Kay Hutchison

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 248, which was submitted earlier today by myself and Senator Gramm and Senator Moseley-Braun.

Mrs. HUTCHISON. Mr. President, I yield the floor. Mr. GORTON addressed the Chair.

Mrs. HUTCHISON

Mrs. HUTCHISON. I thank the Chair. I thank the Senator from Arizona.

Mrs. HUTCHISON. I have a resolution that has been entered by both sides. I wanted to be able to bring it up, read the resolution, and speak for about 5 minutes, and ask unanimous consent that it be passed. So I didn't want to be prohibited from doing that in morning business.

Mrs. HUTCHISON. Mr. President, before you finish, let me make sure that I will be able to ask for a resolution to be unanimously passed and if I can do that in morning business. I want to be sure that I can do that. It has been cleared.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, today I am introducing the Surface Transportation Board Amendments of 1998. This legislation proposes to expand the Surface Transportation Board's existing authority to address circumstances affecting rail service transportation in today's environment. First, I think most colleagues would agree that the STB has performed well since its inception in 1996. The industries it regulates have experienced a number of significant changes in the past few years. The STB has acted consistently with the authority Congress gave it, and clearly within the deregulatory intent with which it was created. This year's reauthorization gives us the first chance since we created the Board to review its practices and performance. My bill is based upon the principle that Congress sets government policy and the Executive Branch, through regulators such as the STB, executes that policy. During hearings in my Surface Transportation and Merchant Marine Subcommittee, I have consistently sought to identify the limits of STB authority to act in certain circumstances, and to identify those areas beyond which STB action would require a policy decision by Congress. It is very important that we pass a re-authorization bill this year. Doing that will require that we establish the middle ground between those who want to roll back the clock and begin to re-regulate the industry and those who think the board needs no additional authority to adequately address the many issues before it. I believe my bill does just that. However, I stand ready to work with my colleagues to further refine my proposals to move this bill through the legislative process. I welcome input from any interested members. My own personal view is that re-regulation is not called for. The Staggers Rail Act of 1980 has had very positive results for both industry and shippers. But we must ensure the board has sufficient tools to ensure that deregulation has its intended effect of greater competition and better value to the consumer. The experiences of the past few years, and this year in particular, give us much to consider. Mr. President, our country has endured a critical rail service crisis for many, many months. My home State of Texas has felt this crisis as much as any other State, and more than most. Texas has sustained billions of dollars of economic losses as the goods bound to and from the State's ports, factories and refineries sit gridlocked on the rails. These service problems primarily have occurred in the West, but there has been a ripple effect throughout the entire rail system. Service problems continue today, and I know the railroads have been working night and day to alleviate service troubles. Mr. President, I will explain my bill at greater length in a moment, but I want to stress that I have worked to craft a bill that maintains the basic de-regulatory rules that the rail industry and shippers have played by since the 1980s. However, it is the shippers today who face a most challenging rail shipping environment. Therefore, I am proposing we take action to ensure that the Board's procedures are more readily accessible to small shippers. I also am proposing to expand the Board's authority with regard to maintaining and promoting rail competition in appropriate circumstances. And, I believe strongly that we can do this without jeopardizing the integrity of deregulation. The Committee on Commerce, Science, and Transportation has been working for many months on issues surrounding the rail service transportation. In that effort, the reauthorization of the Surface Transportation Board is a priority of our Committee. To date we have held four rail service hearings during this Congress--three field hearings along with a Subcommittee hearing on the Board's reauthorization. In addition, at Senator McCain's and my request, the STB held 2 days of hearings in April to address rail access and competition issues at which more than 60 witnesses testified. In response to the information gathered during these many hearings both by our Committee and the Board, today I am proposing legislation to address a number of areas which I believe warrant serious attention and in some cases, reform. I expect some will have a strong reaction to my proposals, as some in the rail industry have tended to tar any legislative proposals affecting their industry as ``re-regulation.'' At the same time, I suspect some shipper groups will report that these proposals do not go nearly as far as they believe we should go. If so, that sounds like we're at least within striking distance of the middle ground. I want to briefly explain the major provisions of this legislation: First, the bill establishes that promoting competition within the rail industry is one of the criteria the STB should use in performing its responsibilities. Second, the bill would extend the time period covering the Board's emergency service orders. The current 270-day emergency order authority would be extended to cover a total period of 18 months. In the event an emergency remains in effect beyond this time frame, the Board would be permitted to request and receive two 6-month extensions of an emergency service order. The Congress could disapprove the Board's requests and also take affirmative action to grant any further extensions as may be necessary. Third, the bill includes several features to simplify the regulatory process involving small rate cases. During every hearing before our Committee, shippers stressed their frustrations that for a small shipper, it is simply too time consuming and costly to ever bring a case to the Board. This bill seeks to acknowledge those concerns and proposes to foreclose discovery in small rate cases, absent a demonstration of compelling need. Further, it would direct the Board to establish an arbitration mechanism for small shipper cases. It would not require mandatory arbitration, but would allow for arbitration at one party's request. Fourth, my bill seeks to address concerns raised about the Board's market dominance standard. Some have advocated Congress statutorily eliminate product and geographic competition from the Board's market dominance analysis as it is a very time consuming process. Yet others contend these considerations remain necessary. My bill recognizes the Board's April 17th decision announcing it would initiate a proceeding to consider whether to maintain, change, or eliminate product and geographic competition from consideration in rate cases. I believe the Board's action is the proper route to follow. Fifth, my bill seeks to address another area of concern raised by shippers: revenue adequacy. At the Board's April hearings, rail and shipper representatives suggested referring this matter of considerable debate to one or more disinterested economists, which the Board initiated April 17th. My bill directs the Board to carry out its proposal in this area and direct rail and shipper representatives to select a panel of 3 disinterested economists to examine the Board's current standards for measuring revenue adequacy and to consider whether alternative measurements of a railroad's financial health are warranted. Sixth, my bill seeks to address the issue of bottleneck rates. There is considerable debate as to the correct approach in this area, with some strongly opposed to any change and others equally adamant about total reform. My proposal seeks to take a balanced approach, ensuring some needed boundaries remain. It would require a carrier to provide a shipper with a rate for a ``bottleneck'' line segment when requested to accommodate a transportation contract. The railroad would be required to provide the shipper with a rate over the ``bottleneck'' line segment as long as the interchange would be operationally feasible and the through route would not significantly impair the railroad's ability to serve its other shippers. Finally, my bill would remove the 3-year renewal requirement regarding antitrust immunity applicable to household goods carriers. While the continued propriety of collective actions by other types of motor carriers has been the subject of debate, no similar concerns have been voiced about the collective activities of household goods carriers. The repeal of the mandatory review requirement would relieve the carriers of an unnecessary regulatory burden, although it would have no effect on the STB's existing authority to modify or revoke collective actions when the STB determines such action is necessary to protect the public interest. Mr. President, I ask unanimous consent a copy of my bill be printed in the Record. I encourage my colleagues to look at this legislation and begin working with me now so that we may reauthorize the Surface Transportation Board this year and provide important policy guidance in regard to rail service matters.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, today I am introducing the Surface Transportation Board Amendments of 1998. This legislation proposes to expand the Surface Transportation Board's existing authority to address circumstances affecting rail service transportation in today's environment. First, I think most colleagues would agree that the STB has performed well since its inception in 1996. The industries it regulates have experienced a number of significant changes in the past few years. The STB has acted consistently with the authority Congress gave it, and clearly within the deregulatory intent with which it was created. This year's reauthorization gives us the first chance since we created the Board to review its practices and performance. My bill is based upon the principle that Congress sets government policy and the Executive Branch, through regulators such as the STB, executes that policy. During hearings in my Surface Transportation and Merchant Marine Subcommittee, I have consistently sought to identify the limits of STB authority to act in certain circumstances, and to identify those areas beyond which STB action would require a policy decision by Congress. It is very important that we pass a re-authorization bill this year. Doing that will require that we establish the middle ground between those who want to roll back the clock and begin to re-regulate the industry and those who think the board needs no additional authority to adequately address the many issues before it. I believe my bill does just that. However, I stand ready to work with my colleagues to further refine my proposals to move this bill through the legislative process. I welcome input from any interested members. My own personal view is that re-regulation is not called for. The Staggers Rail Act of 1980 has had very positive results for both industry and shippers. But we must ensure the board has sufficient tools to ensure that deregulation has its intended effect of greater competition and better value to the consumer. The experiences of the past few years, and this year in particular, give us much to consider. Mr. President, our country has endured a critical rail service crisis for many, many months. My home State of Texas has felt this crisis as much as any other State, and more than most. Texas has sustained billions of dollars of economic losses as the goods bound to and from the State's ports, factories and refineries sit gridlocked on the rails. These service problems primarily have occurred in the West, but there has been a ripple effect throughout the entire rail system. Service problems continue today, and I know the railroads have been working night and day to alleviate service troubles. Mr. President, I will explain my bill at greater length in a moment, but I want to stress that I have worked to craft a bill that maintains the basic de-regulatory rules that the rail industry and shippers have played by since the 1980s. However, it is the shippers today who face a most challenging rail shipping environment. Therefore, I am proposing we take action to ensure that the Board's procedures are more readily accessible to small shippers. I also am proposing to expand the Board's authority with regard to maintaining and promoting rail competition in appropriate circumstances. And, I believe strongly that we can do this without jeopardizing the integrity of deregulation. The Committee on Commerce, Science, and Transportation has been working for many months on issues surrounding the rail service transportation. In that effort, the reauthorization of the Surface Transportation Board is a priority of our Committee. To date we have held four rail service hearings during this Congress--three field hearings along with a Subcommittee hearing on the Board's reauthorization. In addition, at Senator McCain's and my request, the STB held 2 days of hearings in April to address rail access and competition issues at which more than 60 witnesses testified. In response to the information gathered during these many hearings both by our Committee and the Board, today I am proposing legislation to address a number of areas which I believe warrant serious attention and in some cases, reform. I expect some will have a strong reaction to my proposals, as some in the rail industry have tended to tar any legislative proposals affecting their industry as ``re-regulation.'' At the same time, I suspect some shipper groups will report that these proposals do not go nearly as far as they believe we should go. If so, that sounds like we're at least within striking distance of the middle ground. I want to briefly explain the major provisions of this legislation: First, the bill establishes that promoting competition within the rail industry is one of the criteria the STB should use in performing its responsibilities. Second, the bill would extend the time period covering the Board's emergency service orders. The current 270-day emergency order authority would be extended to cover a total period of 18 months. In the event an emergency remains in effect beyond this time frame, the Board would be permitted to request and receive two 6-month extensions of an emergency service order. The Congress could disapprove the Board's requests and also take affirmative action to grant any further extensions as may be necessary. Third, the bill includes several features to simplify the regulatory process involving small rate cases. During every hearing before our Committee, shippers stressed their frustrations that for a small shipper, it is simply too time consuming and costly to ever bring a case to the Board. This bill seeks to acknowledge those concerns and proposes to foreclose discovery in small rate cases, absent a demonstration of compelling need. Further, it would direct the Board to establish an arbitration mechanism for small shipper cases. It would not require mandatory arbitration, but would allow for arbitration at one party's request. Fourth, my bill seeks to address concerns raised about the Board's market dominance standard. Some have advocated Congress statutorily eliminate product and geographic competition from the Board's market dominance analysis as it is a very time consuming process. Yet others contend these considerations remain necessary. My bill recognizes the Board's April 17th decision announcing it would initiate a proceeding to consider whether to maintain, change, or eliminate product and geographic competition from consideration in rate cases. I believe the Board's action is the proper route to follow. Fifth, my bill seeks to address another area of concern raised by shippers: revenue adequacy. At the Board's April hearings, rail and shipper representatives suggested referring this matter of considerable debate to one or more disinterested economists, which the Board initiated April 17th. My bill directs the Board to carry out its proposal in this area and direct rail and shipper representatives to select a panel of 3 disinterested economists to examine the Board's current standards for measuring revenue adequacy and to consider whether alternative measurements of a railroad's financial health are warranted. Sixth, my bill seeks to address the issue of bottleneck rates. There is considerable debate as to the correct approach in this area, with some strongly opposed to any change and others equally adamant about total reform. My proposal seeks to take a balanced approach, ensuring some needed boundaries remain. It would require a carrier to provide a shipper with a rate for a ``bottleneck'' line segment when requested to accommodate a transportation contract. The railroad would be required to provide the shipper with a rate over the ``bottleneck'' line segment as long as the interchange would be operationally feasible and the through route would not significantly impair the railroad's ability to serve its other shippers. Finally, my bill would remove the 3-year renewal requirement regarding antitrust immunity applicable to household goods carriers. While the continued propriety of collective actions by other types of motor carriers has been the subject of debate, no similar concerns have been voiced about the collective activities of household goods carriers. The repeal of the mandatory review requirement would relieve the carriers of an unnecessary regulatory burden, although it would have no effect on the STB's existing authority to modify or revoke collective actions when the STB determines such action is necessary to protect the public interest. Mr. President, I ask unanimous consent a copy of my bill be printed in the Record. I encourage my colleagues to look at this legislation and begin working with me now so that we may reauthorize the Surface Transportation Board this year and provide important policy guidance in regard to rail service matters.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Subcommittee on Technology, Terrorism, and Government Information, of the Senate Judiciary Committee be authorized to hold a hearing during the session of the Senate on Wednesday, June 10, 1998 at 2:15 p.m. in room 226, Senate Dirksen Office Building, on: ``Critical Infrastructure Protection: `Eligible Receiver' and the New PDD.''

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Subcommittee on Financial Services and Technology of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Wednesday, June 10, 1998, to conduct a hearing on ``Disclosing Year 2000 Readiness: Are the Companies You Invest in Ready for the Year 2000? Will You Know if They're Not?''

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Subcommittee on East Asian and Pacific Affairs be authorized to meet during the session of the Senate on Wednesday, June 10, 1998 at 2:00 p.m. to hold a hearing.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Communications Subcommittee of the Senate Committee on Commerce, Science, and Transportation be authorized to meet on June 10, 1998, at 9:30 a.m. on FCC reauthorization.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Wednesday, June 10, 1998 at 2:30 p.m. to hold an open hearing on Intelligence Matters.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Senate Committee on Indian Affairs be authorized to meet during the session of the Senate on Wednesday, June 10, 1998 at 9:30 a.m. to conduct an oversight hearing on Bureau of Indian Affairs School Construction. The hearing will be held in room 106 of the Dirksen Senate Office Building.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be allowed to meet during the session of the Senate on Wednesday, June 10, 1998, at 2 P.M. in SR-328A. The purpose of this meeting will be to examine livestock issues.

Mrs. HUTCHISON

Mrs. HUTCHISON. We will have time to talk?

Mrs. HUTCHISON. Mr. President, excuse me----

Mrs. HUTCHISON. Mr. President, thank you. I want to talk about the tobacco bill in the context of where we started and where we are now. I was on the Commerce Committee, and although I thought the bill had flaws in the Commerce Committee, nevertheless there was a balance to the bill. Our purpose in the tobacco bill is to try to keep teenagers from experimenting and getting hooked on cigarettes before they have the full judgment to understand that nicotine is addictive. That has been everyone's stated purpose. The President said that. Every Member who makes a speech on the floor says that. Everyone agrees. What we came out of the Commerce Committee with was a bill that I felt had a good chance of reaching the goal of severely limiting the amount of teen smoking in this country. Here is what the bill did, in a broad generalization. It had an agreement from the tobacco companies that they would not advertise. That is a key component to curbing youth smoking, not making it seem attractive to smoke. If you are not advertising with the Marlboro Man, it may not be nearly as appealing to smoke. So the tobacco companies voluntarily agree that they are not going to advertise provided a huge part of the balance of this bill. The second part, and what the tobacco companies needed, I suppose, or asked for in order to give up a major right that we could not take away from them--their constitutional right under the first amendment to advertise. Congress could not pass a law saying they could not advertise. We had to have something to which they would agree. What they wanted was some limitation on the liability in any 1 year. So in the bill that came out of committee, there was a limitation of about $8 billion. And if someone sued, and it was above that limit, their claim would not be thrown out but it would roll over until next year. I thought that was a fair balance because it would allow us to go for the target of stopping teenagers from starting to smoke because of advertising, which we now know has been targeted toward them, in return for having what I think is a huge liability limit. Nobody at this point has even come close in this country to $3 or $5 billion in any year from a lawsuit on liability. So I thought we had a balance. What has happened on the floor is, I think--a combination of people who had different purposes in addition to stopping teen smoking, removed all the liability limits, therefore, you lose the tobacco companies agreeing to give up their constitutional right to advertise. I think we lost track of the major target. In the meantime it was also decided that we would tax the people who legally smoke, at least $1.10 a pack, so that the price of a pack of cigarettes would go toward $5 a pack. So now you have what I think is a terrible principle; and that is, that you are taxing one sector of the population to have new programs that may or may not be effective in curbing teen smoking. So now we have an amendment that is going to be offered in the next hour that would say, ``Well, we've got this huge tax increase and I don't like where the spending is going, so let us give it back in tax cuts to somebody else.'' I do not like that principle. I do not want to tax a working person who is making $20,000 a year in order to give money back to a working family making under $50,000. I do want to give money back to the working family that is making under $50,000, but I want to do it in the context of our budget, like we do every other tax cut or every other tax increase, for that matter. This bill violates both principles that we would tax or give tax cuts within a budget and that we would tax one person to give it to someone else. I am the sponsor of the bill that would eliminate the marriage tax penalty. It is my bill. Senator Faircloth and I are cosponsoring this bill together because we believe the highest priority for tax cuts in this country should be eliminating the marriage tax penalty. So given the choice that I am going to have before me of not wanting to tax one person in order to give it to someone else, but my choice being we are going to have the tax increase, what do we do with it? Go spend money on new Government programs or give it back to people who make under $50,000, I am going to choose the latter. I am going to choose to try to start eliminating the marriage tax penalty by giving a higher level of exemption before you have to start paying taxes. So I am going to make the tough choice in favor of giving money back to the people who work for it. But I do not like this bill. And I hope and I urge my colleagues not to continue to try to put this bill in shape but instead to go back and start all over. I think we can pass a responsible bill in this Congress that would severely limit the number of teenagers who start smoking. That is a worthy goal. I also think in this Congress that we should pass the elimination of the marriage tax penalty because it hits people who make $30,000, $40,000, $50,000, couples who get married, who want to make that downpayment on their first home; and when they do, they are hit with a $1,000 or $2,000 tax increase just because they got married. So I want to do both of these things. I do not like the choices that we are looking at in the bill before us. And I do not like the choices being given to us by the amendment. But as the lesser of two evils, I am certainly going to support a tax cut when we already have a tax increase on the floor. But what I would suggest is that we scrap the whole thing and try to do this right. Doing it right means two things: It means, first of all, eliminating the marriage tax penalty in the budget; and, secondly, coming back with a balanced bill that will have the purpose of stopping or severely curtailing teen smoking, but not on the back of a person who is working for a living, not making much money, and is smoking, unfortunately, but nevertheless by his or her own choice. That is a choice that a person makes. I do not think that we should be taxing someone at this level-- it is a regressive tax--when we are not sure that the purpose is going to be achieved. So I hope my colleagues will look at this issue, step back--first of all, pass Senator Gramm's amendment because at least we can take the first step towards eliminating the marriage tax penalty--then I hope we will bring this bill down and start from scratch and try to put forward a bill that will stop teen smoking or at least put a big dent in it. I think we can do that with the balance that we had in the original bill before it got worked over by the U.S. Senate. I suggest the absence of a quorum.

Mrs. HUTCHISON

Mrs. HUTCHISON. That is correct, and I thank the Chairman for his support in this matter.

Mrs. HUTCHISON. Mr. Chairman, I understand the amount authorized under this section for the DART North-Central Light Rail Extension shall be no less than $188 million.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, on May 29th, I will be in Port Arthur, Texas, helping to celebrate the City of Port Arthur's Centennial Day Celebration as well as the tenth anniversary of the Golden Triangle Veterans' Memorial Park. Port Arthur, a city born at the dawn of the 20th century, enters the 21st century confident in its stride as a growing and vibrant community on the Texas' Gulf Coast, not far from my home town of La Marque. Port Arthur, a corner of what some call Texas' Golden Triangle, plays a key role in our national security by contributing to our energy independence through its oil exploration and petroleum refining activities. Nearly every American has benefited from the products that enter the world market from Port Arthur-- petrochemicals and oil in particular. The City of Port Arthur is named for Arthur E. Stillwell, originally of Rochester, New York. In 1895, Mr. Stillwell was searching for a site for the southern terminal of his proposed railroad from Kansas City to the Gulf of Mexico. He chose a site on the north shore of Lake Sabine, where Port Arthur stands today. The railroad to Port Arthur, which eventually became known as the Kansas City Southern Railroad, was completed in 1897. The city of Port Arthur was incorporated on May 30, 1898, one hundred years ago this month. The next year, the original ship canal to the Gulf was opened. Today, cargo tonnage out of the Port of Port Arthur averages about 23,000,000 tons per year. But it was on January 10, 1901, that the destiny of Port Arthur changed forever when a well dug by Anthony Lucas at Spindletop, only ten miles away from Port Arthur, struck black gold. Nearly a million barrels of crude oil are refined in the area daily, justifying Port Arthur's claim--``We Oil the World.'' Today, Port Arthur is the home of three major refineries and the still important terminus of the Kansas City Southern railroad. The town of one thousand people a hundred years ago has grown to almost 60,000, and a diverse economy guarantees Port Arthur's growth into its second century. In addition to its energy industries, Port Arthur has become a year-round fisherman's paradise where thousands of anglers catch more than twenty-five varieties of freshwater and saltwater fish. Other popular local attractions include the Museum of the Gulf Coast, the McFaddin and Texas Point National Wildlife Refuges, the Sabine Pass Battleground State Historical Park, and Sea Rim State Park. I'd like to talk for a moment about the tenth anniversary of the Golden Triangle Veterans' Memorial Park, which we will also be celebrating next week. This is the only park in the United States that recognizes all veterans, including those that served during times of peace. It was built by members of the community, financed and constructed through donations and over 55,000 volunteer man-hours. The park contains walls of honor for all our nation's past wars. The park's ten-year anniversary celebration is part of a week's worth of activities recognizing the Port Arthur Centennial. I want to congratulate Jefferson County Judge Carl Griffith, Port Arthur Mayor Robert Morgan, Jr., and the people of Port Arthur on this historic occasion. Together, we look forward to what their community will accomplish in the next 100 years.

Mrs. HUTCHISON

Mrs. HUTCHISON. Where we differ is, how do we achieve this result? Forty States have now filed lawsuits to engage the tobacco industry in accepting the responsibility for its actions. Recent evidence demonstrates tobacco companies targeted children in their advertising, and the industry may have manipulated scientific research in its favor. This, obviously, is outrageous. We have a historic opportunity to limit youth smoking and to disclose all the information concerning the health risks of adult tobacco use. Four States have moved forward and reached settlements. My State is one of those. As a member of the Commerce Committee, which drafted the first version of the legislation before us, my principal concern was to ensure that nothing we did at the Federal level would undermine the agreements that have been reached by the individual States. I appreciate Senator McCain for his support of my amendments in the committee, most of which are in the bill before us, that would hold those States harmless. In my view, the most critical aspect of the Texas settlement and of the State attorneys general agreement that was reached with the industry was the restrictions on advertising and marketing that the industry accepted. These restrictions were tacit admission by the industry that its practice of marketing to teens was unacceptable. These restrictions are critical to our cause of reducing teen smoking. According to the Congressional Budget Office, if the tobacco industry did reduce its advertising, the greatest effect would probably be among teens. This report notes that studies show that teens are more sensitive than adults to brand-specific advertising. I voted for the original version of this bill in the Commerce Committee in large part because of the testimony of the attorneys general. They said the industry acquiescence in a ban on advertising, combined with a limit on industry liability, was the critical policy mix needed to attack the problem of teen smoking. That is why I voted against the Gregg amendment that was just before the Senate. That amendment will remove the liability limits. The reason a limit on liability was deemed important by the attorneys general was that the tobacco companies are the source of funds for the smoking cessation programs in this bill. If tobacco companies are sued out of business, new ones that aren t held to the standards of this bill will replace them and we will have the worst of all worlds. We will have new tobacco companies that do not have liabilities because they haven't advertised to teens and committed the other misdeeds of the present ones. They will not be bound by the restrictions on advertising. I am afraid we will do more damage if we pass a bill that has no limitations on liability and no restrictions on advertising. This balance between advertising restrictions and liability limitations is what the attorneys general put forward, and I think we must recapture it. In the Texas agreement and in the State attorneys general agreement, the tobacco companies are partners in the effort to stop teen smoking. Largely through the voluntary advertising and marketing restrictions in the legislation that was before the Commerce Committee, we would be able to achieve our result to stop teen smoking. The tobacco companies have now walked, and I am afraid this is not a good development. I hope we can restore the balance and, in our zeal to punish the tobacco companies, that we do not destroy the very companies we expect to pay for the programs in our bill that can end teen smoking. Without the advertising restrictions, I believe what we have before the Senate is a tax bill. We have to decide if raising the price of cigarettes would have the effect of stopping teens from buying them. Now, most parents would be experts in answering the question: Will the demand for cigarettes by teenagers go down if we raise the price? They know, for example, that a $200 pair of tennis shoes or a $75 pair of sunglasses sound perfectly reasonable to a teenager. To those teens, there probably isn't much difference between a pack of cigarettes that costs $2.25 or $3.75. Unfortunately, the Congressional Budget Office study tends to support this common sense observation. According to the CBO study that said teens are sensitive to advertising, teens are not very responsive to tobacco price changes. In fact, studies show that, under some circumstances, there is no impact on teen demand when cigarette prices rise. I have spoken to teens about this. I have asked them, Will raising the price from $2.25 to $3.75 make a difference? What I have found is that teens do think this is a pocketbook issue. But it is not the one you think. It is not the money in their pocketbooks that will make the difference to teens; it is their driver's license. Teens say that what will really deter them from smoking is the threat of losing their driving privileges. In fact, a study by the Texas Department of Health found that 64 percent of teenagers said they would not smoke if they thought they would lose their driver's licenses. This was compared to 48 percent who said a $250 fine would deter them. My State legislature passed legislation that imposed tough penalties on tobacco use for underage Texans, including suspension of their driver's licenses. I am very concerned about what I consider to be essentially a tax bill, because we have lost the balance that we had in the attorneys general agreement. If it is going to be a tax bill, let's be honest; it is a tax bill on lower- and middle-income people. It may also lead to a black market problem. Before I came to the U.S. Senate, I was the treasurer of the State of Texas. In Texas, the treasurer was the tobacco tax collector. I have dealt with the black market. I have seen how differences in tobacco taxes between states affect the black market. My agency did raids on flea markets and roadside sales of illegal cigarettes that didn't have stamps on them, and I can tell you something: We stopped truckloads coming from Louisiana into Texas and into the flea markets because there was a significant difference in taxes between Louisiana and Texas--it s a 21 cent a pack difference today. In fact, the estimates of the nonpartisan Tax Foundation show that my State of Texas loses $172 million in revenue annually due to the black market in tobacco. That is because we live next to a State that has a 21-cent lower tax and next to a country, Mexico, where cheaper cigarettes are available. In Canada, they had the exact same experience when they increased the cigarette tax in 1991. Smuggling became such a problem that many provinces cut their own taxes to make it less lucrative. What did that lead to? Instead of smuggling, there was a black market between the Provinces. The government of British Columbia estimates losses of as much as $100 million a year. This is the reason that the National Association of Police Organizations has asked us to be very cautious with the legislation before the Senate. According to the executive director, Mr. Robert Scully, this bill could lead to an increase in cigarette smuggling beyond the control of organized law enforcement. All of us are struggling to try to do the right thing. I believe that I can truthfully say every Member of the U.S. Senate has the same goal: To stop teen smoking. However, how we get there is the question, and I don't think we are close to agreement on what is the right path to that goal. I am not going to vote for taxes that will run out of business the tobacco companies that can pay for the health and smoking cessation programs. This would result in the emergence into the market of new companies not bound by our restrictions because they would have no history of wrong-doing. Then we would have no funding for the health programs, no voluntary restriction on the advertising, and we will never reach the goal of stopping teen smoking. I am not going to vote for a tax increase that is so high that it causes a black market in my State of Texas as well as Arizona, New Mexico, and California, that borders Mexico, or where the price of cigarettes is very cheap. I am not going to vote for a bill that does not have a reasonable chance of a balance that will achieve the goal of stopping teen smoking. We are going to have a lot of votes. I hope we can come up with a bill that I believe will reach that reasonable balance. I have not seen it yet. I hope that in the end we will not pass a bill that will create a black market, that will create more crime, that will take away the source of revenue that could help us pay for ads to stop teen smoking. And I hope we will not, in our zeal to punish the tobacco companies, have them walk away from the restrictions on advertising which they can only do voluntarily because it is their first amendment right to do so. I hope I can vote for a responsible bill, Mr. President. I hope everyone in the Senate will come together to try to achieve an agreement that will produce the result of stopping teen smoking.

Mrs. HUTCHISON. Mr. President, everyone agrees that children should not smoke. They do not have the maturity or judgment to understand the risks of their decision.

Mrs. HUTCHISON. Thank you, Mr. President.

Mrs. HUTCHISON. If the Senator will yield, the marriage bonus was put in place for single-income-earning families years ago. At that time, under 50 percent of the families in this country had two incomes. But today, 69 percent of the families in this country have two incomes. So the bonus became a penalty, because people were not able to get married remain in the same tax bracket as two singles earning the same combined amount. My colleague from Texas and the Senator from New Mexico are doing here what I have done in another bill, which I introduced with Senator Faircloth of North Carolina. Our bill allows married persons to choose to file as they do now or to file as single persons. That way, marriage versus single status will not have any tax consequences whatsoever. What we want in this country is fairness and equity in our Tax Code.

Mrs. HUTCHISON. I have the answer to that question.