John Kerry

Mr. KERRY

Mr. KERRY. Reserving the right to object, and I will not object. I think it is important to keep moving and we will do that. Mr. President, I will not object.

Mr. KERRY. Mr. President, before the Senator proceeds, can I ask how is the time being allotted to both parties during the quorum call?

Mr. KERRY. I thank the Senator. That is certainly the fair way we have been moving. I thank the manager for his continued effort to make sure we move that way. Let me say for Members who are trying to understand exactly where we are going, the amendment we voted on earlier this afternoon, the Kerry- Bond amendment which carried by 66 to 30-something, was passed by the Senate by voice vote. We will now proceed to have 45 minutes of debate remaining on the amendment on attorneys' fees, at which point there will be a motion to table and we will vote again this evening in about 45 minutes on that amendment, at which point we will then lay down an amendment. I am not sure what the intentions of the majority leader will then be with respect to scheduling a vote on that. I suggest the absence of a quorum.

Mr. KERRY. Mr. President, part of our agreement, and I want to make sure that Senator McCain agrees, and I ask further modification of the unanimous consent request, simply to say that, after disposition of the Faircloth-Sessions amendment on attorney's fees, it is then agreed that it would be the Democrats' opportunity to offer an amendment.

Mr. KERRY. I thank the Chair.

Mr. KERRY. Do I understand from the Senator from North Carolina that he will allow us to interrupt him in order to propound the unanimous consent request?

Mr. KERRY. Mr. President, I ask the cooperation of our colleague that once we have the unanimous consent request worked out, that the Senator would yield back to us for the purposes of propounding that request, and allow that interruption in the debate.

Mr. KERRY. Mr. President, reserving the right to object, it is my understanding that no amendment will be sent to the desk at this point.

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent Senator Bingaman and Senator Kohl be added as cosponsors to the pending amendment.

Mr. KERRY. I will discuss some further evidence of why this is so vital, but let me emphasize to my colleagues what we are doing in restricting this 50 percent of the already restricted funding is not a new program. We are not creating any new program. We are not creating any new bureaucracy. We are not requiring any new line of expenditure. We are using the existing child care development block grant, and we employ a mechanism that both parties, in a bipartisan fashion, have already accepted. This existing, successful bipartisan program already helps States to invest in child care but not adequately. And it already helps this investment in early childhood development programs but still not adequately. I believe all we have to do is look at the example of President Bush, who signed the block grant into law originally, and the bipartisan effort of Senator Hatch and Senator Dodd, who pushed the Senate to make this investment a reality. This amendment spells out explicitly the truth that has been implicit in all of this debate, that children are at the heart of the debate about tobacco in this country. We know--and we now know it to a shocking degree because we have discussed it at length on the Senate floor--through the tobacco companies' own memoranda, the degree to which tobacco companies targeted young children for decades. We went through, about a week ago, some of the extraordinary documents that now exist as a result of the lawsuits that show the million dollars of advertising that researched ways in which the tobacco companies could target young children and, the tobacco companies themselves acknowledged, ``get them when they're most vulnerable.'' The language was the most shocking and explicit statement of a kind of craven policy of how to corrupt young people that you have ever seen. And literally they said, get them hooked early, get them with all these symbols, get them with the advertising, and we won't say anything about the aftereffects because the pharmacological impact, they said--that is the way they politely labeled getting hooked--the pharmacological impact would see to it that the kids continued to buy down the road. So here we have an opportunity to protect our children from exactly that kind of predatory practice that is unacceptable. We believe that is the compelling reason why the Senate should adopt this amendment. According to a January 1998 poll, 83 percent of American voters support what I just said--83 percent of American voters believe that tobacco legislation ought to include significant investments in our children. It is a bipartisan consensus in this country that we ought to do that. Two-thirds of the Republicans who were polled by Lake, Sosin and Associates strongly agreed that the funds from the tobacco bill ought to be invested in child care and other childhood development programs that will make a difference as to whether or not those kids would then pick up smoking. In the Philadelphia Inquirer, the editorial page recently praised this amendment, saying, ``Using tobacco settlement proceeds for child care meshes with the goal of cutting the health toll of smoking and could produce benefits that go far beyond that.'' The Deseret News in Salt Lake City, UT, recognized that support for child care programs ``saves billions of tax dollars down the road.'' The Syracuse Herald-Journal on its editorial page, in urging the Senate to pass this amendment, said, ``Let the tobacco bill do some good.'' The editors of that newspaper reminded us that ``there are good reasons why tobacco revenues should go into child care. Child care and development block grant program, put in place during the Bush administration, simply doesn't have enough of a budget to fulfill the needs of working families--it wouldn't even if $20 billion is allotted. But it would be a start.'' And that is what these voices are telling us--that we ought to make the start. There is, in addition to broad editorial support, Mr. President, the coalition of more than 100 national, State, and local organizations, called Child Care Now, fighting for this amendment because they recognize the connection between kids and smoking. And in that coalition you will find the National Council of Churches of Christ in the USA, the YWCA of the USA. I have a letter that I received from the children and parents of Camp Fire Boys and Girls, 700,000 members strong, asking each Senator to support this amendment because, ``Children engaged in constructive after-school activities are less likely to smoke.'' These are mothers and fathers of working families, and they understand the tremendous pressures and temptations of smoking, and they have asked each and every Senator to support the notion that that is where a significant component of this revenue ought to go, to give their kids a fighting chance. This amendment responds directly to the plea of parents who desperately seek help in the area of child care and early childhood development to help keep their kids away from the cigarettes that they know they are being exposed to during the hours when, because they are working, because they are compelled to be away from the home, and because they do not have enough money to provide adequate support otherwise, their kids are being exposed. And we have an opportunity here to help them do that. Scientific research at the University of Southern California and the School of Public Health at the University of Illinois shows that 13- year-olds who are left home alone after school or during the day are significantly more likely to smoke cigarettes than children who participate in structured after-school activities. But today, only one- third of inner-city schools offer those programs, and, not coincidentally, it is in those very inner cities where youth smoking rates are now rising and going the highest. The National Women's Law Center, committed to protecting the rights of women, but also committed to the economic security of low-income women, wrote to Senator Bond and to me in favor of this bill, because they recognize that under the child care development block grant today only 1 out of 10 eligible children in a low-income working family currently gets the child care assistance they need. So if we are intent on reducing the number of kids who are smoking, and if we are really worried that smoking among high school seniors is at a 19-year high, and we are really worried about what the Senator from Georgia said when he came to the floor and talked about the drug problem, the marijuana increase among young people, then it is critical we focus on the 3 million young children in this country who are eligible but do not get it. We need to leverage the capacity of every State and local community to be able to take kids off the street corners, where they too often cave in to peer pressure and smoke each day, and put them instead into a structured environment that brightens their future, not one that jeopardizes it. So if we are serious about reducing youth smoking, it is imperative that we engage now in this effort to cultivate a whole generation of young people who have the capacity to make the right decisions. I have a letter from Dr. T. Berry Brazelton of the Harvard Medical School. Many people in America know him well, personally, and think of him as America's pediatrician. I would like to point out that he wrote, along with over 50 other doctors, public health officials and child development experts, to Senators about the early child development component of sound decisionmaking for our children. Among those who joined Dr. Brazelton were Julius Richmond, former Surgeon General of the United States, and the Chairman of Pediatrics at Johns Hopkins University School of Medicine, and Elizabeth McAnarney, the Chairwoman of the Department of Pediatrics at the University of Rochester. They tell all of us that scientific study after scientific study shows that the brain development in those first years of life is the most important--I quote from the letter of Dr. Brazelton: . . . for laying the foundation for adequate development, which results in self-confidence, smart decisionmaking, and the ability to later resist destructive habits like smoking. So these aren't ideas that have been cooked up on a political basis somehow. These are the foremost experts in the field. They are telling us if we want to raise a generation of children who are able to make these decisions, who will not fall prey to the lure of tobacco, it is vital that we invest in their capacity to do so. Again, I return to their letter, and read directly from it: We urge Congress to craft a comprehensive program for reducing teen smoking--and to ensure that such an effort includes an essential investment in early childhood development and after-school programs. You can support a down payment on this investment by voting for the Kerry-Bond amendment. I think Dr. Brazelton said it best in a recent editorial when he said--simply-- As a prescription for preventing teen smoking, I'd say that early childhood development and child care programs are just what the doctor ordered. We also know from police officers and prosecutors like Ed Flynn, Chief of Police in Arlington, Virginia, who are leading a fight to invest tobacco money in child care. Chief Flynn has said that child care and after school programs ``help kids learn the valuable skills to become responsible adults.'' An entire organization led by police, prosecutors, and crime victims is pushing the Senate to pass this amendment because: The hours from 2:00 p.m. to 8:00 p.m. are not only the peak hours for juvenile crime, teen sex and teen experimentation with drugs, but also the hours when teens are most likely to get hooked on tobacco. After-school programs are not only our best protection against juvenile crime, but also may be the most powerful anti-smoking programs available. Being unsupervised in the afternoon doubles the risk that kids will smoke, drink, or use drugs. It is those individuals closest to our children who know this is the right way to deal with youth smoking. This is an amendment every Senator ought to support. I want to especially thank Senator McCain for supporting this amendment. In view of the pressure on Senator McCain, the Senator's support means a lot to me. I think I can speak for Senator Bond when I say we are honored to have John McCain by our side on this fight. I also want to thank Senators Chafee, Campbell, and Specter for cosponsoring this amendment. I think it proves that this is an amendment which is based not on Republican ideas or Democrat ideas, but simply on good ideas in touch with the mainstream view in this country. Under the Kerry-Bond amendment states will enjoy the flexibility of the child care development block grant. The truth is we would simply be articulating once and for all the important standard which the public health community and most Governors have already endorsed: that child care and early childhood development are vital tools in reducing the rates of children smoking in this country. We then leave it to the leadership at the state and local level to meet that standard, to design the programs that meet the local needs in places as different and diverse as Illinois, where Gov. Jim Edgar, a Republican, is experimenting with child care, and Rhode Island, where Gov. Almond has made after school care an integral part of preparing children in his state for the next century. The Kerry-Bond amendment empowers communities to find their own way of saving a new generation from smoking. We know how after school programs like Girls Inc. of Worcester, MA have effectively incorporated anti-smoking curriculum designed to teach their participants about the dangers of tobacco and equip them with the values to resist the peer pressure to smoke. I have met with the case workers from Central, MA who tell you that the ``Home Instruction Program for Preschool Youngsters'' helps parents and teachers join in community partnerships to raise healthier kids. But in all these communities and around the country you will find that there are waiting lists for the services--for the programs which teach kids about responsible decision- making, for the anti-smoking programs and the programs which take kids off the streets and give them structure--and the demand far exceeds our capacity to serve. At the Castle Square Early Child Development Center in Boston, there were 67 kids in the program and 500 on the waiting list. I believe it's a moral dilemma that you have 500 children there who aren't receiving the structure they need to resist smoking, that today we have limited ourselves to saving just 67 of those kids. The Kerry-Bond amendment can change that, by ensuring that half of the restricted funds would go to child care programs which can play such an important role in reducing youth smoking. I return to the original premise of this debate, the reason we are here on the floor of the Senate debating a bill that a few years ago would have been considered too hot to handle. We are all fortunate to have Republicans like Senator Bond here in the Senate who believe it is wrong to ignore our children in this tobacco debate. I want to especially thank him for his leadership in this discussion, for his initiative in pushing to include children in our legislation. Senator Bond has helped set a tone of bipartisan cooperation and along with Senator McCain I think he has laid the benchmark for fairness. Kit Bond and I believe this Senate can find room in fair and workable tobacco legislation to put hundreds of thousands of children on the road to good health and responsible decisionmaking. In truth I wonder if we can really believe that fair tobacco legislation could ignore the kids who brought us here today as one unified Senate. Let us prove once again that the moral center can hold in this debate and let us join together in passing the Kerry-Bond amendment.

Mr. KERRY. Mr. President, the amendment that I am offering, together with Senator Bond, Senator Chafee, Senator Kennedy, Senator Dodd, Senator Wellstone, Senator Johnson, Senator Boxer, Senator Specter, Senator Landrieu, Senator Durbin, Senator Graham, and others is a bipartisan amendment with considerable support, I believe, both in the Senate and outside of the Senate. It would be my hope that we would be able to dispose of it rapidly. Over the course of the last couple of weeks we have had some very contentious issues on the floor of the Senate regarding liability, regarding look-backs, the marriage penalty, and drugs. I won't suggest that the drug penalty didn't have some focus with respect to children. Of course it does. But this is primarily children. This amendment is the primary focus of this legislation. This amendment goes to the core effort of how we will best get this legislation to assist in the effort to reduce our young people from smoking. That is why this amendment, I believe, has broad support. That is why this amendment has been supported by editorials across the country. That is why this amendment is supported by different advocacy groups on behalf of children across the country. We have been debating for 2\1/2\ weeks now about the Nation's first opportunity to try to deal comprehensively with tobacco, and, in so doing, comprehensively try to address the question of reducing teenage smoking. This is an amendment that can directly improve the lives of our children by adopting a national policy with respect to tobacco and our approach to children that is workable, proven, and fair. I believe the reason that a number of colleagues on both sides of the aisle, from different political ideologies, have come together on this amendment is for the very simple reason that not only is it focused on children, not only is it about children, but it comes with a proven track record of making an impact on choices that children will make. This is, frankly, not about politics. This is certainly not an effort to stall the bill. This is an effort to make this bill as constructively as possible a bill that is really going to assist us in accomplishing the purposes of the bill; that is, principally to raise a generation of young people who are able to live up to their potential, free from the grasp of what we know to be a dangerous drug. This is an effort to try to guarantee that those 3,000 children who we have talked about day in and day out who begin smoking won't start smoking, and they won't start smoking because there is an intervention in their lives that is significant and meaningful at the time that it counts. Senator Bond, I am pleased to say, comes to this amendment with considerable experience in how these kinds of efforts work. When he was Governor of Missouri, he started the parents and teachers plan there. There are few people in the Senate who I think speak with as much conviction about the difference that it makes for young people when adults are adequately involved in their lives and when the kind of structure is available in their lives so that we can make a difference when it makes the most importance to those children. In my judgment, and I think in Senator Bond's judgment, Senator Chafee's judgment, Senator Specter, and others who are part of this legislation, this seeks to have an impact at the most direct connected level with our young people. The legislation on the floor, Mr. President, currently directs that about 40 percent of the funds that are raised through the tobacco revenues be directed directly to the States over 5 years. That is in the billions of dollars. Those billions of dollars that are directed straight back to the States are divided into two groups. Half of that money is restricted to a certain set of programs in which the States can engage. Half of it is completely unrestricted, as many people in the Senate think it ought to be. That is so that the States can choose, on their own, what they think might make the most difference with respect to tobacco and how they would like to spend the proceeds in an effort that, after all, the States were significantly involved in. The States' attorneys general are the ones who brought the lawsuits and helped significantly to put us in the position to be able to be trying to arrive at a comprehensive national settlement. So that is the theory behind which those funds were distributed appropriately to the States. However, given what has happened in the last days here on the floor, where a considerable portion of this legislation has now been diverted to a specific tax cut, and another considerable portion of the legislation has seen money directed specifically to the Coast Guard, or to the DEA, or to other drug-fighting efforts, it is even more compelling and more appropriate that at this point in time we seek to guarantee that some of those available funds are really going to go to the children on those activities that will most impact those children's choices. So we want to assure that at least 50 percent of the restricted funds--not the unrestricted but 50 percent of the already restricted funds--will be spent on those activities that already exist within the menu of what the restricted funds can spend it on. We want to guarantee that it will go to the after-school programs, to the early childhood development, and to the child care that every expert in the field will tell you will make an enormous difference to the lives of those children. Mr. President, let me just share with my colleagues an article that appeared in the Washington Times yesterday. It is called ``After-School Crime Busing.'' It is an article by Edward Flynn. In fact, he is the chief of the Arlington Community Police Department. He writes: In fact, the tobacco bill is an opportunity for Congress to take its most powerful step ever to fight crime--by investing half the new revenues in the child care and after-school programs proven to prevent crime and make communities safe. This chief of police says to all of us in the Washington Times: The tobacco companies are worried about their bottom line. I look at crime's bottom line. Educational child care for young children and after-school programs for school age kids are two of the most powerful weapons to fight crime and protect our kids from getting hooked on tobacco. For example: Studies have shown that denying at-risk toddlers quality educational child care may multiply by up to five times the risk that they will become chronic lawbreakers as adults, and by up to ten times the risk that they will be delinquent at age 16. What's more, as a recent Rand report shows, these programs actually produce savings to Government--primarily from lower criminal justice and social service expenditures-- as much as four times higher than their cost. But today millions of Americans who must work earn less than the cost of quality child care for two kids. And then it goes on to discuss the availability of child care. Police Chief Flynn says the following: FBI data tells us that violent juvenile crime triples in the hour after the school bell rings, and half occurs between 2 p.m. and 8 p.m. The good news: After-school programs can cut crime by as much as 75 percent. And they help kids do better in school, treat adults with respect and resolve conflicts without violence. Unsupervised after-school hours aren't just prime time for juvenile crime. They're also prime time for youngsters to become crime victims and for other threats to children's health like teen sex and substance abuse. That is what we are talking about here--substance abuse, tobacco. There is good evidence that after school supervision can cut in half the risk that kids will smoke, drink or use drugs. So in addition to their proven anticrime impact, after- school programs--because of the supervision they can offer while parents are at work and their positive effect on kids' values--are powerful antismoking and antidrug programs as well. Mr. President, I ask unanimous consent that the full text of this article be printed in the Record.

Mr. KERRY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. KERRY. Mr. President, I withdraw that request, and I send this amendment to the desk and I ask for its immediate consideration.

Mr. KERRY. Mr. President, I will be sending up an amendment shortly. When that amendment is called up, I will ask unanimous consent that we have 1\1/2\ hours--Mr. President, a small change, a quick change in plan, which is not unusual in the last 2\1/2\ weeks. We are going to debate this amendment. It is our intention to debate this amendment for an hour, at which time there will be a motion to table, and hopefully after we have disposed of this amendment, should we be able to do so, we would proceed to the Faircloth-Sessions-McConnell amendment on attorneys' fees. That is the current plan. We hope to be able to proceed with that plan. I, therefore, ask that amendment No. 2541 be called up. Amendment No. 2689 to Amendment No. 2437 (Purpose: To reduce youth smoking)

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

Mr. KERRY

Mr. KERRY. Mr. President, I thank the Chair. (The remarks of Mr. Kerry, Mr. Cleland and Mr. Abraham pertaining to the introduction of S. 2157 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. KERRY

Mr. KERRY. Mr. President, let me just say to my friend, that is accurate in the sense there was a Democratic amendment. But the discussion we had with the majority leader and the manager of the bill is the Democratic amendments that have flowed to date were essentially responsive amendments on the same subject to the Republican amendment. Effectively, there hasn't been a proactive, freestanding Democratic amendment. I think that is why the majority leader was happy to say he will allow the Democrats to have sort of a substantive amendment of their own choosing, and then we can proceed forward. But we can work this out. I just wanted to make sure at least that was on the record at this time.

Mr. KERRY. Mr. President, I know my colleague wants to address the Senate and I will only take a minute on the business side. It is my understanding with respect to the tobacco bill, in a discussion with the majority leader last night, that there would be a Democratic amendment, I believe, at 11:15, with the understanding that the attorneys' fees amendment will follow that. I can say to a certainty that on the Democratic amendment, we will gladly enter into a time agreement. It will not be a long time agreement. So we can anticipate moving to the attorneys' fees amendment, hopefully, in the early afternoon.

Mr. KERRY

Mr. KERRY. Mr. President, I move to table the Gramm amendment, and I ask for the yeas and nays.

Mr. KERRY. Mr. President, the pending business, I believe, is the Gramm amendment; is that correct?

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

Mr. KERRY. Mr. President, I will speak for a moment and then spend a moment to visit with the Senator from Arizona. Let me correct one thing the Senator from Texas said. The Senator knows just a little while ago I was talking to him and I offered him a compromise which includes the capacity to raise the level of benefit to the spouse--working mom or pop--who stays home with kids. But what the Senator is ignoring also is that under the marriage penalty, so-called, the mother who stays home, or father who stays home today and isn't working and that he wants to reward, is, in fact, already rewarded because the structure of tax is such that with a single earner and one parent staying home, they get a marriage bonus. So we have a tax structure that already rewards the very person the Senator from Texas is talking about. In addition to that, I suggested to him that we ought to be able to work out some way to augment that a little bit. I think that is reasonable. So let's not get into a notion that somehow people want to be more protective of mom and pop who want to stay home with the kids. This debate is about whether or not we are going to be able to have enough money to do the things this tobacco bill must do, which is to reduce the number of kids smoking. You never hear the Senator from Texas talk about how we are going to save lives in America. We hear him talking about saving taxes, but not saving lives. We never hear him talk about the 400,000 people a year who die because they smoke. You also don't hear him refute the tobacco company's own memoranda, which talks about how they know that when the price goes up, the number of people who buy their cigarettes goes down. That is tobacco company fact; it is not made up on the floor of the Senate. So let's begin to deal with the reality here. The reality is that if you don't have the ability to affect the behavior of our kids in this country, we are not doing the job on this legislation. And while it is all well and good to want to restore some money back to people to take care of the marriage penalty--and I am for that--we want to do that in a way that is reasonable within the other obligations of this legislation. That is what we are fighting for here--to maintain common sense in this. I am happy to work out some kind of compromise with the Senator. I think it is important to understand that has to be fair. If we take 80 percent of this bill in order to rebate people who are already getting benefits, we will have departed from all common sense and fairness. I yield the floor and suggest the absence of a quorum.

Mr. KERRY

Mr. KERRY. Mr. President, let me begin with some comments about where we find ourselves, and then I will come back a little bit later and go into greater detail about it. At the outset of the presentation of the amendment as originally filed by the Senator from Texas to repeal the marriage penalty, I and Senator McCain and others said at that time that we were prepared, because we are supportive in principle of the notion of reducing the marriage penalty--we said we are prepared to embrace in this bill a component of marriage penalty reduction, provided that it doesn't strip away so much money that we are unable to accomplish the other purposes of the bill. And we have gone through a long week now--maybe a little bit more than a week--and the Senate has essentially been in a stalemate position as we have negotiated around the concept of how much is appropriate and how do you arrive at how much is appropriate. During the course of that week, the Gramm amendment as originally filed has undergone several changes. We are very pleased with that. I think there has been a bona fide effort here to try to arrive at some kind of sensible approach to the marriage penalty issue. The original Gramm amendment presented us with an estimated cost of $113 billion over 10 years. That would have represented over that 10-year period 80 percent of the costs of all of the tobacco revenues. In other words, all of the tobacco revenues that would have come in, 80 percent of them under Gramm I, as we should call it, would have gone out to the marriage penalty rebate as he had designed it at that time. Last week, at the end of the week, Senator Gramm revised his proposal to what we would call Gramm II. Gramm II made mostly some sort of cosmetic changes that took the full measure of the cost, the $113 billion I have just described, the 80 percent of the revenues, and rather than have them all show up within the first 10 years, it took those revenues and pushed a significant portion of them outside of the 10-year budget window. In other words, we look at the budget of the country in these 5-year periods, and we are looking at a 10-year budget window within which we have an ability to measure what we are doing. Beyond that, it becomes relatively more speculative. Under Gramm II, the Senator from Texas would have still spent nearly 80 percent of the tobacco revenues in years 11 through 25 of the bill. So there would have been a reduction for the years 1 through 10 within the budget process, and outside of that, knowing that we are looking at a 25-year revenue stream as we measure the tobacco bill, that would have then taken the better part of the 80 percent. So you would have taken funds that were intended for public health, research, farmers, and the States, and that would have been significantly reduced. That clearly was also unacceptable. So we stayed locked in sort of a status of essentially negotiating with not a lot happening. We then responded. We responded with an alternative that would have reduced the marriage penalty for most families. But it would have been done at a fraction of the cost of both Gramm I and Gramm II, which brings us now to Gramm III. Gramm III is what we were presented with just a few moments ago as we began this debate when the Senator filed this particular amendment. Under Gramm III, there is now an expenditure of approximately one-third of the funds under the tobacco funding. So it has been significantly reduced in the road that we have traveled as to tobacco funding. In other words, from the revenues raised, if and when this bill passes, no more than a third of that can be taken for the purposes of reducing the marriage penalty. But that is only half the story, because what the Senator from Texas does is maintain a level of benefits. In other words, he has geared his marriage penalty reduction in a way that there are still significant resources necessary in order to fund the benefits that he wishes to give, and he chooses not to take them all as part of our negotiating process from the tobacco bill. But the question then has to be asked, Where does the Senator from Texas take them from? I respectfully submit that as a result of the fact that he has left in the breadth of generosity of benefits that he seeks to return in the form of the marriage penalty, while not taking it from the tobacco bill, he nevertheless seeks to fund it and take it from the other available funds of the Federal Government. That means that he will have to tap a new source of revenue; i.e, the general budget surplus of the country. That means that the Senator from Texas will now look to Social Security, which is where we had originally designated that those funds would go. We have said as a matter of budget policy that we are going to preserve the budget surplus to take care of Social Security. But since the Senator is agreeing that only one-third of this revenue will come from the tobacco bill, the rest of it can only come from the surplus, unless, of course, the Senator has a bunch of offsets he is willing to offer up to suggest where that funding is going to come from. A vote for the Gramm amendment in its current form, Mr. President, is a vote to take $90 billion to $125 billion of surpluses away from Social Security. This is $90 billion to $125 billion that will not be available for the long-term reform of Social Security, because once this tax cut of the Senator becomes law, assuming it does, it is law outside of the budget process. The Tax Code is not part of the budget process. That is then a right that has been created, an expectation as to what people will pay. And it has to be funded. The only place you can turn to fund it is to the general revenues and, therefore, to the surplus. That is one side of what is being offered here. But I want to speak about another side. I would like to ask my colleagues whether or not it is possible to take away the label ``Democrat and Republican,'' take away the contentiousness of this bill, and just look at these two alternatives as a matter of good public policy and of common sense in terms of the budgeting of the country. The alternative that Senator Daschle and others of us on our side are offering, and we would hope with good common sense apply to the analysis that a number of colleagues on the Republican side of the aisle would say is really better policy--and I will say why I believe it is better policy--the fact is that the alternative we will offer provides a greater marriage penalty relief than the Senator from Texas, but it does so with less cost to the Federal Treasury and to the tobacco bill. I want to repeat that. The alternative that we offer will give more marriage penalty relief than the Senator from Texas, but it will do so with less damage to the capacity of the tobacco legislation to be able to provide for public health for research for the States, and so forth. The question is obviously, How do you do that? How do you avoid--is that some kind of a shell game and flimflam artistry, or is it real? I will tell you why it is real. The Senator from Texas, by his own admission, has agreed that he will reward those people who do not smoke. Or let's talk about the targeting. He says it is impossible to target this to accomplish a goal where you would actually wind up targeting nonsmokers versus smokers. I would agree with that. He is absolutely correct. That is pretty hard to do. But you can easily target this marriage penalty reward so that it is actually dealing with the marriage penalty. If the purpose of this is to fix the marriage penalty, then it is possible to target this benefit in a way that it goes to the people who pay a penalty, not paid to the people who get a bonus. The Congressional Budget Office will tell you that 51 percent of American married taxpayers get a bonus. And there is absolutely nothing in the approach of the Senator from Texas that limits them from getting rewarded above the bonus. There is no practical policy here given the difficulties we face of taking from the Social Security surplus, or taking from the tobacco bill, which we have now agreed we don't want to take more than a third from--there is no rationale for coming in and rewarding those people who already get a bonus. So what we have done is guarantee that we are going to give the tax relief to the people who are actually penalized. Senator Gramm's amendment costs 50 percent more than the Democrat alternative, and it gives less marriage penalty relief. The reason is that we have focused on giving about 90 percent of our tax cut to those families that are actually penalized, whereas Senator Gramm is only 40 percent--90 percent versus 40 percent. Sixty percent of the people who are going to get a reward under Senator Gramm's approach don't even pay a marriage penalty. It is not even fixing the marriage penalty. It seems to me as a matter of public policy what we ought to do is guarantee that we reach the maximum number of people who pay the penalty with the maximum amount of dollars back to those people. Our alternative would provide a 20-percent deduction against the income of the lesser-earning spouse. The way the marriage penalty works, as I think most people know by now, is that either on a standard deduction or on the earned-income tax credit or on the marginal rate you pay more or less according to what the income of both members of the household, both married partners pay. But it depends. The vagaries of the Tax Code are such that you could be a married couple with one person working, earning a big salary, one person not working at all, and you won't be affected the same way; you would actually have a bonus versus the two married partners who are both working, both earning sort of a similar amount of money. So if you have two income earners each earning about $25,000, they wind up paying a penalty versus the high- income earner, single earner within the family and the other partner who is not, and there are other aberrations like that as you go through the various levels of income earning. It makes no sense to jeopardize this legislation and to place pressure on the surplus, which we have now decided we ought to reserve to save Social Security in order to reward people who are already rewarded. There is simply no matter of public policy of common sense in doing that, and that is why there is a very significant difference between the two approaches here. Let me give as an example a couple making $35,000. Let us split the $35,000, $20,000 to the husband or vice versa, $15,000 between the two spouses--you have 20 to one and 15 to the other, making $35,000. Under the Gramm approach, that couple would receive an average additional deduction of about $1--$1. By comparison, under the 20-percent, second- earner deduction alternative that we propose, the couple would receive an additional deduction of $3,000--$3,000 deduction versus $1 under Senator Gramm, 20 percent of the $15,000. That represents about twice as large a tax deduction, and it would provide twice as much actual tax relief without any of the negative downside that is carried with the proposal of the Senator from Texas. Let me give you another example. For a couple making $50,000, let's split it evenly between both spouses--$25,000 husband, $25,000 wife. And that is a very realistic, very realistic division in the kind of two-person income of the families that we are trying to reach. Again, under Gramm, the couple would receive an average additional deduction of $1. By contrast, under the 20-percent, second-earner deduction alternative that we propose, the couple would receive an extra $5,000 deduction representing more than three times as much tax relief. So that is the choice here, Mr. President. You can have a reward to people who are already getting a benefit by getting married, which is not a marriage penalty fix at all; you can structure it so that you wind up having to take the money from the general revenues, from the surplus; or you can come in with much greater tax relief that goes to the people who really need it, and you can do so without the negative impact on Social Security and without the negative impact on the tobacco bill itself. I think the choice is very clear. The difficulties presented to the overall budget situation by Senator Gramm's current approach are very significant. It was the understanding, we thought, that we were not going to take more than one-third of the revenues in total, in whatever form they were going to come, that the Senator was going to structure his benefits so that no more than a third was represented in them. What is happening here is the Senator is giving the guarantee that no more than a third comes out of the tobacco bill, but he goes elsewhere to look for the rest of the larger sum of money that he is going to give back by not structuring the benefits downwards. So, in other words, it is essentially outside of the notion that you have an agreement that is going to restrict the total benefits of the marriage penalty to one-third of the level of the tax bill. Now, he can come back and argue: Wait a minute; we are just taking one-third of the tax bill. Well, that is true, except that in total for the marriage penalty they are looking to one-third, significantly more than one-third from these other sources, which is a very different consideration from that with which I think most of us thought we were going to be presented. The bottom line is that the amendment proposed by the Senator from Texas costs 50 percent more in the first 10 years than the Democrat alternative--that is $46 billion total in the first 10 years--versus about $31 billion. But it delivers far less in marriage penalty tax relief. Finally, at this point--I would reserve some time later--but at this point in time, if you have $30 billion taken out of this bill in the first 10 years--9 years, 10 years--added to the 40 percent that goes to the States, and add to that the component of the drug plan that came through yesterday, which takes 50 percent of the public health money, and we all know this bill is not leaving the floor of the Senate unless there is some kind of fix for the farmers, and we are going to look at somewhere between $9 and $18 billion--that is what you have, $9 billion; $18 billion, Senator Lugar, I believe; $9 billion, the Senator from Kentucky. All of a sudden the question has to be asked: Where is the money to stop kids from smoking? Where is the fundamental notion that this is a bill directed at children in order to stop those kids from smoking? And everyone has come to understand that you need counteradvertising, cessation, professional training, and other kinds of things in order to do that. So it is simply unacceptable that suddenly all of the fundamental purpose of the legislation could be stripped away in a manner that would be unacceptable. Now, obviously, if this were to pass, I think everyone knows it is not going to be able to stay that way. There is no way. So the choice before the Senate is very clear: Do we want to make good policy about the marriage penalty, which I support fixing, but I have said all along it has to be done within the confines of reasonableness as to how much is available in this overall package so that we can still accomplish the fundamental purposes of the legislation. We are going to have to clearly visit that a little more over the course of the afternoon. I yield the floor.

Mr. KERRY. I agree with the Senator that some people who pay the marriage penalty will also buy cigarettes, but I am sure the Senator has to acknowledge, and would acknowledge, would he not, that some people who will buy cigarettes, who are called sort of the ``victims'' here, will not get a benefit by this necessarily and some people who do not smoke will get a benefit by this? Is that a fair statement?

Mr. KERRY. Would the Senator yield for a question?