[Congressional Record Volume 145, Number 38 (Wednesday, March 10, 1999)]
[Senate]
[Pages S2518-S2519]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KENNEDY (for himself and Mr. Lautenberg):
  S. 584. A bill to amend title XIX of the Social Security Act to 
permit the Secretary of Health and Human Services to waive recoupment 
under the medicaid program of certain tobacco-related funds received by 
a State if a State uses a portion of such funds for tobacco use 
prevention and health care and early learning programs; to the 
Committee on Finance.


  Children's Smoking Prevention, Health, and Early Learning Trust Fund

  Mr. KENNEDY. Mr. President, today I am introducing legislation which 
will insure that the federal share of the state Medicaid settlements 
negotiated with the tobacco industry is used by the states to prevent 
youth smoking, to improve health care, and to promote child 
development. Fifty-seven cents of every Medicaid dollar spent by the 
states comes from the federal government. The cost of Medicaid 
expenditures to treat people suffering from smoking-induced disease was 
at the core of state lawsuits against the tobacco industry. While the 
federal government could legally demand that the states reimburse 
Washington from their settlements, I believe the states should be 
allowed to keep one hundred percent of the money. However, the federal 
share should be used by the states for programs that will advance the 
goals of protecting children and enhancing public health which were at 
the heart of the litigation and are consistent with the purposes of 
Medicaid. That would be an eminently fair and reasonable compromise of 
this contentious issue.
  While there were a variety of claims made by the states against the 
tobacco industry, the Medicaid dollars used to treat tobacco-related 
illness constituted by far the largest claim monetarily, and it formed 
the basis for the national settlement. As part of that settlement, 
every state released the tobacco companies from federal Medicaid 
liability, as well as state Medicaid liability. Medicaid expenditures 
heavily influenced the distribution formula used to divide the national 
settlement amongst the states. In light of these undeniable facts, the 
dollars obtained by the states from their settlements cannot now be 
divorced from Medicaid. States are free to use the state share of their 
recoveries in any way they choose. However, Congress has a vital 
interest in how the federal share will be used.
  My legislation would require states to use half of the amount of 
money they receive from the tobacco industry each year (the federal 
share) to protect children and improve public health. At least thirty-
five percent of the federal share would be spent on programs to deter 
youth smoking and to help smokers overcome their addiction. This would 
include a broad range of tobacco control initiatives, including school 
and community based tobacco use prevention programs, counter-
advertising to discourage smoking, cessation programs, and enforcement 
of the ban on sale to minors. Three thousand children start smoking 
every day, and one thousand of them will die prematurely as a result of 
tobacco-induced disease. Prevention of youth smoking should be, without 
question, our highest priority for the use of these funds. The state 
settlements provide the resources to dissuade millions of teenagers 
from smoking, to break the cycle of addiction and early death. We must 
seize that opportunity.
  The remainder of the federal share would be available for states to 
use to fund health care and early learning initiatives which they 
select. States can either use the additional resources to supplement 
existing programs in these

[[Page S2519]]

areas, or to fund creative new state initiatives to improve public 
health and promote child development.
  Smoking has long been America's foremost preventable cause of disease 
and early death. It has consumed an enormous amount of the nation's 
health care resources. Finally, resources taken from the tobacco 
companies would be used to improve the nation's health. A state could, 
for example, use a portion of this money to help senior citizens pay 
for prescription drugs, or to provide expanded health care services to 
the uninsured. Funds could be used to support community health centers, 
to reduce public health risks, or to make health insurance more 
affordable.
  For years, the tobacco companies callously targeted children as 
future smokers. The financial success of the entire industry was based 
upon addicting kids when they were too young to appreciate the health 
risks of smoking. It is particularly appropriate that resources taken 
from this malignant industry be used to give our children a better 
start in life. States could use a portion of these funds to improve 
early learning opportunities for young children, or to expand child 
care services, or for other child development initiatives.
  Congress has a compelling interest in how the federal share of these 
dollars is used. They are Medicaid dollars. They should not be used for 
road repair or building maintenance. They should be used by the states 
to create a healthier future for all our citizens, and particularly for 
our children.

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