[Congressional Record (Bound Edition), Volume 145 (1999), Part 4]
[Senate]
[Page 4781]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TOBACCO RECOUPMENT

  Mr. ABRAHAM. Mr. President, I thank the Senator from Kansas. I wanted 
to just briefly speak in relationship to the Harkin-Specter amendment 
with regard to the tobacco recoupment issue and the issue of exactly 
what should happen to the funds that the States are now entitled to 
receive as a result of the legal settlement that was achieved between 
46 States and the tobacco companies.
  Mr. President, this, to me, should be a pretty clear-cut result. The 
States entered into this litigation. They did all the work. They made 
the case persuasively. They were finally able to prevail on the merits, 
in terms of convincing the other side to engage in a settlement. So, 
for those reasons, it does not seem to me to be particularly difficult 
to conclude that the benefits, the proceeds, the settlement moneys 
ought to go to the States. I believe, since the States did this on 
their own and since the States are certainly quite knowledgeable about 
the needs of their constituents, that we should allow them not only to 
be the recipients of those funds but we should give them the discretion 
to make the decisions that are necessary as to what priorities to set 
in spending those dollars.
  Let me just begin briefly with the basic case itself. The States 
joined together. The Federal Government did not play a role in the 
technical sense, or as a party to the proceedings. Indeed, in his State 
of the Union Address the President even indicated he was directing the 
Department of Justice and the Attorney General to bring a separate 
litigation on behalf of the people of the United States against the 
tobacco companies. Presumably, one would not bring that case if one did 
not think that the States' decisions were separate from any kind of 
Federal component.
  Once the States won, of course, money became available. 
Unfortunately, at that point the Federal Government, through the Health 
Care Finance Administration, is attempting to intercede in the 
President's budget to a very substantial degree, trying to wrest 
control of a substantial portion of those dollars. As I recall, roughly 
60 percent of the first 5 years' revenues to the States which, under 
the President's budget, would, instead, be diverted to Washington. The 
basis for their claim is, in my judgment, a weak one, predicated on the 
argument that Medicaid overpayments are to be returned to the States. 
This is not a Medicaid overpayment from the Federal Government. This is 
a settlement between the States and these tobacco companies, a 
settlement fairly reached and a settlement based on the States' belief 
that their citizens had been in some ways the victims of the illnesses 
relating to tobacco.
  That said, we have now moved to a slightly different stage. In the 
content of this supplemental appropriation bill is language which would 
make it absolutely and explicitly clear that the States will receive 
these dollars. Now, we have before us an amendment that says: OK, if 
the States are going to get the money they still have to spend it on 
the priorities set by bureaucrats in Washington. Indeed, it is my 
understanding that the proposed amendment would essentially place the 
Secretary of Health and Human Services in a position to determine what 
programs qualify for, and whether States are in compliance with, these 
Federal mandates for 25 years. Basically, what this amendment says is 
approximately 50 percent, 50 percent of the settlement moneys have to 
be spent the way Washington dictates, and that the Secretary of Health 
and Human Services will decide not only what that dictation means but 
whether the States have done it. The States will be required to engage 
in extensive recordkeeping and an annual process of appealing for 
approval, the same kind of bureaucratic redtape that costs money and 
complicates, in my judgment, far too many things we do already.
  If the Secretary of Health and Human Services, and it's not just this 
Secretary but any Secretary over the next quarter of a century, doesn't 
agree with the States, they can then veto, in effect, the States' 
expenditures costing the States as much as approximately $123 billion 
during that time.
  The bottom line is, I think, a fairly simple one. Who knows best what 
the needs of the States are, the States themselves or bureaucrats in 
the Department of Health and Human Services? I believe the States do. I 
think we can trust the States to make the right decisions as to how to 
spend the moneys derived from the tobacco settlements. That is 
assuming, of course, that we have any right to tell them in the first 
place. I do not even acknowledge that. But assuming there even was a 
right of the Federal Government in some respect, I just cannot imagine 
why anybody here in Washington is going to do a better job than people 
at the State level in making these judgments.
  The priorities that have been set which relate to such things as 
counteradvertising or youth awareness or public health priorities, are 
priorities virtually every State has already set for themselves. Many 
of the States, including I believe my own, have done great things along 
the way to try to discourage smoking by young people and to address 
public health needs. If they have done that well, the notion that they 
now have to spend new moneys recouped through this settlement on these 
programs at least in my judgment would be a grievous error.
  So it comes back to something we talk about a lot around here: Who 
should set priorities and who knows best? In my view, the people at the 
local and State level, on issues and problems like this, do know best. 
They ought to make the decisions as to how the money, which was 
rightfully won by them in these lawsuits, ought to be spent. And we in 
Washington ought to be happy that there is going to be an abundance of 
resources going to the States to address the top priorities of those 
States.
  The notion that we have to dictate how 50 percent or even 30 percent 
or 10 percent of these dollars have to be spent, I think both, A, 
incorrectly presumes that somehow we had a stake in the lawsuit and, B, 
that, somehow we know better. I believe it has been proven time after 
time that we do not know better, particularly in these types of matters 
which obviously have peculiarities that differ from State to State.
  So, for those reasons I rise in opposition to the amendment. I look 
forward to working with the Senator from Texas and with a variety of 
other Senators who have been working together as cosponsors of the 
legislation that is included in the supplemental appropriation bill, to 
make sure that first and foremost the States get access to all the 
money won in the settlements and that, second, the States have the 
right to make the decisions as to how to spend those dollars.
  So, Mr. President, I hope we will be successful in preventing 
agreement to this amendment. I look forward to working on this until it 
is completed.
  I yield the floor.

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