particularly convenience stores, are small businesses and are 
struggling every day for survival.
  I would further remind my colleagues that one need not represent a 
tobacco-producing state to stand for the principles of smaller 
government, lower taxes, and personal responsibility.
  Last Thursday, Virginia Governor Jim Gilmore convened the Tobacco 
Workers' Unity Summit. As a governor who is respected nationwide for 
vigorously enforcing Virginia's laws against the sale of tobacco to 
children while passing the largest tax cut in Virginia history, I 
consider Governor Gilmore's to be an important voice in this debate. In 
his opening remarks at the Unity Summit, Governor Gilmore said, ``We 
will not be successful in combating youth smoking if we leave the 
matter to the tax commissioner rather than the law enforcement 
officer.'' I agree.
  The them of the Unity Summit was ``Protecting Our Children . . . 
Protecting Our Jobs.'' I ask unanimous consent that a list of 
participants which I will send to the desk be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     Tobacco Workers' Unity Summit


                        longshoremen and drivers

       Ed Brown: International Vice President, International 
     Longshoremen's Association.
       John G. Heckman: Executive Assistant to the President of 
     Highway Express.


     bakers, confectionery and tobacco workers international union

       Robert T. Curtis: Vice President, BCTWIU.
       Barry Baker: International Representative, BCTWIU.
       James B. ``Sonny'' Luellen: President, Local #203T, BCTWIU.
       Marian Spratt: Leaf processing worker, Danville, Virginia.


                      building construction trades

       Ray Davenport: President, Virginia State Building & 
     Construction Trades Council.
       Walter F. Merritt: Millwright, Atlantic Industrial Corp. & 
     Member, Local 1402 Millwrights.


                          retail and wholesale

       Ronnie Volkening: Government Affairs Manager, Southland 
     Corporation Dallas, Texas.
       Frank C. Beddell: President, Virginia Petroleum Jobbers.
       Jo Kittner: President, Virginia Retail Merchants 
     Association.
       Duncan Thomas: President and CEO, Q Markets Convenience 
     Stores.
       Read deButts: Executive Director, Coalition for Responsible 
     Tobacco Retailing Wholesale.
       David Strachan: President and CEO American Wholesale 
     Marketers Association.
       Kevin J. Koch: Corporate Vice President, McLane Company, 
     Inc. Temple, Texas.


    international assoc. of machinists and aerospace workers (iamaw)

       Stephen Spain: Directing Business Agent, Lodge #10, IAMAW.
       Nathan Grooms: Printing Pressman, Reynolds Metals Printing 
     Plant Local #670.
       Harlan Young: Machinist, Molin Machine Corporation.


                                growers

       Donnie Anderson: President, Virginia Tobacco Growers 
     Association.
       Wayne Ashworth: President, Virginia Farm Bureau.
       Gary Hodge: Executive Director, Tri-County Council for 
     Southern Maryland. Advisor, Southern Maryland Tobacco Board.
       Haywood J. Hamlet: CEO General Manager, Virginia Dark-Fired 
     Tobacco Growers Association.
       Joe H. Williams: State Board, Dark Fired Tobacco Advisory 
     Committee Chatham, Virginia.
       Jerry Jenkins: Flue-Cured Tobacco Advisory Committee 
     Blackstone, Virginia.


                             leaf industry

       Harry Lea: President, Virginia Flue Cured Warehousemen 
     Association.
       Todd Haymore: Director of Corporate Communications, 
     Dimon, Inc. Danville, Virginia.
       Hart Hudson: R. Hart Hudson Farms and Dixie Tobacco 
     Warehouse South Hill, Virginia.


                      supply and support industry

       Frank E. ``Pepper'' Laughon: Chairman of the Board, 
     Richmond Cold Storage Co., Inc.
       Karen Crawford: Plant Manager, Shorewood Packaging 
     Danville, Virginia.
       Thomas J. Kirkup: General Manager, Flexible Packaging 
     Division, Reynolds Metals.
       Ted A. Lushch: Owner, Jerry Brothers Industries Richmond, 
     Virginia.
       Bo Fear: Vice President, Westvaco Consumer Packaging 
     Division.
       Jean Dunn: Baling Operator, Hoechst Cellanese & Member, 
     UNITE Local 2024, Gaithersburg, Md.
       Susan Gregorek: Joint Board Representative UNITE Mid/
     Atlantic Regional Joint Board.
       James Fifer: President J.E. Fifer Sheet Metal Fabricators, 
     Inc.
       Ralph Bauwens: Plant Manager, Jewett Machine Mfg. Co., 
     Richmond, Virginia.
       Harold C. Hill, Jr.: Vice President, Inside Sales & 
     Customer Service Fi-Tech, Inc.


                           Economic Analysis

       Virginia Lieutenant Governor John Hager.
       Barry Duval: Virginia Secretary of Commerce and Trade.
       Martin Feldman: Director of Research, Solomon Smith Barney, 
     New York, New York.
       Dr. Dixie Watts Reaves: Agricultural Economist, Virginia 
     Polytechnic University.
       Dr. Thomas J. Towberman: Commissioner, Virginia Employment 
     Commission.
       Hugh Keough: President, Virginia Chamber of Commerce.


                      Preventing Underage Smoking

       Virginia Attorney General Mark Earley.
       Gary Aronhalt: Virginia Secretary of Public Safety.
       Colonel Wayne Huggins: Superintendent, Virginia State 
     Police.
       Curtis Coleburn: Policy & Judicial Director, Virginia 
     Alcoholic Beverage Control Board.
       Henry Stanley: Chief of Police, Henrico County, Virginia.
       Dana Schrad: Executive Director, Virginia Association of 
     Chiefs of Police.
  Mr. WARNER. Mr. President, these are the people who have been left 
out of the debate in the Senate--the people who stand to lose their 
livelihoods if this bill is passed.
  The participants of the Unity Summit were universally opposed to the 
bill that is currently before us, and they all signed the following 
Tobacco Workers' Unity Pledge:

       We the undersigned urge President Clinton and the U.S. 
     Congress not to forget the hardworking men and women whose 
     livelihoods are linked to tobacco.
       These men and women include truckers and longshoremen, 
     paper and steelworkers, machinists and growers, convenience 
     store clerks and warehouse workers.
       These working Americans labor long and hard hours to pay 
     their taxes and put food on the table for their families.
       These working families should not be forgotten by those who 
     hold power in Washington.
       We urge policy makers in Washington to find ways to protect 
     children from access to tobacco products that will not result 
     in thousands of working men and women losing their jobs.
       We urge the Administration and Congress to remember that 
     protecting our children is a vital law enforcement issue, not 
     an excuse to raise taxes.
       We also urge the President and the Congress to remember 
     that you will not protect our children by putting their 
     parents out of work.

  The bill before us will create far more problems for the American 
people than it could ever hope to solve. The bill has lost sight of the 
important objective of stopping children from smoking and has fallen 
prey to a multi-billion dollar money grab. The bill has blinded us to 
the American tradition of insisting on personal responsibility from 
adults and protecting our citizens from government intrusion into their 
personal lives.
  Ms. MOSELEY-BRAUN. Mr. President, I would like to take a moment to 
share my thoughts concerning S. 1415, the National Tobacco Policy and 
Youth Smoking Reduction Act.
  The fundamental goal of this bill was supposed to be to drastically 
reduce the number of children who become addicted to cigarettes. 
However, sometime during the last three weeks of debate on this bill 
the Senate seems to have lost its focus on that objective.
  We have debated three different amendments regarding lawyers fees--as 
if the states are incompetent to enter into legal contracts--and 
adopted one

[[Page S6469]]

of them. We have spent the better part of a week on the marriage 
penalty and health insurance deductibility for the self-employed. Now, 
I happen to believe that those two issues are very important, and need 
to be addressed. But this bill is not the proper vehicle for addressing 
them. This bill is supposed to be about reducing smoking--particularly 
teen smoking.
  I still view this bill as the best means of focusing on the main 
goal. For all of its faults, the bill still gives the FDA the power to 
insure: that no human, animal, or cartoon image is used to advertise 
tobacco products; that tobacco companies do not advertise in color on 
the backs of magazines; that cigarettes are not advertised on bill 
boards or other outdoor signs; that tobacco products are not displayed 
in close proximity to products--like candy--that would be attractive to 
children; that cigarettes are not advertised on the Internet; and that 
payments are not made to celebrities to smoke in movies or on 
television.
  And this bill sets targets for reducing smoking by our young people 
and penalizes tobacco companies if they fail to meet those targets. 
This is only fair because tobacco companies have targeted our children. 
Aware that nearly 89 percent of all smokers begin smoking by age 18 and 
eager to maintain its market, the industry specifically targeted 
children in the hopes of creating life-long addicts.
  Its efforts have paid off handsomely. Today, more than 3 million 
American children and teenagers smoke cigarettes. Seventy-one percent 
of high school students have tried cigarette smoking and about one-
third of high school students are current smokers. Teen smoking has 
risen for five years in a row. And if nothing is done, 5 million 
Americans who are now children will die prematurely from tobacco-
related diseases.
  But tobacco products are responsible for enormous damage to all of 
our citizens, not just children. Smoking accounts for nearly one in 
five deaths in the United States. It is related to over 419,000 U.S. 
deaths each year--more than alcohol, car accidents, fires, suicides, 
drugs, and AIDS combined. Approximately half of all continuing smokers 
die prematurely from smoking. Of these, 50 percent die in middle age, 
losing, on average, 20 to 25 years of life.
  We now have proof that the tobacco companies knew precisely what the 
impact of their products would be. According to their own internal 
documents, these companies hid the truth regarding both the dangers 
associated with smoking and the addictiveness of their products. It is 
therefore time for the tobacco industry to be held accountable for 
marketing a product it knew to be unsafe. Fortunately, that is 
something that this bill accomplishes.
  I remain concerned about the regressive nature of the $1.10 per 
cigarette tax that this bill will levy and I believe that it addresses 
issues that, while important, have nothing to do with tobacco 
legislation and should be addressed separately. Despite the many 
problems that the Senate has faced during the last three weeks, I think 
it is a real mistake to kill the tobacco reform legislation at this 
time, and make no mistake about it, that is what is happening here 
today.
  Mr. President, we must tackle the issue of teenage smoking and this 
legislation may very well be our only opportunity to do so. I would not 
want to see this bill become law in its current form, but there are 
still ample opportunities to improve if we allow the legislative 
process to go forward. Mr. President, I urge my colleagues not to kill 
this bill today; I urge them to think of our children and the children 
that will follow them and to cast a vote to prevent another generation 
of young Americans from becoming addicted to tobacco.
  Mr. FAIRCLOTH. Mr. President, I urge my colleagues to vote to kill 
this bill. It is no more than a massive $577 billion tax increase on 
working class Americans. Almost one trillion dollars in taxes and 
penalties to fund the largest expansion of government in years. Almost 
one trillion dollars to throw tens of thousand of North Carolina 
factory workers out of their jobs. Almost one trillion dollars to throw 
tens of thousands of farm families off their land.
  Back in 1993, we denounced the Clinton tax increase, the largest tax 
increase in world history. Today, some of us seem interested in passing 
this tobacco tax bill, the second largest tax increase in world 
history.
  I would like to compare the two bills.
  The 1993 tax increase was for ``fighting deficits.'' The 1998 tax 
increase is for ``fighting teen smoking.''
  The 1993 tax increase totaled 240 billion dollars over the first 5 
years. The 1998 tax increase totals $103 billion over five years.
  The 1993 tax increase paid for a massive increase in new spending. 
The 1998 tax increase pays for a massive increase in new spending.
  The 1993 tax increase was progressive. The 1998 tax increase is 
regressive.
  The 1993 tax increase targeted ``those who succeeded in the decade of 
greed.'' The 1998 tax increase targets smokers--mostly working class 
Americans.
  The 1993 tax increase was done in the name of ``the children.'' The 
1998 tax increase is in the name of ``the children.''
  The 1993 tax increase enlarged the Washington bureaucracy. The 1998 
tax increase enlarges the Washington bureaucracy.
  The 1993 tax increase taxed the American people. The 1998 tax 
increase taxes the American people, not the tobacco companies.
  It literally requires the tobacco companies to pass on the entire tax 
increase to the American people--mostly blue collar people. Those 
earning less than $40,000 per year will pay sixty-one percent of these 
new taxes.
  It will raise taxes on the one-pack-a-day smoker by $1015 per year. 
That's a fifty percent federal tax increase on those earning less than 
ten thousand dollars per year. Those earning more than $75,000 will pay 
less than one percent more from this tax increase.
  We should all be deeply concerned about the ``tax and spend'' 
approach that the bill takes to resolving a social problem. The bill 
reaches right into the pockets of hard-working low- and middle-income 
adults who have every right to smoke if they choose. And, it takes 
their hard-earned dollars to create yet more federal programs and to 
pay trial lawyers billions of dollars. At least the Senate saw the 
light on my efforts to cap these fees.
  We're literally grabbing money from the poorest Americans to buy 
trial lawyers more than Lear jets. Pure greed, Mr. President, pure 
greed.
  To what end are we taxing the American people here? It is unclear 
whether price increases really have the effect of getting kids to stop 
smoking or to prevent them from starting.
  And what is the real motivation here? If it really were to cut 
smoking, we wouldn't phase in the tax, we would drop it right at once. 
But we're not doing that because the tax-and-spenders want the 
revenues. I know they're not doing it for the tobacco companies.
  We all know that this isn't about smoking--it's about money.
  The consequences are irrelevant. Facing huge profit margins, a new 
industry will crop up bringing cigarettes into the country tax-free. It 
will be boom time for smugglers.
  Just consider how much smuggling already occurs. Ten percent of the 
cigarettes consumed in America today are smuggled from low cigarette-
tax states to high-tax states.
  Just ask the Canadian border patrol about the smuggling that occurred 
in 1993 when the Canadian cigarette excise exceeded the U.S. excise by 
as much as $3.50 per pack.
  Increased smuggling means that not only is the additional tax not 
paid, but the existing federal excise of 24 cents per pack would also 
be avoided, as would the state excises.
  Organized crime must be absolutely licking its chops at the prospect 
of smuggling a legal product into the country and then using its 
existing distribution networks to sell it. One thing's for sure--the 
market demand for small planes in about to jump sky high.
  The effect of smuggling is to create two classes of smokers--those 
who smoke only legal cigarettes and those who smoke smuggled 
cigarettes. Those who smoke smuggled cigarettes will see a decline in 
price since these cigarettes will escape the existing federal and state 
taxes.
  Thus, if smokers respond to price changes, smokers of smuggled 
cigarettes will smoke more, while smokers

[[Page S6470]]

of legal cigarettes will smoke less. Netting these changes out will be 
interesting, but it must be done to develop a reasonable revenue 
estimate.
  Then there are the jobs that will be lost in the industry all along 
the production and legal distribution chain.
  This means reduced income and payroll tax receipts to the Federal 
government. The official figures do not include these revenue losses, 
of course, because that would require a level of dynamic analysis the 
estimators are unwilling to try, but the revenue losses will be real 
nonetheless.

  Another element thus far ignored is that the cigarette tax increase 
will reduce projected federal budget surpluses through its effect on 
the Consumer Price Index (CPI). The CPI includes cigarettes on a tax-
inclusive basis.
  A per pack tax hike of $1.10 will cause an estimated one-time and 
permanent increase in the CPI of just under four-tenths of a percentage 
point. A higher CPI automatically increases federal outlays because 
many programs, like Social Security, are indexed to the CPI.
  Phasing the tax hike in over five years as described in the McCain 
bill, the Tax Foundation calculates that federal outlays will rise by 
almost $11 billion over the next five years and by over $29 billion 
over the next ten years. Similarly, many tax provisions are indexed to 
the CPI, like the personal exemption, the standard deduction, and the 
tax brackets.
  An increase in the CPI reduces tax receipts for a given amount of 
gross income. The Tax Foundation estimates that the cigarette-tax 
induced increase in the CPI would reduce federal income tax receipts by 
about $8 billion over the next five years, and by almost $19 billion 
over the next ten years.
  Combined with the spending increases, the cigarette tax hike would 
reduce future budget surpluses by almost $19 billion over the next five 
years by over $48 billion over the next ten years.
  I know that lots of people in this town are jubilant at the prospect 
of this legislation passing. The plaintiffs' lawyers would become 
fabulously wealthy; the public health community would get all of its 
favorite projects generously funded; and, of course, the bureaucrats 
will get write volumes of new rules.
  The ones who won't be so happy are the working class families who 
have been targeted to pay for it all.
  In short, the McCain bill, through its highly regressive tax 
provisions, inflicts enormous costs on lower- and middle-income 
families. Let me put this regressive tax in concrete terms. The 
increased excise tax payments under the McCain bill are projected to 
total some $577 billion over the next 25 years. This is without the 
``look back'' penalties that will add hundreds of billions of dollars 
to the package.
  Where are the cries about regressive taxes? We're all so used to the 
long speeches about taxes on the poor. Or is that argument just used 
for convenience? This is the largest tax increase on the poor in 
years--if not in all time!
  It is estimated that, based on projections of the actual increases in 
the prices of tobacco products, the true cost over the next 25 years 
will be in the range of $380 billion for families earning less than 
$30,000 per year.
  It will be more than $735 billion for families earning less than 
$75,000 a year.
  These are truly staggering numbers.
  After all, 98.5% of cigarettes are legally purchased by adult 
smokers, and therefore higher excise taxes will unfairly (and 
regressively) penalize adult consumers who choose to smoke.
  So, we're talking about hundreds of billions of dollars in new taxes 
to try to stop 1.5 percent of tobacco users from illegally buying 
tobacco. Why not just impose penalties on children who try to purchase 
tobacco? Well, I suppose, because it wouldn't be a jackpot for trial 
lawyers and Washington bureaucrats. The fact that it might help the 
children is irrelevant.
  Mr. President, I, for one, was not elected to sock the American 
taxpayer with more taxes. If teens are really our target, we owe it to 
the taxpayer to first explore other non-price measures to combat youth 
smoking.
  Turning to the bill's reliance on new government programs, I find it 
highly ironic that we are here debating a bill that will increase the 
size of the federal bureaucracy when this Congress is supposedly 
committed to reducing the federal government.
  We also need to think long and hard about the bill's Orwellian 
approach--giving the federal government more power to look over our 
shoulders regarding the personal choices we make.
  I urge my colleagues to learn from experience. Too many times in the 
past, Washington has raised taxes in the name of one feel-good social 
program or another.
  This legislation is going to result in a massive price increase for 
the entire smoking population, including the 98 percent of legal adult 
smokers. I think it is important that my colleagues are aware of all 
the facts before they vote on it.
  We should be concerned that the McCain bill will set a terrible 
precedent that will haunt us for years to come. If we begin to use the 
tax code as a coercive means of social engineering, then I submit that 
there is no end in sight.
  Today, smokers will be asked to pay a huge share of their income to 
the federal government and tomorrow, who will be next?
  We were supposedly sent here to see to it that the tax and spend era 
of big government ends. I'm not sure we're holding up our end of the 
bargain when we propose to pass legislation along the lines of the bill 
we're debating today.
  This bill perpetuates a tax and spend mentality that our constituents 
have rejected. It sets us sliding down the slippery slope. It is a bad 
bill, Mr. President, and we need to move on to other matters.
  Mr. McCONNELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.


                      Unanimous-Consent Agreement

  Mr. McCONNELL. Madam President, I ask unanimous consent that the 
Senate continue consideration of S. 1415, for debate only, until 4:30 
p.m. today.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HELMS addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized.

                          ____________________