[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
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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.
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