John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, I thank my colleague, the Senator from Arizona, for his review of this legislation and for his summary of where we find ourselves today. I also, obviously, particularly thank him for his laying out the important agenda with respect to veterans and what happened in the course of the last week or so. I will join with the Senator, as others will, I know, in trying to remedy that impact, and I am confident that the U.S. Senate will do so. I also recall, not just the degree to which there was a kind of dependency built into the system that both of us were in in the Navy, but often at the end of a particular exercise, or General Quarters, the announcement would come over the loudspeaker on the ship saying, ``The smoking lamp is lit,'' and there was this sort of automatic rush to smoke. It was part of the doctrine, if you will--the ethic. And an awful lot of veterans, as a consequence of that and other things, many other things through the course of life, are today suffering. They are suffering as a consequence of that. So I think the Senator is right on target in his desire to address that. I also thank Senator McCain for his long efforts with respect to this particular bill. In all of the debate on the floor of the Senate, it has been lost that this is a bill that was reported out of committee by a vote of 19 to 1, reflecting a considerable consensus about at least a beginning, a starting place. I think most people would agree, as a reflection of the vote that took place on the floor of the Senate regarding the cap on liability, that the bill which came to the floor moved significantly in the direction that the Senate ultimately decided it wanted to move, by eliminating all of the restraints on class actions and other limitations on liability, with the sole exception of the $8 billion a year. The Senate, in its wisdom, decided to remove that. But the point is, this is a bill that I think has been improved, at least in its starting point, and hopefully in the next days we can improve it further. I listened carefully to the Senator from Oklahoma last week, and I took the time last night to reread his criticisms of this legislation. I think here and there there were some good points that he made. There are ways, in amendments which I am confident the Senator from Arizona and I and others are willing to accept, that those issues could be remedied. So my hope is that in the next days we are going to be able to move to do that. But the most important thing, as we reflect on where we are going, is to remain focused on the positive ways, the constructive ways, in which this bill helps to save children's lives. That is the purpose of this debate. There is not anything else that we are really trying to do here. There is a reason that there is a tobacco legislative effort taking place. There is a fundamental reason that we have come to the floor of the Senate, recognizing the work of the attorneys general around the country who brought suit because of this. There is a reason they brought suit. There is a reason that the suits are settling. There is a reason the tobacco companies are coming to the table and agreeing to settle those lawsuits. They are settling them and agreeing to do the very things that we are seeking to codify in this legislation, but on a national basis, so we can save time, save money, and save lives. That is the purpose of this legislation. One cannot ignore the fact that, in Minnesota, if you extrapolate the cost of what the tobacco companies have agreed to in Minnesota, and take that out on a State-by-State basis across the country, you actually have a greater expenditure than you would have under this legislation. So the tobacco companies have accepted, at least in the legal process, what is being fought here in the national legislative process. I think the truth is that ultimately we are going to come to an agreement that recognizes that fact. The bottom line is that the entire legislative agenda we are engaged in here is to break the cycle of addiction that is hooking 3,000 children a day on a deadly drug. It is a very simple debate fundamentally. Yesterday, the Senator from Texas agreed that you do have to raise the price, and he is prepared to raise the price in order to try to reduce the access. At least we are sort of chipping away at the arguments here and slowly beginning to expose the truth, the facts, as the Senator from Arizona talked about. You can make the arguments politically on the floor, but you cannot make up the facts. The fact is that 3,000 kids a day get addicted to this drug and, as a consequence of that addiction, a third of those young children will die early of throat cancer, larynx cancer, esophagus cancer, kidney disease--some kind of disease that will be initiated and enhanced as a consequence of the addiction to this drug. So we should not be diverted by the side issues here. The side issues are purposefully being used to obfuscate what the real focus of this legislation is. There is only one reason for raising the price. The one reason for raising the price is that every single expert, including the tobacco companies themselves, have said if you raise the price you reduce the access of young people to cigarettes. If this were merely a debate about an adult habit, I guess you would hear a lot of discussion about willpower, about adult choice, about taking responsibility for your actions. If this were just a debate about dangerous adult behavior, whether it is smoking or drinking or driving too fast, we would not be talking it out on the floor of the Senate, I suspect. Fundamentally, we wouldn't be. But it is not a debate about adults; it is a debate about people who did not make a rational adult decision to start smoking. It is a debate about children. And the underlying reality is that 86 percent of smokers begin while they are children. Mr. President, 86 percent of America's 40 to 50 million--what is the number?--45 million Americans who are deemed addicted to cigarettes, 86 percent of them began as teenagers. They began as children. So this is a discussion about underage smoking and that underage smoking fundamentally leads to a very sad and tragic, slow suicide. Some of my colleagues have raised concerns about raising the price. I am glad the Senator from Texas has accepted the notion. I think other colleagues may ultimately do that, because the concept of raising the price is not something that was initiated with some Senator who came down and said, ``Boy, wouldn't this be a great idea? Wouldn't it be wonderful? Here is another way to raise some revenue.'' That is not where it came from. It came, quite simply, from all of the analyses, studies, research, polling data, focus groups, all of the experts have come together and said, ``If we raise the price, we can reduce the number of children who are smoking.'' We can't eliminate it--we all understand that--but we can significantly reduce the access of young people to cigarettes. I ask my colleagues not to ask Senator McCain or myself or Senator Kennedy or Senator Conrad or any of the other advocates of this legislation to be trusted in their word that somehow that is going to happen. I ask them to look at the economic analyses --at the Treasury analysis, the CBO analysis--all of the analyses that have been done. Among the 39,000 documents--and this is perhaps one of the most interesting bases for making this judgment--among the 39,000 documents that were subpoenaed over the years as the tobacco cases slowly made their way through the courts, we find a Philip Morris document that says, quite simply, the following: It is clear that price has a pronounced effect on the smoking prevalence of teenagers. That is a Philip Morris document. You will find an R. J. Reynolds document, and it says as follows: A key finding is that younger adult males are highly sensitive to price. This suggests that the steep rise in prices expected in the coming months could threaten the long- term vitality of the industry by drying up the supply of new younger adult smokers entering the market. It could also undermine the long-range growth potential of brands which rely on new younger smokers, including Marlboro and Newport. That is one of the most extraordinary documents we can ever conceive of reading after all of the protestations to the contrary of tobacco executives who came before the Congress and raised their hands and swore under oath that they don't target young people. Here is an R. J. Reynolds document talking about how price would affect their targeting of younger smokers, how price was going to reduce the industry's capacity to grow by depending on its ability to reach the younger smokers and get them addicted, particularly to Marlboro and to Newport. One might wonder why the tobacco industry conspired, therefore, for years to keep those internal memos under lock and key. The secret, I think, in those documents is not that price correlates strongly with sales, but it does. That is not the secret. The secret is that the number of young smokers, which we know translates too often into 13 and 14-year-old smokers, is going to go down dramatically if cigarette prices go up. Thus spoke the industry itself. That is why we are here in the U.S. Senate arguing about whether or not it is appropriate on a national basis to raise the price of cigarettes, and the cigarette companies themselves have told us in two ways: One, in these memos it is appropriate and it will work; and they have told it to us in the settlements in Minnesota and in Mississippi and elsewhere where they have agreed to those kinds of increases, and in the national settlement where they agreed to raise the price of cigarettes, albeit not to the $1.10, but they agreed to raise the price. They did that because they understood that was a component of reducing teenage smoking. So this is not an idea cooked up in the U.S. Senate. Don't come to the floor of the U.S. Senate and start suggesting that this is some Democrat or some large-scale tax-and-spend issue. This is an idea that the tobacco industry itself has written about for years. This is an idea that the health care industry itself has known for years would work. Public health experts are united in the consensus that raising the price of cigarettes is going to reduce youth smoking. Dr. Koop and Dr. Kessler said: Data indicate that children and youth are more price sensitive than adults and that pricing has a strong and immediate impact on reducing sales of tobacco products overall. The Congressional Research Service said: Most of the evidence suggests that teenagers are about three times more sensitive to cigarette prices as are adults. For every 10 percent price increase, the number of underage smokers drops by 5 to 7 percent. According to the Treasury Department: Substantial real price increases are the best way to combat youth smoking. According to the National Cancer Institute: An increase in the cigarette excise tax may be the most effective single approach to reducing tobacco use by youths. According to the Centers for Disease Control: Tobacco use prevention activities should be designed to prevent the use of all tobacco products. Such activities should include increasing tobacco prices. That is an extraordinary consensus--a consensus of the industry, a consensus of independent health analysis, a consensus of our economic advisers and economic analysts. I think that speaks volumes. Mr. President, I urge my colleagues to also listen to someone who is suffering from a lifetime of smoking. Listen to any of the people who in their twenties and thirties have already begun to feel the impact, and they will tell you how easy it is to buy a pack of cigarettes at age 12 and 13 when it only costs as much as four or five candy bars. Talk to women who will tell you that when they were adolescents, they gladly made that choice about how to spend the change in their pockets because cigarettes were going to keep them thin and candy bars would not. That is the story of Pamela Lafland, a 27-year-old mother of two who lives in Boston. Several weeks ago, I met her, and I thank her for sharing her story with me. When Pam was 11 years old, she had a lot of the same dreams that most young women have: She wanted to be attractive; she wanted to be successful; and she wanted to, while she was younger, look older sooner so that she could start making what she thought were grown-up decisions in a grown-up life. She took her pocket change down to the corner grocery store and she bought cigarettes. She got hooked. At 11, she was already dreaming of having children some day, and at age 22, she had her kids. At age 24, because of juvenile emphysema, she was now raising them from a wheelchair. At age 26, she had a lung transplant, and today her body is rejecting her lung. Her medical bills have exceeded $200,000, and she has found out, as she says herself, that when she was young, cigarettes were cheap, they were readily available, she didn't know to the contrary, and today she knows she could never measure the cost of a pack of cigarettes in quarters and dimes and nickels. For Pam, the cost has been her health, and in many ways, the structure of her life, the quality of her life. Pam tells me that raising the price of cigarettes would have made a difference to her and will spare children today from a price system that allows children to make the grown-up decisions that all but guarantee that when they do grow up, they are not going to have a lot to look forward to. I think we ought to listen to Pam, and we ought to listen to a lot of people like Pam who are similarly suffering in some stage of their life as the consequence of the ready accessibility in the United States of what we know to be a killer narcotic substance. We have heard a few Members of the Senate coming to the floor and suggesting that raising the price of cigarettes is going to hurt low- income people. Mr. President, there is a certain question mark, I guess, to put it politely, that raises when some of those people who have opposed health care for children, who have opposed day care, who have opposed raising the minimum wage, who have opposed student loans for people who are struggling--all of these things--are all of a sudden here on the floor, those very same people are the ones standing up in defense of ``poor people'' who are going to be hurt because the pack of cigarettes is going to cost more. Leaving aside that question mark about what brings them to the floor suddenly as the protectors of the poor in this instance is the fact that it suggests that somehow poor people do not care about their children's smoking, that it is OK to protect getting cancer on the cheap, that what we are going to do is somehow protect the notion that if we keep cigarettes cheap, poor people can buy them and get cancer, since more and more people in poor areas of America, in urban areas, are the ones in whom we see the highest increase in smoking today. So the argument is, we are going to protect you from the increase in the pack of cigarettes, which is going to make it cheaper for you to get cancer, cheaper for you to have your kids' lives ruined. It is an insult to poor people to suggest that they are not just as supportive of raising the price of cigarettes so their kids will not go down and buy them with whatever pocket change they have. We ought to recognize that. We should not be making it easier for a pack of cigarettes to be accessible to people for whom those cigarettes have become one of the better alternatives to some of the other problems that they have in their lives. In poll after poll--in poll after poll--a large majority of those people with incomes below $30,000 a year favor raising the price of tobacco, the price of cigarettes. And they do it because they do care about their kids and because they do want to have an opportunity to have those kids grow up healthy and capable of enjoying the fullness of their lives. Low-income people, just like wealthier people, understand that we have to reduce youth smoking. They also support raising the price because they recognize that spending on tobacco represents about less than 2 percent in spending in any income category. It isn't an issue of income or class; it has nothing to do with your occupation or the size of your family budget. It boils down to a consensus that by far most Americans want the U.S. Senate to do the right thing, which is to take cigarettes out of the hands of children. And the way you take cigarettes out of the hands of children is partly to raise the price, which has been deemed to be the most effective method, but also to engage in counteradvertising, research on addiction, cessation programs, and other things that I will talk about in a minute. So I believe this bill hits that mark. Senator McCain has reviewed each section of this legislation and laid out the ways in which it helps to prevent youth from smoking. Studies have shown that low-income smokers in Great Britain on average reduced their expenditures on cigarettes in response to a tobacco tax increase there. We ought to look to other countries and take the example from them. I think that is very significant, and the reason is that a significant percentage of low-income smokers quit smoking entirely in response to the price increase. Hooray. That is precisely what we want to achieve. So if we can induce a whole group of people--which is part of what is factored into the volume adjustments of this bill--if we can induce large numbers of people to quit, then, again, also the country will be better off. So the policy works. I think my colleagues need to be wary of those companies that have actually targeted people in the past now coming to us and fostering some kind of egalitarian argument when their lack of a sense of egalitarian sensitivity drove them to actually target people in low-income communities to become addicted. You cannot have it both ways. All of a sudden, this new concern is obviously a concern which will continue to allow people to become addicted and to buy cheap cancer. The only reason tobacco companies oppose the higher prices is that they know it will diminish the number of people who smoke. Mr. President, I hope the U.S. Senate is going to be united in the effort to reduce youth smoking. We are convinced by all the scientific evidence and by decades of precedent, even by the secret--now not secret--memos of the tobacco industry itself, that an increase in cigarette price will reduce youth smoking. So we ought to end the debate on the floor of the Senate about ``tax and spend.'' This did not originate in the Senate, did not originate with Democrats, did not originate as an idea of some political party that wanted to find revenue. It originated out of scientific analysis and economic analysis that tells us to a certainty that if the price of cigarettes goes up, then the number of people who smoke goes down. Then the next question for the Senate is, all right, if you have raised the price, and you have X amount of new revenue coming in, what is the best way to use that to continue to be able to reduce teenage smoking and to have an impact on the impact of smoking itself? That is what we are doing. That is precisely what this bill seeks to have an impact on. It is not, in the final analysis, a regressive burden on low-income families; it is a progressive idea that literally sends a generation of American kids into a world that will be healthier and safer no matter how much money their parents earn. It helps relieve all Americans of $130 billion that we lose each year in medical costs, lost wages, sick days, and all of the fallout from smoking. As my colleagues come to the floor of the Senate and talk about the cost of this bill--the cost of this bill is the cost of trying to limit young people from smoking. The cost of not doing that is $130 billion a year that every American is paying--even nonsmokers. Every single American is required to fork out of their tax dollars every year at least $1,370 per person in America to pay for the costs of other people smoking. That is what we pay now. The hidden tax on America is the tax of smoking itself for all of the diseases and trauma that come as a consequence of that. It helps--this bill--I believe, to relieve an individual smoker of over $19,000, on average, in lifetime smoking-related medical costs-- more than double the average amount of a year of tuition at a public university. I want to point, Mr. President, to the chart here that talks about the annual costs of smoking. We have 1 million kids who begin smoking every single year. There are already 45 million smokers in the United States. And, as we know, those 45 million smokers, 86 percent of them started right here as young children smoking. The costs of this break down to 420,000 deaths a year--a year. Those are people in a hospital bed, in a pulmonary ward, with tubes sticking out of them, can't breathe, oxygen, around-the-clock nursing, extraordinary medical costs--420,000 deaths a year; more people, as we know now, than died in all of World War II, all of Korea, Vietnam, Desert Storm, put together, every year--every year--in the United States. We have an opportunity to do something about that, and we are sitting here playing politics about it rather than trying to find the best way of doing something about it--420,000 deaths every single year directly related to smoking; $80 billion in lost productivity to the country as a consequence of the sickness and the disease that people pay the price for as a consequence of smoking; $80 billion in just total health care costs. That is just the cost for caring for 420,000 people dying and for the people who are not dying or are not yet dead in the outyears. There are 420,000 people who die a year as a result, but in the preceding year--and the preceding years--they are just sick, but very sick, and cost enormous amounts of money. So we are spending $80 billion a year because 86 percent of those adults got hooked when they were kids. Here we are in the U.S. Senate with an opportunity to stop them from getting hooked as kids, reducing the number of adults smoking, reducing the amount of health care, reducing the number of deaths. There is $24 billion just in Medicaid and Medicare costs that come out of the pocket of every American. That is the cost. You want to talk about taxes? It is the cigarette tax on every American that is obscene because most Americans didn't ask for that. At least raising the pack of cigarettes is voluntary. You can choose whether you are going to go in and buy them. You can choose whether you will buy one pack or one carton. You can choose how much you will pay out of your own pocket. But these costs, no American gets a choice about these costs. These are forced on every American. These are put to every American as a consequence of our allowing a narcotic drug to be sold over the counter in America. It is time we did something about it. Now, some have suggested that we ought to take some of this money and reduce the marriage penalty. I would like to reduce the marriage penalty. Even though some Americans who get married aren't affected by it, some are. We need to find a way to balance, how to do it smartly. But if we take this money and don't put it into the effort of researching addiction and don't put it into our children in terms of confidence building, all of the things they need for self-esteem to make judgments not to smoke, to help with child care, to help with the after-school times, which is when most of these kids go out and start smoking, when there is no parent home--when school lets out at 2 o'clock in the afternoon and they are hanging out on the street corner with their friends and we don't have enough time to give them something constructive to do--that is when it happens. Instead of providing that kind of constructive oversight with this money, some want to get rid of the marriage penalty. You get rid of the marriage penalty and you will not have done anything to reduce these kids from smoking. I am for getting rid of the marriage penalty, but don't take it out of the ``hide'' of the effort to get our kids unhooked from cigarettes. That doesn't make sense. That is not the smartest tradeoff we have been presented with in the U.S. Senate. Surely we could find a way to agree to vote on the marriage penalty-- and I will vote to get rid of it--at the appropriate time. If we can't do that, then let us at least whittle down some kind of sensible tax rebate to the people who we are supposedly expressing the greatest concern about--poor people--who are going to be paying more because they are buying cigarettes, and target that in some kind of responsible way. If we did that, then, I think, we really would be consistent with the effort to try to reduce teenage smoking. That is what we have to keep focused on here. Every time we get diverted, let us come back to what this is about: It is only about stopping our children from smoking, finding the way to reduce the numbers of kids who smoke. And we have to find the most sensible ways to try to do that. Now, it seems to me that what the Senator from Arizona has described in his opening statement really lays out a series of things that we believe are able to try to do that. In the inner cities of our country, there is a 78-percent likelihood that a child is going to start smoking before the age of 18. What does that mean? It means you will have a young woman who is more than two times more likely than a woman who doesn't smoke to have a low-birth-weight child. It means you will have the highest rates of juvenile emphysema and asthma in our urban centers. It means we will have a generation on the road to cancer of the mouth, throat, larynx, esophagus, pancreas, bladder, and kidney. Cigarettes are killing more children than ever before in our most underserved communities. The obligation of this legislation is to find a way to try to reduce that. What do we do in this bill? We hear people coming out here and talking about ``bureaucracy and government.'' We have left most of the options here to the States. In fact, there are minimal numbers of mandates. The mandates are simply sort of a Federal effort to say we want to make sure they stay on the target of trying to reduce kids from smoking but gives the States a pretty fair recipe as to how to do that. And it leaves the States the option of giving a tax cut. As the Senator from Arizona said, they can make their own choice. The big hand of Washington doesn't have to step in and tell them what to do. If they decide they want to take some of the money that comes back from this revenue and give them a tax cut, they can do that. We don't stop them. So it seems there is ample opportunity here. But most importantly, this bill sets up a structure for some cessation programs for counteradvertising, for research. Every single one of those are related to stopping children from smoking. We don't know all that science can tell us about addiction yet. Therefore, we have laid out a certain component of funding here to fund additional research on a national basis to try to learn more. Maybe we can come up with some kind of vaccine, Mr. President. Maybe we will come up with some kind of a magical combination of education and early input that makes it exceedingly difficult for people to make the choice to smoke. Maybe there is some easy antidote. We don't know yet. Whatever it is that triggers the mechanism in the chemical structure that makes people addicted, we ought to be researching. That is what we do. We put money into research so we can reduce the impact on our society of the $80 billion a year of medical costs. We have counteradvertising. We have learned that is a very, very significant way of reducing people from smoking. There are very significant evidences of that. It seems to me that we ought to keep our eye focused on that. Let me try to document that a little bit with an example. In Massachusetts, we were able to fight our State's addiction to cigarettes by a combination of raising tobacco prices and funding tobacco-control programs, exactly what we are talking about doing in this legislation. In 1992, Massachusetts voters approved Question 1, a ballot initiative, to increase the excise tax on cigarettes by 25 cents. The funds from that 25 cents were spent on cessation, outreach, a Smoker's Quitline, media campaigns about the dangers of tobacco, as well as research. The Smoker's Quitline, which is 1-800-TRY-TO-STOP, received over 35,000 calls through June 1996. It distributed 23,000 cessation materials. The media campaign is entitled ``It's Time We Made Smoking History'' and it reached 94 percent of the children in my State. The Tobacco Education Clearinghouse distributed over 2 million pieces of tobacco information literature in English, Portuguese, Spanish, Vietnamese, and other languages, and 66 primary health care sites have provided smoking cessation programs with individual cessation counseling and advice to 36,000 patients. Forty-nine youth tobacco education programs sponsored 2,570 community tobacco education events, which reached 950,000 Massachusetts youth. Thirty-three population at-risk programs provided tobacco education and cessation activities to targeted racial, ethnic, and gender groups. What were the results of these efforts? The annual per person cigarette consumption in Massachusetts dropped by approximately 30 percent from 1992 to 1997. The plan is working. There is no denying that. So what we are talking about in this bill is not pie in the sky, it is not some made-up notion of a do-good/feel-good concept. It works. It has proven to work. The only question before the U.S. Senate is whether we are prepared to maximize our efforts to reduce young people smoking and reduce the tax on Americans of smoking that occurs today, even for those who don't smoke and haven't asked for that tax. The research shows that we are not talking about some Massachusetts-- this is not a miracle or pie-in-the-sky. This can work all around the country. In the last 10 years, States from Minnesota to California to Arizona have invested in similar community-based antismoking campaigns. The American Stop Smoking Intervention Study for Cancer Prevention has provided funding to 17 States for smoking prevention programs, and they have managed to cut tobacco consumption by 10 percent in just 4 years. So, Mr. President, here you have it. In our State, we have a 30- percent reduction. In California, Minnesota, and Arizona, where they have made these efforts, small as they are, there has been a 10-percent reduction. What we are saying in this legislation is that if we can take this tobacco revenue and apply it to teenage smoking reduction efforts, we will reduce the number of Americans who are addicted, we will reduce the number of Americans who die each year because of this, we will reduce the amazing cost to our society of the burden of our health care, and we will reduce the Medicare and Medicaid component that is associated with it, the tax burden. This is a tax cut plan. This will reduce the cost to America over time, and that is why it makes sense. We also know that counteradvertising works. We need to be empowered--and this legislation seeks to do that--to reach millions of young kids in ways that will change their attitudes about smoking. I know that my colleague from Oklahoma expressed concern last week about the increase in marijuana use in the United States and the increase in smoking. I share that concern with him. There is an inexcusable rise in the level of marijuana smoking taking place. One of the reasons is that there has been a fallback on the commitment that was made a number of years ago to the kinds of proactive efforts of sports stars, role models, advertising, and other efforts that are so essential to helping kids perform the roles and attitudes necessary not to smoke. For decades, we have had the tobacco industry pushing cigarettes that taste sweet. I read a Wall Street Journal article where a former tobacco sales representative is quoted as arguing, ``This cigarette is for somebody who likes the taste of candy, if you know what I'm saying.'' Well, we know exactly what he means, Mr. President. What we ought to be doing is empowering local communities who know what he is saying to deliver a countermessage against youth smoking. Mr. President, in States where they have run messages against youth smoking--places like Arizona--it has worked. It has brought children out of risk. Nationally, I don't think any one of us will ever forget some of the ads we have seen, like the Marlboro Man dying in a hospital bed from lung cancer. He was the guy who was sitting on the horse with the hat on and moustache, looking so macho, selling a generation of cigarettes. He died from lung cancer last year, regretting the smoking and regretting the image that he portrayed, and he made an advertisement about it. That is effective. There was an advertisement of a cigarette addict who lost her larynx to smoking through her tracheotomy. I have talked with teenagers who quit smoking the day they saw those ads. Can anybody say that the effect is going to be the same the day we get rid of the marriage penalty? Come on, Mr. President, let's face it. The reality is that everybody understands if we can run an effective national effort in order to try to counter the impact on our children, we will make a difference. It is up to the U.S. Senate to make that difference now. We have a choice about our priorities. We can come down here and continue to wage the fight against the tobacco companies who continue to stand in opposition to a bill that tries reasonably to deal with the problem of smoking. I say to my colleagues, where it isn't reasonable, let's amend it. Let's come down to the floor with an appropriate substitute or amendment and let's pass it, if it is worthy. If it isn't, let's complete work on this legislation and do what we ought to do to reduce the access of smoking to our children. It seems to me that it is not hard to discern that the purpose of this bill is genuine and it is simple: It saves children's lives. It could save a generation. And it does so with minimal bureaucracy, minimal intrusiveness, and minimal interference. I am open to any ideas that anybody has which will sustain a counteradvertising program, sustain the cessation programs, sustain research into addiction, but at the same time do it somehow with less ``bureaucracy'' or intrusiveness. I am confident the Senator from Arizona and I would accept an amendment if it did so in a way that sustained the fundamental purposes of this legislation. So we have this opportunity, and there is no higher priority in the agenda of this Nation, there is no higher priority in the business of the U.S. Senate. It is hard sometimes to make the words as meaningful as one wants to, hard to find a way to get over the partisan tug-of-war that takes place here, and it is hard sometimes to get the full measure of what this is about. The full measure of what this is about is not the measure of a price of a pack of cigarettes, it is the measure of a child's life, it is the measure of what it is like to have emphysema and be in a hospital because you haven't made the decision that was cognitive when you were young. It is the measure of our responsibility as adults and as citizens to be able to reach our children at a stage when they are most impressionable and subject to making these kinds of mistakes. That is the measure of what we are doing here. I hope the U.S. Senate will measure up and do what every American understands is in the interest of our Nation and in the interest of our children. I yield the floor. Mr. McCAIN addressed the Chair.

Mr. KERRY

Mr. KERRY. The tobacco farmers are a component of the Federal expenditure. But, Madam President, let me answer the Senator. The fact is that because a lot of tobacco farmers are going to be injured here, just as we have helped fishermen in New England, just as we have helped people in the Midwest in the wheat or other crops such as soybeans, just as we have helped people who have been impacted negatively by a decision beyond their control, the Government is coming in and saying what you have been doing for your livelihood for years we have discovered merits our taking action that is going to impact your livelihood. Maybe the Senator from Texas thinks it is OK to abandon a lot of farmers and let them go down the drain. I don't think that is the American way. I think most of us in the U.S. Senate believe if the Government is going to make some kind of decision that actively impacts people's lives as significantly as this could conceivably, then we have an obligation to try to help those people transition into a new livelihood, or into a place of safety and economic security. To do less than that would, indeed, be irresponsible. If the Senator thinks that is a big spending program or some kind of bad giveaway, then let him vote that way. I think the majority of people in the U.S. Senate are going to vote for some kind of a responsible measure to assist the farmers. I think that is an appropriate thing to do for an appropriate period of time. The question is how much, and what is the appropriate period of time? So there is a difference of opinion here. But let us not forget that for years the tobacco industry has been fighting this legislation. For years the tobacco industry fought anything anywhere. It took the attorneys general of this country from 44 States to be willing to go to court to put us in the position to be able to even contemplate some kind of comprehensive settlement. That is where we are, finally-- contemplating it--because we have learned that even the tobacco companies 20 years ago or 18 years ago understood that raising the price of cigarettes would impact their sales. They were unwilling to do that. So they would fight it. They have fought every step of the way. It is time for the U.S. Senate to come together to have the votes, cast the votes that are important, come to closure on this, and decide we are going to pass a bill. Let the majority will of the Senate work its way and move forward. I will just add not just the tobacco companies are those who believe we should be raising this price. We ought to stop debating this issue of price. We really ought to stop debating it. The issue here is not whether or not we ought to be doing that, because there is no evidence to the contrary. The economist Senator from Texas has accepted the notion. ``I am willing to accept the price,'' he says. So the fight is over what we are going to do with it. That is a fight worth having. I believe when we have that fight the Senate will resolve that it is important to keep our focus on what this bill is doing. If we are raising the price, we are doing it for one principal reason, because that will reduce kids from smoking. That is the purpose of this bill. We shouldn't be diverting that purpose to relieve the marriage penalty, worthy as that is, at least to the tune of almost half of the revenue that comes in. We ought to be guaranteeing that that revenue is adequately spent on the cessation programs, the counseling programs, the teaching development programs necessary to help teachers be able to teach the peer group and other kinds of things necessary to lead kids to make wise decisions. We need to be able to guarantee that there is counteradvertising. We need to be able to guarantee that there is research into addiction in order to help us understand better how we are going to end this terrible scourge for a whole bunch of adults who are stuck smoking--40 to 50 million Americans who are addicted and who are going to go out and buy no matter what. We ought to be trying to help them, too. The choice for the Senate is whether we are going to take this revenue that reduces smoking and help these folks to be able to make the choices that are a matter of good health and good public policy. That is what this debate is about. I know there are other colleagues here who wish to speak. I yield the floor at this time. Mr. KENNEDY addressed the Chair.

Mr. KERRY. Madam President, again I will reclaim my right, and I will answer the Senator. He keeps coming back with this notion that what we are spending the money on again has nothing to do with the purpose of stopping kids from smoking, even after I have just particularly cited two States that are engaged in those very efforts. When you look at the legislation and read it, here is what they go to. They go to State and community-based prevention efforts. They go to counteradvertising, which is specifically targeted to stop kids from smoking. They go to cessation programs, specifically targeted to stop kids from smoking, and they go to research on youth smoking. That is it. That is all. The Senator from Texas comes and says----

Mr. KERRY. I will yield for a question in a moment. I want to point out something else to the Senator. He spent a lot of time out here saying, ``I am willing to support a drug program and to support an opportunity for kids to be able to be part of smoker cessation programs.'' Well, that is precisely what this money goes to do, Madam President; that is precisely what it does. It goes to public health, it goes to research into addiction, it goes to State money, and the Senator ought to love this. We are giving the money back to the States and saying, ``You can do what you want with this amount of money in the following areas.'' And every single one of those areas is to prevent kids from smoking. There are safe and drug-free schools. There is a drug plan. There is a safe school plan. There is child care, child welfare, and children's health maternal block grants. There is the professional training of teachers to be able to help kids to understand why they should not smoke. Every single one of those is a cessation program; it is a drug program. It is precisely what the Senator from Texas is saying. So the Senator from Texas can come here filled with all of the traditions of rhetoric and say this is ``tax and spend,'' et cetera, but the fundamental purpose is to raise the price, just as the tobacco companies feared and said, ``We know it will cut down on teenage smoking,'' and to take the money that comes from raising the price and put it into cessation programs, put it into programs for safe and drug- free schools. That is the program. That is what is on the floor of the Senate. It is done in a responsible way that does not tie up the States in a host of Washington bureaucracy and Washington mandates. It allows the States to choose to do what they think works best. Let me just share with my colleague a final thing, and then I will yield for a question. Here is a report that says that the California and Massachusetts programs, both large-scale community-based components, have been effective in reducing tobacco use. For example, 3 years after Massachusetts began its public education and tobacco control campaign, an independent evaluation found that tobacco consumption in Massachusetts declined at a rate three times that of the rate for the rest of the Nation. So we are talking about programs that work, that are demonstrable. Experts--far more expert than the Senator from Texas or I --have all suggested that you have to raise the price of a pack of cigarettes and you have to put these programs in place. In fact, Dr. Koop and Dr. Kessler suggested that we raise the price $2. The Senate voted that it was unwilling to even raise the price $1.50. So we are stuck at $1.10. It seems to me what we are offering is precisely the kind of reasonableness the Senator articulated. I will agree with the Senator that there is a fight here over the issue of the farmers and how that ought to be approached. The Senate, I am confident, in the next week has a chance to work its will intelligently and try to find a common ground there. But I think our colleagues on the other side of the aisle should stop coming here and condemning the bill as a whole. I suggest that we are really talking the same language fundamentally. Unless we are out here trying to find some way to stop it--I am against the marriage penalty. I would like to vote to eliminate the marriage penalty. Most of my colleagues on this side want to eliminate the marriage penalty. Nobody feels, at this point in time, that the marriage penalty is sensible public policy. It is bad tax policy, bad social policy, bad moral policy. But the question is, Is this the place to do it? Is the formulation of the Senator from Texas the formulation that is going to fairly distribute the income that you take from raising money on cigarettes, which you ought to be putting into the cessation and drug programs the Senator has talked about? So the fight here ought to be understood for what it is. If we are really going to try to get rid of the marriage penalty, there are a host of opportunities in the budgeting process to do that fairly. This is not the place to do it. I will vote to get rid of the marriage penalty in the right manner and in the right place. But I think the Senator may indeed have some other motive here than passing the tobacco bill, because this is not the place to take $52 billion of $60 billion and say we are still going to have meaningful cessation programs and meaningful research and meaningful efforts to reduce teenage smoking. I yield for the question without yielding my right to the floor.

Mr. KERRY. I will in a minute. A key finding is that: Younger adult males are highly sensitive to price. This suggests that the steep rise in prices expected in the coming months could threaten the long-term vitality of the industry by drying up the supply of new, younger adult smokers entering the market. That is from an R.J. Reynolds document. The smoking industry--the tobacco sellers--are saying don't raise the price because it will reduce the young kids that we can get addicted to cigarettes. That is the reason we are here raising the price. The Senator can say he doesn't want to vote to stop young kids from smoking.

Mr. KERRY. Madam President, I know the Senator from Texas needs to leave the floor. Not all my comments will be directed to him, but I ask him this. He asked a question at the outset of his comments. The question he asked was, sort of: I don't know why we are raising all this money; why is there a raising of the tax? Now he has come to a point where he has agreed he is willing to raise the tax. But there is one very simple, straightforward reason. It is not in order to raise the money. The money is raised because it is a consequence of taking an action that is deemed imperative by most people who have been involved in trying to get kids to reduce smoking. I simply say this to my friend from Texas. Let me read him a quote: It is clear that price has a pronounced effect on the smoking prevalence of teenagers and that the goals of reducing youth smoking and balancing the budget would both be served by increasing the Federal excise tax on cigarettes. That is a Philip Morris document from 1981.

Mr. KERRY. I hear the Senator from Texas, but if that were true, then he would come to the floor with an amendment that would somehow give the rebate to the actual smoker. By coming to the floor with a marriage penalty tax that costs some $52 billion, he is actually going to take all these people out there, whatever income level they may be at, who happen to pay this, into the upper-income levels. They will wind up getting the benefit for the marriage penalty, and you aren't solving the problem that he is here on the floor complaining about.

Mr. KERRY. Madam President, I ask the Senator further, having acknowledged, then, that to raise the price of tobacco you basically wind up essentially where we are in this legislation, or somewhere near it, because any time you raise the price of tobacco--and, being an economist, the Senator from Texas, I know, will agree--there is no way a tobacco company is simply going to absorb that price, they are going to pass it on. Ultimately, whatever raising of the price of tobacco takes place will be passed on to the tobacco consumer in one form or another. I know the Senator would agree with that.

Mr. KERRY. Let me come back to the Senator again. I understand where he wants to put the money, but he didn't answer my question. I ask him again to answer the question, How does he propose to raise the price of tobacco?

Mr. KERRY. I thank the Senator from Texas. I just had a couple of questions, one that came up momentarily, that I wanted to understand. The Senator suggested three ways we could solve the whole problem, and they were: ``Throwing the feeding frenzy overboard;'' throwing out the ``extraneous programs;'' and, third, to raise the price of tobacco. I just wanted to ask the Senator, first of all, how he intends to raise the price of tobacco.

Mr. KERRY. Will my colleague yield?

Mr. KERRY. Madam President, will the Senator yield so I can answer the question?

Mr. KERRY. Mr. President, I do want to make a few comments. I know my colleague from Texas wants to speak, and in keeping with the unanimous consent agreement that we have, I will not talk as long as I had intended to. I do want to try to make a few comments, if I may. First of all, I will make a couple of comments about where we find ourselves now as we return to the tobacco legislation. Just prior to the Memorial Day recess, the Senate had dealt with two of the most difficult issues with respect to tobacco of perhaps the four or five issues that people assume are the difficult hurdles we need to get over. Those two, obviously, were: The question of price--whether it would be a price of $1.10 or $1.50; and the second issue of the liability, as it was called, the question of the cap or amount of payments that would be made in any 1 year. The third of those difficult issues is now pending, the so-called look-back provisions, in the amendment by Senator Durbin and Senator DeWine, which seek to strengthen the ability to get individual companies to be able to take part in, to have an incentive to be part of, the process of trying to reduce teenage smoking. Obviously, the LEAF program hangs out there as a very critical issue. There are a couple of others, depending on what shape the debate takes over the course of the next days. Then there will be, no doubt, a few individual amendments here and there, but I don't think they present the Senate with the kind of larger issues that we need to face, that have been presented in the context of those amendments I have just talked about. It is possible, with a considerable amount of effort over the course of the week, to dispose of the most difficult issues regarding this legislation, if there is a good-faith effort to try to move forward. I will make a couple of comments about a few of the points that have been made both as we closed debate a week ago and also in the early hours of the debate, the comments that have been made today. First of all, with respect to smuggling, the smuggling that has taken place so far with respect to American cigarettes has been a one-way smuggling out of the United States. Our brands, which are popular internationally and known to be among the best cigarettes, are those that have been smuggled into Europe, where the prices are higher than those that were smuggled temporarily, for a brief period of time, across the border into Canada. We currently don't foresee that kind of problem, according to most people within the law enforcement community who have been asked about it in a series of hearings where the Treasury Department, Customs, and others were also inquired of with respect to the difficulties regarding smuggling. I underscore the testimony of Deputy Treasury Secretary Larry Summers, before the Senate Judiciary Committee on April 30, where he said: ``The Treasury Department believes that the creation of a sound regulatory system, one that will close the distribution chain for tobacco products, will ensure that the diversion and smuggling of tobacco can be effectively controlled and will not defeat the purposes of comprehensive tobacco legislation.'' And most people would agree with that because most people who smoke want to smoke the brands they are accustomed to and that they like and are known to be the best. So depending on whether you are smoking Newport, or Marlboro, or whatever among the most popular brands, those brands are going to be manufactured here, not elsewhere. They are going to be marked in a way and designated in such a way as to be exceedingly difficult to replicate or bring in. The bulk makes them difficult to replicate and bring in. It is far more profitable to continue to smoke even, as people do, heroin, cocaine and other illegal substances. Most people in the law enforcement community who are tracking these kinds of things do not believe that raising our cost of a pack of cigarettes to the level of almost an equivalency to Europe will, in fact, increase smuggling. It will reduce smuggling because there will be less incentive for our cigarettes to be smuggled to these other countries since our prices will be commensurate with theirs. There is another reason why that smuggling would be difficult. This is not a fee which is paid, or an assessment which is paid exclusively at the retail establishment so that you have a huge differential between the price of a carton of cigarettes at the manufacturing location, and then it rises very significantly at the retailer so that there is a huge grab in between. The assessment is a manufacturing assessment; it is a fee that is placed by the manufacturer. It is not unlike a value-added concept so that it is passed on, and as a consequence of that, there is no differential that creates an incentive between manufacturer and retailer. The result of that is you have a tracking system in place where the incentive is obviously for the manufacturer to recoup what the manufacturer already has paid out-of- pocket, and that recoupment comes by having a very strict system in place for the tracking. So as the Treasury Department said, you need to have all entities in the distribution chain for tobacco products--the manufacturers, the wholesalers, the exporters, the importers, the distributors and the retailers, holding a license or permit. That is precisely what will be existing. The licensing will be done at the State level. Licensing can be revoked or suspended for any kind of specific violations, and those conducting business without it obviously would be subject to the same kind of penalties. Secondly, there would be a marking, branding and identification of these packages for domestic distribution and for export so that it is very difficult to divert. And the sales structure from the manufacturer to a specifically identifiable person for whom they are accountable also makes it exceedingly difficult for this kind of diversion to take place. But I think the more important thing is to focus on the most critical issue here. We have heard a lot of talk about the cost of this bill. A number of opponents of the bill--people who seem to be out here prepared to allow the tobacco companies to continue to do what they are doing because they offer no alternative for what they are doing--are arguing that there is a regressive cost here to Americans, that this is somehow too costly. And suddenly, the same people who have proposed tax cut after tax cut after tax cut for the wealthiest Americans, at the expense, most often, of those who pay the most regressive taxes, are becoming the champions of the poor. I wonder if these crocodile tears that we are hearing for those people who smoke in the country--which I remind everybody is a voluntary act; no one is taxed who doesn't decide to go smoke. Nobody has to pay something who isn't actually smoking. Given the number of addicts that we have in the country and the amount that those addictions cost every American, the real regression here is the regression that falls onto the average American who is paying the health care costs of people who are addicted, the health care costs of people who get diseases for which they are either not covered or can't pay. There are countless, countless costs associated with smoking. None of my colleagues on the other side want to come and talk about that. They don't want to talk about the billions of dollars that Americans are assessed because of the cost of a substance being sold that is addictive and is a killer substance. That is the bottom line here. Everybody says, oh, yes, we have to stop our teenagers from smoking. Yes, we have to have preventive programs. But then there is no talk about how you put them in place; there is no talk about what preventive programs are going to be put in place, or how are you going to fund them. No discussion whatsoever. It is just a generic, flat opposition to this particular piece of legislation which seeks to do something real about the problems of smoking. The fact is that 98.5 million American households, families of smokers, and most importantly, nonsmokers, pay about $1,320 a year to cover the damage that smoking does to our society. Every single working family in America, including those who live on the minimum wage, and those struggling to send their kids to college, or to pay for parochial school, or just to make ends meet, are paying for America's deadly smoking habit today. The reality is that the overall smoking cost to our society is about $130 billion a year, and that cost measures the medical costs of smoking--the cost of smoking during pregnancy, the cost of lost output from early death, and even the lost work days, lost productivity that we get as a consequence of this. This taxes every single American, and the question is whether we are going to reduce taxes on Americans by finally stepping up to tackle the problem of smoking. A lot of people argue this is about family economics. They come to the floor and suggest that family economics dictate that in fairness we not somehow tax a person at the minimum wage who is going out and smoking. Well, they are right; it is about family economics. The problem is they are not on the side of families, because those of us who are fighting to pass this legislation are looking for a way to provide some kind of relief to working families by passing this legislation. The fact is that if you are not willing to put in place a tough regimen for reducing teenage smoking, you are in fact augmenting the burden that American families are already paying. The fact is there is a $60 billion-a-year cost in medical costs alone related to smoking. Over 40 percent of those costs--fully $25 billion--are covered by Medicare and Medicaid. Medicare and Medicaid are paying for $25 billion a year of the cost. That is a tax. That is a tax on Americans of $25 billion a year that is paid by all Americans, even those who don't choose to smoke, even those who hate smoking, even those who make every effort possible to avoid secondary smoke in public places. They wind up paying the tax on the medical costs for those who choose to smoke, or those who are addicted and have little choice as a consequence of a habit they picked up as teenagers. The important thing to remember here is this: For all those adults who are smoking today, 86 percent of them got hooked on smoking when they were teenagers. All of the analyses show if you can make it through your teenage years without getting hooked on the habit, without smoking, the likelihood of your having the development of character and a sort of health consciousness that would then keep you from smoking is significant. Most of these people who start smoking in their teenage years start at the ages of 13 and 14 years old. In fact, a very significant proportion are hooked by the time they are 14. Now, we know to a certainty that price affects the availability of any commodity to anyone. Clearly, for young kids the amount of cash which they have in their pockets is going to be spent according to the cost and what particular benefit they deem they are getting for that cost. If you raise the price, it is clear there will be less availability. But that is not all we are doing, Mr. President. This legislation doesn't just raise the price and say, OK, we have done the job, let's go home. This legislation sets up a whole set of efforts to reach out to young people, to increase the awareness regarding addiction, to increase prevention programs, to increase our research efforts within the NIH and the medical community in order to understand addiction better. It increases our capacity to learn whether we can reduce addiction among adults in significant ways. There are a host of other benefits that come with this legislation that are critical. But equally as critical is what the Senator from Illinois is trying to do, Senator Durbin, in the so-called look-back amendment. It doesn't do you a lot of good to simply pass a piece of legislation that somehow leaves the tobacco companies out there in a way that they are not going to be part of the solution of trying to reduce the access of kids to smoking. If the tobacco companies have a strong incentive to be part of that process, then we have a much better chance of reducing smoking and meeting our goals. So the look-back provisions are a way of giving the tobacco companies a grace period in order to be able to make the adjustments in their advertising and their distribution process in order to help in the education of young people and, through that process, significantly reduce the desire of young people to smoke, because it somehow makes them look older and makes them look cool as a response to peer pressure and a whole lot of other reasons that young people do choose to smoke. I might add that we have come to understand very well what those reasons are. Over the course of the last years, while the struggle has been going on between the tobacco industry and people who want kids to be able to lead healthier lives, during the course of that time there have been many, many, many analyses, many surveys, many focus groups, many discussions, many polls, all of which have indicated the degree to which young people smoke as a consequence of either peer pressure or a desire to kind of fit the role model that they may have seen in a movie, or somehow to be older, to look older, at a time in life when some of those choices are important. We were at a tobacco forum in Boston, MA, about a month or two ago with Vice President Gore. We had testimony there from an adult who today has great difficulty breathing, who today is confined to a wheelchair, who testified personally to how the lung problems she has today and the diseases that she is now suffering from came directly from smoking, which came directly from her desire to look older. As she said to those kids who were assembled at this forum, ``Boy, I sure succeeded in my goal. I look a lot older now.'' Those kinds of testimonials are the most important kinds of ways in which we can, hopefully, reach our young before they fall prey to this addiction. What we need to remember as we think about the ``cost'' of this bill is that the cost of this bill is minimal compared to the cost to society of people whose lives are literally ruined as a consequence of the cancers, or liver disease, or heart disease, emphysema, that some members of their family suffer. There are kids in this country whose parents are unable to send them to college, or to buy them books, because of their $13,700-a-year habit to buy cigarettes. That is what you are talking about. So if you want to talk about the real costs to America, the real costs to America are not contained in the first ever comprehensive effort to try to do something about our narcotic killer substance that is being sold across the counter to anyone who wants to buy it. The real costs to our society are costs as a consequence of that happening without the Senate of the United States or the Congress being willing to take action to respond to it. Again and again this week, Mr. President, I hope we are going to be reminded about those costs to the United States. We have people who have been addicted to cigarettes in this country since they were kids. And, literally, there are cases where I have heard people say that they had to tell their kids that they couldn't do X, Y, or Z for their children because of their addiction. The cost of smoking in that regard is enormous. Consider the cost of smoking while pregnant. The truth is that a pregnant woman who smokes daily and suffers complications will spend $8,000 more than a nonsmoker in trying to deliver a healthy baby. That is a cost you do not hear our colleagues on the other side of the aisle talking about. That is a cost that the tobacco companies don't offer up as one they ought to be responsible for. That is a cost to society and a long-term cost to the future of that child. Smoking while pregnant doubles the risk of having a low-birth-weight baby. And that, as we all know, significantly complicates the postnatal period, raising the costs by thousands upon thousands of dollars in hospitals. If that doesn't communicate how serious the problem is, look at the impact. Forty-eight thousand low-birth-rate births are caused by smoking each year--48,000 children who may suffer medical problems their whole lives because of smoking that took place during pregnancy. These are 48,000 kids whose lives will be affected for the rest of their lives. I am not sure how you measure that financially. So as our colleagues come to the floor lamenting the fact that we are asking that people who buy these as a matter of course, on their own decision, on a voluntary basis, would have to pay a little more for their substance that costs all of us a lot more, that is not too much to ask. It is certainly, when you balance it more appropriately, not to protect the tobacco companies; it is to protect the rest of America against those costs. That is the choice that I think most Americans see exist in this legislation. The reality that has been lost in some of the debate about the costs of this legislation is the reason that the Senate is now presented with this vital legislation. It is my hope that over the course of the next days we will be able to move forward on it. A quick word about the look-back provision, and then I will yield to my colleague. The look-back provision is a provision that seeks to try to create a sensible balance in how you invite the cigarette companies to really act more responsibly. Unfortunately, there is a long, long track record of the cigarette companies acting irresponsibly. That is a smoking record in the final analysis. Everybody remembers the times that cigarette executives came up here and raised their hands and swore to tell the truth and nothing but the truth. The truth is, they did not tell the truth, and now all of America knows that. Now, as a result of some courageous attorneys general around the United States taking suit against the cigarette companies, we have received documents that show the degree of the deception, the degree to which there was literally a predatory attack on the young people of our country. That is the choice the U.S. Senate faces here--whether we are going to just talk about protecting our kids from that kind of predatory attack, or whether we are going to actually do something about it. It is a choice that will be very clear to the American people who are going to watch what the Senate of the United States does here. But the question is, How do we get the cigarette companies to take actions that do not try to subvert what we do here? How do we guarantee or at least provide the best structure that we can to invite them to become part of a solution? The way to do that, Mr. President, in my judgment, is to strengthen the look-back provision so that there will be a stronger incentive on the individual companies to participate. Currently, there is a $4 billion cap industry-wide that suggests that a company that decided, ``Well, we are going to just ride the wave of the industry, we will not take part that much, and if we don't happen to meet the goal, then this is not going to cost us as much because the rest of the industry is going to pick up the cost,'' there is a sense, even though there is a penalty of $1,000 per child per percentage point, that they don't meet the goal, which we feel may not be a sufficient goal. So the Durbin-DeWine amendment seeks to shift the remainder of that so that there is less of a cap, less of a requirement on the industry- wide payment and more of an individualized, company-specific payment in order to provide a stronger incentive for that company to become part of the solution here. I think above all the American people have reached a point where they understand that they want these cigarette companies to act responsibly. They want them to be part of the process of helping to protect their kids from exposure to this narcotic substance. On that basis, Mr. President, that is where we find ourselves today. We will debate through the afternoon. And at some point tomorrow there will be some resolution--I guess late tomorrow--with respect to the parliamentary status that we are in.

Mr. KERRY. Mr. President, I ask unanimous consent, for the duration of the afternoon until the Senate either goes out of legislative session or adjourns, that we would be confined to debate only and to no parliamentary procedures with respect to the tobacco bill.

Mr. KERRY. I thank the Chair.

Mr. KERRY. Mr. President, I ask unanimous consent that the Senator from Minnesota be recognized to complete his comments without my losing the right to the floor at that point.

Mr. KERRY. Mr. President, I ask my colleague from Minnesota how long it would be his intention to speak, if he did wish to continue to speak?

Mr. KERRY. Mr. President, at this point in time I believe I have the floor; is that correct?

Mr. KERRY. That is the pending business?

Mr. KERRY. Mr. President, what is the parliamentary status at this point with respect to the bill?

Mr. KERRY

Mr. KERRY. We are just in conversation now, Mr. President. If we can just have time so we can complete the conversation.

Mr. KERRY. I object at this point.

Mr. KERRY

Mr. KERRY. Mr. President, as I have discussed with the distinguished majority leader, I do not want to slow up the proceedings. I never have. I am trying to simply resolve a couple of last-minute details. So I am constrained to object, at least for a few moments, until Senator Chafee can finish doing what he is doing and we have a chance to confer. I assure my colleagues, this should not be a long-term process, and I hope we can resolve it very, very quickly, but I do object at this moment. Several Senators addressed the Chair.

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

Mr. KERRY

Mr. KERRY. I strongly support the nomination of Fred Hochberg to become Deputy Administrator of the Small Business Administration (SBA). The Deputy Administrator oversees the day to day operations of the important financial business education and procurement assistance programs of the SBA to ensure that they are run efficiently and effectively. With more than 20 years of business experience, Fred Hochberg is perfectly suited to step right in and assist the SBA to refine its management structure to insure the SBA is an effective financial institution in the next century, capable of and dedicated to offering genuine help to entrepreneurs and small businesses that are the engine of our free enterprise economy. Fred Hochberg has lived the American dream and will bring that experience to the Small Business Administration. His parents immigrated from Europe at the beginning of this century. In 1951, Lillian Vernon, Fred's mother, started the Lillian Vernon Company with $2,000 she received from her wedding. With Lillian's hard work and persistence the small business grew over the years. Fred Hochberg joined the business after receiving a Masters in Business Administration degree from Columbia University and has served as President and Chief Operating Officer. Under Fred Hochberg's tenure as President and with his mother's help, the Lillian Vernon Company built a sophisticated international mail order company that today serves more than five million customers. Fred Hochberg has mastered the challenges of developing a small business into an international corporation. He managed the complex transition of a family-run business into a publicly held corporation. Today, the Lillian Vernon Company has 1,400 employees and has annual sales of $250 million. No one better knows the problems facing small business today than someone who has been involved in a family-owned business for the past 20 years. When Fred Hochberg appeared before the Senate Small Business Committee earlier this month for his confirmation hearing, he told the Committee ``I understand what American entrepreneurs put into their enterprises: the seven-day weeks, the hard work and sweat equity-- because that's where I come from. I intend to bring these values to my work at the SBA.'' Now he will bring the talent, experience and hard work to lead the SBA and its wide array of programs into the 21st century. I congratulate the President for this nomination. I thank Chairman Bond and Majority Leader Lott for agreeing to bring this nomination before the Senate. And I look forward to Fred Hochberg's arrival at the Small Business Administration where I believe he will make a very considerable contribution to the small businesses of our nation.