John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, 15 minutes equally divided. I have no objection.

Mr. KERRY. I might add, we are just trying to catch up with their side. The time was equally divided up until now. And the Senator from North Carolina and the Senator from Vermont both spoke using all of the time of that side. So we are just trying to catch up on our side.

Mr. KERRY. But will that be equally divided?

Mr. KERRY. Mr. President, I will happily yield to my friend in a moment. And I would agree to the unanimous consent request for 10 minutes.

Mr. KERRY

Mr. KERRY. Let me say to my friend from Virginia, I have great respect for his analysis and for the sober, introspective approach that he brought to this legislation. I must say I cannot disagree with him-- that from, certainly, my perspective, there are one or two amendments that have been agreed to that may be a reflection of sort of a first- round fervor on the floor of the Senate. On the other hand, I am convinced that is going to change over the course of the legislative process. Some people have been trying to wish this bill dead for some period of time. I think the Senator from Arizona and I would agree, this bill is not dead. This bill is going to continue to be fought out in the context of the Senate. I hope in the end the Senator from Virginia will find that, while he may not agree with what could still leave the Senate floor-- and I believe the bill could still leave the Senate floor--if the Congress of the United States works its will in a complete way, it is possible that something could come back, ultimately, that the Senator may feel is better. I also respect the Senator's particular needs with respect to Virginia. There are certain Senators here who obviously have a very particular problem they need to try to resolve in the context of this legislation. At the moment, there is not certainty as to that for the Senator. But I might say that might be also resolved as we go along here. So, I do respect his thinking on it. I appreciate his thoughtful approach. Just so colleagues may have a sense of where we are and what we are doing, we do believe it may be possible within a short period of time that there would be a couple of votes. Our hope is to be able, though it is not yet guaranteed, to proceed forward with a couple of votes, conceivably one on the Coverdell amendment and then an alternative thereto, and then conceivably, first thing tomorrow, we may be able to deal with the issues of the Gramm amendment and a Democrat alternative to it. So, even though things are not bubbling over with excitement on the floor itself, I think there is some quiet progress being made in some meetings behind the scenes. Hopefully, that will allow us to begin to break forward and set up something of a legislative agenda where we can begin to debate some additional amendments and, hopefully, proceed forward. That, obviously, will continue to depend on the goodwill of our colleagues and on the degree to which there is a good-faith effort to try to legislate rather than to procrastinate. Hopefully, within a short period of time we may be able to propound a request with respect to that. I see the Senator from Wisconsin is on his feet and wishes to speak, so I yield the floor.

Mr. KERRY. Will the Senator withhold?

Mr. KERRY

Mr. KERRY. Mr. President, I would like to express my support and admiration to small business owners and entrepreneurs during the first week of June, otherwise known as National Small Business Week. It is appropriate that during this week of recognition that we honor the many contributions entrepreneurs have made to strengthen our communities and our national economy. As the Ranking Democrat of the Small Business Committee, I have followed the dramatic growth of thousands of small businesses and have worked to champion their success by increasing access to capital, expanding Women's Business Centers, improving business education and technical assistance, and reducing capital gains taxes. Under Democratic Leadership, the Small Business Administration now annually guarantees about $10 billion in loans to small businesses, and has increased loans to women business-owners by 86 percent. Small businesses are changing the face of the economy by creating jobs and bringing prosperity to small towns and cities across the country. Nationwide, small businesses represent 99.7 percent of all employers and provide 67 percent of workers with their first jobs. Smaller firms are also more likely to be flexible and hire workers from many segments of the economy, including younger workers, older workers, women, minorities, and people interested in working part time. In the state of Massachusetts, we have two outstanding business owners that deserve special recognition. Cassie Farmer, President and Roberta Adams, Vice President/Treasurer of New World Securities Associates, Inc, have been named State Small Business Persons of the Year by the Small Business Administration, and have been honored this week here in Washington. Ms. Farmer and Ms. Adams began their security business just eight years ago with fifteen employees, one patrol car, and a few clients. They invested their personal savings to get the company off the ground. By 1997, their company has grown to employ 240 people with annual sales of $5 million. The Dorchester-based company is not only the largest employer within the Dorchester/Roxbury/Mattapan area, but is also the largest women/minority owned security company in Massachusetts. I congratulate them on their success.

Mr. KERRY

Mr. KERRY. Will the Senator yield for a question of fact?

Mr. KERRY. Will the Senator yield?

Mr. KERRY. Let's do it.

Mr. KERRY. Would they be the same day? Same time? Could they be this afternoon?

Mr. KERRY. Again, if the leader will yield for a question, isn't it a fact, though, the unanimous consent request that the leader is proposing, while it ostensibly sets up a Democrat-Republican alternative, it is not, in fact, allowing for the Democrat alternative on the marriage penalty to be voted on at the time that the minority leader has requested?

Mr. KERRY. I do not want to interrupt the leader. Mr. President, I wanted to ask the Senator, the majority leader: It seems to me I recall a conversation that the minority leader, the majority leader, Senator Gramm and Senator McCain and I had together at the desk right behind Senator Gramm just about 2 days ago, in which we had originally broached to the majority leader the notion that there would be two votes, almost simultaneously. So the majority leader was, in fact, aware that was what we sought.

Mr. KERRY. Mr. President, all that the Senator from Texas has said sure sounds good when it gets a one-sided airing. But, fortunately, the Senate has an ability to look for the truth here. And the truth is that this is not a Democrat bill, this came out of the Commerce Committee 19-1--19-1--in a bipartisan vote. And the fact is that the Senator from Texas talks about wanting to take only one-third of the money. But he doesn't just take one-third. No, he just doesn't tell the full story. The Senator from Texas is not prepared to let the Senate and the American people know what his amendment really does. So we will show you what it really does. It cleverly, in the first 4 or 5 years, takes one-third, but then it builds up, and over the course of the next 20 years it takes 53 percent over 5 years, 80 percent over 5 years, 79 percent over another 5 years, and 73 percent over the next 5 years. So consistently for a period of 20 years it takes more than 50 percent, and for 15 of those years more than 75 percent. That is extraordinary. He stands here and says to the Members of the Senate, ``All I want is''--what? 33 percent, one-third. That is just not the truth. The truth is that this amendment of the Senator from Texas not only goes to the people he talks about, those working Americans who will get so brutally attacked, but he is going to give money back to people who, under the aberrations of the marriage penalty, actually get a bonus. Fifty-two percent of the people who get married actually get a bonus because of the way the Tax Code works on the earnings of individuals versus joint filings. He gives the bonus recipients back money, too. If we are really concerned about restoring and repairing the notion of fairness for people who are hurt by their wage level and the fact that they buy cigarettes, and you will try and fix the marriage penalty at the same time, then we believe the Democrat alternative is a better alternative. The reason the Republicans don't want to let us have the right to vote on it right away is because it is a better alternative and they are afraid what they really need is some time in between them so that the vote which is hanging out there--the only vote that people will see--the public might get mad and telephone Members and say, why didn't you vote for this, because they won't know there is an alternative. That is the game that is going on here. Under the other alternative, the Democrat alternative, because we make an effort not to wind up taking money from kids that we are trying to stop smoking, not to take money from a cessation program, not to take money from the counteradvertising, and we regard people who, when they got married got rewarded by getting more money under the Tax Code--how can you justify that under these circumstances if this is the tradeoff? The fact is that under the amendment the Democrats are prepared to offer we give almost double the amount of money that you get under the amendment from the Senator from Texas. For a couple with a split income, say they are earning $35,000. One is earning $20,000 and the other is earning $15,000. Under the Democrat alternative they would get $3,000 back; under the Republican alternative they would get back $1,650. Similarly, for a couple earning $50,000, if it was split $25,000 and $25,000 of income for each partner, in our alternative they would get $5,000 back; under the Gramm alternative they would get the same $1,650 as they would have gotten for the lesser amount. So we ask Americans to look carefully. Here is a legitimate proposal to change the penalty of the marriage tax, to fix it for the people who are most penalized and to benefit people who are, in fact, most injured. That is the difference between the two. That is what people will have an option of voting on if we are permitted to vote on it in some simultaneous form. Obviously, our hope is we will still be permitted to do that. Under the amendment from the Senator from Texas, he would, in fact, according to the Centers for Disease Control, he would take money out of the cessation and counteradvertising and school-based prevention. Now, he complains this bill is somehow going to throw money at ``government programs.'' Well, in his State of Texas, there would be 360,000 less kids who would be eligible to have cessation services made available to them. There would be 3,869,000 kids between the ages of 5 and 17 who would not get school-based prevention programs as a result of his own proposal to strip that money out of the revenues from the tobacco bill. That is what would happen. That is what we are talking about here. We are talking about whether or not there will be cessation programs, whether or not there are going to be counteradvertising efforts, all of which have been proven to work. So what you really have out here is a fundamental effort to try to kill the bill or stop the bill or just let it go on and on forever. The Senator from South Dakota, the minority leader, was absolutely correct. There is a whole world of difference between the way this bill is being shepherded versus the way every other piece of legislation that has come to the floor this year, where there have been time agreements, cloture motions filed immediately, immediately limited debate, limited number of amendments--move the legislation. We can tell the difference between those who would like to pass legislation or work on it, I think, in a way that will move this legislation to some kind of a final disposition. The fact is that there is a world of difference between adequately taking care of those efforts that will have the most impact on a proven basis in helping to prevent kids from smoking versus the kind of approach that the Senator from Texas is offering. I would like to vote to cut the marriage penalty. I would like to vote to do away with the whole thing. The question is, Are you going to do it here, when the choice is between reducing kids from smoking or not? That is really what it comes down to when you look at the large amounts of money the Senator from Texas is seeking to take. We have offered a compromise. We have offered to sit down with the Senator from Texas to try and arrive at a lesser amount of money and see if we can't come to some agreement as to what would be reasonable. I think most people on our side of the aisle would welcome the opportunity to change some part of the formula of how these moneys are spent and certainly envision the capacity to embrace a tax cut in an appropriate form and shape and size--in that context. But if there is a genuine effort to do this, then we ought to be able to make that happen. If there is simply an effort to grab so much money that this bill goes under of its own weight, it will be very clear whose intention was what, and ultimately what the impact was as a result of that. I yield the floor and I suggest the absence of a quorum.

Mr. KERRY. Will the Senator yield?

Mr. KERRY

Mr. KERRY. Mr. President, I will be brief. I wanted to say for the Record, so that the Record is absolutely clear here, the Senator from New Mexico said that we are going to get a vote and we ought to be able to get a vote in order to properly allow the American people to receive back some of the money that is in this bill that he has charged is somehow being very badly spent. I think it is important to understand that, No. 1, the division of the money, the revenues, that come in from this bill, was not arrived at in some sort of hasty or unthought-out way. It is not representative of a casual wish list. This is a reflection of what the Governors and the settlements originally arrived at as a notion of those concerns that ought to be addressed through any tobacco legislation. Second, they are a reflection of the Commerce Committee that voted 19 to 1 to send this legislation to the floor with a framework that articulated the broad outlines of how money would be spent and, finally, through a fairly arduous negotiation process which measured very carefully the needs. The Senator said he would challenge anybody to come to the floor and suggest they could defend that every penny in here is being spent as wisely as possible. That is not a hard challenge to fail on. I am not going to try to do that, nor would anybody. Can we find some money here appropriately to try to address the question of the tax cut? We said yes. That is not the debate here. This is not the choice that he presented to the Senate, a choice either between those who want to give something back to people who want to pay a marriage penalty and those who do not. That is not the choice; it is a choice between two different approaches to doing that. We believe that we have the right to have an opportunity to have ours also voted on, that they ought to be voted on at the same time. That is what the division is over here. I think it is important to reflect on the fact that 40 percent of these funds go back to the States in the most direct way, a reflection, I think, of the need of the Governors to be given the opportunity to make decisions about how they can best deliver back their portion of the Medicaid expenses, which is what we are refunding. In addition to that, money is not just spent in a supercilious way, the way the Senator suggested on a whole lot of Government programs that do not already have a track record of accomplishment. Public health, NIH--I might say it was the Senator from Florida, Senator Mack, a Republican, together with Senator Frist, who fought very hard for the notion that there ought to be adequate research funds here. NIH and research are 22 percent of these funds. In addition to that, farmers--I think both sides are competing over how to better take care of the farmers. That reflects some 16 percent of the expenditures, leaving you with only 22 percent that goes to public health--22 percent--that is then divided among counteradvertising, cessation programs, and other kinds of efforts to try to reduce teenage smoking. The Senator from Missouri was on the floor a little earlier, and he was trying to suggest that there are alternative studies and the Canadian experience that somehow suggests an outcome different from what we get by raising the price here. I simply say for the record--very quickly, because I don't want to tie the Senate up now--that I know we want to have a vote, that the methodology of the Cornell study that he referred to was very specifically found flawed, and it was found flawed both in the number of people that they examined and the manner that they examined them. When that flaw was corrected for the appropriate acknowledgment of that flaw, in fact, the Cornell study came out consistent with almost all other studies with respect to the impact of price on smoking. It is interesting to me that those who want to come to the floor and criticize the relationship of price to discouraging kids from smoking completely choose to ignore all of the memoranda of the tobacco companies themselves, that for 20 years have said they know they lose smokers when the price goes up. Their own memoranda say it. You can't have it both ways, it seems to me. The fact is, there is a correlation. On the Canadian experience, the Canadians specifically, as they saw an increase in their price, there was a decrease in the amount of smoking, and there was an equilibration ultimately between their prices and ours. The Canadian experience, in fact, documents that the pattern of youth smoking in Canada confirmed the sensitivity of youth to price changes. In 1981, Canada had a youth smoking rate that was about 50 percent higher than that in the United States. Over the next decade, they raised their prices by over 100 percent and teen smoking fell by almost one-half. Mr. President, we need to deal with the facts here. I hope that the Senate will do so as we vote over the course of the next days. Mr. LOTT addressed the Chair.

Mr. KERRY. I will be very brief. I know the Senator from Oklahoma wants to speak momentarily. How long does he think he will go?

Mr. KERRY. Will the Senator yield?

Mr. KERRY

Mr. KERRY. Mr. President, I was entertained listening to my friend from Texas, who makes some pretty broad statements about who is for what and who supports what. I think I heard him just say Democrats don't really want to give the money back but the Republicans do. Maybe he wishes that were the fact, and sometimes the wish is the father to the fact, but not in this case. As far as I know, Democrats are wholeheartedly in favor of a fairness that has escaped every single proposal that the Senator from Texas has ever brought to the floor with respect to taxes. There isn't one tax proposal that has passed the U.S. Senate in the 14 years I have been here that wasn't proposed on the Republican side of the aisle that wasn't made fairer by the efforts of Democrats on this side of the aisle. There isn't one tax proposal that the Senator from Texas and others have brought to the floor--not one--that wasn't geared to the upper-income level of people in this country, and usually at the expense of the low-income level of people. My friend from Texas may wish it were otherwise, but the fact is that the distinction is not whether or not we want to give money back, the distinction is whom we want to give it back to and whom they want to give it to in the first place. Every single tax bill I have ever seen worked on here, whether it was the capital gains distribution, or how it came in, or the depreciation allowances, or just on the income tax, or on efforts to roll back some of the impact of the payroll tax--in every single instance, we, I think, have been able to improve the distribution. Let me give a classic example. In the agreement we reached last year, with much ballyhoo, on the budget, which brought us to the point of a balanced budget and on the available money for individuals earning $40,000 or less, under the proposal that the Senator from Texas supported and our friends on the other side of the aisle supported, a single-parent mother would have gotten zero income back, zero tax rebate, at $40,000 or less of income. And it was only when we refused to pass that legislation without changing it that she got something. In the end, we passed legislation which provided that single parent with an income of $40,000 with $1,000 of tax benefit rebate. The distinction here is who gets what, and that will be the distinction in an alternative we will offer, if we have to, with respect to the marriage penalty, because we understand, just as well as the Senator from Texas, that the marriage penalty is unfair, the marriage penalty is an aberration in the context of the Tax Code, and has a negative impact on an institution that we respect equally with the Republican Party. So we will offer, I think, in fact a fairer and better structuring of an elimination of the marriage penalty, and we will give the Senate another opportunity to vote on fairness. You can vote for Senator Gramm's proposal, which will benefit not as many people at a lower income level as ours; and we will let others be the judge as to whether ours is, in fact, a fig leaf or yet another Democrat effort to make the Tax Code fairer and to protect people in the institution of marriage. I know where my vote will go. I know what I will be comfortable with based on that judgment. So, Mr. President, the real issue here is, What is the distribution? The Senator from Texas stood there and said, ``All I want is one-third, just one-third. And then they'll have plenty of money to spend on all the other programs that they want.'' Well, analyze that and you find that is not true either. Because the Senator from Texas cannot control what other amendment may come that may try to grab additional revenue. So the first grab may be the marriage penalty, but then you may have--you will have an additional amount of money for drugs; you will have an additional amount of money here or there; and unless the Senator from Texas is prepared to say he and his colleagues will stop trying to raid the effort to stop children from smoking, we would be hard pressed to say that it is only one-third of the money. But there is another reason that one is hard pressed to say that it is only one-third of the money. Because, once again, the Senator from Texas has only told you part of the story. Here is the part of the story the Senator from Texas did not want to tell you. It is right here. The one-third of the distribution of the Senator's money on his approach to dealing with the marriage penalty, yes, it is about one- third in the first year--in the first 5 years. But in the second 5 years, it jumps up to $82 billion, which is 53 percent; in the next 5 years, because we are talking about a bill that works over 25 years-- they are always coming to the floor and telling you it is a $700 billion bill or a $600 billion bill or a $500 billion bill, so when it is convenient for them, they talk about the numbers in the context of 25 years; but when it is inconvenient for them and it tells another side of the story, they try to limit it to just 5 years. Let us put it in the same context as the 25 years they are talking about. In that 25-year context, Mr. President, here is the effect: The first 5 years, it is the one-third the Senator talked about. In the next 5 years, it is 53 percent. Wow. In the third 5 years, it is 80 percent of the amount of money available under this legislation. And in the last two sets of 5 years, it is 77 percent and 73 percent. So the Senator is really talking about gutting--gutting--the effort to stop kids from smoking. And every time he comes to the floor he talks about all the things this bill does that is Government. Well, by gosh, a cessation program involves somebody organizing people to help people not to smoke. And since schools are where most of our children reside for the better part of a day or a good part of a day, and the better part of a year, it makes sense to involve our schools in cessation programs. To do that, you have to spend a little money and organize it. State block grants--that has been something that I always thought the Republicans were for; they want block grants. They want to give the money to the Governors. ``Let the States have a decision as to what they want to do.'' As to education and prevention, smoking prevention, counteradvertising, those are important aspects. Enforcement, there is $500 to $600 million a year for enforcement. We hear people coming to the floor and saying in one breath, they do not want to have this bill passed because it will increase smuggling; in the next breath they do not want to acknowledge the very Government they are criticizing that is spending money for antismuggling enforcement efforts. So, Mr. President, it seems to me that on close analysis we will be able to make a strong judgment as to whether or not there is a fairness in the marriage penalty approach of the Senator from Texas, or whether it is just an effort to try to kill this bill. I am for getting rid of the marriage penalty, and I will vote to find a way to do that. But it makes sense, it seems to me, to recognize that even if we pass getting rid of the marriage penalty on this bill, that is not going to stop one kid from smoking; that is not going to do one thing for additional research into why people get addicted; it is not going to do one thing for counteradvertising to stop kids from smoking. So we can go home and feel good because we took the tobacco bill, which is geared to try to stop kids from smoking, for which the Senator has agreed the price increase is targeted, and you turn out passing the marriage penalty. If you take too much of it, you begin to strip away at the ability to accomplish the purpose of the bill. I am prepared, as I know other Democrats are, to vote for a legitimate amount of money so that we can parcel the appropriate proportion of these revenues to the job of reducing the number of kids who smoke. But I think there is a place where common sense says you have to stop if it goes too far in stripping us from the fundamental purpose of this bill itself. I also point out that there are other areas that will want to compete for some of this funding. I think it is important for Senators to think about the overall amount of money that would be available for those purposes. The final comment I make is the Senator from Texas spent a lot of time saying how this bill is misdirected. He is crying for the poor people who are going to pay for an additional cost of a pack of cigarettes. He says how misdirected this bill is because it comes down on the victims, and not on the tobacco companies. But then he says he is willing to raise the price. You cannot have it both ways, Mr. President. You just cannot have it both ways. There is no way to focus a tax on the tobacco companies, whatever you call it. I heard him the other day call it a ``windfall profits tax.'' No matter what you call it, if you tax them, you tell me a company in the United States of America which winds up with additional costs of manufacturing a product that does not, unless they just eat them--and nobody expects the tobacco companies to do that-- that does not pass it off in the cost of doing business. The cost of the product will rise. But by doing this in the way that this bill seeks to do it, by setting a fee that is levied at the level of manufacturing, you actually have a far more effective way of constraining the smuggling of, of creating accountability in the system; and ultimately you wind up doing the very same thing that would happen under any other circumstances, which is the tobacco companies are going to pass it on to the consumer. In the end, there is a benefit from raising the price. The benefit outweighs whatever crocodile tears we are hearing shed for those who are going to pay the additional cost of the cigarette. First of all, it is voluntary. Nobody forces them. They buy it. Secondly, it is a smaller amount in total than the amount that people are paying anyway. Then the costs to our society as a whole, which will be reduced by accomplishing what the cigarette companies themselves have said will occur, which is if you raise the price, you will reduce the number of kids who are smoking, you will ultimately reduce the numbers of people who are addicted and you will significantly reduce the costs overall. So America has a choice. You can reduce the costs, reduce the number of kids who are addicted, reduce the number of our fellow Americans who die, reduce the overall costs to our hospitals and ultimately wind up with a better and healthier society as a consequence of that, or you can take the alternative route, which is the only alternative to what the Senator is saying, and vote to leave it the way it is and let the tobacco companies continue to addict the next generation without making a legitimate effort. I think the case ought to be very, very clear. cosponsorship of amendment No. 2446

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

Mr. KERRY. No.

Mr. KERRY. Mr. President, I thank my colleague from Oregon for his continued, persistent, passionate commitment to trying to pass this legislation. The Senator was referring to the extraordinary sums of money that the tobacco industry spends. Let me remind our fellow Americans that amount of money is $6.5 billion per year, $16.5 million per day, $700,000 every hour to get people to smoke. What is most astonishing about this effort to get people to smoke is the degree to which it has been targeted at young people, targeted at children. It is an extraordinary story. Nine out of 10 kids who smoke use one of the three most advertised brands, and yet less than 30 percent of adults use those most advertised brands. A study of 6-year-olds showed that just as many 6-year-olds--91 percent of all the 6-year-olds in this country--could identify Joe Camel just as they could identify Mickey Mouse. That is an absolutely extraordinary statement. Now, there is a reverse side of how extraordinary these statistics really are, because for every American who smokes there is an American or two who are trying not to smoke. All of them will tell you--or almost all, 86 percent to 90 percent of them--they started smoking when they were teenagers. Most of them--again, many, many, analyses and polls have been done of this--most of those people who started smoking as teenagers will tell us if they could quit today, they would quit today and never start again. If they had the choice to make again, they wouldn't choose to smoke. But they smoke because they are addicted. They are hooked. The truth is, in the United States of America we have more people spending more money to try to get unhooked on an annual basis than we spend on day care. That is most extraordinary. I found it hard to believe when I heard that. In Massachusetts alone, our citizens are spending $1.3 billion a year on nicotine patches, on different kinds of gums, on therapy, on hypnosis, on all of the things that people go through to try to stop. We are spending $1.3 billion a year in Massachusetts alone. Extrapolate that out across the country--it is millions of dollars more than the Federal Government commits to day care for our children. The reason this happens is because people get hooked at the early stages. Now, I want to share with my colleagues something about getting hooked in the early stages. We continue to hear colleagues come to the floor and say, gosh, this is going to raise money in the expense of cigarettes, and that is not a good thing. But they never address the amount of money that Americans are spending because of people who smoke. They never address the tax that cigarettes ``whack'' every American, even those who don't smoke. Every single household in America is spending an unwanted, unrequested, undesired 1,300 plus dollars -- 1,370 or so dollars. Every household in America spends that, whether they want to or not, on the cost of the other Americans who smoke and then get sick. Let me share a story about some Americans who smoke and get sick, a commentary in USA Today by Victor Crawford. The title is ``Tobacco was Dad's Life; It Also Took his Life.'' I read from the article: My father never had a chance. When he was growing up in the 1940s, almost everyone smoked cigarettes. He said it was the thing to do. It was not until 1964 that the U.S. Surgeon General declared smoking was harmful. But by then, my father had been addicted for almost 20 years. His addiction finally killed him last March, one month before his 64th birthday. When my father was diagnosed with throat cancer in 1991, some thought he had it coming to him. You see, my father was a Maryland State senator turned tobacco lobbyist. He was the first to dismiss the antismoking people as ``health Nazis'' but spent the last years of his life trying to undo the damage he had done. He admitted he had lied, and he apologized for claiming, ``There is no evidence that smoking causes cancer.'' Unfortunately, tobacco lobbyists understand this simple logic all too well. Like my father, most smokers today start when they are about 13 years old. And since about 90 percent of all new smokers are 18 and under, the industry needs to keep hooking kids to stay in business. I will skip through a little bit, turning to the end: My father said, ``Some of the smartest people in America work at just one thing: trying to figure out how to get young people to smoke. As tobacco kills off people like me, they need replacements.'' My father didn't live to see his daughter graduate from college; he won't meet my future wife, nor will he walk my sister down the aisle at her upcoming wedding; he will never know his grandchildren, and they will never meet their grandfather--all because when he was 13, smoking was the thing to do. Let's give today's kids a fighting chance. Mr. President, that is why we are here in the U.S. Senate. We have been tied up for more than a week now trying to give kids a fighting chance. There is only one reason this bill is on the floor of the Senate: because every expert in America, including the tobacco companies, tells us that if you raise the price of cigarettes, you will reduce the number of young people who smoke. And if we reduce the number of young people who smoke now, we will reduce the 420,000 Americans who die every year as a result of a smoking-related disease, such as cancer of the pancreas, cancer of the larynx, cancer of the throat--one cancer or another--and heart disease and liver disease. The Presiding Officer understands better than anybody, as a practicing physician and one who has been a key architect in helping to get this bill in a position to pass it, that this bill is about stopping kids from smoking and reducing the costs to America, the costs to families, the unwanted, unrequested costs of smoking. Families who result with a disease that comes from smoking wind up paying tens of thousands of dollars more in health insurance. But the impact for those people who don't have insurance, or adequate insurance, is to raise the insurance costs for everybody in America, raise the costs of all of our hospitals, raise the costs for families who can ill afford it. Mr. President, this is the first opportunity the U.S. Senate has had to address an extraordinary history. I want to share that history with my colleagues. It is now known that the tobacco industry helped to create this mess by targeting young people, by creating replacement smokers. Many of my colleagues may not have had an opportunity to focus precisely on the degree to which that has been true and the degree to which, therefore, this effort to try to raise the price of cigarettes and create a series of efforts to prevent young people from smoking through cessation programs, counteradvertising, and other efforts, is so important. In 1975, the R.J. Reynolds company, in a memorandum, wrote the following: To ensure increased and longer-term growth for Camel filter, the brand must increase its share penetration among the 14-24 age group, which have a new set of more liberal values and which represent tomorrow's cigarette business. That is the R.J. Reynolds company talking about targeting the 14- to 24-year-old age group because they are ``tomorrow's cigarette business.'' They represent tomorrow's cigarette business. As this 14-24 age group matures, they will account for a key share of the total cigarette volume for at least the next 25 years. That is an R.J. Reynolds tobacco company executive, a vice president for marketing, C.A. Tucker, on September 30, 1974. Let me read what Mr. C.A. Tucker also said: This suggests slow market share erosion for us in the years to come unless the situation is corrected . . . Our strategy becomes clear for our established brands: 1. Direct advertising appeal to the younger smokers. Let me read what Dianne Burrows, a researcher, wrote in a memo for R.J. Reynolds in 1984: If younger adults turn away from smoking, the industry must decline, just as the population which does not give birth will eventually dwindle. In the same memo, it says: Younger adult smokers have been the critical factor in the growth and decline of every major brand and company over the last 50 years. They will continue to be just as important to brands/companies in the future for two simple reasons: the renewal of the market stems almost entirely from 18-year-old smokers. No more than 5 percent of smokers start after the age of 24. That is an R.J. Reynolds research memorandum, telling us that people don't start smoking after age 24. They targeted young people and got them hooked with a narcotic killer substance. Brands/companies which fail to attract their fair share of younger adult smokers face an uphill battle. Younger adult smokers are the only source of replacement smokers. So kill them off and replace them. Kill them off and replace them. That is the way it has been. This is a Brown & Williamson memo from consultants recommending that the company consider Coca-Cola or other sweet-flavored cigarettes. The 1972 memo says: It's a well-known fact that teenagers like sweet products. Honey might be considered. They were talking about a way to try to sweeten cigarettes and get more young people hooked. Another Brown & Williamson memo said: Kool has shown little or no growth in share of users in the 26 [plus] age group . . . Growth is from 16-25 year olds. At the present rate, a smoker in the 16-24 year age group will soon be three times as important to Kool as a prospect in any other broad age category. Let me share a Philip Morris document with you. We are going to spread this around. We have had some from R.J. Reynolds and Brown & Williamson. This is from a report sent from researcher Myron E. Johnson to Robert B. Seligman, then vice president of research and development, in 1981: We will no longer be able to rely on a rapidly increasing pool of teenagers from which to replace smokers through lost normal attrition . . . Because of our high share of the market among the youngest smokers, Philip Morris will suffer more than the other companies from the decline in the number of teenage smokers. So here you have Philip Morris, particularly, concerned about the loss between different companies, targeting teenagers. This from the same report of Philip Morris: Today's teenager is tomorrow's potential regular customer . . . The smoking patterns of teenagers are particularly important to Philip Morris . . . the share index is highest in the youngest group for all Marlboro and Virginia Slims packings. 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, which includes younger teenagers, shows even higher Marlboro market penetration among 15-17 year olds. This is from a different document, Mr. President. This is a Philip Morris internal document in 1987. This came from the Minnesota case. This was an exhibit in the Minnesota trial. This may explain one of the reasons that Minnesota finally reached a settlement. You may recall from the article I sent you that Jeffrey Harris of MIT calculated . . . the 1982-1983 round of price increases caused two million adults to quit smoking and prevented 600,000 teenagers from starting to smoke. Those teenagers are now 18-21 years old, and since about 70 percent of 18-20 year-olds and 35 percent of older smokers smoke a PM brand, this means that 700,000 of those adult quitters had been PM smokers and 420,000 of the non-starters would have been PM smokers. Thus, if Harris is right, we were hit disproportionately hard. Here is the kicker: ``We don't need this to happen again.'' In other words, we don't need to lose these smokers again. We have to find a way to penetrate--that, and the young people. But the most important thing is they found that their price increase caused 2 million adults to quit, and it prevented 600,000 teenagers from starting to smoke. That is a cigarette industry document. For those Senators who keep coming to the floor saying, ``Why are we raising this price?'' all they have to do is read the cigarette companies that they are inadvertently, or otherwise, protecting on the floor by not voting for this legislation, because the cigarette companies themselves will tell you, raise the price and they lose business. That is precisely why people agreed on a volume adjustment in the process of arriving at how much money is going to be gained over the course of the life of this legislation. Let me read from a different Philip Morris memo. The teenage years are also important because those are the years during which most smokers begin to smoke, the years in which initial brand selections are made, and the period in the life cycle in which conformity to peer group norms is greatest. Mr. President, here we have an admission by Philip Morris of what everybody has known--that they are actually targeting the peer group which they know to be the most susceptible to exactly the kind of advertising that they geared up. The teenage years are also important because those are the years during which most smokers begin to smoke . . . the period in the life cycle in which conformity to peer group norms is the greatest. That is extraordinary. So the cigarette companies willfully played on the time period of greatest peer group pressure and played to the peer group pressure. So it is today that we can hear from people who are in wheelchairs who have lung transplants like Pam Lafland, who I quoted a few days ago, who tells a story today of her starting, as just that kind of peer group pressure person who responded to the notion, ``Oh, boy. If I smoke a cigarette, I am going to look older.'' Today she looks a lot older. Today she is trying to take care of her kids out of a wheelchair. Mr. President, that is what this is all about. Let me read from a different R.J. Reynolds Tobacco Co. marketing report on the future of Winston. This is 1990--15 years ago already of reports that we are looking at. Winston, of course, faces one unique challenge . . . . It's what we have been calling the `doomsday scenario'. Get this, the ``doomsday scenario.'' . . . an acute deficiency of young adult smokers, apparently implying Marlboro's final domination and our utter demise within a generation.'' The ``doomsday scenario''--that they are not going to get enough young people hooked on Marlboros, and down they go. Here is a 1969 draft report from the Philip Morris board of directors: Smoking a cigarette for the beginner is a symbolic act . . . . `I am no longer my mother's child, I am tough, I am an adventurer, I'm not square' . . . . As the force . . . This is really. * * * As the force from the psychological symbolism subsides, the pharmacological effect takes over to sustain the habit * * * Mr. President, that is one of the most remarkable admissions from a company that we have had in this entire debate. I want to rephrase it. What they are saying is that after they have abused a young person's susceptibility to peer pressure, after they have exploited this young person's availability to get them into smoking, they acknowledged in 1969 that once the psychological symbolism is gone, it is the pharmacological effect that sustains the habit. In other words, they are hooked. They are addicted. They got to have it. Here is a Lorillard executive in 1978: ``The base of our business is the high-school student.'' Mr. President, there are pages and pages of the thoughts of the cigarette companies regarding their availability to cigarettes, all of which are the most profound fundamental documentation and for which the U.S. Senate must pass this legislation in the next days. There is no room for excuses in the face of the cigarette companies' own acknowledgments of what they have done to target generation after generation of Americans in order to get them hooked on a substance that is a drug, that is addictive and a killer substance which winds up costing Americans increasing amounts of money. costing Americans increasing amounts of money. Mr. President, we have that opportunity here. We have the opportunity to do precisely what the cigarette companies themselves have now agreed to do. They settled of their own accord with a number of different States. And in their settlements with those States, they agreed to pay amounts of money, they agreed to curb advertising, they agreed to engage in cessation programs, and they agreed to raise the price of cigarettes--all of the things that we are seeking to do here in this legislation. There is no excuse for a U.S. Senator coming to the floor and suggesting that we shouldn't do at a national level in the U.S. Senate what the cigarette companies themselves have agreed to do in settlements with the States--no excuse. The States themselves have arrived at settlements. If you extrapolate the amount of money that they are paying in those settlements, it is more than the U.S. Senate has agreed in its denial of a $1.50 increase and more than it has agreed to raise in total in this legislation. So this is not a matter of economic survival for those companies. This is a question of whether or not we are going to engage in an effort to reduce the access of our young people to cigarettes. That is what this is about. I have heard some people complain, ``Well, you know, it is one thing to raise the money but we ought to do the right thing with the money.'' Then they start coming and diverting the money to a whole lot of things that have nothing to do with stopping kids from smoking. It is going to take more than just a price increase to be successful in our goals. We need to guarantee that kids who are particularly vulnerable--kids who have difficult situations at home or kids who may leave school at 2 o'clock in the afternoon for whom there is no adult supervision between the hours of 2 o'clock and 6 or 7 in the evening-- are not going to be left to their own devices in order to go out in the streets and meet a drug dealer, or subject themselves to the various peer pressures and wind up with smoking as a new habit. Mr. President, we have the opportunity here to be able to make a difference in the availability of kids to that kind of free time. We have the opportunity to be able to provide cessation programs, which have been proven to work. California, Arizona, my own State of Massachusetts, have exemplary programs which are reducing the level of teenagers who are smoking, and they do it through various kinds of education--outreach, peer groups--different kinds of educational efforts within the classrooms and within the schools. But we need to train people in that. We need to train teenagers. You need the adequate development of teachers to be able to conduct that kind of pedagogy with which they may not be familiar. And you need to have an adequate supply of materials. You need to be able to help organize it administratively. I think this bill is structured in a way that tries to afford the maximum opportunity to States and local communities to be able to decide how to do that. This is not some big Federal mandate. This is left largely for the States to be able to decide what works for them best and how they will organize their efforts. We have simply tried to outline those areas that by most expert judgments there is the greatest chance of really having an impact on children and making a difference in their lives. So those outlines have been laid out as a menu, if you will, from which one could choose at the State level. It is not insignificant that the Governors, both Republican and Democrat alike, have signed off on that concept. If they are content that they can exercise their judgment adequately and that this gives them an opportunity to be able to continue the things that they have started, I think that ought to satisfy the judgment of those who often make a career out of fending for the right of States to make those decisions and a career out of opposing the Federal Government's heavy hand into something. This bill specifically, I think, appeals to both of those best options. I hope my colleagues will recognize that upon close analysis. Mr. President, I simply wanted to refocus the Senate on the critical component of what brings us here. I think we have, hopefully, finally arrived at an assessment that there is only one reason for raising the price of cigarettes. That reason did not initiate itself in the Senate. It came from the tobacco companies themselves, from economists, from experts. It came from health experts, and it came from many focus groups and analyses, all of which have arrived at the conclusion that price is important. Now, I thought, frankly, that Adam Smith and others had arrived at that conclusion a long, long time ago. I think most people in the marketplace have always known that most commodities are price sensitive, and the marketplace is price sensitive. Indeed, the tobacco companies have underscored that in their own memoranda which say they lost smokers as a result of their earlier price increases. What happened before will happen again. The question is whether we are going to maximize our effort in order to guarantee that kids get a lot more than just the price increase, that they get the kinds of guidance and the kinds of personal counseling and the kinds of personal education that will make a difference in the peer pressure, symbolic side of the choice that so many have made. And this ultimately will benefit every single American. If we are going to talk about the cost, let us talk about the cost to all of America of smoking--the cost through all of our hospitals, our pulmonary wards, through emphysema, the length of extraordinary care and its cost for those who have terminal illnesses as a consequence of smoking and the consequences to all other Americans who choose not to smoke but because of secondary smoke. Mr. President, I suggest the absence of a quorum. Mr. GRAMM addressed the Chair.

Mr. KERRY

Mr. KERRY. Mr. President, I know the Senator from North Dakota, Senator Conrad, is coming to the floor to take a few minutes to share some thoughts with colleagues. But before he arrives, I just wanted to take a minute to refocus some of the discussion that we had earlier this morning, and perhaps in the waning hours of a week ago, and that is to address this question that has been raised by a number of opponents to the bill. The tobacco industry is now spending multimillions of dollars across the country. A number of colleagues heard in their home States their names being mentioned in radio ads as opponents are being ginned up to try to stop this bill. Americans should understand as they listen to these advertisements. I heard one of the advertisements that Dr. Koop is doing. Dr. Koop wisely asks every American to stop and consider the source of the advertising against the bill. When you hear people talk about big tax or big Government, or to stop the big hand of Washington from reaching in, all of these things try to elicit a kind of primal response that most of us have in America about politics and Washington and being told what to do, and so forth. It is all a very legitimate feeling, but the tobacco companies are trying to once again fake it with Americans. They are trying to once again cloak the reality of what is happening here. They are, ironically, doing so even as they settle lawsuits in certain parts of the country that have them doing the very things that they are fighting us doing on a national basis. Let me be more specific. In Minnesota, they have just come to a settlement for literally billions of dollars over a number of years. They have agreed to most of the terms that the attorney general was fighting for. They are going to engage in many of the programs that we are hearing colleagues come to the floor saying, no, no, no, don't do that. But the tobacco companies are actually entering into agreements with the attorneys general to do these very things. If you take the amount of money that the tobacco companies have agreed to in these States individually and you extrapolate that and apply it to the concept of a national settlement, you in fact wind up with more money being raised and dispensed than we are trying to do in this legislation. So there is an enormous amount of duplicity--both duplicity, I suppose, and hypocrisy in what the big tobacco companies are trying to do. Dr. Koop says, ``Be wary of who is sponsoring these ads.'' When you hear the list of sponsors, you know that the very same people who told America that they weren't selling an addictive substance, the very same people who said to America, ``Oh no, no, no, we are not targeting young people,'' are back again with a series of advertisements to try to distort the debate. The fact is that we have also heard a lot of focus about the cost of raising the tax on a pack of cigarettes, raising the fee on cigarettes, a tax, or whatever you want to call it. The price of cigarettes go up; that is the bottom line. The bottom line is that the cigarette companies themselves signed onto an agreement earlier in the summer, last year, that would have wound up doing exactly that. They agreed to raise the price. And the reason they agreed to raise the price was because everybody agreed that by raising the price, we would reduce the numbers of young people who would access cigarettes. We also know, according to every analysis, that the more you raise the price--every 10 cents that you raise the price, there is a 5 to 7-percent reduction in the numbers of kids who are smoking. So these are not pennies of taxes, these are lives of children that you are saving because we know that every 3,000 kids who get hooked on smoking every day, 1,000 of them are going to die early. We know that from the statistics. We know that 420,000 people die every year of tobacco-related diseases. It is a phenomenal, staggering number of people. It is phenomenal enough that we lose something like 58,000, I think it is, in traffic accidents, or due to driving under the influence, and so forth, over a year in America. We are talking about, five, six times that now that we lose, as a consequence, or six or seven times that that we lose as a consequence of smoking--every year. And every one of those people don't just suddenly die without any cost, except in the case, I suppose, of those who have heart disease related to smoking and suffer a massive coronary. But for those suffering from cancer of the larynx, or cancer of the throat, or cancer of the pancreas, or any of the forms of cancer, or kidney disease, which come from smoking, those are prolonged and very expensive diseases. We know to a certainty that people with those diseases are paying many tens of thousands of dollars more than people who aren't suffering from those smoking-related diseases. The truth is also that many of those people don't have health insurance, or many exhaust their health insurance. Then what happens? Mr. President, then every single American is taxed. It is the tobacco tax; it is the unwanted, unasked-for tobacco tax in America that every single one of our citizens pays to cover the cost of the deaths, the cost in the loss of productivity, the cost of the health care--$80 billion a year--and the Medicare costs of tobacco-related disease alone, which is $24 billion; $24 billion is parceled out by Americans, right out of their pockets, to cover the costs of other Americans smoking. So we need to stay focused and understand that all of the 98.5 million American households are each paying the unwanted tobacco tax of $1,370 a year for smoking. That is the cost of not passing a tobacco bill. That is the cost of leaving the situation the way it is today. America, if you want a tax cut, you want this bill passed because this bill offers tax relief by reducing the numbers of young people who will become smokers and, ultimately, the amount of our hospital and health care costs in this country. This is a tax cut bill. The only people who pay an additional tax are voluntary. If you go and buy a pack of cigarettes, which nobody is forcing you to do, you pay an additional amount for that pack of cigarettes. Now, they pay that amount in Canada. They pay that amount in Europe. When we finish raising the price of a pack of cigarettes in the United States by the $1.10 that is in this bill, we will still be lower in the cost of a pack of cigarettes than some European countries. We will be at the mean, at the average of most European countries. That will reduce smuggling between the United States and Europe. It will equalize our payments, and it will allow us to do the other things that the Senator from Missouri, Mr. Bond, just said we need to do--the outreach programs, the cessation programs, the counteradvertising programs, all of the things that buttress the raising of the price and help us create a compliance rate in this country that is significant. I must say also it is a known fact that cigarettes are a gateway drug, and they are a gateway to marijuana or to other drugs. It is a known fact, just as marijuana is a gateway drug to other drugs. So if you want to deal with the drug problem that we have heard a number of colleagues come to the floor and talk about, if you want to reduce the dramatic increase in the number of our young people smoking marijuana, then this is a way to also begin. This is not just an anticigarette program. This is an antinarcotic substance program. It is an antidrug program. And the way you provide a comprehensive drug program--just ask Gen. Barry McCafrey--is by having a comprehensive program on the demand side. I saw today that Admiral Kramek, Commandant of the Coast Guard, just retired, and I have dealt with Admiral Kramek over the last years through the Commerce Committee on the Oceans Subcommittee. Year after year, he would come before our committee as the Coast Guard has been charged more and more with the responsibilities for dealing with drugs but less and less money has been going to them, less and less capacity to do the greater amount of work on the demand side and interdiction side. So here is an opportunity for us to do something further with respect to the overall drug policy of this country. If our young people can be the beneficiaries of the kind of cessation and self-esteem programs that are part of this effort and part of our States' efforts now, we have a much greater hope of having young people who will be able to say no--not just say no to this narcotic, smoke that goes into their lungs, but say no to the other narcotic smoke that goes into their lungs. So this is a program that in our best estimate is a very significant tax reduction, long-term investment in the young people of our country. It is a way to reduce the overall costs of smoking to our Nation. It is time for the Senate to take that action which hopefully can resolve some of the remaining issues that we have on this legislation. I am very hopeful that we can work out an approach in a number of those difficult areas that still remain so that we could rapidly move forward. I think there is a capacity to do that if Senators are determined to try to act in good faith, and that will obviously be the test of the next days. I see the Senator from North Dakota is now here, and I yield the floor.

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

Mr. KERRY. Mr. President, I thank my colleague from Arizona. I am delighted to join with him, with Senator Rockefeller, and with others, in proposing this fix, which in our judgment is compelling beyond description. I think the reactions that we received from members of the veterans community were to be expected and, frankly, were really an unfortunate consequence of some of the things that happen around here. I think the veterans community had every right in the world to question whether people here had lost all sense of priority and all sense of connection to the kinds of commitments that we make along the way and certainly the good faith relationship between those who have served their country and had a certain set of promises made to them--I might add, not things that they requested originally, not things that were the conditions automatically of their service, but were, in a sense, the rewards to that service given at a time later on. And all of a sudden to find that, in the hurly-burly of the moment, people are so little connected to the meaning of that service, that there is sort of a grab that takes place for money for bridges and roads in the transit bill, to the exclusion of legitimately rightfully earned benefits that come as a consequence of serving the country, is really quite extraordinary. I think their anger was well placed and understandable. I am pleased that this afternoon we are going to take sort of the largest step we can take, in the context at least of this bill, but which will have a significant impact in redressing that by providing about $600 million available each year over a 5-year basis to the Veterans' Administration for the use for smoking-related disease, compensation and health care. I think that that is most appropriate. I am delighted that the Senator from Arizona and I were able to get sort of a consensus to be able to immediately move to send a very clear message to the veterans community that the Senate recognizes what occurred and does not concur with that particular action and is moving now to try to address it. As we do that, Mr. President, I also--and I know my colleague from Missouri wants to speak, so I will not take a long time here--but I do want to also highlight that the entire purpose of this legislation is geared towards children and towards reducing the level of smoking in our society. I will have more to say about that in the course of the afternoon. But I think it is critical that we remain focused on the smoking- related aspects of this legislation rather than some of the other attempts to sort of grab some of the revenue and use it for worthy but nevertheless nonrelated causes. And I think it is critical that we try to maintain the fundamental purpose of the legislation. This morning, out on the swamp, we met with a young group of kids who were part of Smoke-Free Efforts in America. Some 18 kids joined with a bipartisan group of Senators--Senator DeWine, Senator Chafee, Senator McCain, Senator Kennedy, Senator Conrad, and other Democrats--and, together with these kids, the point that was trying to be made was that there is only one reason that the U.S. Senate has come to the point of considering this tobacco legislation. That single point is to try to do the best job we can to reduce the level of teenage smoking and ultimately reducing the number of children who, when they become adults, will die early as a consequence of learning how and becoming addicted to smoking as teenagers, realizing that, of the 45 million Americans who smoke and are fundamentally addicted to smoking, 86 percent of them started as teenagers. That is the purpose that brings us to the floor. And for those who have been concerned about costs, we will reiterate again and again and again, the true tax on America is not the voluntary tax paid by somebody who picks up a pack of cigarettes, it is the involuntary tax paid by millions of Americans to pay for the $80 billion a year of medical costs for those who are smoking, and to pay for the 420,000 people a year who die as a consequence of smoking-related diseases, and the $25 billion of health care, under Medicaid and Medicare, that is picked up by everybody in the United States involuntarily in order to pay for the results of a narcotic, killing substance that we allow to be sold across the counter. While we are not, obviously, prepared to stop that altogether, we know enough about the addiction and enough about the downside of the disease that we are prepared to have the FDA finally regulate it and we are prepared to try to minimize the exposure of our children to this killer substance. That is what this debate is about. It is not about some concoction on the Senate floor to try to find additional revenue. Dr. Koop, Dr. Kessler, the American Cancer Society, the American Lung Association, the Treasury Department, a host of entities, have all agreed, the single best way to reduce the level of teenage smoking is to raise the price. And, most importantly, the tobacco companies themselves have made that statement clear in their own memoranda, in their own documents. So that is what we are here for. That is what I hope the U.S. Senate will accomplish. Mr. BOND addressed the Chair.