Member of Congress

Kent Conrad

Role
Former Senator
State
ND
Party
Democrat

Speeches

NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT1998-06-04

Mr. CONRAD

Mr. CONRAD. Will the Senator further yield?

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NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT1998-06-04

Mr. CONRAD

Mr. CONRAD. Mr. President, on Tuesday, June 2, during Senate consideration of the McCain-Kerry and others amendment No. 2446, I was added as a cosponsor of that amendment, however, the Record of June 2 does not reflect my cosponsorship. I, therefore, ask unanimous consent that the permanent Record be corrected to reflect my cosponsorship of Senate amendment No. 2446. In addition, I now ask unanimous consent my cosponsorship of Senate amendment No. 2446 appear in the Record at the appropriate place.

Mr. CONRAD. I suggest the absence of a quorum.

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NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT1998-06-02

Mr. CONRAD

Mr. CONRAD. Mr. President, I thank the Senator from Massachusetts for the extraordinary leadership he has brought to this issue. The Commerce Committee was given jurisdiction over this matter, and the Commerce Committee reported out a good beginning, a bill that provided a floor from which we could move in this Chamber to strengthen the provisions that were reported out of the Commerce Committee. Indeed, over a series of weeks, there was a negotiation between members of the Commerce Committee and representatives of the White House, and others, to improve what was reported out of the Commerce Committee, and, indeed, this bill was improved and improved dramatically, and in no small measure because of the leadership of the Senator from Massachusetts, Mr. Kerry. I want to recognize the tremendous contribution he has made to this legislation. Mr. President, sometimes I think we get lost around here as to what this bill is about. Some of our colleagues talk about this as a tax bill. They talk about it as every other kind of legislation other than what it really intends to do. This legislation is intended to protect the public health and to reduce youth smoking. That is the fundamental reason for this bill. I know it gets confusing because we have had some of our colleagues who really are the apologists for the tobacco industry who are out here trying to confuse the issue, and they are talking about every subject under the sun other than protecting the public health and reducing youth smoking. They are talking about all kinds of issues that are really sideshows, and they are doing it to try to distract attention from the fundamental question: are we going to protect the public health? Are we going to do something serious about reducing youth smoking? I think it is very simple. This debate is about kids, and it is about health. It is about stopping the tobacco industry's cynical attempt to hook our kids on a deadly and addictive product. At the end of the day, the hard reality is this is the only legal product sold in this country when used as intended by the manufacturer that addicts and kills its customers. That is harsh language, and I am not somebody who is given to harsh language. I am a Scandanavian. We Scandanavians typically do not talk in harsh terms. But after chairing the task force on tobacco on our side of the aisle for 6 months, I must say I have developed a very strong view about what this industry is doing to our country and what it is doing to our kids. That impression was indelibly changed by the release of what had been secret documents, documents we had never seen before. Document after document after document, that were the industry's own documents, revealed what they have been up to--what they knew and what they told the American people. And the two are at very great variance. We all remember when the executives of the tobacco industry came before Congress and swore under oath that their products did not cause serious disease problems. They swore under oath that their products were not addictive. They swore under oath that they had not targeted our children. And they asserted that they had never manipulated nicotine levels to further addict our kids. Now, with the release of their documents, we now know that each and every one of those claims, each and every one of those statements, was false. I do not know how else to say it. It is just as clear as it can be. They did not tell the truth. The fact is they knew at the time they were here swearing under oath that their products caused serious health problems. They knew that they were targeting our kids. They knew that their products were addictive. In fact, in their internal memos they talked about how important that was to the effectiveness of their various campaigns to children. The fact that their products were addictive strengthened their position financially. And it is now absolutely clear from reading their documents that they knew they were manipulating nicotine levels to further hook kids. All these things are very clear. Let me just show you one chart. I developed, after the work on this task force, the ``Top Ten Tobacco Tall Tales,'' and the corresponding truths. No. 10, the tall tale told by the tobacco companies was they do not market to children. That is what they said. They came to my office and said, ``Oh, no, Senator, we don't market to children; it is illegal to sell to children. There is no way we would condone marketing to kids.'' Well, the truth is from their own documents. This is from a Brown & Williamson document that was released in the court actions, and I quote: The studies reported on youngsters' motivation for starting, their brand preferences, as well as the starting behavior of children as young as 5 years old . . . the studies examined . . . young smokers' attitudes towards addiction, and contained multiple references to how very young smokers at first believe they cannot become addicted, only to later discover, to their regret, that they are. These are their documents. I could speak a whole afternoon just from their documents. They are the most damning things that could be presented in this debate, because one document after another indicts this industry. They have lied to the American people, and their own words reveal it. Why is it important to take on this battle and win it now? Let me just review a few of the facts on tobacco use and its cost to society. Despite decades of misinformation, there can be no question that tobacco imposes enormous costs on society. Some of our colleagues have said: Look, you are going to impose a regressive price increase on those who are the customers. Mr. President, this industry has been imposing costs on all of us, and they have been doing it for a long time. That is the hard reality. First, there are the human costs. Obviously, they are the most important. Tobacco is the No. 1 preventable cause of death in America today. Mr. President, 425,000 of our fellow citizens die every year from tobacco-related illness. That is a fact. That is one tobacco- related death every 75 seconds. Every 75 seconds, somebody dies in this country because of tobacco-related illnesses. That is a fact. For each of those deaths, there are dozens of Americans who are struggling with terrifying illnesses and terrifying diagnoses from their habits and their lifetime of smoking addiction. There are dozens of friends and relatives and loved ones who must also pay the price and experience the pain caused by tobacco products. Second, there are future costs. Three thousand children start smoking every day in this country. One thousand of them will die prematurely from smoking-related illnesses. If we don't act to stop kids from starting to smoke, we condemn those children to a future painful death. They are not adults making a decision fully informed; they are subject to a massive advertising and marketing campaign by this industry, targeted directly to them. Make no mistake, that is precisely what this industry has done. Again, their documents reveal that they have targeted teenagers, and they have targeted them because they have understood they have to have replacement smokers for the 425,000 of their customers who die every year. They know it is best to get them when they are young. That is when kids are looking to rebel, looking to make a statement as to their maturity. What better way than to take up the habit of smoking? That has been the message of the tobacco industry, and they have done it knowingly. Make no mistake about it, they have done it absolutely knowing what they were doing, and the documents reveal it. Third, there are the financial costs. The Treasury Department reports that tobacco use costs American taxpayers $130 billion a year. We hear from our friends, some who are on the other side, who say: Wait a minute, if we increase the prices, it is going to impose a regressive tax on those who are the customers. How about all the folks in this country who are having costs imposed on them, $130 billion a year? They didn't choose to have these costs. They didn't choose to pick up the tab for somebody's lung cancer. They didn't choose to pick up the tab to cover the cost because of lost productivity in this society. Those costs are being imposed on them, and those are regressive, and they are far higher than the health fee that we would be imposing here to redress the imbalance of $130 billion a year. That is what this industry is costing America, and we are asking $18 billion or $20 billion as a balancing mechanism, imposing a health fee to start to ask this industry to bear a fairer share of the costs they are imposing on all the rest of us. That is not unreasonable or unfair. Of the $130 billion a year of costs being imposed on American taxpayers by this industry, $60 billion is direct health care costs-- higher costs for Medicare, higher costs for Medicaid, and for private health insurance. When we hear them say: Gee, you are going to raise the prices, and that is going to be regressive and have an adverse effect on low-income people in this country--nothing could have a more regressive effect, nothing could have a more unfair result than sticking $130 billion in costs onto the American taxpayer, costs that are borne disproportionately by those with low incomes, because they are the ones who smoke the most. They are the ones who have most of the health-related disease. They are the ones who are disproportionately picking up the tab. These are costs that are borne by all taxpayers, and, as I say, it is time to redress the imbalance. As I headed this task force, we heard from the victims. We had hearings all across the country, and we listened to the victims. I can remember so well a young woman named Gina Seagraves, who testified in New Jersey about her mother dying at a young age, and what it did to their family, how devastating it was when her mother died, how it really disrupted their entire family. I remember very well a big, tough football coach who came and testified. When he testified, you could barely hear him. He spoke in a very raspy voice, and he spoke that way because, as he told the committee, he had developed cancer of the larynx, and when it was diagnosed the doctor said, ``We have one chance to save your life, and that's for you to undergo a laryngectomy and have your larynx taken out. And if we do not do it now, you are going to die.'' This big, tough football coach told us of the terror he felt when the doctor looked across the examining table from him and told him, ``If we don't operate, and operate now, you are going to die.'' He told us about how he feels now when he goes back to the high school where he is also the assistant principal, and he sees kids lighting up. He thinks to himself how much he had hoped that his story could prevent some of them from taking up the habit, because he started when he was 14 or 15 years old, was unable to quit, was addicted. He said: ``You know, if I could just convince a few of these young people that they are going to suffer the same fate I did, maybe I could make a difference. Maybe I could prevent some of the suffering that I have experienced.'' Those were not the only victims we heard from. We heard from a Mr. Harold Taylor, who testified that he began smoking when he was 15, eventually developed cancer of the throat. His larynx and his vocal cords were removed, much like Mr. Fravenheim. The operation left a hole in his neck, and he will have to live with that for the rest of his life. Because of that hole in his neck, he can never again breathe through his nose or mouth. He told what it is like to have this particular disability. He has lost his sense of smell. He can no longer enjoy the smells that we take for granted. He said he always loved to walk into his wife's kitchen and smell whatever was cooking there. He walks in now and doesn't smell a thing. He has also lost his sense of taste. He has told us he is unable to distinguish between a bowl of spaghetti and a bowl of beans. We also had the opportunity to hear from a Ms. Janet Sackman from Long Island, NY. Ms. Sackman had a successful modeling career. Ironically, she was a model for the tobacco industry. That success had a tremendous price. In 1983, she was diagnosed with cancer of the larynx and had her vocal cord and larynx removed. She completely lost her ability to talk. She was only able to testify because she learned esophagal speech, which is very, very difficult. She was encouraged by the company that hired her to take up smoking. In fact, it was in her contract. They required her to take up smoking in order to be paid to be a model for the tobacco company for which she worked. To listen to these victims is a powerful experience. This particular woman's suffering has continued. In 1990, after being diagnosed with lung cancer, she had one-third of her lung removed. Again, this was a woman who took up smoking not because she wanted to, but because she was a Lucky Strike model, and Lucky Strike in her contract required her to take up smoking. She did, became addicted, and now has suffered these incredible health threats. A third witness, Mr. Alan Landers, was a Winston man, Winston cigarettes. He was a representative of the company. He was told to portray smoking as stylish, pleasurable, and attractive. Indeed, he is a very handsome man, a very stylish man. He was required to smoke on the set to achieve the correct appearance. The tobacco industry did not tell Mr. Landers what they knew at the time, because as early as the 1950s, tobacco industry scientists had already established from their own research that smoking caused very serious health risks. In 1987, Mr. Landers learned the true danger of cigarette smoking when he was diagnosed with lung cancer. Although 95 percent of lung cancer victims do not survive, Mr. Landers has had large sections of both lungs removed and is suffering from emphysema, while he waits for his day in court. I can tell you, Mr. Landers knows that his chances of ever getting to court are limited because he is under a death sentence. I could go on and on talking about the victims from whom we heard. Everyplace we went, every community we visited, people came up to us and said, ``You know, my father died of a tobacco-related illness;'' ``my mother,'' ``my aunt,'' ``my brother,'' ``my sister''--the emotional pain that is out there brought on by the use of these products is staggering. I grew up in a family where virtually nobody smoked. My grandfather did. He died at a ripe old age. I don't know if a tobacco-related illness was a part of his death, although I wouldn't be surprised if it was. He was a heavy smoker. Of the others in my family, very few ever took up the habit. But in traveling around the country, holding the hearings of this task force, we heard over and over and over of the addiction, disease, and death caused by these products. Some have said, ``What are you going to do about it? What business does the Government have to do anything about this? The Government ought to stay out of it. This is a personal decision whether somebody smokes or not.'' That is true, it is a personal decision. But you know what? There is more than the individual involved, because this industry, as I have described, is imposing enormous costs on all the rest of us. I chose not to smoke, but I am picking up the tab for those who have chosen to smoke. Mr. President, $130 billion a year are the costs that are being imposed by this industry--$130 billion, $60 billion in direct health care costs every year--$60 billion; Medicare, $20 billion; Medicaid, $12 billion, $13 billion a year. We are paying for costs imposed by that industry, and they are not covering the tab, make no mistake about that. That is the hard reality of what is occurring. If we want to do something about it--every witness who came before our committee said there is no silver bullet, you have to have a comprehensive approach. You have to do all kinds of different things to reduce the level of youth smoking. Why is youth smoking so important? Because we know that 90 percent of smokers take up the habit before they are 19, about half before they are age 14. When somebody is not hooked when they are young, they probably are not going to get hooked. That is in the tobacco industry documents. They knew they had to get people when they were young. They knew when somebody didn't start when they were young, they probably were not going to take up the habit. Some of the comments in the tobacco industry documents are startling. I remember one is: How are you going to get somebody to take up what is really a dirty habit and unpleasant? You have to convince them that it is cool, you have to convince them that it shows maturity, that it is stylish. The cynicism of this industry in trying to hook kids is really incredible. Here is a 1972 Brown and Williamson document: It's a well-known fact that teenagers like sweet products. Honey might be considered. They are thinking about putting honey in cigarettes to attract teenagers. Smoking a cigarette for the beginner is a symbolic act. I'm no longer my mother's child. I'm tough. I'm an adventurer. I'm not square. As the force from the psychological symbolism subsides, the pharmacological effect takes over to sustain the habit. That was from a 1969 draft report to the board of directors of Philip Morris. Here is a good one. When the industry comes up here and says, ``We never targeted kids,'' this is a quote from a 1973 RJR marketing memo: Comic-strip-type copy might get a much higher readership among younger people than any other type of copy. Talk about cynical; talk about people who are thinking about themselves and didn't give a hoot what the effect was on somebody else. And they say they didn't target kids? I have read the documents. Document after document shows they directly targeted kids as young as 12 years old. That is who they are going after. These Joe Camel ads, do you think they designed those to go after adults? No, no, no. They designed those ads because they knew that they were slipping among the youth market, and they were trying to figure out a way to get to the kids. So they said comic-strip-type might get a much higher readership among young people. That is where Joe Camel came from. How brilliant that strategy was. It really worked to hook kids. Here is another 1973 Brown and Williamson memo: Kool-- That is a brand-- Kool has shown little or no growth in the share of users in the 26-plus-age group. Growth is from 16 to 25-year-olds. At the present rate, a smoker in the 16 to 25-year-age group will soon be three times as important to Kool as a prospect in any other broad-age category. You have to wonder what these people thought when they went home at night after writing these memos, after coming up with these strategies, after coming up with these marketing schemes to hook kids. I wonder if they were proud of themselves when they went home at night. Here is another 1973 memo from an RJR assistant director of research and development. And I quote: Because brands of the new type continue to show vigorous growth in sales; because a high proportion of beginning smokers are learning to like Marlboro, the leading brand of the new type; and because we have no current brand in this newly identified, major segment of the market; it has become appropriate for us to consider moving our present brands in the direction of the new type of cigarette. And why? Because they needed to hook beginning smokers. Well, it goes on and on and on. The documents are so overwhelmingly clear. Evidence is now available to indicate that the 14- to 18- year-old [age] group is an increasing segment of the smoking population. RJR-T[eam] must soon establish a successful new brand in this market if our position in the industry is to be maintained over the long term. That is a 1976 draft report, ``Planning Assumptions and Forecast for the Period 1977-1986 for R.J. Reynolds Tobacco Company.'' ``Evidence is now available to indicate that the 14- to 18-year-old [age] group is an increasing segment of the smoking population'' and they have to establish a successful brand there if they are going to be successful. Mr. President, I go back to the basic question: What do we do? We know we have a problem. We know people are suffering from addiction, disease and death. As I said earlier, every witness that came before us said you have to have a comprehensive approach. No single thing will address this health threat, and that is what the McCain bill does. It pursues exactly the sort of comprehensive approach that every public health expert has testified is necessary. Yes, it contains price increases. And why? Because every study, every public health expert has told us that price increases are the most effective thing to reduce consumption and use, especially important among young people. The studies indicate that for every 10-percent increase in price, you get a corresponding 5- to 7-percent reduction in consumption among youth. These studies are consistent. They are clear. They are not done by the tobacco companies. They are not done by the apologists for the tobacco companies. They are done by the scientific community. They are done by the Congressional Research Service. They are done by the National Institutes of Health. They are done by the American Cancer Society, the American Lung Association. Those are the people that I intend to listen to in this debate. I am not going to be listening to the sweet swan song of the tobacco lobby who, by the way, have hired virtually every lobbying firm in this town. In fact, I am told they have hired a lobbying firm for every U.S. Senator. And I would not be surprised if it is true. As you look at the list, they are spending hundreds of millions of dollars on this attempt--hundreds of millions of dollars to mislead the American people; hundreds of millions of dollars to influence public opinion; hundreds of millions of dollars to try to fool people here in the Congress of the United States. I had a man call me from North Dakota the other day. He got on the phone with me, and he said, ``Senator, I'm against that tax bill.'' I said, ``What tax bill are you talking about?'' He said, ``I don't know.'' He said, ``I had somebody call me and ask me if I was against taxes. I told them I was, and he said, `I'll connect you with your Senator right away.' '' He said, ``I didn't even have to call. They connected me to your office.'' And he did not even know what the bill was about, but he knew he was against it because they asked him if he was against taxes. I tell you, these guys are shameless. They are shameless in what they have said up here. They are shameless in the negotiating strategy they pursued on this legislation, and they are shameless in what they are saying to people trying to mislead them about this legislation. This bill, sponsored by Senator McCain--yes, it contains price increases because that is central to any strategy to actually reduce consumption and to save people's lives. But it does much more than that. It clarifies the Food and Drug Administration's authority to regulate advertising targeted to children. It gives the Food and Drug Administration authority to regulate the manufacture and distribution of tobacco products, to protect children and reduce the ill-health effects associated with tobacco use. It includes provisions to reduce youth access to tobacco products, including a requirement that States enact laws to make it illegal for minors to purchase or possess tobacco products. It provides look-back surcharges to create an incentive for companies to stop targeting children and to hold those companies accountable that fail to reduce youth smoking of their brands. It requires document disclosure. Mr. President, an awful lot of what we have learned we have learned only because of the Minnesota trial. I want to commend Attorney General Humphrey of Minnesota who was tough and determined and who won a massive lawsuit against the tobacco industry. In winning that suit, he was able to release millions of documents that formed the basis of our knowledge of what this industry has been doing. Thank goodness for what he has accomplished because, as I say, I could read from these documents for days on end, these documents that indict this industry, because this industry knew that their products were killing people. They absolutely knew their products were addictive. They absolutely knew that they were targeting kids and they absolutely knew that they were manipulating nicotine levels to further--to further--hook customers. It was written across the pages of these documents time after time after time. There is no question, none, about what these guys were doing. It was cynical. It was manipulative. And it was targeted at kids. I have nothing against anybody that seeks to engage in a legal business and make a profit. That is the American way. I am proud of people that do that. I come from a business family myself. I am educated in business. But I tell you, to make your livelihood targeting kids for addiction and disease is not a very proud way to conduct oneself. This industry was so incredibly cynical in the way they operated. They ought to be ashamed of themselves. They say now, well, they have a new culture. Well, I tell you, I do not see it. I do not see their new culture. I see them operating just as they have in the past. I have indicated some of the provisions of this bill. There are others, as well, that are important. Because this legislation also funds tobacco control programs, including smoking cessation, countertobacco advertising, smoking prevention, education and health research. You know, if there is nothing else that comes out of this--I hope we are able to discourage people from smoking--but I hope we are also able to fund medical research to help the victims of the past. I hope we are able to do some things that will be positive for those that have already suffered. I hope we are able to find the cure for cancer. I hope we are able to find a cure for emphysema or at least treatments that can reduce the suffering of people who are inflicted. But this bill does more than that. It also includes environmental tobacco smoke provisions to protect nonsmokers in public buildings because one of the things we have learned from the research of the industry itself is that secondhand smokers also suffer. And what they suffer is irreversible. We did not know that before. We used to think, well, not just the smoker is going to be affected and be affected adversely. I think all of us knew for a long time that was the case. But we probably did not realize that those of us who are around smokers also are affected, and the way we are affected is irreversible. It cannot be improved. That is what the latest scientific evidence tells us. So it is important to do something about limiting where smoking can occur so nonsmokers are not having imposed on them the health risks because somebody else has made a choice that they are going to smoke. That is fine. That is their business. But it is not their business to have an adverse effect on somebody else's health, and certainly not on a child. This legislation also provides generous assistance to tobacco farmers and their communities for the effect they will experience. Clearly, this is a comprehensive approach. It is multifaceted because that is what the experts say is necessary. We don't need experts to tell us what will be effective here. I have heard from all the experts. They came before our task force. We heard from hundreds of them. I respect them. This is a matter of common sense. We don't need an expert to tell us if you raise the price, consumption goes down. That is Economics 101. We don't need an expert to tell us if you do countertobacco advertising that warns people of the health risks of tobacco products, that will have an effect. Why else would the industry spend billions of dollars a year advertising tobacco products? Because they know advertising works. Countertobacco advertising, we also know, will be effective. And we also know you have to fund smoking cessation and smoking prevention programs, because that helps people. Now, it is true that very few people are able to quit. Seventy percent of the smokers in America today say they want to quit. Only 2 or 3 percent a year are actually able to. That is because smoking is addictive. In fact, the testimony of the experts told us that smoking addiction is in the same class as cocaine addiction. We went to Brown University and had a hearing there. We had an addiction expert come before us. He said, if you think a smoking addiction is something easy to escape, but you think cocaine addiction is hard, don't be fooled, don't be misled. Because the fact is the one is as difficult as the other. I will talk a little more about the look-back provisions because that is the pending business before the U.S. Senate. We may have forgotten that around here, but that is the pending business. That is the business before this body, the look-back provisions of this bill. Before I go into that, I want to talk about an issue that has been raised several times by the opponents of this legislation. That is the effect of the bill on low-income people. It is very interesting around here to hear those who are the chief defenders of the tobacco industry all of a sudden develop a new-found concern for lower-income Americans. I must say, I would be more persuaded by their concern if many of those same people had not spent most of their Senate careers opposing the minimum wages, opposing the earned-income tax credit, and opposing other measures that would help low-income, working Americans. I would be more persuaded if these same Senators had not spent much of their time in the Senate pushing for special tax breaks, tax giveaways and tax loopholes for the wealthiest among us at the expense of programs that benefit lower-income Americans. Before I talk further about the so-called regressive impact of this legislation, I just want to point out that inaction imposes a cruel tax on low-income Americans. The tobacco industry has deliberately targeted lower-income Americans as its customers. In fact, they are disproportionately the customers of the tobacco industry. They have gone after that low-income market. They have succeeded. And this industry that all of a sudden is so concerned about low-income Americans has charged them rates of profit that are three times the level of profit in the consumer goods industry in America today. The profit margins in tobacco are 30 percent--triple the profit margins of other consumer goods industries in America today. If they are so concerned about low-income Americans in the tobacco industry, why don't they cut their profits if that is their concern. That is not their concern. Who are they kidding? Their concern is their bottom line. That is their children. And it comes out in every document that has been revealed in these court proceedings. They aren't concerned about low- income Americans other than trying to hook them, addict them, and let them suffer the consequences of disease and death that accompany the use of these products. The simple fact is that a failure to act will kill low-income Americans and their children in disproportionate numbers. The Senators who now say they are concerned for low-income Americans are nowhere to be found when we talk about protecting children or providing cessation programs for low-income Americans. Instead, they spend their time talking about the costs that this legislation will impose on lower- income Americans. They completely leave out the rest of the story--the fact that lower-income Americans will disproportionately benefit from this legislation. The facts are that this legislation will reduce costs on low-income Americans more than it will increase costs on them. First, the nonpartisan Congressional Budget Office has concluded that the income distribution tables our opponents have been using exaggerate the effects on lower-income people. The fact is that people's incomes are not the same throughout their lives, and their expenditure patterns reflect that. Opponents also count on what we see as a claim that this legislation will hurt lower-income people because study after study has shown that lower-income smokers are much more likely to respond to a price increase by quitting or reducing their use of tobacco products. The Congressional Budget Office has estimated the price increase will reduce average consumption of tobacco products by about a third. That means that lower-income Americans will reduce their consumption by even more than a third. So they will actually reduce their overall spending on tobacco products, and for every dollar they pay in increased costs for each pack of cigarettes, they will save more than $1 by purchasing fewer packs. Third, the health benefits of reduction in smoking will be largest for low-income populations. By not smoking, lower-income Americans can reduce their lifetime health costs by $14,000, on average, because lower-income people are the least likely to have health insurance. The direct health cost benefits to reducing smoking will go disproportionately to lower-income Americans. Finally, the main focus is, and should be, on our children. Lower- income Americans love their children just like every other American loves theirs. They want to make certain that their children get a healthy start in life. I don't believe they will say that a few hundred dollars is too much to pay to ensure that their kids don't get addicted to these deadly products. The bottom line, nobody is going to pay the increased fees associated with this bill unless they decide to go to the counter and buy these products. There is nobody saying you have to buy cigarettes in America. Nobody has to pay this additional fee unless they decide they want to, unless they decide they are going to buy cigarette products. You only pay it if you buy the product. Frankly, if you buy the product, you ought to pay it because otherwise you are imposing costs on everybody else in society. Mr. President, $130 billion a year is what is being taken out of this society by the use of these products. I will, at a later time, talk about the pending amendment, the Durbin-DeWine amendment, but I think at this point I am going to turn it back to the Senator from Arizona, Senator McCain, and again thank him for his leadership. His courage and his character shine through in this entire debate. I want to thank him very much for his leadership.

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS1998-06-02

Mr. CONRAD

Mr. CONRAD. Mr. President, today I introduce a bill to permit the Secretary of the Interior to accept a one- time, lump-sum payment from the city of Dickinson, North Dakota, in lieu of the annual payments required under the city's existing repayment contract for construction of the ``bascule gates'' on the Dickinson Dam on the Heart River. In exchange for reducing the debt the City would pay, this legislation calls on the City to work to improve the water quality on Patterson Lake. This bill would resolve a long- standing issue for the City of Dickinson and the Bureau of Reclamation. Mr. President, the history of the Bascule Gates is long and complex. The Bureau of Reclamation constructed the Dickinson Dam on the Heart River in 1949 and 1950 to supply water to the city of Dickinson, and for flood control, recreation, and other purposes. The reservoir created by this dam was named Patterson Lake in about 1960. The need for additional water supply for the city was identified in the early 1970s, and the bascule gates were constructed in the early 1980s, to provide additional water storage capacity in Lake Patterson. At the time, the City expressed reservations over the cost of the bascule gates and the viability of the gates, since the City was not aware of any other location in a northern climate in which the gates had been tested or proven. In 1982, shortly after the gates were operational, a large ice block caused excessive pressure on the hydraulic system, causing it to fail. Construction modifications were made to the gate hydraulic system and a de-icing system was added in 1982, adding further costs to the project. In 1991, the city began to receive its municipal water supply from the Southwest Pipeline Project, a project constructed in part with funds provided for North Dakota's statewide water project, the Garrison Diversion project, which is another Bureau of Reclamation project. The Southwest Pipeline brings high-quality water from Lake Sakakawea on the Missouri River to the City of Dickinson and other communities in southwest North Dakota. The water is of much higher quality that the water from the city's previous supply from Lake Patterson, and has helped spur economic development in the region. While the citizens of the area now benefit from a higher quality water supply, the City no longer benefits from the additional water supply provided by the bascule gates. The result is the City is paying for two Bureau of Reclamation projects, while it is using water from only one of those projects for its municipal water supply. The City has repaid more than $1 million to the United States for the bascule gates, despite the fact that the gates now provide almost no direct benefit to the City. The City has previously investigated alternatives to the current situation. The City has discussed the option of assuming title to the dam and bascule gates, as well as attempting to negotiate a new agreement with the Bureau of Reclamation administratively. However, because the terms of the existing contract are outlined statutorily, new legislation is required to make any changes to the current repayment contract. The legislation I am introducing today would do four primary things. First, it would permit the Interior Secretary to accept a lump-sum payment of $150,000 from the City and terminate the remaining annual payments required under the existing repayment contract. This would end the issue of paying for the construction of these gates for both the City and the Federal government. Second, my bill would require the Secretary to reallocate the costs of operation and maintenance for the bascule gates and the Dickinson Dam. The bill does not prescribe any particular reallocation formula, but does require the Secretary to consider the fact that the current benefits of the dam and bascule gates are primarily for flood control, recreation, and fish and wildlife purposes. In my view, operation and maintenance costs should be borne by those who benefit from a particular project. Third, this legislation would permit the Secretary to enter an agreement with the City to give the city responsibility for improving the water quality and recreation value of the lake. The City has expressed its interest in developing the area to promote and enhance recreation and the environment in the area. In recent years, the City has been working with the U.S. Geological Survey and the North Dakota Department of Health and Department of Game and Fish to improve the lake's water quality. Finally, my bill would permit the Secretary to enter any appropriate water service contracts in the future if the city uses water from Patterson Lake for its municipal water supply or for other purposes. It is only fair that if the City benefits in the future from the water stored behind the bascule gates that we preserve an option for recovering additional costs from those beneficiaries. Mr. President, this legislation represents a win-win situation for the residents of the Dickinson area and for the Federal government. I hope this Congress will carefully study this issue and quickly pass this important legislation. I ask unanimous consent that the bill and a letter from the City Administrator of Dickinson be printed in the Record.

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Introductory Statement on S. 21271998-06-02

Mr. CONRAD

Mr. CONRAD. Mr. President, today I introduce a bill to permit the Secretary of the Interior to accept a one- time, lump-sum payment from the city of Dickinson, North Dakota, in lieu of the annual payments required under the city's existing repayment contract for construction of the ``bascule gates'' on the Dickinson Dam on the Heart River. In exchange for reducing the debt the City would pay, this legislation calls on the City to work to improve the water quality on Patterson Lake. This bill would resolve a long- standing issue for the City of Dickinson and the Bureau of Reclamation. Mr. President, the history of the Bascule Gates is long and complex. The Bureau of Reclamation constructed the Dickinson Dam on the Heart River in 1949 and 1950 to supply water to the city of Dickinson, and for flood control, recreation, and other purposes. The reservoir created by this dam was named Patterson Lake in about 1960. The need for additional water supply for the city was identified in the early 1970s, and the bascule gates were constructed in the early 1980s, to provide additional water storage capacity in Lake Patterson. At the time, the City expressed reservations over the cost of the bascule gates and the viability of the gates, since the City was not aware of any other location in a northern climate in which the gates had been tested or proven. In 1982, shortly after the gates were operational, a large ice block caused excessive pressure on the hydraulic system, causing it to fail. Construction modifications were made to the gate hydraulic system and a de-icing system was added in 1982, adding further costs to the project. In 1991, the city began to receive its municipal water supply from the Southwest Pipeline Project, a project constructed in part with funds provided for North Dakota's statewide water project, the Garrison Diversion project, which is another Bureau of Reclamation project. The Southwest Pipeline brings high-quality water from Lake Sakakawea on the Missouri River to the City of Dickinson and other communities in southwest North Dakota. The water is of much higher quality that the water from the city's previous supply from Lake Patterson, and has helped spur economic development in the region. While the citizens of the area now benefit from a higher quality water supply, the City no longer benefits from the additional water supply provided by the bascule gates. The result is the City is paying for two Bureau of Reclamation projects, while it is using water from only one of those projects for its municipal water supply. The City has repaid more than $1 million to the United States for the bascule gates, despite the fact that the gates now provide almost no direct benefit to the City. The City has previously investigated alternatives to the current situation. The City has discussed the option of assuming title to the dam and bascule gates, as well as attempting to negotiate a new agreement with the Bureau of Reclamation administratively. However, because the terms of the existing contract are outlined statutorily, new legislation is required to make any changes to the current repayment contract. The legislation I am introducing today would do four primary things. First, it would permit the Interior Secretary to accept a lump-sum payment of $150,000 from the City and terminate the remaining annual payments required under the existing repayment contract. This would end the issue of paying for the construction of these gates for both the City and the Federal government. Second, my bill would require the Secretary to reallocate the costs of operation and maintenance for the bascule gates and the Dickinson Dam. The bill does not prescribe any particular reallocation formula, but does require the Secretary to consider the fact that the current benefits of the dam and bascule gates are primarily for flood control, recreation, and fish and wildlife purposes. In my view, operation and maintenance costs should be borne by those who benefit from a particular project. Third, this legislation would permit the Secretary to enter an agreement with the City to give the city responsibility for improving the water quality and recreation value of the lake. The City has expressed its interest in developing the area to promote and enhance recreation and the environment in the area. In recent years, the City has been working with the U.S. Geological Survey and the North Dakota Department of Health and Department of Game and Fish to improve the lake's water quality. Finally, my bill would permit the Secretary to enter any appropriate water service contracts in the future if the city uses water from Patterson Lake for its municipal water supply or for other purposes. It is only fair that if the City benefits in the future from the water stored behind the bascule gates that we preserve an option for recovering additional costs from those beneficiaries. Mr. President, this legislation represents a win-win situation for the residents of the Dickinson area and for the Federal government. I hope this Congress will carefully study this issue and quickly pass this important legislation. I ask unanimous consent that the bill and a letter from the City Administrator of Dickinson be printed in the Record.

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THE HIGHWAY BILL1998-05-22

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD. Mr. President, I have been a member of the conference committee on the ISTEA bill, and I want to express my appreciation to all those who played a leadership role in writing this legislation. North Dakota is profoundly dependent on Federal support to maintain a strong road system in our State. As all of my colleagues know, we have a big area and we have a sparse population. If we are going to have a national road system, we have to have a national program. I can tell my colleagues, it would be pretty grim going across North Dakota without the Federal Highway Program. Instead, we really have an outstanding network of roads across our State, although they are in deteriorating condition. You cannot drive around my State without noticing that the condition of our highway network is deteriorating, and deteriorating markedly. That is why it was so critically important that there be additional resources for the road and bridge program in the country and why I am so pleased at the result of the conference committee. We have seen a very significant increase in funding. On average, States will receive a 44-percent increase. I am pleased my State will do somewhat better than that, but it is very much needed. Our State will receive $171.5 million a year. Under the previous program, we have been getting $111 million a year. So that is a substantial increase. It is very much needed in order to catch up with the maintenance conditions that currently exist in the State. I will say, Mr. President, that there is a part of this funding mechanism that does concern me, and that relates to the question of the funding. I am concerned about that part of the funding that comes out of the veterans' program. There is a group of us who opposed that funding mechanism in the Budget Committee and who opposed that funding mechanism on the floor of the Senate when we had an amendment to try to change it. I assure veterans in my State that we will take further steps to try to redress the wrong that is done with respect to that funding source in the highway legislation. With that one exception, I think it is very important to thank those who have been the leaders on this matter. The Senate bill was far superior to the House bill, and we should thank Senator Chafee and Senator Baucus for their very strong leadership in allowing us to have a bill that is much closer to the Senate bill than to the House bill. I thank our colleagues who were members of the conference committee, and I especially thank Senator Chafee and Senator Baucus. I thank the Chair and yield the floor. Mr. DORGAN addressed the Chair.

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TRIBUTE TO THE OUTSTANDING DISASTER ASSISTANCE PROVIDED BY THE GRAND FORKS AIR FORCE BASE AND ITS BRANCH OF THE AMERICAN RED CROSS1998-05-21

Mr. CONRAD

Mr. CONRAD. Mr. President, I rise today to pay tribute to the extraordinary disaster assistance efforts of the Grand Forks Air Force Base (AFB) and its branch of the American Red Cross. Twelve months have passed since my state suffered the worst winter and spring of its history. A record eight blizzards dropped more than eight feet of snow on North Dakota, and brought with them sub-zero temperatures well into the month of April. The worst and final storm, Blizzard Hannah, glazed the state in a thick coat of ice, knocked out power for much of North Dakota, and made the snowmelt that followed even more devastating. On the heels of these paralyzing storms came a ``500-year'' flood, driving thousands from their homes, many in the middle of the night. The hasty evacuation of Grand Forks, North Dakota, was the single largest evacuation in recent American history. Roused from their beds by the wail of sirens, many citizens left their city with little more than the clothes on their backs. Homes inaccessible and loved ones far away, thousands lacked shelter. I firmly believe that the evacuation of Grand Forks would have been impossible without the Grand Forks AFB providing for those in need of a safe place to sleep and something to eat. The Base opened the doors of its homes and cleared its hangars of aircraft to house neighbors in need. It is estimated that 4,500 residents of Grand Forks found shelter at the air base. The assistance of the Grand Forks AFB Red Cross was also invaluable. Red Cross volunteers worked tirelessly over the period of the flood feeding the displaced, staffing the hospice center for the elderly, locating loved ones, and ably dealing with the daunting task of sheltering thousands. Then, when the waters receded, the Grand Forks AFB American Red Cross continued its efforts: cleaning flood-damaged homes, housing those whose homes remained unlivable, and working to meet the needs of its neighbors. Six hundred fifty volunteers recorded nearly 48,000 hours of service in the flood and flood-recovery effort. Mr. President, these were volunteers in the best sense of the word. The men and women of the Grand Forks AFB Red Cross were not immune to the emotional upheaval of last year's disasters in the Red River Valley. These volunteers had families and jobs, and in many cases suffered disaster losses of their own, but they gave of their time freely. Though many of these men and women only enjoyed a brief stay at Grand Forks AFB, we North Dakotans will always consider them neighbors. The dedicated and selfless service of Grand Forks AFB personnel made me tremendously proud of America's Air Force, and our base. I was particularly impressed that Air Force personnel labored to battle flood waters, even as their own homes were inundated. I felt it was the least I could do to author an amendment which ensured that all Grand Forks AFB personnel would have full access to an Air Force disaster relief program. Together with all my fellow North Dakotans I would like to extend my sincerest thanks to Grand Forks AFB an the base's American Red Cross. The base commander at the time, Brigadier General Kenneth W. Hess, and the Station Manager of the American Red Cross at the time, Mary Martin, deserve special thanks. Additionally, I would like to thank the current base commander, Colonel James A. Hawkins, for his continued assistance in helping Grand forks get back on its feet. Under their leadership, the base and the Red Cross helped save a community, and made the state and the Nation proud. Mr. President, I ask that my letter to Brigadier General Kenneth W. Hess be printed in the Record. The letter follows: U.S. Senator, Washington, DC, May 6, 1997. Brig. Gen. Kenneth W. Hess, Commander, 319 Air Refueling Wing, Grand Forks Air Force Base, Grand Forks, ND. Dear General Hess: Working on the disaster has become all consuming, but I did want to take a moment to let you know how much I appreciate the courtesies you extended to me and my staff on our recent stay. Too, I shall be forever grateful to you for all you have done for the people of North Dakota. The night-time evacuation of the city of Grand Forks would have been impossible without the availability of the Grand Forks Air Force Base facilities to those in need of shelter. Your quick response and leadership made a situation rife with danger manageable. This same helpful attitude was evident everywhere on the Base--encouragement, hope, and a warm smile went along with the uniform whether at the Emergency Operations Center of the Command Center. And, kindness did not hamper your efficiency--The Grand Forks Air Force Base was a gracious host to the President of the United States and six Cabinet Members in the midst of a disaster. General Hess, you can be very proud of the men and women of the 319 Air Refueling Wing. One Airman mentioned to a member of my staff, ``We're glad to help out. We are just one big Grand Forks family.'' With deepest appreciation, Sincerely Kent Conrad, U.S. Senate.

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NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT1998-05-21

Mr. CONRAD

Mr. CONRAD. Will the Senator yield for a question?

Mr. CONRAD. I understand. I don't want to interrupt the Senator. I just want, if I could for the purposes of the Record, if nothing else, and maybe for the education of both of us, to ask just one question. Has the Senator, in the numbers that he has displayed on the chart, made any volume adjustment?

Mr. CONRAD. Will the Senator--

Mr. CONRAD. Will the Senator just yield on that point?

Mr. CONRAD. Mr. President, I was seeking to ask the Senator from Oklahoma some questions about the numbers he was displaying about the revenue generated by this bill, because the numbers he was displaying are not the official forecasts by the Joint Tax Committee of what this bill will raise. His numbers that he was displaying here are much higher than the numbers that are in the official forecast. Generally, when we debate a bill on the floor of the Senate, we debate based on common numbers. We debate based on the official forecasts. The Senator from Oklahoma has chosen not to do that. He has chosen to take other numbers that are much higher and different. The major difference between those numbers is that the bill calls for a volume adjustment that is not contained in the Senator's figures. The volume adjustment appears very clearly in the bill at page 189, No. 2, ``Volume Adjustment.'' I will not go through the technical details. But the volume adjustment provides for, if volumes of cigarettes consumed declined because of an increase in price, the price increase will be adjusted downward. The numbers of the Senator from Oklahoma do not contain that volume adjustment. The fact is both Joint Tax and the Congressional Budget Office assume there will be a reduction in volume of about one-third, and any volume reduction beyond a 40-percent volume reduction will result in a lowering of the price increase. Again, the Senator's numbers did not include those figures. The numbers he was using are not the official forecasts for this bill. They are at great variance from what has been provided by the Senator and are the official forecasts of what this bill will raise made by the Joint Tax Committee. I want to point that out because I think it is important to set the Record straight. At this point in the record, I ask unanimous consent to have printed in the Record the Joint Tax Committee's estimates of what this bill will raise. I also would like to enter into the Record at this point page 189 from the bill that points out the volume adjustment provisions which the Senator from Oklahoma neglected to advise the Senate are not contained in the numbers which he displayed for our colleagues.

Mr. CONRAD. Mr. President, I am just going to repeat the point. I am sorry to have set off my colleague from Oklahoma. The simple fact is the numbers he has displayed here are not the official forecast for what this bill will raise. They just are not. They are dramatically higher than the official forecast before this body by the Joint Tax Committee, which is the forecasting service we all use. And so the numbers that he has presented to our colleagues, to anybody else who is listening, are numbers that are not the official forecast of what this bill is going to raise.

Mr. CONRAD. No. I asked repeatedly for the Senator to yield to me. He repeatedly refused, so I refuse. The point is very simple. The reason his numbers are at dramatic variance with the official estimate of what this bill that is before this body will raise is because he takes no account of the volume adjustment that is contained clearly in the bill. And that volume adjustment calls for lower payments from the companies as the use of the product falls. Now, any economist and anybody with common sense understands that as you increase the price of something, you sell less of it. That is just basic. And so the legislation acknowledges that economic fact of life. I yield the floor. Mr. NICKLES addressed the Chair.

Mr. CONRAD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

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NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT1998-05-21

Mr. CONRAD

Mr. CONRAD. Mr. President, it all boils down to the question at the bottom, which is, What are we going to do to reduce smoking in this country? Why is that the goal? Because we have 400,000 of our fellow citizens dying every year from smoking-related diseases. It is the No. 1 health challenge in the country that is avoidable. It is No. 1. There is nothing else that kills this number of our fellow citizens. The estimate is for every three that are smoking, one will die of smoking- related diseases. I have held hearings now all across America. Everywhere we have gone people have come forward and described the agony and the tragedy caused in American families by the use of this product. This is the only legal product in America when used as intended by the manufacturers that addicts and kills its customers. There is no other product that fits that bill. The only one, the only legal product, when used as intended by the manufacturer that addicts and kills its customers. People in this country are asking us to stand up and do something to help them--to help them keep their kids from using this drug, and a drug it is--to help them avoid the disability and death that attends the use of tobacco products. We are not going to prohibit the use of tobacco because we have 45 million people in this country that smoke. We don't have a very good history with prohibition. We can do something to help American families deal with the agony caused by the use of these products. We should not avoid the opportunity to act. I thank the Chair. I yield the floor. Mr. BIDEN addressed the Chair.

Mr. CONRAD. Mr. President, I ask for 1 additional minute.

Mr. CONRAD. Mr. President, the Senator from Texas has indicated that the bill is unconstitutional with respect to the look-back provisions. We have an opinion from the Congressional Research Service on the look- back provisions, and this is what they say: ``We conclude that the bill which may be refined further in the amendment process does not appear to pose serious constitutional concerns and would seem to satisfy a showing of rationality and legitimate government action.'' So while the Senator from Texas has determined this bill unconstitutional, the Congressional Research Service says otherwise. They say this bill is constitutional. They say that it will satisfy a showing of rationality and legitimate government action. We have heard a lot of arguments out on the floor today. We have had a number of Senators dominate the discussion, and, frankly, I had begun to wonder if they were afraid to debate and afraid to vote. That is what is going on here. We are in the ``stall,'' because some are afraid to debate and they are afraid to vote. They won't even allow a debate to occur out here on the floor. They reject any interchange, any discussion. Instead, they just want to give speeches to stall and delay. So, maybe it is time for us to have a debate. I don't know why they won't come out here and debate. Let's have a debate, and let's see what the American people conclude after that. Now, we have heard all day that this is disproportionately affecting the lowest-income people. This is a levy on them. The first thing I point out is, people choose what they do. Nobody is going to pay a penny of tax if they don't go to the store and buy the cigarettes. They don't have to do that. There is no requirement to do that. This is no levy on their income; this is their choice. Our friends on the other side of the aisle talk about personal responsibility. This is a question of personal responsibility. It goes beyond that. Nobody is talking about the taxes imposed on all the rest of us who are expected to pick up the tab because this industry imposes costs on society that aren't being covered by them. Mr. President, the rest of us are being expected to pay taxes, to pay the Medicare bill estimated at $22 billion a year imposed by this industry. The Medicaid Program has over $11 billion a year of cost imposed on them because of this industry. That is not covered. How did we get here? We got here because State attorneys general sued the tobacco companies--sued them. And the basis for the lawsuit was, the tobacco industry was imposing costs on State Medicaid Programs. Of course, part of State Medicaid Programs is financed not only by State taxpayers but by Federal taxpayers. Federal taxpayers have had costs imposed on them because of the use of tobacco products. It is only fair to the vast majority of people who don't smoke that they have some of these costs relieved from them. Three-quarters of the people in this country do not smoke, and they are being expected to pick up the tab for the industry's actions, for what this industry has done. That is not fair. It is time to redress some of this balance. The three- quarters of the people who get stuck with the bill each and every year say, ``Wait just a minute now. It is time for this industry to pay a fuller share of the costs it imposes in this society.'' The best estimates we have are that the use of tobacco products costs this society $130 billion a year. Those are the costs being imposed by this industry. People smoke 24 billion packs of cigarettes a year. So the costs per pack being imposed on this society are $5 a pack. Those are the costs being imposed by this industry on all the rest of us. Who is paying that tab? Every other taxpayer, every single one that doesn't smoke, is being stuck with that bill. We are saying it is time for the industry to start paying a fair share of the costs that it imposes on this society and all the rest of us. That is just a matter of fairness. Now, why do we have look-back provisions? Senator McCain is precisely right: The reason there are look-back penalties imposed is because this industry has a history of going after young people. They try to addict them because they know they become lifetime smokers, and they know if they don't get them young and early, they don't get them. If there is any question about what this industry has done, let me go back to my top 10 tobacco tall tales. No. 7 was, ``Tobacco companies don't market to children.'' Here is their own document, a 1978 memo from a Lorillard tobacco executive. These are not words, these are the words from a tobacco company executive: ``The base of our business are high school students.'' That is the base of their business. They know what the base of it is. That is why they have been going after kids with their marketing and advertising campaigns for years. Tall Tale No. 8: Again, the claim, ``Tobacco companies don't market to children.'' Their own documents, a 1976 R.J. Reynolds research department forecast: ``Evidence is now available to indicate that the 14 to 18-year-old-year-old age group is an increasing segment of the smoking population. RJR must soon establish a successful new brand in this market if our position in the industry is to be maintained over the long term.'' What could be more clear? They are going after kids with advertising, with marketing, because they understand they are the base of their business. Tall tale No. 9: Again, the claim that the tobacco companies don't market to children. From their own documents, a 1975 report from Philip Morris researcher, Myron Johnston: Marlboro's phenomenal growth rate in the past has been attributable in large part to our high market penetration among young smokers . . . 15 to 19 years old . . . my own data . . . shows even higher Marlboro market penetration among 15-17-year-olds. This is why it is necessary to have a look-back provision. This is why it is necessary to say, if you do not achieve the goals for reduction of youth smoking, you are going to pay an economic penalty, because nobody knows more about marketing to kids and how to successfully hook them than the tobacco industry. They spend hundreds of millions of dollars learning how to effectively get across to them. And they are the only ones that have the best information, or I should say they are the ones who have the best information on what might work to allow youth smoking to decline. The best way to get an effect of what we are serious about here, reducing youth smoking, is to give the companies an economic incentive to achieve those goals. Unfortunately, in the McCain bill most of the penalty is given on an industry-wide basis. The Durbin amendment is seeking to shift that so most of the penalty is on a company-specific basis. Why? First, if you punish everybody equally you punish the good with the bad. Unfortunately, that is what the McCain bill does because they put most of the penalty industry-wide. It doesn't matter if you are a good company and you really achieve the goals for reducing youth smoking, or you are a bad company. You still pay the penalty. That is not individual responsibility. Frankly, that is socialism. That has everybody in the pot together, good or bad. Second, having a penalty that is largely based, industry-wide, creates a perverse incentive. With an industry-wide penalty, if a company does the right thing and reduces youth smoking, it still pays the penalty. In fact, it pays twice. It pays the penalty, and it suffers the loss of market share from not addicting young kids. What a perverse incentive that is. Mr. President, the third point that needs to be made is that because all the companies will pay the same surcharge, they can just treat this as a cost of doing business and pass that surcharge along to the customers.

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NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT1998-05-20

Mr. CONRAD

Mr. CONRAD. Will the Senator from Missouri yield for a question?

Mr. CONRAD. Will the Senator yield?

Mr. CONRAD. Will the Senator yield on that point?

Mr. CONRAD. I ask for an additional 2 minutes.

Mr. CONRAD. Mr. President, reserving the right to object.

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