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CONCURRENT RESOLUTION ON THE BUDGET
(Senate - May 21, 1997)

Text of this article available as: TXT PDF [Pages S4782-S4849] CONCURRENT RESOLUTION ON THE BUDGET The PRESIDING OFFICER (Mr. Enzi). The clerk will report the budget resolution. The assistant legislative clerk read as follows: A concurrent resolution (S. Con. Res. 27) setting forth the congressional budget for the United States Government for fiscal years 1998, 1999, 2000, 2001, and 2002. The Senate resumed consideration of the concurrent resolution. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Amendment No. 297 (Purpose: To provide affordable health coverage for low- and moderate- income children and for additional deficit reduction, financed by an increase in the tobacco tax; in addition to the amounts included in the bipartisan budget agreement for one or both of the following: (1) Medicaid, including outreach activities to identify and enroll eligible children and providing 12-month continuous eligibility; and also to restore Medicaid for current disabled children losing SSI because of the new, more strict definition of childhood eligibility; and (2) a program of capped mandatory grants to States to finance health insurance coverage for uninsured children) Mr. HATCH. I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The clerk read as follows: The Senator from Utah [Mr. Hatch], for himself, and Mr. Kennedy, proposes an amendment numbered 297. Mr. HATCH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: On page 3, line 3, increase the amount by 6,000,000,000. On page 3, line 4, increase the amount by 6,000,000,000. On page 3, line 5, increase the amount by 6,000,000,000. On page 3, line 6, increase the amount by 6,000,000,000. On page 3, line 7, increase the amount by 6,000,000,000. On page 3, line 11, increase the amount by 6,000,000,000. On page 3, line 12, increase the amount by 6,000,000,000. On page 3, line 13, increase the amount by 6,000,000,000. On page 3, line 14, increase the amount by 6,000,000,000. On page 3, line 15, increase the amount by 6,000,000,000. On page 4, line 4, increase the amount by 3,000,000,000. On page 4, line 5, increase the amount by 3,000,000,000. On page 4, line 6, increase the amount by 4,000,000,000. On page 4, line 7, increase the amount by 5,000,000,000. On page 4, line 8, increase the amount by 5,000,000,000. On page 4, line 12, increase the amount by 3,000,000,000. On page 4, line 13, increase the amount by 3,000,000,000. On page 4, line 14, increase the amount by 4,000,000,000. On page 4, line 15, increase the amount by 5,000,000,000. On page 4, line 16, increase the amount by 5,000,000,000. On page 4, line 19, increase the amount by 3,000,000,000. On page 4, line 20, increase the amount by 3,000,000,000. On page 4, line 21, increase the amount by 2,000,000,000. On page 4, line 22, increase the amount by 1,000,000,000. On page 4, line 23, increase the amount by 1,000,000,000. On page 5, line 1, increase the amount by 3,000,000,000. On page 5, line 2, increase the amount by 6,000,000,000. On page 5, line 3, increase the amount by 8,000,000,000. On page 5, line 4, increase the amount by 9,000,000,000. On page 5, line 5, increase the amount by 10,000,000,000. On page 23, line 8, increase the amount by 3,000,000,000. On page 23, line 9, increase the amount by 3,000,000,000. On page 23, line 15, increase the amount by 3,000,000,000. On page 23, line 16, increase the amount by 3,000,000,000. On page 23, line 22, increase the amount by 4,000,000,000. On page 23, line 23, increase the amount by 4,000,000,000. On page 24, line 5, increase the amount by 5,000,000,000. On page 24, line 6, increase the amount by 5,000,000,000. On page 24, line 12, increase the amount by 5,000,000,000. On page 24, line 13, increase the amount by 5,000,000,000. On page 39, line 22, increase the amount by 500,000,000. On page 39, line 23, increase the amount by 2,000,000,000. On page 40, line 16, increase the amount by 4,500,000,000. On page 40, line 17, increase the amount by 18,000,000,000. On page 41, line 7, increase the amount by 6,000,000,000. On page 41, line 8, increase the amount by 30,000,000,000. Mr. HATCH. Mr. President, I ask unanimous consent that the time on this amendment be allocated to me as the prime sponsor of the amendment. The PRESIDING OFFICER. That is the order. Mr. FORD. Mr. President, will the Senator yield for a question? Mr. HATCH. On the Senator's time. Mr. FORD. I don't have any time. Mr. HATCH. I will be glad to yield to the Senator. Mr. FORD. I want to know if this amendment is similar to 525 and 526 that you had as health care for children and a tax bill that is now combined? They are basically the same? Mr. HATCH. It is basically geared to get us to that point. Yes. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. DOMENICI. Mr. President, will the Senator yield for one observation on my time? Mr. HATCH. I will. Mr. DOMENICI. Mr. President, I want to make sure that the Senator, the prime sponsor, understands that in the unanimous-consent request following disposition of the Kennedy amendment, which I assume---- Mr. HATCH. This is not the Kennedy amendment. This is the Hatch- Kennedy amendment. Mr. DOMENICI. That language does not preclude a second-degree amendment. Mr. HATCH. That is correct. Mr. DOMENICI. The Senator understands that. Mr. HATCH. I understand that. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. HATCH. Mr. President, I sent this amendment to the desk on behalf of myself and Senator Kennedy. This is well known as the Hatch-Kennedy amendment. I think everyone in the Senate ought to know that. It is an amendment that we have worked out over a 6-month period, or longer, and one that I think deserves consideration in every sense of that term. The amendment that Senator Kennedy and I offer today addresses what I consider to be a top priority of this Congress: making sure America's kids are healthy. The Hatch-Kennedy amendment calls for an increase in the tobacco excise tax to fund additional spending for children's health insurance. We have made enactment of a bipartisan children's health insurance bill a top priority this Congress, and plan to press forward at every opportunity if the Senate does not act in a responsible manner. This amendment is the right thing to do, and I urge its adoption. Specifically, our amendment would raise $30 billion in revenues through a 43-cent tobacco excise tax increase. Twenty billion dollars will be used for services to uninsured kids, and $10 billion for deficit reduction. [[Page S4783]] We intend that the money be used for the same purposes as those outlined in the bipartisan budget agreement; that is, for Medicaid and for a mandatory capped State grant program to finance health insurance for uninsured children. Under our amendment, $18 billion in program funding will go to the Labor Committee, and $2 billion to the Finance Committee, to be added to the $16 billion already in the budget resolution. That means each committee will get $18 billion to work on complementary programs to help the poor and near poor. To pass this amendment--and this is an uphill battle we face--we need to have the will to do two things. First, we must recognize that we need to help children from America's working families, as well as the poorest of the poor. About 88 percent of uninsured children come from families where at least one parent is employed. Don't forget that. Eighty-eight percent of these kids live in a family where one parent works, at least. The majority of these kids will not be addressed by any Medicaid bill. Second, in order to help these forgotten children, we need to have the courage to take on some very powerful special interests. When we started this fight I knew that Big Tobacco would not just roll over and play dead. And they have not disappointed me. If we demonstrate one thing by this vote today let it be this: we are sending a message today that Senator Kennedy and I and the other supporters of this bill will stand up for children and against Big Tobacco. Senators, who do you stand with? Joe Camel, or Joey? That is what it comes down to. What the Senate must do today is decide whether we are going to protect Joe Camel, or whether we are going to protect Joey. Let our votes today be the answer. Now I am certain that those speaking in opposition to our amendment will offer a lot of complicated reasons why our amendment is deficient. But as they talk, ask yourself who should be protected: Joey or Joe Camel? Sometimes the logic of something is just so simple that no amount of obfuscation, legal mumbo-jumbo, technical economic jargon, and procedural objections can fool the American public. I expect that some will come to the floor today and say that this budget resolution is the wrong time and place for this legislation. One of their objections will be that the bill includes $10 billion in deficit reduction. Some will argue that this is not needed in a balanced budget document. Those who make that argument simply do not take into account the fact that the interest payments on the accumulated annual deficits--the $6 trillion national debt--now consume 15% of annual Federal spending. This is as much as we spend for our national defense. Having managed the floor debate for the balanced budget amendment that fell 1 vote short of the 67 necessary votes, I have a special place in my heart for the ``LD'' part of the CHILD bill: lowering the deficit. Once again, think of Joe Camel and Joey. Frankly, as a conservative Republican I am proud to have convinced so many Democrats to cosponsor legislation that provides $1 for deficit reduction for every $2 devoted to program costs. If this model is adopted in other areas, not only will we more quickly reach the goal of a balanced budget, but we will also be better able to face the formidable challenges of entitlement reform and financing the national debt. Our amendment has two very basic and extremely important goals. The Hatch-Kennedy healthy kids amendment benefits American families, working families so that they can get health care. The healthy kids amendment helps reduce the deficit and reduce our debt service requirements. Our amendment will help millions of kids get a healthy start in life. As it stands now, we know that too many American children do not get the benefits of health insurance. The General Accounting Office recently made a number of important observations about this problem. In House testimony, the GAO said: In summary, we have found that while most children have health insurance, almost 10 million children lack insurance. Between 1989 and 1995, the percentage of children with private coverage declined significantly--part of an overall decline in coverage of dependents through family health insurance policies. The GAO concluded: Had this decrease not occurred, nearly 5 million more children would have had private health insurance. From these observations of GAO, I think it is fair to say that there is a big problem in the area of children's health insurance, and unless we do something about it, it is bound to get bigger. Who are these 10 million children? These uninsured kids come from working families. At least 88 percent of those kids come from families where at least one parent is working. Many live in families whose income is just above the Medicaid limit, but they do not make enough money to provide health insurance for their kids. Who are the Hatch-Kennedy kids? I will tell you who they are. They are, in large part, the children of good, hard-working families who make too much for Medicaid and not enough to buy their own health insurance. This chart shows you that there is a pronounced spike in the number of uninsured Americans who live in that $20,000 to $30,000 working- class income bracket. This is the family income range of many of these families who stand to benefit from the Hatch-Kennedy amendment. It is clear to this Senator that there is a problem to be solved. These are uninsured Americans. Some are saying we do not need this amendment. The budget negotiators did a good job, in my opinion, in including a significant amount of new spending for children's health--$16 billion in this budget resolution. That is a good start, and I praised them for it. No question about it. But the fact is there are about 10 million kids in the United States without health insurance, and I believe that the budget resolution probably will not cover even half of them. I think it is important that my colleagues understand the Congressional Budget Office is coming in with very conservative estimates on the number of children who will be served under various congressional proposals. For example, the CBO, Congressional Budget Office, has estimated that the Medicaid 12-month, continuous eligibility proposal would cost $14 billion alone if implemented by every State. That alone is almost all of the money in this budget resolution. Or, if you look at it another way, the Federal share of Medicaid costs for a child is about $860 on average this year. According to the Employee Benefit Research Institute, there are 4.7 million uninsured children whose parents make less than 125 percent of the Federal poverty level. That is $19,500 for a family of four. How can they afford insurance? By simple calculation, to cover those kids under Medicaid would cost $4.2 billion, about $1 billion more a year than is included in this budget resolution, and that is just the Medicaid kids. There are 7 million here who are not. And this would leave the vast majority of children of working parents under 125 percent of poverty level uncovered. While I admit $16 billion is a substantial start and I commend my colleagues on the Budget Committee, it is just not enough to do the whole job. Many of us are also cosponsors of the Chafee-Rockefeller-Jeffords- Breaux CHIPS bill, which is estimated to cost at least $15 billion, perhaps even more. This Medicaid bill is targeted to help 5 million kids, including the 3 million or so Medicaid-eligible children who are not enrolled because they do not know enough to get enrolled. We see these two bills as compatible. The CHIPS bill improves basic Medicaid, and our bill would be added on top of that to take care of these uninsured kids who do not qualify. There obviously is a close connection between the two. That is why in our amendment we decided to divide the money equally between each of the two committees, Labor and Finance, and to work out an integrated approach. Let me also take a few minutes to explain my views about using a tobacco [[Page S4784]] tax as the revenue source for our amendment. There can be no doubt that smoking and tobacco use are major public health problems. By any measure they are costly. Smoking is our Nation's No. 1 preventable health cause of death. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. There are 3 million kids who smoke. Consider these smoking facts. Smoking causes cancer and is addictive. One out of five cancers is caused by smoking; four out of five lung cancers are caused by smoking; 3,000 kids are starting to smoke every day; 50 percent of all smokers begin before age 15, 90 percent before the age 18; 419,000 American smokers die annually. Just think about it. Of those 3,000 young Americans who start smoking every day, at least half of them are going to become nicotine addicts. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack and AIDS combined. In fact, cigarettes are a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires. This represented over 1,000 deaths in our society. Every day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. According to a 1994 CDC report, tobacco costs our society $100 billion annually--$50 billion in direct medical costs. Of 24 billion cigarette packs sold in 1993, $2.06 per pack in medical care costs. Of this, 89 cents was paid by public sources; $10 billion Medicare, $5 billion Medicaid, $4.75 billion other Federal, and $16.75 billion higher insurance premiums. Just think about that. The price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported for the first time that smoking causes cancer. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less and that the American people should keep more of their money that they earn in our economy. Yet the statistics about tobacco use and costs that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying for the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services for children, coupled with the significant deficit reduction component against my natural aversion to raising taxes, I come down in favor of this financing mechanism with the tobacco tax or, as I call it, a user fee because only those who smoke are going to pay this tax. And 50 percent of them, according to the recent polls, are for this tax realizing that smoking causes a lot of detriment to society. If we are going to commit ourselves to addressing the problem of adequate health care for children, then it is essential that we identify how this program is going to be funded. I knew I was going to take the heat on this one, but I strongly believed that it was the fiscally responsible thing to do, and I still think this is the case. Accordingly, let me pose to my colleagues this question. What do you believe is a better offset? From what program do you suggest we take the money? Now, I am willing to listen and discuss this issue but, quite frankly, I have not heard from anybody concerning a viable alternative financing source. Let us get to the real issue here. Smoking is dangerous for our public health, and it is dangerous for our economy. It hurts the kids we are trying to help. That is the crux of our amendment here today. Many of the critics of our proposal have seized on this amendment today to express concerns which were raised earlier about the Child Health Insurance and Lower Deficit Act. A lot of those charges against the bill are in error, as I am prepared to debate here today. But the fundamental question today is not should we pass the Hatch-Kennedy child bill. Rather, the more pertinent question before the body is should we do more for children's health? The answer, totally clear to this Senator, is ``most definitely.'' I consider children's health to be a top priority issue for this Congress. I think the American people expect that of us. My colleagues may be interested in a Wall Street Journal-NBC News poll taken between April 26 and 28 of this year. The question was posed as follows: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack and giving much of the money raised to help States provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? The response was astounding. I ask unanimous consent that it be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: Wall Street Journal/NBC News Poll, April 26-28, 1997 Question: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack, and giving much of the money raised to help states provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? [In percent] ------------------------------------------------------------------------ Not Favor Oppose sure ------------------------------------------------------------------------ All adults.................................. 72 24 4 Men......................................... 67 30 3 Women....................................... 76 20 4 Northeast................................... 73 20 7 Midwest..................................... 73 26 1 South....................................... 69 28 3 West........................................ 74 23 3 Whites...................................... 70 26 4 Blacks...................................... 80 16 4 Age 18 to 34................................ 73 25 2 Age 35 to 49................................ 74 23 3 Age 50 to 64................................ 66 30 4 Age 65 and over............................. 72 21 7 Under $20,000 income........................ 74 23 3 $20,000 to $30,000.......................... 76 21 3 $30,000 to 50,000........................... 70 28 2 Over $50,000................................ 70 26 4 Urban....................................... 76 21 3 Suburb/towns................................ 70 26 4 Rural....................................... 70 28 2 Registered voters........................... 73 23 4 Non-Registered adults....................... 65 32 3 Democrats................................... 79 18 3 Republicans................................. 67 29 4 Independents................................ 69 27 4 Clinton voters.............................. 80 17 3 Dole voters................................. 64 31 5 Liberals.................................... 79 19 2 Moderates................................... 79 19 2 Conservatives............................... 64 31 5 Professionals/Managers...................... 76 21 3 White collar workers........................ 77 20 3 Blue collar workers......................... 62 35 3 High School or less......................... 66 30 4 Some College................................ 75 22 3 College graduates........................... 75 21 4 ------------------------------------------------------------------------ Mr. HATCH. Mr. President, 72 percent of all adults responded that they favor this proposal and only 24 percent were opposed; 67 percent of all men approved of this proposal and 76 percent of all women were in favor. The results were remarkably consistent throughout each geographic region in the United States, across age groups and, indeed, income groups. The point is simple. This is an idea whose time has come. So to those who believe there is a better way to go, I earnestly solicit your views. Indeed, I will make an offer to every Member in this body. I want to work with each of you and with our leadership to address this issue in a responsible way. If changes need to be made, if we need to move toward a middle ground in order to get a proposal enacted, I will be an advocate for these changes. It is for this reason that Senator Kennedy and I initiated our discussions on this issue several months ago. The fact is that Senator Kennedy and I approach issues like these from vastly different ends of the political spectrum. That perhaps is what strengthens the product of our discussions on those issues, the fact that we can find common ground. I believe we desperately need to find that bipartisan common ground on an issue like child health insurance, an issue which matters to so many of all of our constituents. I think one of the lessons we have learned in the last 18 months is that the American public believes Congress is unnecessarily politicizing issues and sandbagging legislation in areas which beg for action. Children's health is an obvious example. I caution my colleagues not to be ashamed to work in a [[Page S4785]] bipartisan manner. Working across the aisle and knitting together political coalitions in order to get things done is an element of leadership, and I think it is what the public expects of all of us. I think that our approach is a true bipartisan partnership. Public health leaders back this approach. Six former Cabinet Secretaries of HHS or its predecessor, HEW, representing all Presidential administrations back to the Nixon administration support our amendment. I thank Secretaries Elliot Richardson, David Mathews, Joseph Califano, Richard Schweiker, Otis Bowen, and Louis Sullivan for their support and leadership in moving this legislation. I also want my colleagues to know that former Surgeons General C. Everett Koop, Julius Richmond, Paul Erlich, and Jesse Steinfield are backing this effort. Today is the time for we politicians to take the advice of these leaders in public health and vote to increase the tax on tobacco users in order to help children. Indeed, the budget compromise and the child bill plus the public's heightened sense of concern about the perils of tobacco are coming together to present a rare and historic opportunity for our society to help children get health insurance, further discourage tobacco use, especially among our young people, and target a sizable $10 billion for deficit reduction. This is a unique time, and we should make the most of it. I believe that we can and should strengthen Medicaid and create a new program for those children from working families who are not Medicaid eligible. That is what our amendment is intended to do. I will not use up all our time. Let us just keep this simple. Vote for Joey, not for Joe Camel. I reserve the remainder of my time. The PRESIDING OFFICER. Who yields time? Mr. KENNEDY addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Massachusetts. Mr. KENNEDY. I yield myself 10 minutes. Mr. President, I ask unanimous consent that Lauren Ewers be given privileges of the Senate floor during the pending debate on the budget resolution. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. KENNEDY. Mr. President, first of all, I commend my friend and colleague, Senator Hatch, for explaining the thrust of this legislation and the range of support that we have for it and the importance of it for working families. Let me just continue in the presentation. Mr. President, I join Senator Hatch in offering this amendment to guarantee a healthy start in life for every American child. Our amendment to the budget poses a clear choice for every Senator. Whose interests do you care about--the interests of America's children--or the interests of the big tobacco companies? Are you for Joe Camel and the Marlboro Man, or millions of children who lack adequate health care? Our amendment will make the Hatch-Kennedy children's health insurance plan part of the budget. Our goal is to make health insurance accessible and affordable for every child. The plan is financed by an increase of 43 cents a pack in the cigarette tax. That increase has the additional important benefit of reducing smoking by children. Our plan has broad bipartisan support--because health care for children is not a Republican issue or a Democratic issue. It is a human issue. Six former Secretaries of the Department of Health and Human Services and four former Surgeon Generals have endorsed the plan. These leaders served under Presidents Nixon, Ford, Carter, Reagan, and Bush. They all understand the importance of health insurance for children and decisive action to reduce smoking. They all understand that health care for children is an issue that should transcend political party and ideology. We all know the crisis we are facing in children's health. Ten and a half million children in this country--1 child in every 7--have no health insurance. Over a 2 year period, 23 million children--1 child in every 3--are without health insurance for substantial periods of time. Ninety percent of uninsured children are members of working families. Their families work hard--40 hours a week, 52 weeks a year--but all their hard work can't buy their children the health care they need, because they don't qualify for Medicaid and they can't afford to buy insurance on their own. Too many children are left out and left behind because they are uninsured. Too many parents face a cruel choice between putting food on the table, paying the rent, and giving their children the health care they need. For millions of children the only family doctor is the hospital emergency room. Each year 600,000 sick children do not receive any medical care, because they are uninsured. Each year, 400,000 children go without the medicine their doctors have prescribed because they have no insurance. Each year, 1\1/2\ million children go without the dental care they need, because they have no insurance. Each year, 600,000 uninsured children suffer from asthma and less than half see a physician even once. Each month, 1 million uninsured children suffer from sore throats with high fever. If they have strep throats, it can lead to heart disease and kidney disease if it's not treated. Each year, 300,000 uninsured children have chronic, untreated ear infections. Uninsured children are 50 percent more likely to die in the hospital than other children because their parents couldn't afford the health insurance they needed. We all know our country's shameful record on infant mortality--we rank behind 17 other industrialized countries. The lack of health care for children plagues the education system too. Children who are sick can't study well in school. Children who cannot see the blackboard because they have no eyeglasses can't succeed in the classroom. Children who cannot hear the teacher are unlikely to learn. Children who do not get a healthy start in life are unlikely to have a healthy future. And without healthy children, our country won't have a healthy future either--because children are the country's future. Passage of this amendment, combined with the money already included in the budget agreement, can end this crisis and make this the Congress in which we guarantee every child the opportunity for the healthy start in life that should be the birthright of every child. A budget is about setting priorities. There is no more important priority than health care for our children. The amendment provides the additional funds necessary to achieve our goal. It includes in the instructions to the Finance Committee the necessary adjustments to provide for a 43-cent-a-pack increase in the cigarette tax to finance the coverage. And it includes in the instructions to the Finance and Labor and Human Resources Committee the spending to implement this program. The Hatch-Kennedy legislation includes provisions that were common to bills introduced two Congresses ago by Republicans and Democrats alike. It will make health insurance coverage more affordable for every working family with uninsured children. It does so without creating any new Government mandates--on the States, on the insurance industry, or on individuals. The program is purely voluntary. Our legislation creates no new entitlement. Instead, it encourages family responsibility, by offering parents the help they need to purchase affordable health insurance for their children. The bill does not create any new bureaucracies--either Federal or State. The Federal Government already collects tobacco taxes, and all States have agencies that run their Medicaid, public health, and children's health insurance programs. Our legislation builds on what the States are already doing. Fourteen States have their own public programs on which our proposal is modeled. Another 17 States have private programs to subsidize the cost of child- only coverage for low-income families. Finally, our proposal builds on the private insurance industry. States choosing to participate will contract with private insurers to provide child-only private coverage. Subsidies will be available to help families purchase the coverage for their children, or to participate in employment-based health plans. [[Page S4786]] Even families not eligible for the financial assistance will be helped by this plan, since children's health insurance policies will be widely available in all States as a result of this proposal. Under our plan, $20 billion over the next 5 years will be available to expand health insurance for children, and an additional $10 billion will be available for deficit reduction beyond what is provided in the budget agreement. Paying for this program by an increase in the cigarette tax is both logical and practical. The link between smoking and children's health is obvious. If we do nothing, 5 million of today's children will die from smoking-related illnesses. For years, tobacco companies have cynically targeted the Nation's children. It is appropriate now to ask those companies and smokers to make a contribution to the cost of health insurance for children. By providing a specific financing source to cover the cost of the program we are doing the fiscally responsible thing. Some will oppose this legislation on the grounds that the $16 billion already included in the budget over the next 5 years is enough. But the fact is, the $16 billion is barely enough to cover the 3 million uninsured children already eligible for Medicaid but not participating. In total, it will cover only 3.7 million children of the 10\1/2\ million who are uninsured. Let me repeat that: It will cover only 3.7 million children of the 10 million uninsured. The budget agreement is an important step forward. But that improvement is not enough to help the seven million other children in hard-working families whose parents will still make too much to qualify for Medicaid but not enough to buy the health care their children need. The Hatch-Kennedy plan fills that large gap. Some will oppose this legislation on the grounds that the budget agreement was designed to cut taxes, not increase them. But a cigarette tax increase is a user fee and affirmative step to improve health care. It is not like other taxes. If you don't smoke, you don't pay the tax. We all know the heavy costs that tobacco companies and smokers inflict on all taxpayers. The average pack of cigarettes sells for $1.80 today--and it costs the Nation $3.90 in smoking-related costs. This proposal helps in a modest way to offset those costs. Every poll shows that, unlike other tax increases, raising the cigarette tax has overwhelming public support. The only people who don't like this increase are the tobacco companies and their lobbyists. Some will claim that this program will displace existing private insurance coverage. But our bill has strong safeguards to prevent this from happening. In fact, it has not occurred in the States that have already acted to implement similar programs. Some will argue that this program creates new mandates on States or new entitlements. But anyone who reads the bill will see that it does not. Participation is voluntary for States. The requirements for participation are no greater than for other, typical Federal grants to States for health care. The bill states clearly that it creates no new individual entitlement. Obviously, we are not voting today on the specific provisions of our legislation. There will be plenty of time for adjustment and improvement as it moves through Congress. But this vote on the budget resolution is the key vote that determines whether the overall budget will contain room for this program, financed by a tobacco tax increase, that will guarantee every family affordable coverage for their children. Big tobacco opposes this legislation. They are powerful and well- funded, but they do not deserve to succeed in their effort to block our amendment. A vote for this amendment is a vote for children's health care and a vote against the insidious and shameful poisoning of generations of children by the tobacco industry. Enough is enough is enough. An extraordinary 72 percent of the American people support this program. Republicans and Democrats, liberals and conservatives, low- income families and high-income families, North, South, East, and West--support is overwhelming. The question is whether democracy still works. The American people understand the choice we are making today-- and Congress should listen to their views. How can any Senator say no? I would like to close by telling my colleagues the story of the children in two families. Sylvia Pierce of Everett, MA, didn't think twice about taking one of her four children to the doctor, when her husband was alive. The family medical bills were covered under her husband's health insurance that he got through his job. When one of the children needed a shot, Pierce took the child to the doctor; if the baby had an earache, Pierce got a prescription. ``People don't realize what a luxury health insurance is,'' Pierce said. ``I know I didn't. I took it for granted. I never thought about it; I never worried about it.'' That all changed October 6, 1993, when her husband was murdered. In an instant, Pierce's life was changed forever. Gone was the father of her children, the family's main breadwinner--and its health insurance, leaving her four children, 13-year-old Leonard, 8-year-old Brian, 6-year-old Alyssa, and the baby, Jillian, unprotected. ``It was the middle of the winter, the worst time of year as far as kids and sickness are concerned,'' Pierce said. ``The kids were always catching something at school, and the baby had earaches and needed to have her immunizations. I kept postponing her shots because I didn't have the money. It was a very anxious time.'' ``I didn't choose to be in this situation * * * We've got to take care of our children. They can't speak for themselves so we have to speak for them.'' Maria lives in California. Shortly after Maria entered a new school as a third grader, her progress reports indicated that she seemed to be performing far below her potential. A health examination arranged by her school revealed that Maria had suffered multiple ear infections-- probably over a period of several years. Maria's father ran a small yard maintenance business, but was not able to afford health insurance for her. As a result, her parents were unable to obtain treatment for her ear infections. Without timely and thorough medical attention, scar tissue had built up, causing her to become deaf in one ear and have hearing loss in the other. Maria's inability to access affordable medical care affects not only her physical health but her educational development as well. Every day we delay means more children like Maria and like Leonard and Brian and Alyssa and Jillian suffer. It is time to say, ``enough.'' We have failed our children long enough. Children are the country's future. When we fail children, we also fail the country and its future. We all know what's at stake. For children, this vote is the most important vote we will cast in this entire Congress. I reserve the remainder of my time. Mr. DOMENICI addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from New Mexico. Mr. DOMENICI. Mr. President, I might just, first, ask that every Senator who is interested in this amendment and what it does, that they get a copy of the amendment. Look through it. Turn one sheet after another. See if you find mentioned in this document cigarette taxes. See if you see it in here. There is no mention of cigarette taxes in this. The reason is, you cannot, in a budget resolution, carry out a mandate that a cigarette tax be imposed. Let me repeat. If this amendment is adopted, there is no assurance that a cigarette tax will be imposed because you cannot do that in a budget resolution. So let us look at it, page by page. There is no mention of a cigarette tax. I repeat to Senator Hatch, my very good friend, that there is absolutely no assurance and no way, in a budget resolution, that you can instruct the Finance Committee of the Senate of the United States to levy any kind of tax specifically. You can change the total amount of taxation and say, ``We sure hope, when you change that, that you will pass a cigarette tax.'' I tell you that because the budget resolution is not the place to argue about what a tax package is going to look like specifically, especially with reference to imposing a new one. Second, for those who are interested in cutting taxes--I assume there are a whole bunch of people on our side who want to cut taxes, and I think there are [[Page S4787]] some on this side who want to cut taxes--if this amendment is adopted, while it does not mandate a cigarette tax, believe it or not, it cuts the taxes that you can cut by $30 billion. So that will be a wonderful accomplishment, especially by conservative Senators on this side of the aisle, that essentially the only thing you are assured they accomplish is that there will be a tax cut for the American people that will be less than we expected when we got this budget resolution passed. That is just the arithmetic of an instruction to the committee--just plain arithmetic. Having said that, there should be no bones about it, because of what I have just said with reference to a tax cut and with reference to adding more money to programs, this is in violation of the bipartisan agreement. Mr. President and fellow Senators, I do not know who is going to lobby this in behalf of the agreement. I do not know who is going to lobby from the White House or from the office of the minority leader. I do know Senator Lott and I intend to defeat this. So we are not only going to be lobbying, we are going to be working to see that this agreement that we entered into is kept and not violated by this amendment or any other amendment. For, make no bones about it, if you adopt this amendment, this agreement is wide open, if you believe anybody on this side of the aisle or that side of the aisle who wants to live under this is going to sit by for a major change like this. Essentially, the principal change is to reduce the amount of money you can cut taxes by $30 billion. Let me also say, fellow Senators, and anyone listening here today, whatever the wonderful discussions by well-meaning Senators--and they are all well-meaning, I say that to my friend, Senator Hatch, looking right at him, wonderfully intentioned--the issue of covering children in America who are not covered by insurance, listen up, Americans: They are all covered in this agreement. The President claims victory in this agreement. And guess what he says, Senator Kennedy, when he said this is a great agreement--5 million Americans, and he put up his hand with his 5 fingers like that--5 million Americans, young children, are going to be covered by health insurance because I made a deal to make sure that occurs. So let us make sure that the speeches about covering children, trying, in this debate, to tie that to raising a cigarette tax--and another day, another place, another way, perhaps many Senators would vote for a cigarette tax increase. Perhaps. Mr. KENNEDY. Will the Senator just yield on that point? Mr. DOMENICI. I just want to finish this thought. Mr. President, this cigarette tax is not needed. We need not break this agreement to cover children who are uncovered, in terms of health insurance, because they are covered. Let me tell you how much they are covered by. There is $16 billion--one-six--$16 billion in new money in this agreement that is there specifically and singularly to cover children who do not have insurance. All 5 million are covered by the $16 billion. Let me suggest that the White House in these negotiations put before us a plan to cover the 5 million young people, 5 million young children in America. They put forth a plan and they said it is going to be very difficult to find out how to cover these young children because we do not have any experience in it. We do not have any insurance policies out there to cover them. But $16 billion ought to do the job. Mr. KENNEDY. Will the Senator yield on my time for 1 minute? Mr. DOMENICI. Sure. I will be pleased to. Mr. KENNEDY. Mr. President, just to make it clear, in the budget is some $16 billion. The Medicaid costs are $860 per person. If you work that out, that covers 3.7 million. I think the President said ``up to 5 million.'' So, there is a major part of that group, particularly the working poor, who are not covered in that. I strongly support the point that the Senator has made in that we are going to see progress, and it is important progress. I think we ought to at least have an understanding. We have $16 billion and it costs $860 to cover each child. If you do the math, it is 3.7 million. The President, I think, said up to 5 million. I think, frankly, if you do the math, it is a little closer to 3.7 million. Mr. DOMENICI. Mr. President, fellow Senators, the truth of the matter is that nobody knows, nobody knows today how to cover these children who are uncovered in America. Nobody has a plan. Nobody knows which plan to use. Obviously, a very large number ought to be put under Medicaid. But they will not all fit under Medicaid, so another plan has to be developed for the rest of them. Frankly, this Senator is convinced that we can devise a plan in the Finance Committee of the U.S. Senate that will cover them all and will not even use the $16 billion. That is just as honest a statement as my friend from Massachusetts makes when he plucks a number, because we do not know what it is going to cost. Mr. President, do my fellow Senators know that if you went out 6 months ago across America and you said, ``Let's buy health insurance for some uninsured kids; let's just go around to the insurance agencies and say, `How about giving us an insurance bid,' '' there was no policy until about 2 months ago when a company decided to issue a policy. Nobody even knows, since it is the only one, whether its price is going to remain when they all start issuing them, for it is, indeed, not expensive to cover children; everybody knows that. One of the reasons given to cover them is it is not very expensive to cover them. All I am suggesting is that the President of the United States, in this bipartisan agreement, made great, great emphasis to the American people that it was a good agreement for many reasons, and one of them was that we had covered the young people who are not covered with $16 billion in new money. I want to close on this point, and I will have a lot more to say, but essentially, this amendment in no way will cause a cigarette tax to be imposed if that is the wish of the sponsors, because you cannot do it in a budget resolution and you cannot find the words ``cigarette tax'' in the boundaries of their amendment, because there is no way to do that. They just have numbers plugged in and they wish the Finance Committee will use the numbers the way they are giving their speeches on the floor. They are hoping that they will do that, but the Finance Committee does not have to. So what we are doing is, we are tying in kids' coverage, which is already in the agreement, to a national issue on smoking cigarettes. And it is a national issue. It is a terribly tough issue, but, essentially, they are unrelated in terms of the budget resolution. So what we are doing is asking for more money for a program that is already covered, with no assurance that it will be spent for that program, and we are calling for a tax increase, with no assurance that it will be a cigarette tax, but a real assurance that you will have cut the $85 billion that we are providing for net new taxes by $30 billion, just the mathematical effect of the amendment. I yield the floor at this time. Mr. HELMS. Mr. President, Senator Domenici is absolutely correct. If the Senator from Massachusetts wants to render nugatory the work of all the Senators who labored so long to produce a budget, his amendment is the way to do it. At stake, Mr. President, are the livelihoods of this country's tobacco farm families as Senators Kennedy and Hatch attempt to extract an additional $30 billion tax increase from the American taxpayers by upping the existing 24-cent excise tax to 67 cents. The impact of this proposal, if enacted, would not only devastate the Southeastern economy; it will harm the entire country. It will be harmful to the lives of thousands of farm families, to the manufacturing workers who stand to lose their jobs, to the retail-store owner and his employees, to the truck driver who delivers the product to market, to the farm implement dealer who supplies the tobacco farmer, to the schools financed by taxes levied on tobacco farmers, and on and on. Mr. President, this tax increase will cost thousands of fine North Carolinians their jobs; it will effectively destroy the livelihoods of thousands of small family tobacco farmers. According to American Economics Group, Inc., nearly 662,402 citizens are employed in the production, manufacturing, and marketing of tobacco. If [[Page S4788]] enacted, the 43-cent excise tax on tobacco products would abolish 43,000 jobs nationwide, and North Carolina alone would lose 17,849 jobs. Furthermore, any increase in the cigarette excise tax will fall disproportionally on lower- and middle-income consumers--the citizens least able to pay it. Those earning less than $30,000 annually already pay 5 times more in excise taxes than those earning $60,000 or more. Those families earning less than $30,000 pay a staggering 47 percent of all tobacco excise taxes, yet these families earn only 16 percent of national family income. Make no mistake about it--the tobacco tax is not a user fee as so often claimed by the proponents of this amendment--it is a tax increase. We all know that when excise taxes are increased on any product, sales of that product decrease. If tobacco revenues fall short of projections--which will certainly be the case because there will be a substantially smaller tax base--how will the shortfall be made up? More taxes? What other group will be singled out to shoulder this financial burden? Tobacco has been targeted for enormous tax increases because it is an easy way for this Government to take even more money out of the taxpayers' pockets. Smokers, tobacco farmers, and those who work in the tobacco industry should not be singled out to shoulder the burden of paying for the health care of uninsured children. The anti smoking zealots have made clear that they are willing to do almost anything in order to tax tobacco right out of existence. They do not care about the 18,000 people in North Carolina alone who stand to lose their jobs. The proponents of this amendment talk about all the children they are trying to insure with the revenues from this tax. Well, I can guarantee that they'll be able to add more uninsured children to that list if this tax is enacted. There will be a number of folks without work, and a number of children who will suffer because of it. Once we head down this road of using the taxing power of Government to discourage Americans from undertaking activities Congress and the White House find objectionable, or politically incorrect, where will it stop? This tax discriminates against an entire region, an entire industry, and all people who use tobacco products. Mr. FORD. Will the Senator yield me 10 minutes? Mr. DOMENICI. I yield 10 minutes to Senator Ford. Mr. FORD. I thank the Senator. Mr. President, I am quite proud of the record I have established over the years in support of programs that help children. No one in this Chamber is going to suggest that this Senator, this grandfather of five, takes second place to anyone when it comes to priorities affecting children. I have supported expanding educational opportunities ever since I came to the Senate. Nothing is more important for our children than education. I have supported full funding for Head Start and the WIC Program and expanding Medicaid coverage to poor children. I have supported child care programs. I have supported the expansion of the earned income tax credit. I have supported a child tax credit that will become, hopefully, a part of this budget. I have supported drug abuse funding to help children. I have supported reasonable environmental initiatives that improve the lives of our children. But this is not a debate about whether or not to provide funds for child health care. The budget agreement already includes $16 billion in additional funds for child health care. A vote for this budget agreement, as is, is a vote for this country's children. I support the budget agreement that was negotiated earlier because it strikes an important balance. It provides much-needed programs for children from education to health care. It provides much-needed tax relief for middle-income families, and it balances the budget by 2002. An enormous amount of what we spend in the Federal budget is about children, and I believe that is right because our children are the most important resource this country has. We have to balance a lot of competing priorities. There is virtually no end to what we could spend on educating our children, for instance, if money were no object, but money is an object, because we have to balance the size--and I underscore size--of Government with the appetite of our constituents to pay taxes. I thought the budget arrangement announced earlier struck a pretty fair balance. It protected a number of national priorities while balancing the budget. As I have always said, it includes $16 billion for children's health care over 5 years, an amount that we are told will cover approximately 5 million children. The budget deal assumes that there will be $135 billion in gross tax cuts offset by $50 billion in new revenues already. Now we look at the Kennedy-Hatch proposal. No matter how you look at it, this proposal undercuts the budget deal by changing the balance reached in that agreement. It requires the Federal Government to be $30 billion bigger in tax revenues and at least $20 billion bigger in spending programs. Tax-and-spend. So, with this amendment, there will only be $55 billion in net tax cuts. That is not the agreement I agreed to, the White House signed off on last week, and it is not the agreement that the American public has been led to believe they are getting. There are plenty of other problems with the substance of the Kennedy- Hatch amendment. I do not think the budget deal was about raising taxes. If this amendment is adopted, this budget deal will become more and more about raising taxes. Put another way, this amendment reduces the net tax cut in this bill by 35 percent, more than a third. It requires a 60-percent increase in revenue raisers in this bill over the next 5 years. Tax increase, revenue raisers. Let's quit talking about taxes a moment, and let's talk about the Kennedy-Hatch amendment. While it is true that States have the option of denying the new block grant under this amendment, once they decide to accept the money, several conditions and mandates--I underscore mandates--to the States apply. The Kennedy-Hatch proposal contains 27 separate provisions which state that a State ``shall'' or a State ``must'' or a State ``may not'' do something. States have restrictions on how to write their plan to cover children. Who must approve the plan before they receive the funds? HHS. Which children are eligible for health insurance subsidies? What must be covered under the health insurance policy? You have told the insurance companies what they have to write, who they can contract with--think about that now, who a State can contract with for policies and how--how much they must pay out of State funds to receive this money; what percentage of administrative costs they must cover-- mandates on the States. Having been there and done that, I understand what a Governor has to do, but, if faced with a choice of stretching dollars, a Governor might prefer to provide a very basic policy but to cover more children. Under the Kennedy-Hatch amendment, the benefits that must be covered are specified in the bill. What is the cost to the States? The Kennedy-Hatch amendment will cost the States up to $5 billion in additional matching funds, requiring them to raise their money or their taxes. The Kennedy-Hatch amendment will cause cigarette consumption to decline by a minimum of 10 percent. This means that States could lose between $4 and $7 billion in excise taxes if they do not participate in the bill, meaning that even more money must be made up somewhere else. For weeks and weeks and months and months, there has been a bill filed to get rid of Joe Camel, to get rid of Marlboro Man, to do away with advertising, to do all those things that FDA has regulated, and then just ask FDA to get out of adult choice. But people who will not help prevent youth from smoking are here with an issue, not solving the problem, they are here with an issue, because if they wanted to solve the problem, they had an opportunity months ago to get on a piece of legislation that would do exactly what FDA is now saying will be in regulations. So, Mr. President, don't let anyone say that they want to solve the problem. They, by their own words, have let thousands upon thousands upon thousands of kids die because months and months and months ago, they would not get on a bill to help stop youth smoking. Now they have an issue: They [[Page S4789]] want to raise taxes in order to stop youth from smoking. Well, it tells me something that they want the issue and not a solving of the problem. I yield the floor, Mr. President. Mr. KENNEDY. Mr. President, I yield myself 2 minutes. The PRESIDING OFFICER (Mr. Inhofe). The Senator from Massachusetts. Mr. KENNEDY. Mr. President, just for the benefit of the membership, this legislation is drafted in the historical, traditional way of amending the Budget Act. There should be no question as to exactly what this legislation is about. It is about providing health insurance for working families who cannot afford it. This is spelled out in the purpose of the amendment, which also states that it will be * * * ``financed by an increase in the tobacco tax.'' What we are voting on ought to be very clear. Second, Mr. President, I ask unanimous consent to have printed in the Record a joint tax review that states that even with the decline in potential tobacco use, there still will be $30 billion generated over the period of the next 5 years. This also takes into consideration the arguments of the Senator from Kentucky. There being no objection, the material was ordered to be printed in the Record, as follows: Joint Committee on Taxation, Washington, DC, May 19, 1997. Hon. Edward M. Kennedy, U.S. Senate, Washington, DC. Dear Senator Kennedy: This is a revenue estimate of your bill, S. 526, introduced with Senator Hatch. Under present law, the excise tax rates on tobacco products are as follows: small cigarettes, $12.00 per thousand; large cigarettes, $25.20 per thousand; small cigars, $1.125 per thousand; large cigars, 12.75 percent of wholesale price (but not more than $30.00 per thousand); snuff, $0.36 per pound; chewing tobacco, $0.12 per pound; pipe tobacco, $0.675 per pound; cigarette papers, $0.0075 per book containing more than 25 papers (with no tax on books containing less than 25 papers); and cigarette tubes, $0.015 per 50 tubes. Under present law, there is no tax on fine cut (roll-your-own) tobacco. Under the bill, the tax on small cigarettes would be increased by $0.43 per pack to $0.67 per pack. The excise taxes on other tobacco products are to be increased by the same percentage increase as the increase (179 percent) on small cigarettes except for the tax on snuff, which would be increased by 569 percent to $2.41 per pound and chewing tobacco which would be increased by 4,975 percent to $6.09 per pound. In addition, an excise tax is to be imposed on fine-cut tobacco equal to the tax on pipe tobacco. The proposed tax increases for small cigarettes and other tobacco products would become effective on October 1, 1997, with floor stocks taxes levied on that date. However, a credit to be applied against the floor stocks tax liability equal to $500 would be allowed every vendor responsible for the payment of floor stocks taxes. We estimate that the floor stocks tax credit would reduce fiscal year 1998 receipts by $400 million from what they otherwise would be. We estimate that this proposal would increase Federal fiscal year budget receipts are as follows:

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CONCURRENT RESOLUTION ON THE BUDGET
(Senate - May 21, 1997)

Text of this article available as: TXT PDF [Pages S4782-S4849] CONCURRENT RESOLUTION ON THE BUDGET The PRESIDING OFFICER (Mr. Enzi). The clerk will report the budget resolution. The assistant legislative clerk read as follows: A concurrent resolution (S. Con. Res. 27) setting forth the congressional budget for the United States Government for fiscal years 1998, 1999, 2000, 2001, and 2002. The Senate resumed consideration of the concurrent resolution. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Amendment No. 297 (Purpose: To provide affordable health coverage for low- and moderate- income children and for additional deficit reduction, financed by an increase in the tobacco tax; in addition to the amounts included in the bipartisan budget agreement for one or both of the following: (1) Medicaid, including outreach activities to identify and enroll eligible children and providing 12-month continuous eligibility; and also to restore Medicaid for current disabled children losing SSI because of the new, more strict definition of childhood eligibility; and (2) a program of capped mandatory grants to States to finance health insurance coverage for uninsured children) Mr. HATCH. I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The clerk read as follows: The Senator from Utah [Mr. Hatch], for himself, and Mr. Kennedy, proposes an amendment numbered 297. Mr. HATCH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: On page 3, line 3, increase the amount by 6,000,000,000. On page 3, line 4, increase the amount by 6,000,000,000. On page 3, line 5, increase the amount by 6,000,000,000. On page 3, line 6, increase the amount by 6,000,000,000. On page 3, line 7, increase the amount by 6,000,000,000. On page 3, line 11, increase the amount by 6,000,000,000. On page 3, line 12, increase the amount by 6,000,000,000. On page 3, line 13, increase the amount by 6,000,000,000. On page 3, line 14, increase the amount by 6,000,000,000. On page 3, line 15, increase the amount by 6,000,000,000. On page 4, line 4, increase the amount by 3,000,000,000. On page 4, line 5, increase the amount by 3,000,000,000. On page 4, line 6, increase the amount by 4,000,000,000. On page 4, line 7, increase the amount by 5,000,000,000. On page 4, line 8, increase the amount by 5,000,000,000. On page 4, line 12, increase the amount by 3,000,000,000. On page 4, line 13, increase the amount by 3,000,000,000. On page 4, line 14, increase the amount by 4,000,000,000. On page 4, line 15, increase the amount by 5,000,000,000. On page 4, line 16, increase the amount by 5,000,000,000. On page 4, line 19, increase the amount by 3,000,000,000. On page 4, line 20, increase the amount by 3,000,000,000. On page 4, line 21, increase the amount by 2,000,000,000. On page 4, line 22, increase the amount by 1,000,000,000. On page 4, line 23, increase the amount by 1,000,000,000. On page 5, line 1, increase the amount by 3,000,000,000. On page 5, line 2, increase the amount by 6,000,000,000. On page 5, line 3, increase the amount by 8,000,000,000. On page 5, line 4, increase the amount by 9,000,000,000. On page 5, line 5, increase the amount by 10,000,000,000. On page 23, line 8, increase the amount by 3,000,000,000. On page 23, line 9, increase the amount by 3,000,000,000. On page 23, line 15, increase the amount by 3,000,000,000. On page 23, line 16, increase the amount by 3,000,000,000. On page 23, line 22, increase the amount by 4,000,000,000. On page 23, line 23, increase the amount by 4,000,000,000. On page 24, line 5, increase the amount by 5,000,000,000. On page 24, line 6, increase the amount by 5,000,000,000. On page 24, line 12, increase the amount by 5,000,000,000. On page 24, line 13, increase the amount by 5,000,000,000. On page 39, line 22, increase the amount by 500,000,000. On page 39, line 23, increase the amount by 2,000,000,000. On page 40, line 16, increase the amount by 4,500,000,000. On page 40, line 17, increase the amount by 18,000,000,000. On page 41, line 7, increase the amount by 6,000,000,000. On page 41, line 8, increase the amount by 30,000,000,000. Mr. HATCH. Mr. President, I ask unanimous consent that the time on this amendment be allocated to me as the prime sponsor of the amendment. The PRESIDING OFFICER. That is the order. Mr. FORD. Mr. President, will the Senator yield for a question? Mr. HATCH. On the Senator's time. Mr. FORD. I don't have any time. Mr. HATCH. I will be glad to yield to the Senator. Mr. FORD. I want to know if this amendment is similar to 525 and 526 that you had as health care for children and a tax bill that is now combined? They are basically the same? Mr. HATCH. It is basically geared to get us to that point. Yes. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. DOMENICI. Mr. President, will the Senator yield for one observation on my time? Mr. HATCH. I will. Mr. DOMENICI. Mr. President, I want to make sure that the Senator, the prime sponsor, understands that in the unanimous-consent request following disposition of the Kennedy amendment, which I assume---- Mr. HATCH. This is not the Kennedy amendment. This is the Hatch- Kennedy amendment. Mr. DOMENICI. That language does not preclude a second-degree amendment. Mr. HATCH. That is correct. Mr. DOMENICI. The Senator understands that. Mr. HATCH. I understand that. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. HATCH. Mr. President, I sent this amendment to the desk on behalf of myself and Senator Kennedy. This is well known as the Hatch-Kennedy amendment. I think everyone in the Senate ought to know that. It is an amendment that we have worked out over a 6-month period, or longer, and one that I think deserves consideration in every sense of that term. The amendment that Senator Kennedy and I offer today addresses what I consider to be a top priority of this Congress: making sure America's kids are healthy. The Hatch-Kennedy amendment calls for an increase in the tobacco excise tax to fund additional spending for children's health insurance. We have made enactment of a bipartisan children's health insurance bill a top priority this Congress, and plan to press forward at every opportunity if the Senate does not act in a responsible manner. This amendment is the right thing to do, and I urge its adoption. Specifically, our amendment would raise $30 billion in revenues through a 43-cent tobacco excise tax increase. Twenty billion dollars will be used for services to uninsured kids, and $10 billion for deficit reduction. [[Page S4783]] We intend that the money be used for the same purposes as those outlined in the bipartisan budget agreement; that is, for Medicaid and for a mandatory capped State grant program to finance health insurance for uninsured children. Under our amendment, $18 billion in program funding will go to the Labor Committee, and $2 billion to the Finance Committee, to be added to the $16 billion already in the budget resolution. That means each committee will get $18 billion to work on complementary programs to help the poor and near poor. To pass this amendment--and this is an uphill battle we face--we need to have the will to do two things. First, we must recognize that we need to help children from America's working families, as well as the poorest of the poor. About 88 percent of uninsured children come from families where at least one parent is employed. Don't forget that. Eighty-eight percent of these kids live in a family where one parent works, at least. The majority of these kids will not be addressed by any Medicaid bill. Second, in order to help these forgotten children, we need to have the courage to take on some very powerful special interests. When we started this fight I knew that Big Tobacco would not just roll over and play dead. And they have not disappointed me. If we demonstrate one thing by this vote today let it be this: we are sending a message today that Senator Kennedy and I and the other supporters of this bill will stand up for children and against Big Tobacco. Senators, who do you stand with? Joe Camel, or Joey? That is what it comes down to. What the Senate must do today is decide whether we are going to protect Joe Camel, or whether we are going to protect Joey. Let our votes today be the answer. Now I am certain that those speaking in opposition to our amendment will offer a lot of complicated reasons why our amendment is deficient. But as they talk, ask yourself who should be protected: Joey or Joe Camel? Sometimes the logic of something is just so simple that no amount of obfuscation, legal mumbo-jumbo, technical economic jargon, and procedural objections can fool the American public. I expect that some will come to the floor today and say that this budget resolution is the wrong time and place for this legislation. One of their objections will be that the bill includes $10 billion in deficit reduction. Some will argue that this is not needed in a balanced budget document. Those who make that argument simply do not take into account the fact that the interest payments on the accumulated annual deficits--the $6 trillion national debt--now consume 15% of annual Federal spending. This is as much as we spend for our national defense. Having managed the floor debate for the balanced budget amendment that fell 1 vote short of the 67 necessary votes, I have a special place in my heart for the ``LD'' part of the CHILD bill: lowering the deficit. Once again, think of Joe Camel and Joey. Frankly, as a conservative Republican I am proud to have convinced so many Democrats to cosponsor legislation that provides $1 for deficit reduction for every $2 devoted to program costs. If this model is adopted in other areas, not only will we more quickly reach the goal of a balanced budget, but we will also be better able to face the formidable challenges of entitlement reform and financing the national debt. Our amendment has two very basic and extremely important goals. The Hatch-Kennedy healthy kids amendment benefits American families, working families so that they can get health care. The healthy kids amendment helps reduce the deficit and reduce our debt service requirements. Our amendment will help millions of kids get a healthy start in life. As it stands now, we know that too many American children do not get the benefits of health insurance. The General Accounting Office recently made a number of important observations about this problem. In House testimony, the GAO said: In summary, we have found that while most children have health insurance, almost 10 million children lack insurance. Between 1989 and 1995, the percentage of children with private coverage declined significantly--part of an overall decline in coverage of dependents through family health insurance policies. The GAO concluded: Had this decrease not occurred, nearly 5 million more children would have had private health insurance. From these observations of GAO, I think it is fair to say that there is a big problem in the area of children's health insurance, and unless we do something about it, it is bound to get bigger. Who are these 10 million children? These uninsured kids come from working families. At least 88 percent of those kids come from families where at least one parent is working. Many live in families whose income is just above the Medicaid limit, but they do not make enough money to provide health insurance for their kids. Who are the Hatch-Kennedy kids? I will tell you who they are. They are, in large part, the children of good, hard-working families who make too much for Medicaid and not enough to buy their own health insurance. This chart shows you that there is a pronounced spike in the number of uninsured Americans who live in that $20,000 to $30,000 working- class income bracket. This is the family income range of many of these families who stand to benefit from the Hatch-Kennedy amendment. It is clear to this Senator that there is a problem to be solved. These are uninsured Americans. Some are saying we do not need this amendment. The budget negotiators did a good job, in my opinion, in including a significant amount of new spending for children's health--$16 billion in this budget resolution. That is a good start, and I praised them for it. No question about it. But the fact is there are about 10 million kids in the United States without health insurance, and I believe that the budget resolution probably will not cover even half of them. I think it is important that my colleagues understand the Congressional Budget Office is coming in with very conservative estimates on the number of children who will be served under various congressional proposals. For example, the CBO, Congressional Budget Office, has estimated that the Medicaid 12-month, continuous eligibility proposal would cost $14 billion alone if implemented by every State. That alone is almost all of the money in this budget resolution. Or, if you look at it another way, the Federal share of Medicaid costs for a child is about $860 on average this year. According to the Employee Benefit Research Institute, there are 4.7 million uninsured children whose parents make less than 125 percent of the Federal poverty level. That is $19,500 for a family of four. How can they afford insurance? By simple calculation, to cover those kids under Medicaid would cost $4.2 billion, about $1 billion more a year than is included in this budget resolution, and that is just the Medicaid kids. There are 7 million here who are not. And this would leave the vast majority of children of working parents under 125 percent of poverty level uncovered. While I admit $16 billion is a substantial start and I commend my colleagues on the Budget Committee, it is just not enough to do the whole job. Many of us are also cosponsors of the Chafee-Rockefeller-Jeffords- Breaux CHIPS bill, which is estimated to cost at least $15 billion, perhaps even more. This Medicaid bill is targeted to help 5 million kids, including the 3 million or so Medicaid-eligible children who are not enrolled because they do not know enough to get enrolled. We see these two bills as compatible. The CHIPS bill improves basic Medicaid, and our bill would be added on top of that to take care of these uninsured kids who do not qualify. There obviously is a close connection between the two. That is why in our amendment we decided to divide the money equally between each of the two committees, Labor and Finance, and to work out an integrated approach. Let me also take a few minutes to explain my views about using a tobacco [[Page S4784]] tax as the revenue source for our amendment. There can be no doubt that smoking and tobacco use are major public health problems. By any measure they are costly. Smoking is our Nation's No. 1 preventable health cause of death. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. There are 3 million kids who smoke. Consider these smoking facts. Smoking causes cancer and is addictive. One out of five cancers is caused by smoking; four out of five lung cancers are caused by smoking; 3,000 kids are starting to smoke every day; 50 percent of all smokers begin before age 15, 90 percent before the age 18; 419,000 American smokers die annually. Just think about it. Of those 3,000 young Americans who start smoking every day, at least half of them are going to become nicotine addicts. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack and AIDS combined. In fact, cigarettes are a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires. This represented over 1,000 deaths in our society. Every day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. According to a 1994 CDC report, tobacco costs our society $100 billion annually--$50 billion in direct medical costs. Of 24 billion cigarette packs sold in 1993, $2.06 per pack in medical care costs. Of this, 89 cents was paid by public sources; $10 billion Medicare, $5 billion Medicaid, $4.75 billion other Federal, and $16.75 billion higher insurance premiums. Just think about that. The price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported for the first time that smoking causes cancer. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less and that the American people should keep more of their money that they earn in our economy. Yet the statistics about tobacco use and costs that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying for the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services for children, coupled with the significant deficit reduction component against my natural aversion to raising taxes, I come down in favor of this financing mechanism with the tobacco tax or, as I call it, a user fee because only those who smoke are going to pay this tax. And 50 percent of them, according to the recent polls, are for this tax realizing that smoking causes a lot of detriment to society. If we are going to commit ourselves to addressing the problem of adequate health care for children, then it is essential that we identify how this program is going to be funded. I knew I was going to take the heat on this one, but I strongly believed that it was the fiscally responsible thing to do, and I still think this is the case. Accordingly, let me pose to my colleagues this question. What do you believe is a better offset? From what program do you suggest we take the money? Now, I am willing to listen and discuss this issue but, quite frankly, I have not heard from anybody concerning a viable alternative financing source. Let us get to the real issue here. Smoking is dangerous for our public health, and it is dangerous for our economy. It hurts the kids we are trying to help. That is the crux of our amendment here today. Many of the critics of our proposal have seized on this amendment today to express concerns which were raised earlier about the Child Health Insurance and Lower Deficit Act. A lot of those charges against the bill are in error, as I am prepared to debate here today. But the fundamental question today is not should we pass the Hatch-Kennedy child bill. Rather, the more pertinent question before the body is should we do more for children's health? The answer, totally clear to this Senator, is ``most definitely.'' I consider children's health to be a top priority issue for this Congress. I think the American people expect that of us. My colleagues may be interested in a Wall Street Journal-NBC News poll taken between April 26 and 28 of this year. The question was posed as follows: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack and giving much of the money raised to help States provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? The response was astounding. I ask unanimous consent that it be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: Wall Street Journal/NBC News Poll, April 26-28, 1997 Question: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack, and giving much of the money raised to help states provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? [In percent] ------------------------------------------------------------------------ Not Favor Oppose sure ------------------------------------------------------------------------ All adults.................................. 72 24 4 Men......................................... 67 30 3 Women....................................... 76 20 4 Northeast................................... 73 20 7 Midwest..................................... 73 26 1 South....................................... 69 28 3 West........................................ 74 23 3 Whites...................................... 70 26 4 Blacks...................................... 80 16 4 Age 18 to 34................................ 73 25 2 Age 35 to 49................................ 74 23 3 Age 50 to 64................................ 66 30 4 Age 65 and over............................. 72 21 7 Under $20,000 income........................ 74 23 3 $20,000 to $30,000.......................... 76 21 3 $30,000 to 50,000........................... 70 28 2 Over $50,000................................ 70 26 4 Urban....................................... 76 21 3 Suburb/towns................................ 70 26 4 Rural....................................... 70 28 2 Registered voters........................... 73 23 4 Non-Registered adults....................... 65 32 3 Democrats................................... 79 18 3 Republicans................................. 67 29 4 Independents................................ 69 27 4 Clinton voters.............................. 80 17 3 Dole voters................................. 64 31 5 Liberals.................................... 79 19 2 Moderates................................... 79 19 2 Conservatives............................... 64 31 5 Professionals/Managers...................... 76 21 3 White collar workers........................ 77 20 3 Blue collar workers......................... 62 35 3 High School or less......................... 66 30 4 Some College................................ 75 22 3 College graduates........................... 75 21 4 ------------------------------------------------------------------------ Mr. HATCH. Mr. President, 72 percent of all adults responded that they favor this proposal and only 24 percent were opposed; 67 percent of all men approved of this proposal and 76 percent of all women were in favor. The results were remarkably consistent throughout each geographic region in the United States, across age groups and, indeed, income groups. The point is simple. This is an idea whose time has come. So to those who believe there is a better way to go, I earnestly solicit your views. Indeed, I will make an offer to every Member in this body. I want to work with each of you and with our leadership to address this issue in a responsible way. If changes need to be made, if we need to move toward a middle ground in order to get a proposal enacted, I will be an advocate for these changes. It is for this reason that Senator Kennedy and I initiated our discussions on this issue several months ago. The fact is that Senator Kennedy and I approach issues like these from vastly different ends of the political spectrum. That perhaps is what strengthens the product of our discussions on those issues, the fact that we can find common ground. I believe we desperately need to find that bipartisan common ground on an issue like child health insurance, an issue which matters to so many of all of our constituents. I think one of the lessons we have learned in the last 18 months is that the American public believes Congress is unnecessarily politicizing issues and sandbagging legislation in areas which beg for action. Children's health is an obvious example. I caution my colleagues not to be ashamed to work in a [[Page S4785]] bipartisan manner. Working across the aisle and knitting together political coalitions in order to get things done is an element of leadership, and I think it is what the public expects of all of us. I think that our approach is a true bipartisan partnership. Public health leaders back this approach. Six former Cabinet Secretaries of HHS or its predecessor, HEW, representing all Presidential administrations back to the Nixon administration support our amendment. I thank Secretaries Elliot Richardson, David Mathews, Joseph Califano, Richard Schweiker, Otis Bowen, and Louis Sullivan for their support and leadership in moving this legislation. I also want my colleagues to know that former Surgeons General C. Everett Koop, Julius Richmond, Paul Erlich, and Jesse Steinfield are backing this effort. Today is the time for we politicians to take the advice of these leaders in public health and vote to increase the tax on tobacco users in order to help children. Indeed, the budget compromise and the child bill plus the public's heightened sense of concern about the perils of tobacco are coming together to present a rare and historic opportunity for our society to help children get health insurance, further discourage tobacco use, especially among our young people, and target a sizable $10 billion for deficit reduction. This is a unique time, and we should make the most of it. I believe that we can and should strengthen Medicaid and create a new program for those children from working families who are not Medicaid eligible. That is what our amendment is intended to do. I will not use up all our time. Let us just keep this simple. Vote for Joey, not for Joe Camel. I reserve the remainder of my time. The PRESIDING OFFICER. Who yields time? Mr. KENNEDY addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Massachusetts. Mr. KENNEDY. I yield myself 10 minutes. Mr. President, I ask unanimous consent that Lauren Ewers be given privileges of the Senate floor during the pending debate on the budget resolution. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. KENNEDY. Mr. President, first of all, I commend my friend and colleague, Senator Hatch, for explaining the thrust of this legislation and the range of support that we have for it and the importance of it for working families. Let me just continue in the presentation. Mr. President, I join Senator Hatch in offering this amendment to guarantee a healthy start in life for every American child. Our amendment to the budget poses a clear choice for every Senator. Whose interests do you care about--the interests of America's children--or the interests of the big tobacco companies? Are you for Joe Camel and the Marlboro Man, or millions of children who lack adequate health care? Our amendment will make the Hatch-Kennedy children's health insurance plan part of the budget. Our goal is to make health insurance accessible and affordable for every child. The plan is financed by an increase of 43 cents a pack in the cigarette tax. That increase has the additional important benefit of reducing smoking by children. Our plan has broad bipartisan support--because health care for children is not a Republican issue or a Democratic issue. It is a human issue. Six former Secretaries of the Department of Health and Human Services and four former Surgeon Generals have endorsed the plan. These leaders served under Presidents Nixon, Ford, Carter, Reagan, and Bush. They all understand the importance of health insurance for children and decisive action to reduce smoking. They all understand that health care for children is an issue that should transcend political party and ideology. We all know the crisis we are facing in children's health. Ten and a half million children in this country--1 child in every 7--have no health insurance. Over a 2 year period, 23 million children--1 child in every 3--are without health insurance for substantial periods of time. Ninety percent of uninsured children are members of working families. Their families work hard--40 hours a week, 52 weeks a year--but all their hard work can't buy their children the health care they need, because they don't qualify for Medicaid and they can't afford to buy insurance on their own. Too many children are left out and left behind because they are uninsured. Too many parents face a cruel choice between putting food on the table, paying the rent, and giving their children the health care they need. For millions of children the only family doctor is the hospital emergency room. Each year 600,000 sick children do not receive any medical care, because they are uninsured. Each year, 400,000 children go without the medicine their doctors have prescribed because they have no insurance. Each year, 1\1/2\ million children go without the dental care they need, because they have no insurance. Each year, 600,000 uninsured children suffer from asthma and less than half see a physician even once. Each month, 1 million uninsured children suffer from sore throats with high fever. If they have strep throats, it can lead to heart disease and kidney disease if it's not treated. Each year, 300,000 uninsured children have chronic, untreated ear infections. Uninsured children are 50 percent more likely to die in the hospital than other children because their parents couldn't afford the health insurance they needed. We all know our country's shameful record on infant mortality--we rank behind 17 other industrialized countries. The lack of health care for children plagues the education system too. Children who are sick can't study well in school. Children who cannot see the blackboard because they have no eyeglasses can't succeed in the classroom. Children who cannot hear the teacher are unlikely to learn. Children who do not get a healthy start in life are unlikely to have a healthy future. And without healthy children, our country won't have a healthy future either--because children are the country's future. Passage of this amendment, combined with the money already included in the budget agreement, can end this crisis and make this the Congress in which we guarantee every child the opportunity for the healthy start in life that should be the birthright of every child. A budget is about setting priorities. There is no more important priority than health care for our children. The amendment provides the additional funds necessary to achieve our goal. It includes in the instructions to the Finance Committee the necessary adjustments to provide for a 43-cent-a-pack increase in the cigarette tax to finance the coverage. And it includes in the instructions to the Finance and Labor and Human Resources Committee the spending to implement this program. The Hatch-Kennedy legislation includes provisions that were common to bills introduced two Congresses ago by Republicans and Democrats alike. It will make health insurance coverage more affordable for every working family with uninsured children. It does so without creating any new Government mandates--on the States, on the insurance industry, or on individuals. The program is purely voluntary. Our legislation creates no new entitlement. Instead, it encourages family responsibility, by offering parents the help they need to purchase affordable health insurance for their children. The bill does not create any new bureaucracies--either Federal or State. The Federal Government already collects tobacco taxes, and all States have agencies that run their Medicaid, public health, and children's health insurance programs. Our legislation builds on what the States are already doing. Fourteen States have their own public programs on which our proposal is modeled. Another 17 States have private programs to subsidize the cost of child- only coverage for low-income families. Finally, our proposal builds on the private insurance industry. States choosing to participate will contract with private insurers to provide child-only private coverage. Subsidies will be available to help families purchase the coverage for their children, or to participate in employment-based health plans. [[Page S4786]] Even families not eligible for the financial assistance will be helped by this plan, since children's health insurance policies will be widely available in all States as a result of this proposal. Under our plan, $20 billion over the next 5 years will be available to expand health insurance for children, and an additional $10 billion will be available for deficit reduction beyond what is provided in the budget agreement. Paying for this program by an increase in the cigarette tax is both logical and practical. The link between smoking and children's health is obvious. If we do nothing, 5 million of today's children will die from smoking-related illnesses. For years, tobacco companies have cynically targeted the Nation's children. It is appropriate now to ask those companies and smokers to make a contribution to the cost of health insurance for children. By providing a specific financing source to cover the cost of the program we are doing the fiscally responsible thing. Some will oppose this legislation on the grounds that the $16 billion already included in the budget over the next 5 years is enough. But the fact is, the $16 billion is barely enough to cover the 3 million uninsured children already eligible for Medicaid but not participating. In total, it will cover only 3.7 million children of the 10\1/2\ million who are uninsured. Let me repeat that: It will cover only 3.7 million children of the 10 million uninsured. The budget agreement is an important step forward. But that improvement is not enough to help the seven million other children in hard-working families whose parents will still make too much to qualify for Medicaid but not enough to buy the health care their children need. The Hatch-Kennedy plan fills that large gap. Some will oppose this legislation on the grounds that the budget agreement was designed to cut taxes, not increase them. But a cigarette tax increase is a user fee and affirmative step to improve health care. It is not like other taxes. If you don't smoke, you don't pay the tax. We all know the heavy costs that tobacco companies and smokers inflict on all taxpayers. The average pack of cigarettes sells for $1.80 today--and it costs the Nation $3.90 in smoking-related costs. This proposal helps in a modest way to offset those costs. Every poll shows that, unlike other tax increases, raising the cigarette tax has overwhelming public support. The only people who don't like this increase are the tobacco companies and their lobbyists. Some will claim that this program will displace existing private insurance coverage. But our bill has strong safeguards to prevent this from happening. In fact, it has not occurred in the States that have already acted to implement similar programs. Some will argue that this program creates new mandates on States or new entitlements. But anyone who reads the bill will see that it does not. Participation is voluntary for States. The requirements for participation are no greater than for other, typical Federal grants to States for health care. The bill states clearly that it creates no new individual entitlement. Obviously, we are not voting today on the specific provisions of our legislation. There will be plenty of time for adjustment and improvement as it moves through Congress. But this vote on the budget resolution is the key vote that determines whether the overall budget will contain room for this program, financed by a tobacco tax increase, that will guarantee every family affordable coverage for their children. Big tobacco opposes this legislation. They are powerful and well- funded, but they do not deserve to succeed in their effort to block our amendment. A vote for this amendment is a vote for children's health care and a vote against the insidious and shameful poisoning of generations of children by the tobacco industry. Enough is enough is enough. An extraordinary 72 percent of the American people support this program. Republicans and Democrats, liberals and conservatives, low- income families and high-income families, North, South, East, and West--support is overwhelming. The question is whether democracy still works. The American people understand the choice we are making today-- and Congress should listen to their views. How can any Senator say no? I would like to close by telling my colleagues the story of the children in two families. Sylvia Pierce of Everett, MA, didn't think twice about taking one of her four children to the doctor, when her husband was alive. The family medical bills were covered under her husband's health insurance that he got through his job. When one of the children needed a shot, Pierce took the child to the doctor; if the baby had an earache, Pierce got a prescription. ``People don't realize what a luxury health insurance is,'' Pierce said. ``I know I didn't. I took it for granted. I never thought about it; I never worried about it.'' That all changed October 6, 1993, when her husband was murdered. In an instant, Pierce's life was changed forever. Gone was the father of her children, the family's main breadwinner--and its health insurance, leaving her four children, 13-year-old Leonard, 8-year-old Brian, 6-year-old Alyssa, and the baby, Jillian, unprotected. ``It was the middle of the winter, the worst time of year as far as kids and sickness are concerned,'' Pierce said. ``The kids were always catching something at school, and the baby had earaches and needed to have her immunizations. I kept postponing her shots because I didn't have the money. It was a very anxious time.'' ``I didn't choose to be in this situation * * * We've got to take care of our children. They can't speak for themselves so we have to speak for them.'' Maria lives in California. Shortly after Maria entered a new school as a third grader, her progress reports indicated that she seemed to be performing far below her potential. A health examination arranged by her school revealed that Maria had suffered multiple ear infections-- probably over a period of several years. Maria's father ran a small yard maintenance business, but was not able to afford health insurance for her. As a result, her parents were unable to obtain treatment for her ear infections. Without timely and thorough medical attention, scar tissue had built up, causing her to become deaf in one ear and have hearing loss in the other. Maria's inability to access affordable medical care affects not only her physical health but her educational development as well. Every day we delay means more children like Maria and like Leonard and Brian and Alyssa and Jillian suffer. It is time to say, ``enough.'' We have failed our children long enough. Children are the country's future. When we fail children, we also fail the country and its future. We all know what's at stake. For children, this vote is the most important vote we will cast in this entire Congress. I reserve the remainder of my time. Mr. DOMENICI addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from New Mexico. Mr. DOMENICI. Mr. President, I might just, first, ask that every Senator who is interested in this amendment and what it does, that they get a copy of the amendment. Look through it. Turn one sheet after another. See if you find mentioned in this document cigarette taxes. See if you see it in here. There is no mention of cigarette taxes in this. The reason is, you cannot, in a budget resolution, carry out a mandate that a cigarette tax be imposed. Let me repeat. If this amendment is adopted, there is no assurance that a cigarette tax will be imposed because you cannot do that in a budget resolution. So let us look at it, page by page. There is no mention of a cigarette tax. I repeat to Senator Hatch, my very good friend, that there is absolutely no assurance and no way, in a budget resolution, that you can instruct the Finance Committee of the Senate of the United States to levy any kind of tax specifically. You can change the total amount of taxation and say, ``We sure hope, when you change that, that you will pass a cigarette tax.'' I tell you that because the budget resolution is not the place to argue about what a tax package is going to look like specifically, especially with reference to imposing a new one. Second, for those who are interested in cutting taxes--I assume there are a whole bunch of people on our side who want to cut taxes, and I think there are [[Page S4787]] some on this side who want to cut taxes--if this amendment is adopted, while it does not mandate a cigarette tax, believe it or not, it cuts the taxes that you can cut by $30 billion. So that will be a wonderful accomplishment, especially by conservative Senators on this side of the aisle, that essentially the only thing you are assured they accomplish is that there will be a tax cut for the American people that will be less than we expected when we got this budget resolution passed. That is just the arithmetic of an instruction to the committee--just plain arithmetic. Having said that, there should be no bones about it, because of what I have just said with reference to a tax cut and with reference to adding more money to programs, this is in violation of the bipartisan agreement. Mr. President and fellow Senators, I do not know who is going to lobby this in behalf of the agreement. I do not know who is going to lobby from the White House or from the office of the minority leader. I do know Senator Lott and I intend to defeat this. So we are not only going to be lobbying, we are going to be working to see that this agreement that we entered into is kept and not violated by this amendment or any other amendment. For, make no bones about it, if you adopt this amendment, this agreement is wide open, if you believe anybody on this side of the aisle or that side of the aisle who wants to live under this is going to sit by for a major change like this. Essentially, the principal change is to reduce the amount of money you can cut taxes by $30 billion. Let me also say, fellow Senators, and anyone listening here today, whatever the wonderful discussions by well-meaning Senators--and they are all well-meaning, I say that to my friend, Senator Hatch, looking right at him, wonderfully intentioned--the issue of covering children in America who are not covered by insurance, listen up, Americans: They are all covered in this agreement. The President claims victory in this agreement. And guess what he says, Senator Kennedy, when he said this is a great agreement--5 million Americans, and he put up his hand with his 5 fingers like that--5 million Americans, young children, are going to be covered by health insurance because I made a deal to make sure that occurs. So let us make sure that the speeches about covering children, trying, in this debate, to tie that to raising a cigarette tax--and another day, another place, another way, perhaps many Senators would vote for a cigarette tax increase. Perhaps. Mr. KENNEDY. Will the Senator just yield on that point? Mr. DOMENICI. I just want to finish this thought. Mr. President, this cigarette tax is not needed. We need not break this agreement to cover children who are uncovered, in terms of health insurance, because they are covered. Let me tell you how much they are covered by. There is $16 billion--one-six--$16 billion in new money in this agreement that is there specifically and singularly to cover children who do not have insurance. All 5 million are covered by the $16 billion. Let me suggest that the White House in these negotiations put before us a plan to cover the 5 million young people, 5 million young children in America. They put forth a plan and they said it is going to be very difficult to find out how to cover these young children because we do not have any experience in it. We do not have any insurance policies out there to cover them. But $16 billion ought to do the job. Mr. KENNEDY. Will the Senator yield on my time for 1 minute? Mr. DOMENICI. Sure. I will be pleased to. Mr. KENNEDY. Mr. President, just to make it clear, in the budget is some $16 billion. The Medicaid costs are $860 per person. If you work that out, that covers 3.7 million. I think the President said ``up to 5 million.'' So, there is a major part of that group, particularly the working poor, who are not covered in that. I strongly support the point that the Senator has made in that we are going to see progress, and it is important progress. I think we ought to at least have an understanding. We have $16 billion and it costs $860 to cover each child. If you do the math, it is 3.7 million. The President, I think, said up to 5 million. I think, frankly, if you do the math, it is a little closer to 3.7 million. Mr. DOMENICI. Mr. President, fellow Senators, the truth of the matter is that nobody knows, nobody knows today how to cover these children who are uncovered in America. Nobody has a plan. Nobody knows which plan to use. Obviously, a very large number ought to be put under Medicaid. But they will not all fit under Medicaid, so another plan has to be developed for the rest of them. Frankly, this Senator is convinced that we can devise a plan in the Finance Committee of the U.S. Senate that will cover them all and will not even use the $16 billion. That is just as honest a statement as my friend from Massachusetts makes when he plucks a number, because we do not know what it is going to cost. Mr. President, do my fellow Senators know that if you went out 6 months ago across America and you said, ``Let's buy health insurance for some uninsured kids; let's just go around to the insurance agencies and say, `How about giving us an insurance bid,' '' there was no policy until about 2 months ago when a company decided to issue a policy. Nobody even knows, since it is the only one, whether its price is going to remain when they all start issuing them, for it is, indeed, not expensive to cover children; everybody knows that. One of the reasons given to cover them is it is not very expensive to cover them. All I am suggesting is that the President of the United States, in this bipartisan agreement, made great, great emphasis to the American people that it was a good agreement for many reasons, and one of them was that we had covered the young people who are not covered with $16 billion in new money. I want to close on this point, and I will have a lot more to say, but essentially, this amendment in no way will cause a cigarette tax to be imposed if that is the wish of the sponsors, because you cannot do it in a budget resolution and you cannot find the words ``cigarette tax'' in the boundaries of their amendment, because there is no way to do that. They just have numbers plugged in and they wish the Finance Committee will use the numbers the way they are giving their speeches on the floor. They are hoping that they will do that, but the Finance Committee does not have to. So what we are doing is, we are tying in kids' coverage, which is already in the agreement, to a national issue on smoking cigarettes. And it is a national issue. It is a terribly tough issue, but, essentially, they are unrelated in terms of the budget resolution. So what we are doing is asking for more money for a program that is already covered, with no assurance that it will be spent for that program, and we are calling for a tax increase, with no assurance that it will be a cigarette tax, but a real assurance that you will have cut the $85 billion that we are providing for net new taxes by $30 billion, just the mathematical effect of the amendment. I yield the floor at this time. Mr. HELMS. Mr. President, Senator Domenici is absolutely correct. If the Senator from Massachusetts wants to render nugatory the work of all the Senators who labored so long to produce a budget, his amendment is the way to do it. At stake, Mr. President, are the livelihoods of this country's tobacco farm families as Senators Kennedy and Hatch attempt to extract an additional $30 billion tax increase from the American taxpayers by upping the existing 24-cent excise tax to 67 cents. The impact of this proposal, if enacted, would not only devastate the Southeastern economy; it will harm the entire country. It will be harmful to the lives of thousands of farm families, to the manufacturing workers who stand to lose their jobs, to the retail-store owner and his employees, to the truck driver who delivers the product to market, to the farm implement dealer who supplies the tobacco farmer, to the schools financed by taxes levied on tobacco farmers, and on and on. Mr. President, this tax increase will cost thousands of fine North Carolinians their jobs; it will effectively destroy the livelihoods of thousands of small family tobacco farmers. According to American Economics Group, Inc., nearly 662,402 citizens are employed in the production, manufacturing, and marketing of tobacco. If [[Page S4788]] enacted, the 43-cent excise tax on tobacco products would abolish 43,000 jobs nationwide, and North Carolina alone would lose 17,849 jobs. Furthermore, any increase in the cigarette excise tax will fall disproportionally on lower- and middle-income consumers--the citizens least able to pay it. Those earning less than $30,000 annually already pay 5 times more in excise taxes than those earning $60,000 or more. Those families earning less than $30,000 pay a staggering 47 percent of all tobacco excise taxes, yet these families earn only 16 percent of national family income. Make no mistake about it--the tobacco tax is not a user fee as so often claimed by the proponents of this amendment--it is a tax increase. We all know that when excise taxes are increased on any product, sales of that product decrease. If tobacco revenues fall short of projections--which will certainly be the case because there will be a substantially smaller tax base--how will the shortfall be made up? More taxes? What other group will be singled out to shoulder this financial burden? Tobacco has been targeted for enormous tax increases because it is an easy way for this Government to take even more money out of the taxpayers' pockets. Smokers, tobacco farmers, and those who work in the tobacco industry should not be singled out to shoulder the burden of paying for the health care of uninsured children. The anti smoking zealots have made clear that they are willing to do almost anything in order to tax tobacco right out of existence. They do not care about the 18,000 people in North Carolina alone who stand to lose their jobs. The proponents of this amendment talk about all the children they are trying to insure with the revenues from this tax. Well, I can guarantee that they'll be able to add more uninsured children to that list if this tax is enacted. There will be a number of folks without work, and a number of children who will suffer because of it. Once we head down this road of using the taxing power of Government to discourage Americans from undertaking activities Congress and the White House find objectionable, or politically incorrect, where will it stop? This tax discriminates against an entire region, an entire industry, and all people who use tobacco products. Mr. FORD. Will the Senator yield me 10 minutes? Mr. DOMENICI. I yield 10 minutes to Senator Ford. Mr. FORD. I thank the Senator. Mr. President, I am quite proud of the record I have established over the years in support of programs that help children. No one in this Chamber is going to suggest that this Senator, this grandfather of five, takes second place to anyone when it comes to priorities affecting children. I have supported expanding educational opportunities ever since I came to the Senate. Nothing is more important for our children than education. I have supported full funding for Head Start and the WIC Program and expanding Medicaid coverage to poor children. I have supported child care programs. I have supported the expansion of the earned income tax credit. I have supported a child tax credit that will become, hopefully, a part of this budget. I have supported drug abuse funding to help children. I have supported reasonable environmental initiatives that improve the lives of our children. But this is not a debate about whether or not to provide funds for child health care. The budget agreement already includes $16 billion in additional funds for child health care. A vote for this budget agreement, as is, is a vote for this country's children. I support the budget agreement that was negotiated earlier because it strikes an important balance. It provides much-needed programs for children from education to health care. It provides much-needed tax relief for middle-income families, and it balances the budget by 2002. An enormous amount of what we spend in the Federal budget is about children, and I believe that is right because our children are the most important resource this country has. We have to balance a lot of competing priorities. There is virtually no end to what we could spend on educating our children, for instance, if money were no object, but money is an object, because we have to balance the size--and I underscore size--of Government with the appetite of our constituents to pay taxes. I thought the budget arrangement announced earlier struck a pretty fair balance. It protected a number of national priorities while balancing the budget. As I have always said, it includes $16 billion for children's health care over 5 years, an amount that we are told will cover approximately 5 million children. The budget deal assumes that there will be $135 billion in gross tax cuts offset by $50 billion in new revenues already. Now we look at the Kennedy-Hatch proposal. No matter how you look at it, this proposal undercuts the budget deal by changing the balance reached in that agreement. It requires the Federal Government to be $30 billion bigger in tax revenues and at least $20 billion bigger in spending programs. Tax-and-spend. So, with this amendment, there will only be $55 billion in net tax cuts. That is not the agreement I agreed to, the White House signed off on last week, and it is not the agreement that the American public has been led to believe they are getting. There are plenty of other problems with the substance of the Kennedy- Hatch amendment. I do not think the budget deal was about raising taxes. If this amendment is adopted, this budget deal will become more and more about raising taxes. Put another way, this amendment reduces the net tax cut in this bill by 35 percent, more than a third. It requires a 60-percent increase in revenue raisers in this bill over the next 5 years. Tax increase, revenue raisers. Let's quit talking about taxes a moment, and let's talk about the Kennedy-Hatch amendment. While it is true that States have the option of denying the new block grant under this amendment, once they decide to accept the money, several conditions and mandates--I underscore mandates--to the States apply. The Kennedy-Hatch proposal contains 27 separate provisions which state that a State ``shall'' or a State ``must'' or a State ``may not'' do something. States have restrictions on how to write their plan to cover children. Who must approve the plan before they receive the funds? HHS. Which children are eligible for health insurance subsidies? What must be covered under the health insurance policy? You have told the insurance companies what they have to write, who they can contract with--think about that now, who a State can contract with for policies and how--how much they must pay out of State funds to receive this money; what percentage of administrative costs they must cover-- mandates on the States. Having been there and done that, I understand what a Governor has to do, but, if faced with a choice of stretching dollars, a Governor might prefer to provide a very basic policy but to cover more children. Under the Kennedy-Hatch amendment, the benefits that must be covered are specified in the bill. What is the cost to the States? The Kennedy-Hatch amendment will cost the States up to $5 billion in additional matching funds, requiring them to raise their money or their taxes. The Kennedy-Hatch amendment will cause cigarette consumption to decline by a minimum of 10 percent. This means that States could lose between $4 and $7 billion in excise taxes if they do not participate in the bill, meaning that even more money must be made up somewhere else. For weeks and weeks and months and months, there has been a bill filed to get rid of Joe Camel, to get rid of Marlboro Man, to do away with advertising, to do all those things that FDA has regulated, and then just ask FDA to get out of adult choice. But people who will not help prevent youth from smoking are here with an issue, not solving the problem, they are here with an issue, because if they wanted to solve the problem, they had an opportunity months ago to get on a piece of legislation that would do exactly what FDA is now saying will be in regulations. So, Mr. President, don't let anyone say that they want to solve the problem. They, by their own words, have let thousands upon thousands upon thousands of kids die because months and months and months ago, they would not get on a bill to help stop youth smoking. Now they have an issue: They [[Page S4789]] want to raise taxes in order to stop youth from smoking. Well, it tells me something that they want the issue and not a solving of the problem. I yield the floor, Mr. President. Mr. KENNEDY. Mr. President, I yield myself 2 minutes. The PRESIDING OFFICER (Mr. Inhofe). The Senator from Massachusetts. Mr. KENNEDY. Mr. President, just for the benefit of the membership, this legislation is drafted in the historical, traditional way of amending the Budget Act. There should be no question as to exactly what this legislation is about. It is about providing health insurance for working families who cannot afford it. This is spelled out in the purpose of the amendment, which also states that it will be * * * ``financed by an increase in the tobacco tax.'' What we are voting on ought to be very clear. Second, Mr. President, I ask unanimous consent to have printed in the Record a joint tax review that states that even with the decline in potential tobacco use, there still will be $30 billion generated over the period of the next 5 years. This also takes into consideration the arguments of the Senator from Kentucky. There being no objection, the material was ordered to be printed in the Record, as follows: Joint Committee on Taxation, Washington, DC, May 19, 1997. Hon. Edward M. Kennedy, U.S. Senate, Washington, DC. Dear Senator Kennedy: This is a revenue estimate of your bill, S. 526, introduced with Senator Hatch. Under present law, the excise tax rates on tobacco products are as follows: small cigarettes, $12.00 per thousand; large cigarettes, $25.20 per thousand; small cigars, $1.125 per thousand; large cigars, 12.75 percent of wholesale price (but not more than $30.00 per thousand); snuff, $0.36 per pound; chewing tobacco, $0.12 per pound; pipe tobacco, $0.675 per pound; cigarette papers, $0.0075 per book containing more than 25 papers (with no tax on books containing less than 25 papers); and cigarette tubes, $0.015 per 50 tubes. Under present law, there is no tax on fine cut (roll-your-own) tobacco. Under the bill, the tax on small cigarettes would be increased by $0.43 per pack to $0.67 per pack. The excise taxes on other tobacco products are to be increased by the same percentage increase as the increase (179 percent) on small cigarettes except for the tax on snuff, which would be increased by 569 percent to $2.41 per pound and chewing tobacco which would be increased by 4,975 percent to $6.09 per pound. In addition, an excise tax is to be imposed on fine-cut tobacco equal to the tax on pipe tobacco. The proposed tax increases for small cigarettes and other tobacco products would become effective on October 1, 1997, with floor stocks taxes levied on that date. However, a credit to be applied against the floor stocks tax liability equal to $500 would be allowed every vendor responsible for the payment of floor stocks taxes. We estimate that the floor stocks tax credit would reduce fiscal year 1998 receipts by $400 million from what they otherwise would be. We estimate that this proposal would increase Federal fiscal year budget receipts are as follows:

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CONCURRENT RESOLUTION ON THE BUDGET
(Senate - May 21, 1997)

Text of this article available as: TXT PDF [Pages S4782-S4849] CONCURRENT RESOLUTION ON THE BUDGET The PRESIDING OFFICER (Mr. Enzi). The clerk will report the budget resolution. The assistant legislative clerk read as follows: A concurrent resolution (S. Con. Res. 27) setting forth the congressional budget for the United States Government for fiscal years 1998, 1999, 2000, 2001, and 2002. The Senate resumed consideration of the concurrent resolution. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Amendment No. 297 (Purpose: To provide affordable health coverage for low- and moderate- income children and for additional deficit reduction, financed by an increase in the tobacco tax; in addition to the amounts included in the bipartisan budget agreement for one or both of the following: (1) Medicaid, including outreach activities to identify and enroll eligible children and providing 12-month continuous eligibility; and also to restore Medicaid for current disabled children losing SSI because of the new, more strict definition of childhood eligibility; and (2) a program of capped mandatory grants to States to finance health insurance coverage for uninsured children) Mr. HATCH. I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The clerk read as follows: The Senator from Utah [Mr. Hatch], for himself, and Mr. Kennedy, proposes an amendment numbered 297. Mr. HATCH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: On page 3, line 3, increase the amount by 6,000,000,000. On page 3, line 4, increase the amount by 6,000,000,000. On page 3, line 5, increase the amount by 6,000,000,000. On page 3, line 6, increase the amount by 6,000,000,000. On page 3, line 7, increase the amount by 6,000,000,000. On page 3, line 11, increase the amount by 6,000,000,000. On page 3, line 12, increase the amount by 6,000,000,000. On page 3, line 13, increase the amount by 6,000,000,000. On page 3, line 14, increase the amount by 6,000,000,000. On page 3, line 15, increase the amount by 6,000,000,000. On page 4, line 4, increase the amount by 3,000,000,000. On page 4, line 5, increase the amount by 3,000,000,000. On page 4, line 6, increase the amount by 4,000,000,000. On page 4, line 7, increase the amount by 5,000,000,000. On page 4, line 8, increase the amount by 5,000,000,000. On page 4, line 12, increase the amount by 3,000,000,000. On page 4, line 13, increase the amount by 3,000,000,000. On page 4, line 14, increase the amount by 4,000,000,000. On page 4, line 15, increase the amount by 5,000,000,000. On page 4, line 16, increase the amount by 5,000,000,000. On page 4, line 19, increase the amount by 3,000,000,000. On page 4, line 20, increase the amount by 3,000,000,000. On page 4, line 21, increase the amount by 2,000,000,000. On page 4, line 22, increase the amount by 1,000,000,000. On page 4, line 23, increase the amount by 1,000,000,000. On page 5, line 1, increase the amount by 3,000,000,000. On page 5, line 2, increase the amount by 6,000,000,000. On page 5, line 3, increase the amount by 8,000,000,000. On page 5, line 4, increase the amount by 9,000,000,000. On page 5, line 5, increase the amount by 10,000,000,000. On page 23, line 8, increase the amount by 3,000,000,000. On page 23, line 9, increase the amount by 3,000,000,000. On page 23, line 15, increase the amount by 3,000,000,000. On page 23, line 16, increase the amount by 3,000,000,000. On page 23, line 22, increase the amount by 4,000,000,000. On page 23, line 23, increase the amount by 4,000,000,000. On page 24, line 5, increase the amount by 5,000,000,000. On page 24, line 6, increase the amount by 5,000,000,000. On page 24, line 12, increase the amount by 5,000,000,000. On page 24, line 13, increase the amount by 5,000,000,000. On page 39, line 22, increase the amount by 500,000,000. On page 39, line 23, increase the amount by 2,000,000,000. On page 40, line 16, increase the amount by 4,500,000,000. On page 40, line 17, increase the amount by 18,000,000,000. On page 41, line 7, increase the amount by 6,000,000,000. On page 41, line 8, increase the amount by 30,000,000,000. Mr. HATCH. Mr. President, I ask unanimous consent that the time on this amendment be allocated to me as the prime sponsor of the amendment. The PRESIDING OFFICER. That is the order. Mr. FORD. Mr. President, will the Senator yield for a question? Mr. HATCH. On the Senator's time. Mr. FORD. I don't have any time. Mr. HATCH. I will be glad to yield to the Senator. Mr. FORD. I want to know if this amendment is similar to 525 and 526 that you had as health care for children and a tax bill that is now combined? They are basically the same? Mr. HATCH. It is basically geared to get us to that point. Yes. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. DOMENICI. Mr. President, will the Senator yield for one observation on my time? Mr. HATCH. I will. Mr. DOMENICI. Mr. President, I want to make sure that the Senator, the prime sponsor, understands that in the unanimous-consent request following disposition of the Kennedy amendment, which I assume---- Mr. HATCH. This is not the Kennedy amendment. This is the Hatch- Kennedy amendment. Mr. DOMENICI. That language does not preclude a second-degree amendment. Mr. HATCH. That is correct. Mr. DOMENICI. The Senator understands that. Mr. HATCH. I understand that. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. HATCH. Mr. President, I sent this amendment to the desk on behalf of myself and Senator Kennedy. This is well known as the Hatch-Kennedy amendment. I think everyone in the Senate ought to know that. It is an amendment that we have worked out over a 6-month period, or longer, and one that I think deserves consideration in every sense of that term. The amendment that Senator Kennedy and I offer today addresses what I consider to be a top priority of this Congress: making sure America's kids are healthy. The Hatch-Kennedy amendment calls for an increase in the tobacco excise tax to fund additional spending for children's health insurance. We have made enactment of a bipartisan children's health insurance bill a top priority this Congress, and plan to press forward at every opportunity if the Senate does not act in a responsible manner. This amendment is the right thing to do, and I urge its adoption. Specifically, our amendment would raise $30 billion in revenues through a 43-cent tobacco excise tax increase. Twenty billion dollars will be used for services to uninsured kids, and $10 billion for deficit reduction. [[Page S4783]] We intend that the money be used for the same purposes as those outlined in the bipartisan budget agreement; that is, for Medicaid and for a mandatory capped State grant program to finance health insurance for uninsured children. Under our amendment, $18 billion in program funding will go to the Labor Committee, and $2 billion to the Finance Committee, to be added to the $16 billion already in the budget resolution. That means each committee will get $18 billion to work on complementary programs to help the poor and near poor. To pass this amendment--and this is an uphill battle we face--we need to have the will to do two things. First, we must recognize that we need to help children from America's working families, as well as the poorest of the poor. About 88 percent of uninsured children come from families where at least one parent is employed. Don't forget that. Eighty-eight percent of these kids live in a family where one parent works, at least. The majority of these kids will not be addressed by any Medicaid bill. Second, in order to help these forgotten children, we need to have the courage to take on some very powerful special interests. When we started this fight I knew that Big Tobacco would not just roll over and play dead. And they have not disappointed me. If we demonstrate one thing by this vote today let it be this: we are sending a message today that Senator Kennedy and I and the other supporters of this bill will stand up for children and against Big Tobacco. Senators, who do you stand with? Joe Camel, or Joey? That is what it comes down to. What the Senate must do today is decide whether we are going to protect Joe Camel, or whether we are going to protect Joey. Let our votes today be the answer. Now I am certain that those speaking in opposition to our amendment will offer a lot of complicated reasons why our amendment is deficient. But as they talk, ask yourself who should be protected: Joey or Joe Camel? Sometimes the logic of something is just so simple that no amount of obfuscation, legal mumbo-jumbo, technical economic jargon, and procedural objections can fool the American public. I expect that some will come to the floor today and say that this budget resolution is the wrong time and place for this legislation. One of their objections will be that the bill includes $10 billion in deficit reduction. Some will argue that this is not needed in a balanced budget document. Those who make that argument simply do not take into account the fact that the interest payments on the accumulated annual deficits--the $6 trillion national debt--now consume 15% of annual Federal spending. This is as much as we spend for our national defense. Having managed the floor debate for the balanced budget amendment that fell 1 vote short of the 67 necessary votes, I have a special place in my heart for the ``LD'' part of the CHILD bill: lowering the deficit. Once again, think of Joe Camel and Joey. Frankly, as a conservative Republican I am proud to have convinced so many Democrats to cosponsor legislation that provides $1 for deficit reduction for every $2 devoted to program costs. If this model is adopted in other areas, not only will we more quickly reach the goal of a balanced budget, but we will also be better able to face the formidable challenges of entitlement reform and financing the national debt. Our amendment has two very basic and extremely important goals. The Hatch-Kennedy healthy kids amendment benefits American families, working families so that they can get health care. The healthy kids amendment helps reduce the deficit and reduce our debt service requirements. Our amendment will help millions of kids get a healthy start in life. As it stands now, we know that too many American children do not get the benefits of health insurance. The General Accounting Office recently made a number of important observations about this problem. In House testimony, the GAO said: In summary, we have found that while most children have health insurance, almost 10 million children lack insurance. Between 1989 and 1995, the percentage of children with private coverage declined significantly--part of an overall decline in coverage of dependents through family health insurance policies. The GAO concluded: Had this decrease not occurred, nearly 5 million more children would have had private health insurance. From these observations of GAO, I think it is fair to say that there is a big problem in the area of children's health insurance, and unless we do something about it, it is bound to get bigger. Who are these 10 million children? These uninsured kids come from working families. At least 88 percent of those kids come from families where at least one parent is working. Many live in families whose income is just above the Medicaid limit, but they do not make enough money to provide health insurance for their kids. Who are the Hatch-Kennedy kids? I will tell you who they are. They are, in large part, the children of good, hard-working families who make too much for Medicaid and not enough to buy their own health insurance. This chart shows you that there is a pronounced spike in the number of uninsured Americans who live in that $20,000 to $30,000 working- class income bracket. This is the family income range of many of these families who stand to benefit from the Hatch-Kennedy amendment. It is clear to this Senator that there is a problem to be solved. These are uninsured Americans. Some are saying we do not need this amendment. The budget negotiators did a good job, in my opinion, in including a significant amount of new spending for children's health--$16 billion in this budget resolution. That is a good start, and I praised them for it. No question about it. But the fact is there are about 10 million kids in the United States without health insurance, and I believe that the budget resolution probably will not cover even half of them. I think it is important that my colleagues understand the Congressional Budget Office is coming in with very conservative estimates on the number of children who will be served under various congressional proposals. For example, the CBO, Congressional Budget Office, has estimated that the Medicaid 12-month, continuous eligibility proposal would cost $14 billion alone if implemented by every State. That alone is almost all of the money in this budget resolution. Or, if you look at it another way, the Federal share of Medicaid costs for a child is about $860 on average this year. According to the Employee Benefit Research Institute, there are 4.7 million uninsured children whose parents make less than 125 percent of the Federal poverty level. That is $19,500 for a family of four. How can they afford insurance? By simple calculation, to cover those kids under Medicaid would cost $4.2 billion, about $1 billion more a year than is included in this budget resolution, and that is just the Medicaid kids. There are 7 million here who are not. And this would leave the vast majority of children of working parents under 125 percent of poverty level uncovered. While I admit $16 billion is a substantial start and I commend my colleagues on the Budget Committee, it is just not enough to do the whole job. Many of us are also cosponsors of the Chafee-Rockefeller-Jeffords- Breaux CHIPS bill, which is estimated to cost at least $15 billion, perhaps even more. This Medicaid bill is targeted to help 5 million kids, including the 3 million or so Medicaid-eligible children who are not enrolled because they do not know enough to get enrolled. We see these two bills as compatible. The CHIPS bill improves basic Medicaid, and our bill would be added on top of that to take care of these uninsured kids who do not qualify. There obviously is a close connection between the two. That is why in our amendment we decided to divide the money equally between each of the two committees, Labor and Finance, and to work out an integrated approach. Let me also take a few minutes to explain my views about using a tobacco [[Page S4784]] tax as the revenue source for our amendment. There can be no doubt that smoking and tobacco use are major public health problems. By any measure they are costly. Smoking is our Nation's No. 1 preventable health cause of death. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. There are 3 million kids who smoke. Consider these smoking facts. Smoking causes cancer and is addictive. One out of five cancers is caused by smoking; four out of five lung cancers are caused by smoking; 3,000 kids are starting to smoke every day; 50 percent of all smokers begin before age 15, 90 percent before the age 18; 419,000 American smokers die annually. Just think about it. Of those 3,000 young Americans who start smoking every day, at least half of them are going to become nicotine addicts. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack and AIDS combined. In fact, cigarettes are a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires. This represented over 1,000 deaths in our society. Every day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. According to a 1994 CDC report, tobacco costs our society $100 billion annually--$50 billion in direct medical costs. Of 24 billion cigarette packs sold in 1993, $2.06 per pack in medical care costs. Of this, 89 cents was paid by public sources; $10 billion Medicare, $5 billion Medicaid, $4.75 billion other Federal, and $16.75 billion higher insurance premiums. Just think about that. The price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported for the first time that smoking causes cancer. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less and that the American people should keep more of their money that they earn in our economy. Yet the statistics about tobacco use and costs that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying for the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services for children, coupled with the significant deficit reduction component against my natural aversion to raising taxes, I come down in favor of this financing mechanism with the tobacco tax or, as I call it, a user fee because only those who smoke are going to pay this tax. And 50 percent of them, according to the recent polls, are for this tax realizing that smoking causes a lot of detriment to society. If we are going to commit ourselves to addressing the problem of adequate health care for children, then it is essential that we identify how this program is going to be funded. I knew I was going to take the heat on this one, but I strongly believed that it was the fiscally responsible thing to do, and I still think this is the case. Accordingly, let me pose to my colleagues this question. What do you believe is a better offset? From what program do you suggest we take the money? Now, I am willing to listen and discuss this issue but, quite frankly, I have not heard from anybody concerning a viable alternative financing source. Let us get to the real issue here. Smoking is dangerous for our public health, and it is dangerous for our economy. It hurts the kids we are trying to help. That is the crux of our amendment here today. Many of the critics of our proposal have seized on this amendment today to express concerns which were raised earlier about the Child Health Insurance and Lower Deficit Act. A lot of those charges against the bill are in error, as I am prepared to debate here today. But the fundamental question today is not should we pass the Hatch-Kennedy child bill. Rather, the more pertinent question before the body is should we do more for children's health? The answer, totally clear to this Senator, is ``most definitely.'' I consider children's health to be a top priority issue for this Congress. I think the American people expect that of us. My colleagues may be interested in a Wall Street Journal-NBC News poll taken between April 26 and 28 of this year. The question was posed as follows: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack and giving much of the money raised to help States provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? The response was astounding. I ask unanimous consent that it be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: Wall Street Journal/NBC News Poll, April 26-28, 1997 Question: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack, and giving much of the money raised to help states provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? [In percent] ------------------------------------------------------------------------ Not Favor Oppose sure ------------------------------------------------------------------------ All adults.................................. 72 24 4 Men......................................... 67 30 3 Women....................................... 76 20 4 Northeast................................... 73 20 7 Midwest..................................... 73 26 1 South....................................... 69 28 3 West........................................ 74 23 3 Whites...................................... 70 26 4 Blacks...................................... 80 16 4 Age 18 to 34................................ 73 25 2 Age 35 to 49................................ 74 23 3 Age 50 to 64................................ 66 30 4 Age 65 and over............................. 72 21 7 Under $20,000 income........................ 74 23 3 $20,000 to $30,000.......................... 76 21 3 $30,000 to 50,000........................... 70 28 2 Over $50,000................................ 70 26 4 Urban....................................... 76 21 3 Suburb/towns................................ 70 26 4 Rural....................................... 70 28 2 Registered voters........................... 73 23 4 Non-Registered adults....................... 65 32 3 Democrats................................... 79 18 3 Republicans................................. 67 29 4 Independents................................ 69 27 4 Clinton voters.............................. 80 17 3 Dole voters................................. 64 31 5 Liberals.................................... 79 19 2 Moderates................................... 79 19 2 Conservatives............................... 64 31 5 Professionals/Managers...................... 76 21 3 White collar workers........................ 77 20 3 Blue collar workers......................... 62 35 3 High School or less......................... 66 30 4 Some College................................ 75 22 3 College graduates........................... 75 21 4 ------------------------------------------------------------------------ Mr. HATCH. Mr. President, 72 percent of all adults responded that they favor this proposal and only 24 percent were opposed; 67 percent of all men approved of this proposal and 76 percent of all women were in favor. The results were remarkably consistent throughout each geographic region in the United States, across age groups and, indeed, income groups. The point is simple. This is an idea whose time has come. So to those who believe there is a better way to go, I earnestly solicit your views. Indeed, I will make an offer to every Member in this body. I want to work with each of you and with our leadership to address this issue in a responsible way. If changes need to be made, if we need to move toward a middle ground in order to get a proposal enacted, I will be an advocate for these changes. It is for this reason that Senator Kennedy and I initiated our discussions on this issue several months ago. The fact is that Senator Kennedy and I approach issues like these from vastly different ends of the political spectrum. That perhaps is what strengthens the product of our discussions on those issues, the fact that we can find common ground. I believe we desperately need to find that bipartisan common ground on an issue like child health insurance, an issue which matters to so many of all of our constituents. I think one of the lessons we have learned in the last 18 months is that the American public believes Congress is unnecessarily politicizing issues and sandbagging legislation in areas which beg for action. Children's health is an obvious example. I caution my colleagues not to be ashamed to work in a [[Page S4785]] bipartisan manner. Working across the aisle and knitting together political coalitions in order to get things done is an element of leadership, and I think it is what the public expects of all of us. I think that our approach is a true bipartisan partnership. Public health leaders back this approach. Six former Cabinet Secretaries of HHS or its predecessor, HEW, representing all Presidential administrations back to the Nixon administration support our amendment. I thank Secretaries Elliot Richardson, David Mathews, Joseph Califano, Richard Schweiker, Otis Bowen, and Louis Sullivan for their support and leadership in moving this legislation. I also want my colleagues to know that former Surgeons General C. Everett Koop, Julius Richmond, Paul Erlich, and Jesse Steinfield are backing this effort. Today is the time for we politicians to take the advice of these leaders in public health and vote to increase the tax on tobacco users in order to help children. Indeed, the budget compromise and the child bill plus the public's heightened sense of concern about the perils of tobacco are coming together to present a rare and historic opportunity for our society to help children get health insurance, further discourage tobacco use, especially among our young people, and target a sizable $10 billion for deficit reduction. This is a unique time, and we should make the most of it. I believe that we can and should strengthen Medicaid and create a new program for those children from working families who are not Medicaid eligible. That is what our amendment is intended to do. I will not use up all our time. Let us just keep this simple. Vote for Joey, not for Joe Camel. I reserve the remainder of my time. The PRESIDING OFFICER. Who yields time? Mr. KENNEDY addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Massachusetts. Mr. KENNEDY. I yield myself 10 minutes. Mr. President, I ask unanimous consent that Lauren Ewers be given privileges of the Senate floor during the pending debate on the budget resolution. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. KENNEDY. Mr. President, first of all, I commend my friend and colleague, Senator Hatch, for explaining the thrust of this legislation and the range of support that we have for it and the importance of it for working families. Let me just continue in the presentation. Mr. President, I join Senator Hatch in offering this amendment to guarantee a healthy start in life for every American child. Our amendment to the budget poses a clear choice for every Senator. Whose interests do you care about--the interests of America's children--or the interests of the big tobacco companies? Are you for Joe Camel and the Marlboro Man, or millions of children who lack adequate health care? Our amendment will make the Hatch-Kennedy children's health insurance plan part of the budget. Our goal is to make health insurance accessible and affordable for every child. The plan is financed by an increase of 43 cents a pack in the cigarette tax. That increase has the additional important benefit of reducing smoking by children. Our plan has broad bipartisan support--because health care for children is not a Republican issue or a Democratic issue. It is a human issue. Six former Secretaries of the Department of Health and Human Services and four former Surgeon Generals have endorsed the plan. These leaders served under Presidents Nixon, Ford, Carter, Reagan, and Bush. They all understand the importance of health insurance for children and decisive action to reduce smoking. They all understand that health care for children is an issue that should transcend political party and ideology. We all know the crisis we are facing in children's health. Ten and a half million children in this country--1 child in every 7--have no health insurance. Over a 2 year period, 23 million children--1 child in every 3--are without health insurance for substantial periods of time. Ninety percent of uninsured children are members of working families. Their families work hard--40 hours a week, 52 weeks a year--but all their hard work can't buy their children the health care they need, because they don't qualify for Medicaid and they can't afford to buy insurance on their own. Too many children are left out and left behind because they are uninsured. Too many parents face a cruel choice between putting food on the table, paying the rent, and giving their children the health care they need. For millions of children the only family doctor is the hospital emergency room. Each year 600,000 sick children do not receive any medical care, because they are uninsured. Each year, 400,000 children go without the medicine their doctors have prescribed because they have no insurance. Each year, 1\1/2\ million children go without the dental care they need, because they have no insurance. Each year, 600,000 uninsured children suffer from asthma and less than half see a physician even once. Each month, 1 million uninsured children suffer from sore throats with high fever. If they have strep throats, it can lead to heart disease and kidney disease if it's not treated. Each year, 300,000 uninsured children have chronic, untreated ear infections. Uninsured children are 50 percent more likely to die in the hospital than other children because their parents couldn't afford the health insurance they needed. We all know our country's shameful record on infant mortality--we rank behind 17 other industrialized countries. The lack of health care for children plagues the education system too. Children who are sick can't study well in school. Children who cannot see the blackboard because they have no eyeglasses can't succeed in the classroom. Children who cannot hear the teacher are unlikely to learn. Children who do not get a healthy start in life are unlikely to have a healthy future. And without healthy children, our country won't have a healthy future either--because children are the country's future. Passage of this amendment, combined with the money already included in the budget agreement, can end this crisis and make this the Congress in which we guarantee every child the opportunity for the healthy start in life that should be the birthright of every child. A budget is about setting priorities. There is no more important priority than health care for our children. The amendment provides the additional funds necessary to achieve our goal. It includes in the instructions to the Finance Committee the necessary adjustments to provide for a 43-cent-a-pack increase in the cigarette tax to finance the coverage. And it includes in the instructions to the Finance and Labor and Human Resources Committee the spending to implement this program. The Hatch-Kennedy legislation includes provisions that were common to bills introduced two Congresses ago by Republicans and Democrats alike. It will make health insurance coverage more affordable for every working family with uninsured children. It does so without creating any new Government mandates--on the States, on the insurance industry, or on individuals. The program is purely voluntary. Our legislation creates no new entitlement. Instead, it encourages family responsibility, by offering parents the help they need to purchase affordable health insurance for their children. The bill does not create any new bureaucracies--either Federal or State. The Federal Government already collects tobacco taxes, and all States have agencies that run their Medicaid, public health, and children's health insurance programs. Our legislation builds on what the States are already doing. Fourteen States have their own public programs on which our proposal is modeled. Another 17 States have private programs to subsidize the cost of child- only coverage for low-income families. Finally, our proposal builds on the private insurance industry. States choosing to participate will contract with private insurers to provide child-only private coverage. Subsidies will be available to help families purchase the coverage for their children, or to participate in employment-based health plans. [[Page S4786]] Even families not eligible for the financial assistance will be helped by this plan, since children's health insurance policies will be widely available in all States as a result of this proposal. Under our plan, $20 billion over the next 5 years will be available to expand health insurance for children, and an additional $10 billion will be available for deficit reduction beyond what is provided in the budget agreement. Paying for this program by an increase in the cigarette tax is both logical and practical. The link between smoking and children's health is obvious. If we do nothing, 5 million of today's children will die from smoking-related illnesses. For years, tobacco companies have cynically targeted the Nation's children. It is appropriate now to ask those companies and smokers to make a contribution to the cost of health insurance for children. By providing a specific financing source to cover the cost of the program we are doing the fiscally responsible thing. Some will oppose this legislation on the grounds that the $16 billion already included in the budget over the next 5 years is enough. But the fact is, the $16 billion is barely enough to cover the 3 million uninsured children already eligible for Medicaid but not participating. In total, it will cover only 3.7 million children of the 10\1/2\ million who are uninsured. Let me repeat that: It will cover only 3.7 million children of the 10 million uninsured. The budget agreement is an important step forward. But that improvement is not enough to help the seven million other children in hard-working families whose parents will still make too much to qualify for Medicaid but not enough to buy the health care their children need. The Hatch-Kennedy plan fills that large gap. Some will oppose this legislation on the grounds that the budget agreement was designed to cut taxes, not increase them. But a cigarette tax increase is a user fee and affirmative step to improve health care. It is not like other taxes. If you don't smoke, you don't pay the tax. We all know the heavy costs that tobacco companies and smokers inflict on all taxpayers. The average pack of cigarettes sells for $1.80 today--and it costs the Nation $3.90 in smoking-related costs. This proposal helps in a modest way to offset those costs. Every poll shows that, unlike other tax increases, raising the cigarette tax has overwhelming public support. The only people who don't like this increase are the tobacco companies and their lobbyists. Some will claim that this program will displace existing private insurance coverage. But our bill has strong safeguards to prevent this from happening. In fact, it has not occurred in the States that have already acted to implement similar programs. Some will argue that this program creates new mandates on States or new entitlements. But anyone who reads the bill will see that it does not. Participation is voluntary for States. The requirements for participation are no greater than for other, typical Federal grants to States for health care. The bill states clearly that it creates no new individual entitlement. Obviously, we are not voting today on the specific provisions of our legislation. There will be plenty of time for adjustment and improvement as it moves through Congress. But this vote on the budget resolution is the key vote that determines whether the overall budget will contain room for this program, financed by a tobacco tax increase, that will guarantee every family affordable coverage for their children. Big tobacco opposes this legislation. They are powerful and well- funded, but they do not deserve to succeed in their effort to block our amendment. A vote for this amendment is a vote for children's health care and a vote against the insidious and shameful poisoning of generations of children by the tobacco industry. Enough is enough is enough. An extraordinary 72 percent of the American people support this program. Republicans and Democrats, liberals and conservatives, low- income families and high-income families, North, South, East, and West--support is overwhelming. The question is whether democracy still works. The American people understand the choice we are making today-- and Congress should listen to their views. How can any Senator say no? I would like to close by telling my colleagues the story of the children in two families. Sylvia Pierce of Everett, MA, didn't think twice about taking one of her four children to the doctor, when her husband was alive. The family medical bills were covered under her husband's health insurance that he got through his job. When one of the children needed a shot, Pierce took the child to the doctor; if the baby had an earache, Pierce got a prescription. ``People don't realize what a luxury health insurance is,'' Pierce said. ``I know I didn't. I took it for granted. I never thought about it; I never worried about it.'' That all changed October 6, 1993, when her husband was murdered. In an instant, Pierce's life was changed forever. Gone was the father of her children, the family's main breadwinner--and its health insurance, leaving her four children, 13-year-old Leonard, 8-year-old Brian, 6-year-old Alyssa, and the baby, Jillian, unprotected. ``It was the middle of the winter, the worst time of year as far as kids and sickness are concerned,'' Pierce said. ``The kids were always catching something at school, and the baby had earaches and needed to have her immunizations. I kept postponing her shots because I didn't have the money. It was a very anxious time.'' ``I didn't choose to be in this situation * * * We've got to take care of our children. They can't speak for themselves so we have to speak for them.'' Maria lives in California. Shortly after Maria entered a new school as a third grader, her progress reports indicated that she seemed to be performing far below her potential. A health examination arranged by her school revealed that Maria had suffered multiple ear infections-- probably over a period of several years. Maria's father ran a small yard maintenance business, but was not able to afford health insurance for her. As a result, her parents were unable to obtain treatment for her ear infections. Without timely and thorough medical attention, scar tissue had built up, causing her to become deaf in one ear and have hearing loss in the other. Maria's inability to access affordable medical care affects not only her physical health but her educational development as well. Every day we delay means more children like Maria and like Leonard and Brian and Alyssa and Jillian suffer. It is time to say, ``enough.'' We have failed our children long enough. Children are the country's future. When we fail children, we also fail the country and its future. We all know what's at stake. For children, this vote is the most important vote we will cast in this entire Congress. I reserve the remainder of my time. Mr. DOMENICI addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from New Mexico. Mr. DOMENICI. Mr. President, I might just, first, ask that every Senator who is interested in this amendment and what it does, that they get a copy of the amendment. Look through it. Turn one sheet after another. See if you find mentioned in this document cigarette taxes. See if you see it in here. There is no mention of cigarette taxes in this. The reason is, you cannot, in a budget resolution, carry out a mandate that a cigarette tax be imposed. Let me repeat. If this amendment is adopted, there is no assurance that a cigarette tax will be imposed because you cannot do that in a budget resolution. So let us look at it, page by page. There is no mention of a cigarette tax. I repeat to Senator Hatch, my very good friend, that there is absolutely no assurance and no way, in a budget resolution, that you can instruct the Finance Committee of the Senate of the United States to levy any kind of tax specifically. You can change the total amount of taxation and say, ``We sure hope, when you change that, that you will pass a cigarette tax.'' I tell you that because the budget resolution is not the place to argue about what a tax package is going to look like specifically, especially with reference to imposing a new one. Second, for those who are interested in cutting taxes--I assume there are a whole bunch of people on our side who want to cut taxes, and I think there are [[Page S4787]] some on this side who want to cut taxes--if this amendment is adopted, while it does not mandate a cigarette tax, believe it or not, it cuts the taxes that you can cut by $30 billion. So that will be a wonderful accomplishment, especially by conservative Senators on this side of the aisle, that essentially the only thing you are assured they accomplish is that there will be a tax cut for the American people that will be less than we expected when we got this budget resolution passed. That is just the arithmetic of an instruction to the committee--just plain arithmetic. Having said that, there should be no bones about it, because of what I have just said with reference to a tax cut and with reference to adding more money to programs, this is in violation of the bipartisan agreement. Mr. President and fellow Senators, I do not know who is going to lobby this in behalf of the agreement. I do not know who is going to lobby from the White House or from the office of the minority leader. I do know Senator Lott and I intend to defeat this. So we are not only going to be lobbying, we are going to be working to see that this agreement that we entered into is kept and not violated by this amendment or any other amendment. For, make no bones about it, if you adopt this amendment, this agreement is wide open, if you believe anybody on this side of the aisle or that side of the aisle who wants to live under this is going to sit by for a major change like this. Essentially, the principal change is to reduce the amount of money you can cut taxes by $30 billion. Let me also say, fellow Senators, and anyone listening here today, whatever the wonderful discussions by well-meaning Senators--and they are all well-meaning, I say that to my friend, Senator Hatch, looking right at him, wonderfully intentioned--the issue of covering children in America who are not covered by insurance, listen up, Americans: They are all covered in this agreement. The President claims victory in this agreement. And guess what he says, Senator Kennedy, when he said this is a great agreement--5 million Americans, and he put up his hand with his 5 fingers like that--5 million Americans, young children, are going to be covered by health insurance because I made a deal to make sure that occurs. So let us make sure that the speeches about covering children, trying, in this debate, to tie that to raising a cigarette tax--and another day, another place, another way, perhaps many Senators would vote for a cigarette tax increase. Perhaps. Mr. KENNEDY. Will the Senator just yield on that point? Mr. DOMENICI. I just want to finish this thought. Mr. President, this cigarette tax is not needed. We need not break this agreement to cover children who are uncovered, in terms of health insurance, because they are covered. Let me tell you how much they are covered by. There is $16 billion--one-six--$16 billion in new money in this agreement that is there specifically and singularly to cover children who do not have insurance. All 5 million are covered by the $16 billion. Let me suggest that the White House in these negotiations put before us a plan to cover the 5 million young people, 5 million young children in America. They put forth a plan and they said it is going to be very difficult to find out how to cover these young children because we do not have any experience in it. We do not have any insurance policies out there to cover them. But $16 billion ought to do the job. Mr. KENNEDY. Will the Senator yield on my time for 1 minute? Mr. DOMENICI. Sure. I will be pleased to. Mr. KENNEDY. Mr. President, just to make it clear, in the budget is some $16 billion. The Medicaid costs are $860 per person. If you work that out, that covers 3.7 million. I think the President said ``up to 5 million.'' So, there is a major part of that group, particularly the working poor, who are not covered in that. I strongly support the point that the Senator has made in that we are going to see progress, and it is important progress. I think we ought to at least have an understanding. We have $16 billion and it costs $860 to cover each child. If you do the math, it is 3.7 million. The President, I think, said up to 5 million. I think, frankly, if you do the math, it is a little closer to 3.7 million. Mr. DOMENICI. Mr. President, fellow Senators, the truth of the matter is that nobody knows, nobody knows today how to cover these children who are uncovered in America. Nobody has a plan. Nobody knows which plan to use. Obviously, a very large number ought to be put under Medicaid. But they will not all fit under Medicaid, so another plan has to be developed for the rest of them. Frankly, this Senator is convinced that we can devise a plan in the Finance Committee of the U.S. Senate that will cover them all and will not even use the $16 billion. That is just as honest a statement as my friend from Massachusetts makes when he plucks a number, because we do not know what it is going to cost. Mr. President, do my fellow Senators know that if you went out 6 months ago across America and you said, ``Let's buy health insurance for some uninsured kids; let's just go around to the insurance agencies and say, `How about giving us an insurance bid,' '' there was no policy until about 2 months ago when a company decided to issue a policy. Nobody even knows, since it is the only one, whether its price is going to remain when they all start issuing them, for it is, indeed, not expensive to cover children; everybody knows that. One of the reasons given to cover them is it is not very expensive to cover them. All I am suggesting is that the President of the United States, in this bipartisan agreement, made great, great emphasis to the American people that it was a good agreement for many reasons, and one of them was that we had covered the young people who are not covered with $16 billion in new money. I want to close on this point, and I will have a lot more to say, but essentially, this amendment in no way will cause a cigarette tax to be imposed if that is the wish of the sponsors, because you cannot do it in a budget resolution and you cannot find the words ``cigarette tax'' in the boundaries of their amendment, because there is no way to do that. They just have numbers plugged in and they wish the Finance Committee will use the numbers the way they are giving their speeches on the floor. They are hoping that they will do that, but the Finance Committee does not have to. So what we are doing is, we are tying in kids' coverage, which is already in the agreement, to a national issue on smoking cigarettes. And it is a national issue. It is a terribly tough issue, but, essentially, they are unrelated in terms of the budget resolution. So what we are doing is asking for more money for a program that is already covered, with no assurance that it will be spent for that program, and we are calling for a tax increase, with no assurance that it will be a cigarette tax, but a real assurance that you will have cut the $85 billion that we are providing for net new taxes by $30 billion, just the mathematical effect of the amendment. I yield the floor at this time. Mr. HELMS. Mr. President, Senator Domenici is absolutely correct. If the Senator from Massachusetts wants to render nugatory the work of all the Senators who labored so long to produce a budget, his amendment is the way to do it. At stake, Mr. President, are the livelihoods of this country's tobacco farm families as Senators Kennedy and Hatch attempt to extract an additional $30 billion tax increase from the American taxpayers by upping the existing 24-cent excise tax to 67 cents. The impact of this proposal, if enacted, would not only devastate the Southeastern economy; it will harm the entire country. It will be harmful to the lives of thousands of farm families, to the manufacturing workers who stand to lose their jobs, to the retail-store owner and his employees, to the truck driver who delivers the product to market, to the farm implement dealer who supplies the tobacco farmer, to the schools financed by taxes levied on tobacco farmers, and on and on. Mr. President, this tax increase will cost thousands of fine North Carolinians their jobs; it will effectively destroy the livelihoods of thousands of small family tobacco farmers. According to American Economics Group, Inc., nearly 662,402 citizens are employed in the production, manufacturing, and marketing of tobacco. If [[Page S4788]] enacted, the 43-cent excise tax on tobacco products would abolish 43,000 jobs nationwide, and North Carolina alone would lose 17,849 jobs. Furthermore, any increase in the cigarette excise tax will fall disproportionally on lower- and middle-income consumers--the citizens least able to pay it. Those earning less than $30,000 annually already pay 5 times more in excise taxes than those earning $60,000 or more. Those families earning less than $30,000 pay a staggering 47 percent of all tobacco excise taxes, yet these families earn only 16 percent of national family income. Make no mistake about it--the tobacco tax is not a user fee as so often claimed by the proponents of this amendment--it is a tax increase. We all know that when excise taxes are increased on any product, sales of that product decrease. If tobacco revenues fall short of projections--which will certainly be the case because there will be a substantially smaller tax base--how will the shortfall be made up? More taxes? What other group will be singled out to shoulder this financial burden? Tobacco has been targeted for enormous tax increases because it is an easy way for this Government to take even more money out of the taxpayers' pockets. Smokers, tobacco farmers, and those who work in the tobacco industry should not be singled out to shoulder the burden of paying for the health care of uninsured children. The anti smoking zealots have made clear that they are willing to do almost anything in order to tax tobacco right out of existence. They do not care about the 18,000 people in North Carolina alone who stand to lose their jobs. The proponents of this amendment talk about all the children they are trying to insure with the revenues from this tax. Well, I can guarantee that they'll be able to add more uninsured children to that list if this tax is enacted. There will be a number of folks without work, and a number of children who will suffer because of it. Once we head down this road of using the taxing power of Government to discourage Americans from undertaking activities Congress and the White House find objectionable, or politically incorrect, where will it stop? This tax discriminates against an entire region, an entire industry, and all people who use tobacco products. Mr. FORD. Will the Senator yield me 10 minutes? Mr. DOMENICI. I yield 10 minutes to Senator Ford. Mr. FORD. I thank the Senator. Mr. President, I am quite proud of the record I have established over the years in support of programs that help children. No one in this Chamber is going to suggest that this Senator, this grandfather of five, takes second place to anyone when it comes to priorities affecting children. I have supported expanding educational opportunities ever since I came to the Senate. Nothing is more important for our children than education. I have supported full funding for Head Start and the WIC Program and expanding Medicaid coverage to poor children. I have supported child care programs. I have supported the expansion of the earned income tax credit. I have supported a child tax credit that will become, hopefully, a part of this budget. I have supported drug abuse funding to help children. I have supported reasonable environmental initiatives that improve the lives of our children. But this is not a debate about whether or not to provide funds for child health care. The budget agreement already includes $16 billion in additional funds for child health care. A vote for this budget agreement, as is, is a vote for this country's children. I support the budget agreement that was negotiated earlier because it strikes an important balance. It provides much-needed programs for children from education to health care. It provides much-needed tax relief for middle-income families, and it balances the budget by 2002. An enormous amount of what we spend in the Federal budget is about children, and I believe that is right because our children are the most important resource this country has. We have to balance a lot of competing priorities. There is virtually no end to what we could spend on educating our children, for instance, if money were no object, but money is an object, because we have to balance the size--and I underscore size--of Government with the appetite of our constituents to pay taxes. I thought the budget arrangement announced earlier struck a pretty fair balance. It protected a number of national priorities while balancing the budget. As I have always said, it includes $16 billion for children's health care over 5 years, an amount that we are told will cover approximately 5 million children. The budget deal assumes that there will be $135 billion in gross tax cuts offset by $50 billion in new revenues already. Now we look at the Kennedy-Hatch proposal. No matter how you look at it, this proposal undercuts the budget deal by changing the balance reached in that agreement. It requires the Federal Government to be $30 billion bigger in tax revenues and at least $20 billion bigger in spending programs. Tax-and-spend. So, with this amendment, there will only be $55 billion in net tax cuts. That is not the agreement I agreed to, the White House signed off on last week, and it is not the agreement that the American public has been led to believe they are getting. There are plenty of other problems with the substance of the Kennedy- Hatch amendment. I do not think the budget deal was about raising taxes. If this amendment is adopted, this budget deal will become more and more about raising taxes. Put another way, this amendment reduces the net tax cut in this bill by 35 percent, more than a third. It requires a 60-percent increase in revenue raisers in this bill over the next 5 years. Tax increase, revenue raisers. Let's quit talking about taxes a moment, and let's talk about the Kennedy-Hatch amendment. While it is true that States have the option of denying the new block grant under this amendment, once they decide to accept the money, several conditions and mandates--I underscore mandates--to the States apply. The Kennedy-Hatch proposal contains 27 separate provisions which state that a State ``shall'' or a State ``must'' or a State ``may not'' do something. States have restrictions on how to write their plan to cover children. Who must approve the plan before they receive the funds? HHS. Which children are eligible for health insurance subsidies? What must be covered under the health insurance policy? You have told the insurance companies what they have to write, who they can contract with--think about that now, who a State can contract with for policies and how--how much they must pay out of State funds to receive this money; what percentage of administrative costs they must cover-- mandates on the States. Having been there and done that, I understand what a Governor has to do, but, if faced with a choice of stretching dollars, a Governor might prefer to provide a very basic policy but to cover more children. Under the Kennedy-Hatch amendment, the benefits that must be covered are specified in the bill. What is the cost to the States? The Kennedy-Hatch amendment will cost the States up to $5 billion in additional matching funds, requiring them to raise their money or their taxes. The Kennedy-Hatch amendment will cause cigarette consumption to decline by a minimum of 10 percent. This means that States could lose between $4 and $7 billion in excise taxes if they do not participate in the bill, meaning that even more money must be made up somewhere else. For weeks and weeks and months and months, there has been a bill filed to get rid of Joe Camel, to get rid of Marlboro Man, to do away with advertising, to do all those things that FDA has regulated, and then just ask FDA to get out of adult choice. But people who will not help prevent youth from smoking are here with an issue, not solving the problem, they are here with an issue, because if they wanted to solve the problem, they had an opportunity months ago to get on a piece of legislation that would do exactly what FDA is now saying will be in regulations. So, Mr. President, don't let anyone say that they want to solve the problem. They, by their own words, have let thousands upon thousands upon thousands of kids die because months and months and months ago, they would not get on a bill to help stop youth smoking. Now they have an issue: They [[Page S4789]] want to raise taxes in order to stop youth from smoking. Well, it tells me something that they want the issue and not a solving of the problem. I yield the floor, Mr. President. Mr. KENNEDY. Mr. President, I yield myself 2 minutes. The PRESIDING OFFICER (Mr. Inhofe). The Senator from Massachusetts. Mr. KENNEDY. Mr. President, just for the benefit of the membership, this legislation is drafted in the historical, traditional way of amending the Budget Act. There should be no question as to exactly what this legislation is about. It is about providing health insurance for working families who cannot afford it. This is spelled out in the purpose of the amendment, which also states that it will be * * * ``financed by an increase in the tobacco tax.'' What we are voting on ought to be very clear. Second, Mr. President, I ask unanimous consent to have printed in the Record a joint tax review that states that even with the decline in potential tobacco use, there still will be $30 billion generated over the period of the next 5 years. This also takes into consideration the arguments of the Senator from Kentucky. There being no objection, the material was ordered to be printed in the Record, as follows: Joint Committee on Taxation, Washington, DC, May 19, 1997. Hon. Edward M. Kennedy, U.S. Senate, Washington, DC. Dear Senator Kennedy: This is a revenue estimate of your bill, S. 526, introduced with Senator Hatch. Under present law, the excise tax rates on tobacco products are as follows: small cigarettes, $12.00 per thousand; large cigarettes, $25.20 per thousand; small cigars, $1.125 per thousand; large cigars, 12.75 percent of wholesale price (but not more than $30.00 per thousand); snuff, $0.36 per pound; chewing tobacco, $0.12 per pound; pipe tobacco, $0.675 per pound; cigarette papers, $0.0075 per book containing more than 25 papers (with no tax on books containing less than 25 papers); and cigarette tubes, $0.015 per 50 tubes. Under present law, there is no tax on fine cut (roll-your-own) tobacco. Under the bill, the tax on small cigarettes would be increased by $0.43 per pack to $0.67 per pack. The excise taxes on other tobacco products are to be increased by the same percentage increase as the increase (179 percent) on small cigarettes except for the tax on snuff, which would be increased by 569 percent to $2.41 per pound and chewing tobacco which would be increased by 4,975 percent to $6.09 per pound. In addition, an excise tax is to be imposed on fine-cut tobacco equal to the tax on pipe tobacco. The proposed tax increases for small cigarettes and other tobacco products would become effective on October 1, 1997, with floor stocks taxes levied on that date. However, a credit to be applied against the floor stocks tax liability equal to $500 would be allowed every vendor responsible for the payment of floor stocks taxes. We estimate that the floor stocks tax credit would reduce fiscal year 1998 receipts by $400 million from what they otherwise would be. We estimate that this proposal would increase Federal fiscal year budget receipts are as follows:

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CONCURRENT RESOLUTION ON THE BUDGET
(Senate - May 21, 1997)

Text of this article available as: TXT PDF [Pages S4782-S4849] CONCURRENT RESOLUTION ON THE BUDGET The PRESIDING OFFICER (Mr. Enzi). The clerk will report the budget resolution. The assistant legislative clerk read as follows: A concurrent resolution (S. Con. Res. 27) setting forth the congressional budget for the United States Government for fiscal years 1998, 1999, 2000, 2001, and 2002. The Senate resumed consideration of the concurrent resolution. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Amendment No. 297 (Purpose: To provide affordable health coverage for low- and moderate- income children and for additional deficit reduction, financed by an increase in the tobacco tax; in addition to the amounts included in the bipartisan budget agreement for one or both of the following: (1) Medicaid, including outreach activities to identify and enroll eligible children and providing 12-month continuous eligibility; and also to restore Medicaid for current disabled children losing SSI because of the new, more strict definition of childhood eligibility; and (2) a program of capped mandatory grants to States to finance health insurance coverage for uninsured children) Mr. HATCH. I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The clerk read as follows: The Senator from Utah [Mr. Hatch], for himself, and Mr. Kennedy, proposes an amendment numbered 297. Mr. HATCH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: On page 3, line 3, increase the amount by 6,000,000,000. On page 3, line 4, increase the amount by 6,000,000,000. On page 3, line 5, increase the amount by 6,000,000,000. On page 3, line 6, increase the amount by 6,000,000,000. On page 3, line 7, increase the amount by 6,000,000,000. On page 3, line 11, increase the amount by 6,000,000,000. On page 3, line 12, increase the amount by 6,000,000,000. On page 3, line 13, increase the amount by 6,000,000,000. On page 3, line 14, increase the amount by 6,000,000,000. On page 3, line 15, increase the amount by 6,000,000,000. On page 4, line 4, increase the amount by 3,000,000,000. On page 4, line 5, increase the amount by 3,000,000,000. On page 4, line 6, increase the amount by 4,000,000,000. On page 4, line 7, increase the amount by 5,000,000,000. On page 4, line 8, increase the amount by 5,000,000,000. On page 4, line 12, increase the amount by 3,000,000,000. On page 4, line 13, increase the amount by 3,000,000,000. On page 4, line 14, increase the amount by 4,000,000,000. On page 4, line 15, increase the amount by 5,000,000,000. On page 4, line 16, increase the amount by 5,000,000,000. On page 4, line 19, increase the amount by 3,000,000,000. On page 4, line 20, increase the amount by 3,000,000,000. On page 4, line 21, increase the amount by 2,000,000,000. On page 4, line 22, increase the amount by 1,000,000,000. On page 4, line 23, increase the amount by 1,000,000,000. On page 5, line 1, increase the amount by 3,000,000,000. On page 5, line 2, increase the amount by 6,000,000,000. On page 5, line 3, increase the amount by 8,000,000,000. On page 5, line 4, increase the amount by 9,000,000,000. On page 5, line 5, increase the amount by 10,000,000,000. On page 23, line 8, increase the amount by 3,000,000,000. On page 23, line 9, increase the amount by 3,000,000,000. On page 23, line 15, increase the amount by 3,000,000,000. On page 23, line 16, increase the amount by 3,000,000,000. On page 23, line 22, increase the amount by 4,000,000,000. On page 23, line 23, increase the amount by 4,000,000,000. On page 24, line 5, increase the amount by 5,000,000,000. On page 24, line 6, increase the amount by 5,000,000,000. On page 24, line 12, increase the amount by 5,000,000,000. On page 24, line 13, increase the amount by 5,000,000,000. On page 39, line 22, increase the amount by 500,000,000. On page 39, line 23, increase the amount by 2,000,000,000. On page 40, line 16, increase the amount by 4,500,000,000. On page 40, line 17, increase the amount by 18,000,000,000. On page 41, line 7, increase the amount by 6,000,000,000. On page 41, line 8, increase the amount by 30,000,000,000. Mr. HATCH. Mr. President, I ask unanimous consent that the time on this amendment be allocated to me as the prime sponsor of the amendment. The PRESIDING OFFICER. That is the order. Mr. FORD. Mr. President, will the Senator yield for a question? Mr. HATCH. On the Senator's time. Mr. FORD. I don't have any time. Mr. HATCH. I will be glad to yield to the Senator. Mr. FORD. I want to know if this amendment is similar to 525 and 526 that you had as health care for children and a tax bill that is now combined? They are basically the same? Mr. HATCH. It is basically geared to get us to that point. Yes. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. DOMENICI. Mr. President, will the Senator yield for one observation on my time? Mr. HATCH. I will. Mr. DOMENICI. Mr. President, I want to make sure that the Senator, the prime sponsor, understands that in the unanimous-consent request following disposition of the Kennedy amendment, which I assume---- Mr. HATCH. This is not the Kennedy amendment. This is the Hatch- Kennedy amendment. Mr. DOMENICI. That language does not preclude a second-degree amendment. Mr. HATCH. That is correct. Mr. DOMENICI. The Senator understands that. Mr. HATCH. I understand that. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Senator from Utah. Mr. HATCH. Mr. President, I sent this amendment to the desk on behalf of myself and Senator Kennedy. This is well known as the Hatch-Kennedy amendment. I think everyone in the Senate ought to know that. It is an amendment that we have worked out over a 6-month period, or longer, and one that I think deserves consideration in every sense of that term. The amendment that Senator Kennedy and I offer today addresses what I consider to be a top priority of this Congress: making sure America's kids are healthy. The Hatch-Kennedy amendment calls for an increase in the tobacco excise tax to fund additional spending for children's health insurance. We have made enactment of a bipartisan children's health insurance bill a top priority this Congress, and plan to press forward at every opportunity if the Senate does not act in a responsible manner. This amendment is the right thing to do, and I urge its adoption. Specifically, our amendment would raise $30 billion in revenues through a 43-cent tobacco excise tax increase. Twenty billion dollars will be used for services to uninsured kids, and $10 billion for deficit reduction. [[Page S4783]] We intend that the money be used for the same purposes as those outlined in the bipartisan budget agreement; that is, for Medicaid and for a mandatory capped State grant program to finance health insurance for uninsured children. Under our amendment, $18 billion in program funding will go to the Labor Committee, and $2 billion to the Finance Committee, to be added to the $16 billion already in the budget resolution. That means each committee will get $18 billion to work on complementary programs to help the poor and near poor. To pass this amendment--and this is an uphill battle we face--we need to have the will to do two things. First, we must recognize that we need to help children from America's working families, as well as the poorest of the poor. About 88 percent of uninsured children come from families where at least one parent is employed. Don't forget that. Eighty-eight percent of these kids live in a family where one parent works, at least. The majority of these kids will not be addressed by any Medicaid bill. Second, in order to help these forgotten children, we need to have the courage to take on some very powerful special interests. When we started this fight I knew that Big Tobacco would not just roll over and play dead. And they have not disappointed me. If we demonstrate one thing by this vote today let it be this: we are sending a message today that Senator Kennedy and I and the other supporters of this bill will stand up for children and against Big Tobacco. Senators, who do you stand with? Joe Camel, or Joey? That is what it comes down to. What the Senate must do today is decide whether we are going to protect Joe Camel, or whether we are going to protect Joey. Let our votes today be the answer. Now I am certain that those speaking in opposition to our amendment will offer a lot of complicated reasons why our amendment is deficient. But as they talk, ask yourself who should be protected: Joey or Joe Camel? Sometimes the logic of something is just so simple that no amount of obfuscation, legal mumbo-jumbo, technical economic jargon, and procedural objections can fool the American public. I expect that some will come to the floor today and say that this budget resolution is the wrong time and place for this legislation. One of their objections will be that the bill includes $10 billion in deficit reduction. Some will argue that this is not needed in a balanced budget document. Those who make that argument simply do not take into account the fact that the interest payments on the accumulated annual deficits--the $6 trillion national debt--now consume 15% of annual Federal spending. This is as much as we spend for our national defense. Having managed the floor debate for the balanced budget amendment that fell 1 vote short of the 67 necessary votes, I have a special place in my heart for the ``LD'' part of the CHILD bill: lowering the deficit. Once again, think of Joe Camel and Joey. Frankly, as a conservative Republican I am proud to have convinced so many Democrats to cosponsor legislation that provides $1 for deficit reduction for every $2 devoted to program costs. If this model is adopted in other areas, not only will we more quickly reach the goal of a balanced budget, but we will also be better able to face the formidable challenges of entitlement reform and financing the national debt. Our amendment has two very basic and extremely important goals. The Hatch-Kennedy healthy kids amendment benefits American families, working families so that they can get health care. The healthy kids amendment helps reduce the deficit and reduce our debt service requirements. Our amendment will help millions of kids get a healthy start in life. As it stands now, we know that too many American children do not get the benefits of health insurance. The General Accounting Office recently made a number of important observations about this problem. In House testimony, the GAO said: In summary, we have found that while most children have health insurance, almost 10 million children lack insurance. Between 1989 and 1995, the percentage of children with private coverage declined significantly--part of an overall decline in coverage of dependents through family health insurance policies. The GAO concluded: Had this decrease not occurred, nearly 5 million more children would have had private health insurance. From these observations of GAO, I think it is fair to say that there is a big problem in the area of children's health insurance, and unless we do something about it, it is bound to get bigger. Who are these 10 million children? These uninsured kids come from working families. At least 88 percent of those kids come from families where at least one parent is working. Many live in families whose income is just above the Medicaid limit, but they do not make enough money to provide health insurance for their kids. Who are the Hatch-Kennedy kids? I will tell you who they are. They are, in large part, the children of good, hard-working families who make too much for Medicaid and not enough to buy their own health insurance. This chart shows you that there is a pronounced spike in the number of uninsured Americans who live in that $20,000 to $30,000 working- class income bracket. This is the family income range of many of these families who stand to benefit from the Hatch-Kennedy amendment. It is clear to this Senator that there is a problem to be solved. These are uninsured Americans. Some are saying we do not need this amendment. The budget negotiators did a good job, in my opinion, in including a significant amount of new spending for children's health--$16 billion in this budget resolution. That is a good start, and I praised them for it. No question about it. But the fact is there are about 10 million kids in the United States without health insurance, and I believe that the budget resolution probably will not cover even half of them. I think it is important that my colleagues understand the Congressional Budget Office is coming in with very conservative estimates on the number of children who will be served under various congressional proposals. For example, the CBO, Congressional Budget Office, has estimated that the Medicaid 12-month, continuous eligibility proposal would cost $14 billion alone if implemented by every State. That alone is almost all of the money in this budget resolution. Or, if you look at it another way, the Federal share of Medicaid costs for a child is about $860 on average this year. According to the Employee Benefit Research Institute, there are 4.7 million uninsured children whose parents make less than 125 percent of the Federal poverty level. That is $19,500 for a family of four. How can they afford insurance? By simple calculation, to cover those kids under Medicaid would cost $4.2 billion, about $1 billion more a year than is included in this budget resolution, and that is just the Medicaid kids. There are 7 million here who are not. And this would leave the vast majority of children of working parents under 125 percent of poverty level uncovered. While I admit $16 billion is a substantial start and I commend my colleagues on the Budget Committee, it is just not enough to do the whole job. Many of us are also cosponsors of the Chafee-Rockefeller-Jeffords- Breaux CHIPS bill, which is estimated to cost at least $15 billion, perhaps even more. This Medicaid bill is targeted to help 5 million kids, including the 3 million or so Medicaid-eligible children who are not enrolled because they do not know enough to get enrolled. We see these two bills as compatible. The CHIPS bill improves basic Medicaid, and our bill would be added on top of that to take care of these uninsured kids who do not qualify. There obviously is a close connection between the two. That is why in our amendment we decided to divide the money equally between each of the two committees, Labor and Finance, and to work out an integrated approach. Let me also take a few minutes to explain my views about using a tobacco [[Page S4784]] tax as the revenue source for our amendment. There can be no doubt that smoking and tobacco use are major public health problems. By any measure they are costly. Smoking is our Nation's No. 1 preventable health cause of death. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. There are 3 million kids who smoke. Consider these smoking facts. Smoking causes cancer and is addictive. One out of five cancers is caused by smoking; four out of five lung cancers are caused by smoking; 3,000 kids are starting to smoke every day; 50 percent of all smokers begin before age 15, 90 percent before the age 18; 419,000 American smokers die annually. Just think about it. Of those 3,000 young Americans who start smoking every day, at least half of them are going to become nicotine addicts. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack and AIDS combined. In fact, cigarettes are a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires. This represented over 1,000 deaths in our society. Every day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. According to a 1994 CDC report, tobacco costs our society $100 billion annually--$50 billion in direct medical costs. Of 24 billion cigarette packs sold in 1993, $2.06 per pack in medical care costs. Of this, 89 cents was paid by public sources; $10 billion Medicare, $5 billion Medicaid, $4.75 billion other Federal, and $16.75 billion higher insurance premiums. Just think about that. The price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported for the first time that smoking causes cancer. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less and that the American people should keep more of their money that they earn in our economy. Yet the statistics about tobacco use and costs that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying for the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services for children, coupled with the significant deficit reduction component against my natural aversion to raising taxes, I come down in favor of this financing mechanism with the tobacco tax or, as I call it, a user fee because only those who smoke are going to pay this tax. And 50 percent of them, according to the recent polls, are for this tax realizing that smoking causes a lot of detriment to society. If we are going to commit ourselves to addressing the problem of adequate health care for children, then it is essential that we identify how this program is going to be funded. I knew I was going to take the heat on this one, but I strongly believed that it was the fiscally responsible thing to do, and I still think this is the case. Accordingly, let me pose to my colleagues this question. What do you believe is a better offset? From what program do you suggest we take the money? Now, I am willing to listen and discuss this issue but, quite frankly, I have not heard from anybody concerning a viable alternative financing source. Let us get to the real issue here. Smoking is dangerous for our public health, and it is dangerous for our economy. It hurts the kids we are trying to help. That is the crux of our amendment here today. Many of the critics of our proposal have seized on this amendment today to express concerns which were raised earlier about the Child Health Insurance and Lower Deficit Act. A lot of those charges against the bill are in error, as I am prepared to debate here today. But the fundamental question today is not should we pass the Hatch-Kennedy child bill. Rather, the more pertinent question before the body is should we do more for children's health? The answer, totally clear to this Senator, is ``most definitely.'' I consider children's health to be a top priority issue for this Congress. I think the American people expect that of us. My colleagues may be interested in a Wall Street Journal-NBC News poll taken between April 26 and 28 of this year. The question was posed as follows: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack and giving much of the money raised to help States provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? The response was astounding. I ask unanimous consent that it be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: Wall Street Journal/NBC News Poll, April 26-28, 1997 Question: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack, and giving much of the money raised to help states provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? [In percent] ------------------------------------------------------------------------ Not Favor Oppose sure ------------------------------------------------------------------------ All adults.................................. 72 24 4 Men......................................... 67 30 3 Women....................................... 76 20 4 Northeast................................... 73 20 7 Midwest..................................... 73 26 1 South....................................... 69 28 3 West........................................ 74 23 3 Whites...................................... 70 26 4 Blacks...................................... 80 16 4 Age 18 to 34................................ 73 25 2 Age 35 to 49................................ 74 23 3 Age 50 to 64................................ 66 30 4 Age 65 and over............................. 72 21 7 Under $20,000 income........................ 74 23 3 $20,000 to $30,000.......................... 76 21 3 $30,000 to 50,000........................... 70 28 2 Over $50,000................................ 70 26 4 Urban....................................... 76 21 3 Suburb/towns................................ 70 26 4 Rural....................................... 70 28 2 Registered voters........................... 73 23 4 Non-Registered adults....................... 65 32 3 Democrats................................... 79 18 3 Republicans................................. 67 29 4 Independents................................ 69 27 4 Clinton voters.............................. 80 17 3 Dole voters................................. 64 31 5 Liberals.................................... 79 19 2 Moderates................................... 79 19 2 Conservatives............................... 64 31 5 Professionals/Managers...................... 76 21 3 White collar workers........................ 77 20 3 Blue collar workers......................... 62 35 3 High School or less......................... 66 30 4 Some College................................ 75 22 3 College graduates........................... 75 21 4 ------------------------------------------------------------------------ Mr. HATCH. Mr. President, 72 percent of all adults responded that they favor this proposal and only 24 percent were opposed; 67 percent of all men approved of this proposal and 76 percent of all women were in favor. The results were remarkably consistent throughout each geographic region in the United States, across age groups and, indeed, income groups. The point is simple. This is an idea whose time has come. So to those who believe there is a better way to go, I earnestly solicit your views. Indeed, I will make an offer to every Member in this body. I want to work with each of you and with our leadership to address this issue in a responsible way. If changes need to be made, if we need to move toward a middle ground in order to get a proposal enacted, I will be an advocate for these changes. It is for this reason that Senator Kennedy and I initiated our discussions on this issue several months ago. The fact is that Senator Kennedy and I approach issues like these from vastly different ends of the political spectrum. That perhaps is what strengthens the product of our discussions on those issues, the fact that we can find common ground. I believe we desperately need to find that bipartisan common ground on an issue like child health insurance, an issue which matters to so many of all of our constituents. I think one of the lessons we have learned in the last 18 months is that the American public believes Congress is unnecessarily politicizing issues and sandbagging legislation in areas which beg for action. Children's health is an obvious example. I caution my colleagues not to be ashamed to work in a [[Page S4785]] bipartisan manner. Working across the aisle and knitting together political coalitions in order to get things done is an element of leadership, and I think it is what the public expects of all of us. I think that our approach is a true bipartisan partnership. Public health leaders back this approach. Six former Cabinet Secretaries of HHS or its predecessor, HEW, representing all Presidential administrations back to the Nixon administration support our amendment. I thank Secretaries Elliot Richardson, David Mathews, Joseph Califano, Richard Schweiker, Otis Bowen, and Louis Sullivan for their support and leadership in moving this legislation. I also want my colleagues to know that former Surgeons General C. Everett Koop, Julius Richmond, Paul Erlich, and Jesse Steinfield are backing this effort. Today is the time for we politicians to take the advice of these leaders in public health and vote to increase the tax on tobacco users in order to help children. Indeed, the budget compromise and the child bill plus the public's heightened sense of concern about the perils of tobacco are coming together to present a rare and historic opportunity for our society to help children get health insurance, further discourage tobacco use, especially among our young people, and target a sizable $10 billion for deficit reduction. This is a unique time, and we should make the most of it. I believe that we can and should strengthen Medicaid and create a new program for those children from working families who are not Medicaid eligible. That is what our amendment is intended to do. I will not use up all our time. Let us just keep this simple. Vote for Joey, not for Joe Camel. I reserve the remainder of my time. The PRESIDING OFFICER. Who yields time? Mr. KENNEDY addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Massachusetts. Mr. KENNEDY. I yield myself 10 minutes. Mr. President, I ask unanimous consent that Lauren Ewers be given privileges of the Senate floor during the pending debate on the budget resolution. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. KENNEDY. Mr. President, first of all, I commend my friend and colleague, Senator Hatch, for explaining the thrust of this legislation and the range of support that we have for it and the importance of it for working families. Let me just continue in the presentation. Mr. President, I join Senator Hatch in offering this amendment to guarantee a healthy start in life for every American child. Our amendment to the budget poses a clear choice for every Senator. Whose interests do you care about--the interests of America's children--or the interests of the big tobacco companies? Are you for Joe Camel and the Marlboro Man, or millions of children who lack adequate health care? Our amendment will make the Hatch-Kennedy children's health insurance plan part of the budget. Our goal is to make health insurance accessible and affordable for every child. The plan is financed by an increase of 43 cents a pack in the cigarette tax. That increase has the additional important benefit of reducing smoking by children. Our plan has broad bipartisan support--because health care for children is not a Republican issue or a Democratic issue. It is a human issue. Six former Secretaries of the Department of Health and Human Services and four former Surgeon Generals have endorsed the plan. These leaders served under Presidents Nixon, Ford, Carter, Reagan, and Bush. They all understand the importance of health insurance for children and decisive action to reduce smoking. They all understand that health care for children is an issue that should transcend political party and ideology. We all know the crisis we are facing in children's health. Ten and a half million children in this country--1 child in every 7--have no health insurance. Over a 2 year period, 23 million children--1 child in every 3--are without health insurance for substantial periods of time. Ninety percent of uninsured children are members of working families. Their families work hard--40 hours a week, 52 weeks a year--but all their hard work can't buy their children the health care they need, because they don't qualify for Medicaid and they can't afford to buy insurance on their own. Too many children are left out and left behind because they are uninsured. Too many parents face a cruel choice between putting food on the table, paying the rent, and giving their children the health care they need. For millions of children the only family doctor is the hospital emergency room. Each year 600,000 sick children do not receive any medical care, because they are uninsured. Each year, 400,000 children go without the medicine their doctors have prescribed because they have no insurance. Each year, 1\1/2\ million children go without the dental care they need, because they have no insurance. Each year, 600,000 uninsured children suffer from asthma and less than half see a physician even once. Each month, 1 million uninsured children suffer from sore throats with high fever. If they have strep throats, it can lead to heart disease and kidney disease if it's not treated. Each year, 300,000 uninsured children have chronic, untreated ear infections. Uninsured children are 50 percent more likely to die in the hospital than other children because their parents couldn't afford the health insurance they needed. We all know our country's shameful record on infant mortality--we rank behind 17 other industrialized countries. The lack of health care for children plagues the education system too. Children who are sick can't study well in school. Children who cannot see the blackboard because they have no eyeglasses can't succeed in the classroom. Children who cannot hear the teacher are unlikely to learn. Children who do not get a healthy start in life are unlikely to have a healthy future. And without healthy children, our country won't have a healthy future either--because children are the country's future. Passage of this amendment, combined with the money already included in the budget agreement, can end this crisis and make this the Congress in which we guarantee every child the opportunity for the healthy start in life that should be the birthright of every child. A budget is about setting priorities. There is no more important priority than health care for our children. The amendment provides the additional funds necessary to achieve our goal. It includes in the instructions to the Finance Committee the necessary adjustments to provide for a 43-cent-a-pack increase in the cigarette tax to finance the coverage. And it includes in the instructions to the Finance and Labor and Human Resources Committee the spending to implement this program. The Hatch-Kennedy legislation includes provisions that were common to bills introduced two Congresses ago by Republicans and Democrats alike. It will make health insurance coverage more affordable for every working family with uninsured children. It does so without creating any new Government mandates--on the States, on the insurance industry, or on individuals. The program is purely voluntary. Our legislation creates no new entitlement. Instead, it encourages family responsibility, by offering parents the help they need to purchase affordable health insurance for their children. The bill does not create any new bureaucracies--either Federal or State. The Federal Government already collects tobacco taxes, and all States have agencies that run their Medicaid, public health, and children's health insurance programs. Our legislation builds on what the States are already doing. Fourteen States have their own public programs on which our proposal is modeled. Another 17 States have private programs to subsidize the cost of child- only coverage for low-income families. Finally, our proposal builds on the private insurance industry. States choosing to participate will contract with private insurers to provide child-only private coverage. Subsidies will be available to help families purchase the coverage for their children, or to participate in employment-based health plans. [[Page S4786]] Even families not eligible for the financial assistance will be helped by this plan, since children's health insurance policies will be widely available in all States as a result of this proposal. Under our plan, $20 billion over the next 5 years will be available to expand health insurance for children, and an additional $10 billion will be available for deficit reduction beyond what is provided in the budget agreement. Paying for this program by an increase in the cigarette tax is both logical and practical. The link between smoking and children's health is obvious. If we do nothing, 5 million of today's children will die from smoking-related illnesses. For years, tobacco companies have cynically targeted the Nation's children. It is appropriate now to ask those companies and smokers to make a contribution to the cost of health insurance for children. By providing a specific financing source to cover the cost of the program we are doing the fiscally responsible thing. Some will oppose this legislation on the grounds that the $16 billion already included in the budget over the next 5 years is enough. But the fact is, the $16 billion is barely enough to cover the 3 million uninsured children already eligible for Medicaid but not participating. In total, it will cover only 3.7 million children of the 10\1/2\ million who are uninsured. Let me repeat that: It will cover only 3.7 million children of the 10 million uninsured. The budget agreement is an important step forward. But that improvement is not enough to help the seven million other children in hard-working families whose parents will still make too much to qualify for Medicaid but not enough to buy the health care their children need. The Hatch-Kennedy plan fills that large gap. Some will oppose this legislation on the grounds that the budget agreement was designed to cut taxes, not increase them. But a cigarette tax increase is a user fee and affirmative step to improve health care. It is not like other taxes. If you don't smoke, you don't pay the tax. We all know the heavy costs that tobacco companies and smokers inflict on all taxpayers. The average pack of cigarettes sells for $1.80 today--and it costs the Nation $3.90 in smoking-related costs. This proposal helps in a modest way to offset those costs. Every poll shows that, unlike other tax increases, raising the cigarette tax has overwhelming public support. The only people who don't like this increase are the tobacco companies and their lobbyists. Some will claim that this program will displace existing private insurance coverage. But our bill has strong safeguards to prevent this from happening. In fact, it has not occurred in the States that have already acted to implement similar programs. Some will argue that this program creates new mandates on States or new entitlements. But anyone who reads the bill will see that it does not. Participation is voluntary for States. The requirements for participation are no greater than for other, typical Federal grants to States for health care. The bill states clearly that it creates no new individual entitlement. Obviously, we are not voting today on the specific provisions of our legislation. There will be plenty of time for adjustment and improvement as it moves through Congress. But this vote on the budget resolution is the key vote that determines whether the overall budget will contain room for this program, financed by a tobacco tax increase, that will guarantee every family affordable coverage for their children. Big tobacco opposes this legislation. They are powerful and well- funded, but they do not deserve to succeed in their effort to block our amendment. A vote for this amendment is a vote for children's health care and a vote against the insidious and shameful poisoning of generations of children by the tobacco industry. Enough is enough is enough. An extraordinary 72 percent of the American people support this program. Republicans and Democrats, liberals and conservatives, low- income families and high-income families, North, South, East, and West--support is overwhelming. The question is whether democracy still works. The American people understand the choice we are making today-- and Congress should listen to their views. How can any Senator say no? I would like to close by telling my colleagues the story of the children in two families. Sylvia Pierce of Everett, MA, didn't think twice about taking one of her four children to the doctor, when her husband was alive. The family medical bills were covered under her husband's health insurance that he got through his job. When one of the children needed a shot, Pierce took the child to the doctor; if the baby had an earache, Pierce got a prescription. ``People don't realize what a luxury health insurance is,'' Pierce said. ``I know I didn't. I took it for granted. I never thought about it; I never worried about it.'' That all changed October 6, 1993, when her husband was murdered. In an instant, Pierce's life was changed forever. Gone was the father of her children, the family's main breadwinner--and its health insurance, leaving her four children, 13-year-old Leonard, 8-year-old Brian, 6-year-old Alyssa, and the baby, Jillian, unprotected. ``It was the middle of the winter, the worst time of year as far as kids and sickness are concerned,'' Pierce said. ``The kids were always catching something at school, and the baby had earaches and needed to have her immunizations. I kept postponing her shots because I didn't have the money. It was a very anxious time.'' ``I didn't choose to be in this situation * * * We've got to take care of our children. They can't speak for themselves so we have to speak for them.'' Maria lives in California. Shortly after Maria entered a new school as a third grader, her progress reports indicated that she seemed to be performing far below her potential. A health examination arranged by her school revealed that Maria had suffered multiple ear infections-- probably over a period of several years. Maria's father ran a small yard maintenance business, but was not able to afford health insurance for her. As a result, her parents were unable to obtain treatment for her ear infections. Without timely and thorough medical attention, scar tissue had built up, causing her to become deaf in one ear and have hearing loss in the other. Maria's inability to access affordable medical care affects not only her physical health but her educational development as well. Every day we delay means more children like Maria and like Leonard and Brian and Alyssa and Jillian suffer. It is time to say, ``enough.'' We have failed our children long enough. Children are the country's future. When we fail children, we also fail the country and its future. We all know what's at stake. For children, this vote is the most important vote we will cast in this entire Congress. I reserve the remainder of my time. Mr. DOMENICI addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from New Mexico. Mr. DOMENICI. Mr. President, I might just, first, ask that every Senator who is interested in this amendment and what it does, that they get a copy of the amendment. Look through it. Turn one sheet after another. See if you find mentioned in this document cigarette taxes. See if you see it in here. There is no mention of cigarette taxes in this. The reason is, you cannot, in a budget resolution, carry out a mandate that a cigarette tax be imposed. Let me repeat. If this amendment is adopted, there is no assurance that a cigarette tax will be imposed because you cannot do that in a budget resolution. So let us look at it, page by page. There is no mention of a cigarette tax. I repeat to Senator Hatch, my very good friend, that there is absolutely no assurance and no way, in a budget resolution, that you can instruct the Finance Committee of the Senate of the United States to levy any kind of tax specifically. You can change the total amount of taxation and say, ``We sure hope, when you change that, that you will pass a cigarette tax.'' I tell you that because the budget resolution is not the place to argue about what a tax package is going to look like specifically, especially with reference to imposing a new one. Second, for those who are interested in cutting taxes--I assume there are a whole bunch of people on our side who want to cut taxes, and I think there are [[Page S4787]] some on this side who want to cut taxes--if this amendment is adopted, while it does not mandate a cigarette tax, believe it or not, it cuts the taxes that you can cut by $30 billion. So that will be a wonderful accomplishment, especially by conservative Senators on this side of the aisle, that essentially the only thing you are assured they accomplish is that there will be a tax cut for the American people that will be less than we expected when we got this budget resolution passed. That is just the arithmetic of an instruction to the committee--just plain arithmetic. Having said that, there should be no bones about it, because of what I have just said with reference to a tax cut and with reference to adding more money to programs, this is in violation of the bipartisan agreement. Mr. President and fellow Senators, I do not know who is going to lobby this in behalf of the agreement. I do not know who is going to lobby from the White House or from the office of the minority leader. I do know Senator Lott and I intend to defeat this. So we are not only going to be lobbying, we are going to be working to see that this agreement that we entered into is kept and not violated by this amendment or any other amendment. For, make no bones about it, if you adopt this amendment, this agreement is wide open, if you believe anybody on this side of the aisle or that side of the aisle who wants to live under this is going to sit by for a major change like this. Essentially, the principal change is to reduce the amount of money you can cut taxes by $30 billion. Let me also say, fellow Senators, and anyone listening here today, whatever the wonderful discussions by well-meaning Senators--and they are all well-meaning, I say that to my friend, Senator Hatch, looking right at him, wonderfully intentioned--the issue of covering children in America who are not covered by insurance, listen up, Americans: They are all covered in this agreement. The President claims victory in this agreement. And guess what he says, Senator Kennedy, when he said this is a great agreement--5 million Americans, and he put up his hand with his 5 fingers like that--5 million Americans, young children, are going to be covered by health insurance because I made a deal to make sure that occurs. So let us make sure that the speeches about covering children, trying, in this debate, to tie that to raising a cigarette tax--and another day, another place, another way, perhaps many Senators would vote for a cigarette tax increase. Perhaps. Mr. KENNEDY. Will the Senator just yield on that point? Mr. DOMENICI. I just want to finish this thought. Mr. President, this cigarette tax is not needed. We need not break this agreement to cover children who are uncovered, in terms of health insurance, because they are covered. Let me tell you how much they are covered by. There is $16 billion--one-six--$16 billion in new money in this agreement that is there specifically and singularly to cover children who do not have insurance. All 5 million are covered by the $16 billion. Let me suggest that the White House in these negotiations put before us a plan to cover the 5 million young people, 5 million young children in America. They put forth a plan and they said it is going to be very difficult to find out how to cover these young children because we do not have any experience in it. We do not have any insurance policies out there to cover them. But $16 billion ought to do the job. Mr. KENNEDY. Will the Senator yield on my time for 1 minute? Mr. DOMENICI. Sure. I will be pleased to. Mr. KENNEDY. Mr. President, just to make it clear, in the budget is some $16 billion. The Medicaid costs are $860 per person. If you work that out, that covers 3.7 million. I think the President said ``up to 5 million.'' So, there is a major part of that group, particularly the working poor, who are not covered in that. I strongly support the point that the Senator has made in that we are going to see progress, and it is important progress. I think we ought to at least have an understanding. We have $16 billion and it costs $860 to cover each child. If you do the math, it is 3.7 million. The President, I think, said up to 5 million. I think, frankly, if you do the math, it is a little closer to 3.7 million. Mr. DOMENICI. Mr. President, fellow Senators, the truth of the matter is that nobody knows, nobody knows today how to cover these children who are uncovered in America. Nobody has a plan. Nobody knows which plan to use. Obviously, a very large number ought to be put under Medicaid. But they will not all fit under Medicaid, so another plan has to be developed for the rest of them. Frankly, this Senator is convinced that we can devise a plan in the Finance Committee of the U.S. Senate that will cover them all and will not even use the $16 billion. That is just as honest a statement as my friend from Massachusetts makes when he plucks a number, because we do not know what it is going to cost. Mr. President, do my fellow Senators know that if you went out 6 months ago across America and you said, ``Let's buy health insurance for some uninsured kids; let's just go around to the insurance agencies and say, `How about giving us an insurance bid,' '' there was no policy until about 2 months ago when a company decided to issue a policy. Nobody even knows, since it is the only one, whether its price is going to remain when they all start issuing them, for it is, indeed, not expensive to cover children; everybody knows that. One of the reasons given to cover them is it is not very expensive to cover them. All I am suggesting is that the President of the United States, in this bipartisan agreement, made great, great emphasis to the American people that it was a good agreement for many reasons, and one of them was that we had covered the young people who are not covered with $16 billion in new money. I want to close on this point, and I will have a lot more to say, but essentially, this amendment in no way will cause a cigarette tax to be imposed if that is the wish of the sponsors, because you cannot do it in a budget resolution and you cannot find the words ``cigarette tax'' in the boundaries of their amendment, because there is no way to do that. They just have numbers plugged in and they wish the Finance Committee will use the numbers the way they are giving their speeches on the floor. They are hoping that they will do that, but the Finance Committee does not have to. So what we are doing is, we are tying in kids' coverage, which is already in the agreement, to a national issue on smoking cigarettes. And it is a national issue. It is a terribly tough issue, but, essentially, they are unrelated in terms of the budget resolution. So what we are doing is asking for more money for a program that is already covered, with no assurance that it will be spent for that program, and we are calling for a tax increase, with no assurance that it will be a cigarette tax, but a real assurance that you will have cut the $85 billion that we are providing for net new taxes by $30 billion, just the mathematical effect of the amendment. I yield the floor at this time. Mr. HELMS. Mr. President, Senator Domenici is absolutely correct. If the Senator from Massachusetts wants to render nugatory the work of all the Senators who labored so long to produce a budget, his amendment is the way to do it. At stake, Mr. President, are the livelihoods of this country's tobacco farm families as Senators Kennedy and Hatch attempt to extract an additional $30 billion tax increase from the American taxpayers by upping the existing 24-cent excise tax to 67 cents. The impact of this proposal, if enacted, would not only devastate the Southeastern economy; it will harm the entire country. It will be harmful to the lives of thousands of farm families, to the manufacturing workers who stand to lose their jobs, to the retail-store owner and his employees, to the truck driver who delivers the product to market, to the farm implement dealer who supplies the tobacco farmer, to the schools financed by taxes levied on tobacco farmers, and on and on. Mr. President, this tax increase will cost thousands of fine North Carolinians their jobs; it will effectively destroy the livelihoods of thousands of small family tobacco farmers. According to American Economics Group, Inc., nearly 662,402 citizens are employed in the production, manufacturing, and marketing of tobacco. If [[Page S4788]] enacted, the 43-cent excise tax on tobacco products would abolish 43,000 jobs nationwide, and North Carolina alone would lose 17,849 jobs. Furthermore, any increase in the cigarette excise tax will fall disproportionally on lower- and middle-income consumers--the citizens least able to pay it. Those earning less than $30,000 annually already pay 5 times more in excise taxes than those earning $60,000 or more. Those families earning less than $30,000 pay a staggering 47 percent of all tobacco excise taxes, yet these families earn only 16 percent of national family income. Make no mistake about it--the tobacco tax is not a user fee as so often claimed by the proponents of this amendment--it is a tax increase. We all know that when excise taxes are increased on any product, sales of that product decrease. If tobacco revenues fall short of projections--which will certainly be the case because there will be a substantially smaller tax base--how will the shortfall be made up? More taxes? What other group will be singled out to shoulder this financial burden? Tobacco has been targeted for enormous tax increases because it is an easy way for this Government to take even more money out of the taxpayers' pockets. Smokers, tobacco farmers, and those who work in the tobacco industry should not be singled out to shoulder the burden of paying for the health care of uninsured children. The anti smoking zealots have made clear that they are willing to do almost anything in order to tax tobacco right out of existence. They do not care about the 18,000 people in North Carolina alone who stand to lose their jobs. The proponents of this amendment talk about all the children they are trying to insure with the revenues from this tax. Well, I can guarantee that they'll be able to add more uninsured children to that list if this tax is enacted. There will be a number of folks without work, and a number of children who will suffer because of it. Once we head down this road of using the taxing power of Government to discourage Americans from undertaking activities Congress and the White House find objectionable, or politically incorrect, where will it stop? This tax discriminates against an entire region, an entire industry, and all people who use tobacco products. Mr. FORD. Will the Senator yield me 10 minutes? Mr. DOMENICI. I yield 10 minutes to Senator Ford. Mr. FORD. I thank the Senator. Mr. President, I am quite proud of the record I have established over the years in support of programs that help children. No one in this Chamber is going to suggest that this Senator, this grandfather of five, takes second place to anyone when it comes to priorities affecting children. I have supported expanding educational opportunities ever since I came to the Senate. Nothing is more important for our children than education. I have supported full funding for Head Start and the WIC Program and expanding Medicaid coverage to poor children. I have supported child care programs. I have supported the expansion of the earned income tax credit. I have supported a child tax credit that will become, hopefully, a part of this budget. I have supported drug abuse funding to help children. I have supported reasonable environmental initiatives that improve the lives of our children. But this is not a debate about whether or not to provide funds for child health care. The budget agreement already includes $16 billion in additional funds for child health care. A vote for this budget agreement, as is, is a vote for this country's children. I support the budget agreement that was negotiated earlier because it strikes an important balance. It provides much-needed programs for children from education to health care. It provides much-needed tax relief for middle-income families, and it balances the budget by 2002. An enormous amount of what we spend in the Federal budget is about children, and I believe that is right because our children are the most important resource this country has. We have to balance a lot of competing priorities. There is virtually no end to what we could spend on educating our children, for instance, if money were no object, but money is an object, because we have to balance the size--and I underscore size--of Government with the appetite of our constituents to pay taxes. I thought the budget arrangement announced earlier struck a pretty fair balance. It protected a number of national priorities while balancing the budget. As I have always said, it includes $16 billion for children's health care over 5 years, an amount that we are told will cover approximately 5 million children. The budget deal assumes that there will be $135 billion in gross tax cuts offset by $50 billion in new revenues already. Now we look at the Kennedy-Hatch proposal. No matter how you look at it, this proposal undercuts the budget deal by changing the balance reached in that agreement. It requires the Federal Government to be $30 billion bigger in tax revenues and at least $20 billion bigger in spending programs. Tax-and-spend. So, with this amendment, there will only be $55 billion in net tax cuts. That is not the agreement I agreed to, the White House signed off on last week, and it is not the agreement that the American public has been led to believe they are getting. There are plenty of other problems with the substance of the Kennedy- Hatch amendment. I do not think the budget deal was about raising taxes. If this amendment is adopted, this budget deal will become more and more about raising taxes. Put another way, this amendment reduces the net tax cut in this bill by 35 percent, more than a third. It requires a 60-percent increase in revenue raisers in this bill over the next 5 years. Tax increase, revenue raisers. Let's quit talking about taxes a moment, and let's talk about the Kennedy-Hatch amendment. While it is true that States have the option of denying the new block grant under this amendment, once they decide to accept the money, several conditions and mandates--I underscore mandates--to the States apply. The Kennedy-Hatch proposal contains 27 separate provisions which state that a State ``shall'' or a State ``must'' or a State ``may not'' do something. States have restrictions on how to write their plan to cover children. Who must approve the plan before they receive the funds? HHS. Which children are eligible for health insurance subsidies? What must be covered under the health insurance policy? You have told the insurance companies what they have to write, who they can contract with--think about that now, who a State can contract with for policies and how--how much they must pay out of State funds to receive this money; what percentage of administrative costs they must cover-- mandates on the States. Having been there and done that, I understand what a Governor has to do, but, if faced with a choice of stretching dollars, a Governor might prefer to provide a very basic policy but to cover more children. Under the Kennedy-Hatch amendment, the benefits that must be covered are specified in the bill. What is the cost to the States? The Kennedy-Hatch amendment will cost the States up to $5 billion in additional matching funds, requiring them to raise their money or their taxes. The Kennedy-Hatch amendment will cause cigarette consumption to decline by a minimum of 10 percent. This means that States could lose between $4 and $7 billion in excise taxes if they do not participate in the bill, meaning that even more money must be made up somewhere else. For weeks and weeks and months and months, there has been a bill filed to get rid of Joe Camel, to get rid of Marlboro Man, to do away with advertising, to do all those things that FDA has regulated, and then just ask FDA to get out of adult choice. But people who will not help prevent youth from smoking are here with an issue, not solving the problem, they are here with an issue, because if they wanted to solve the problem, they had an opportunity months ago to get on a piece of legislation that would do exactly what FDA is now saying will be in regulations. So, Mr. President, don't let anyone say that they want to solve the problem. They, by their own words, have let thousands upon thousands upon thousands of kids die because months and months and months ago, they would not get on a bill to help stop youth smoking. Now they have an issue: They [[Page S4789]] want to raise taxes in order to stop youth from smoking. Well, it tells me something that they want the issue and not a solving of the problem. I yield the floor, Mr. President. Mr. KENNEDY. Mr. President, I yield myself 2 minutes. The PRESIDING OFFICER (Mr. Inhofe). The Senator from Massachusetts. Mr. KENNEDY. Mr. President, just for the benefit of the membership, this legislation is drafted in the historical, traditional way of amending the Budget Act. There should be no question as to exactly what this legislation is about. It is about providing health insurance for working families who cannot afford it. This is spelled out in the purpose of the amendment, which also states that it will be * * * ``financed by an increase in the tobacco tax.'' What we are voting on ought to be very clear. Second, Mr. President, I ask unanimous consent to have printed in the Record a joint tax review that states that even with the decline in potential tobacco use, there still will be $30 billion generated over the period of the next 5 years. This also takes into consideration the arguments of the Senator from Kentucky. There being no objection, the material was ordered to be printed in the Record, as follows: Joint Committee on Taxation, Washington, DC, May 19, 1997. Hon. Edward M. Kennedy, U.S. Senate, Washington, DC. Dear Senator Kennedy: This is a revenue estimate of your bill, S. 526, introduced with Senator Hatch. Under present law, the excise tax rates on tobacco products are as follows: small cigarettes, $12.00 per thousand; large cigarettes, $25.20 per thousand; small cigars, $1.125 per thousand; large cigars, 12.75 percent of wholesale price (but not more than $30.00 per thousand); snuff, $0.36 per pound; chewing tobacco, $0.12 per pound; pipe tobacco, $0.675 per pound; cigarette papers, $0.0075 per book containing more than 25 papers (with no tax on books containing less than 25 papers); and cigarette tubes, $0.015 per 50 tubes. Under present law, there is no tax on fine cut (roll-your-own) tobacco. Under the bill, the tax on small cigarettes would be increased by $0.43 per pack to $0.67 per pack. The excise taxes on other tobacco products are to be increased by the same percentage increase as the increase (179 percent) on small cigarettes except for the tax on snuff, which would be increased by 569 percent to $2.41 per pound and chewing tobacco which would be increased by 4,975 percent to $6.09 per pound. In addition, an excise tax is to be imposed on fine-cut tobacco equal to the tax on pipe tobacco. The proposed tax increases for small cigarettes and other tobacco products would become effective on October 1, 1997, with floor stocks taxes levied on that date. However, a credit to be applied against the floor stocks tax liability equal to $500 would be allowed every vendor responsible for the payment of floor stocks taxes. We estimate that the floor stocks tax credit would reduce fiscal year 1998 receipts by $400 million from what they otherwise would be. We estimate that this proposal would increase Federal fiscal year budget receipts are as follows: