Jack Reed

Mr. REED

Mr. REED. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. REED. Mr. President, I am offering this amendment tonight not only on behalf of myself, but Mr. Abraham, Mr. Chafee, Mr. Leahy, Mr. Wellstone, and Ms. Mikulski. My amendment would add a modest $10 million increase to the budget for the Office of Lead Hazard in the Department of Housing and Urban Development. I first want to commend and thank the chairman and ranking member for their assistance and their help. Both Senator Bond and Senator Mikulski have committed to finding more resources to prevent the exposure of young children to the lead hazard which is so prevalent in older housing throughout the United States. They have worked very closely with my staff and myself. I thank them for that. I am also very confident they will continue these efforts in conference so we can increase even more the funds that are allocated to this important endeavor. Over the last 20 years, the United States has made great strides in reducing lead exposure among our population, particularly among our children. Since the enactment of a ban on lead-based paint, since the elimination of lead solder in food cans and the deleading of gasoline, we have seen a significant decrease in blood level exposures of American citizens by about an order of 80 percent. However, it is still estimated that approximately 1 million children nationwide still have excessive levels of lead in their blood, making lead poisoning a leading childhood environmental disease and a disease that can be prevented. Today, the key culprit in this exposure is lead-based paint in housing. It is the major source of exposure and is responsible for most cases of childhood lead poisoning. It has been estimated that approximately half of America's housing stock, roughly 64 million homes, contain some lead-based paint. Twenty million of these homes contain lead-based paint in a hazardous condition, paint which is peeling, cracked or chipped, paint that can be ingested by children, taken into their bloodstream, causing them severe health problems. The problem of lead-based paint is particularly severe in my home State of Rhode Island. Forty-three percent of our housing stock was built before 1950, the time in which lead paint was universally used in painting homes. But the problem of lead-paint exposure and lead-paint poisoning in children is not related to Rhode Island; it is truly a national problem. One in 11 children nationwide have elevated blood levels, and if you refer to the chart on my left, you can see that, for example, in the city of Baltimore, 22 percent of children age 1 through 6 have dangerously high levels of blood--Chicago, 12 percent; Davenport, Iowa, 18 percent; Denver, CO, 16 percent; Milwaukee, 36 percent; St. Louis, MO, 23 percent; my home State, Providence, RI, 28 percent of children tested have higher than normal levels of lead in their bloodstream. This is a nationwide problem. It is a problem particularly severe in the older urban areas of the country, but not exclusively there. Again, one of the key factors is housing stock of the community. Housing built before 1950 typically have extensive lead paint still residing in these homes. If you look across the country, there are States everywhere that have significant totals of housing built before 1950. For example, in Illinois, 36 percent of the housing was built before 1950; in Michigan, 31 percent; in New York, 47 percent. All of this points to an extremely important public health problem. It is important because childhood lead poisoning has a profound health effect on children, a profound educational impact on children, their ability to learn and their ability to develop intellectually. Children with high blood levels can suffer from brain damage, behavior and learning problems, slow growth and hearing problems. Children with a history of lead poisoning frequently require special education to compensate for intellectual deficits and behavior problems. In my State of Rhode Island, officials believe special education services are 40 percent higher among children with significant lead exposure, and in 1990 dollars, it costs roughly an additional $10,000 to provide special education services to a child. By failing to eliminate the hazard of lead in homes, we are harming not only the children directly, but we are also incurring huge additional costs for education and health care. This is truly a problem that we must address, and we have to address it with the resources necessary to address this problem effectively. Mr. President, childhood lead poisoning is a significant health, educational and fiscal issue. We must do everything to eliminate this lead-based paint hazard to our children. By providing sufficient funding to the HUD's Office of Lead Hazard Control, which has the primary responsibility for addressing this hazard in housing, and since 1992, the Office of Lead Hazard Control has been a highly effective component of the Federal Government's effort to address childhood lead poisoning. Through its grant program, this office has provided grants to State and local governments to reduce the exposure of young children to lead- based paint hazards in their homes. Specifically, they have given grants to privately owned homes, to low-income occupied, and rental housing, all in an attempt to help them eliminate the source of lead poisoning in children, the most common source, and that is lead paint within homes. Since 1993, $385 million has been awarded to 30 States and the District of Columbia. These grants have helped abate or mitigate lead- based paint hazards in 50,000 homes where young children reside. Regrettably, this is just, in effect, the tip of the iceberg, because there are so many homes that have these particular hazards to children. In addition to helping mitigate and abate lead exposure in homes, they have also supported programs to test children for lead-based paint exposure, and also to test the homes. All of these efforts together have helped in some small way to eliminate this problem, and I have had the opportunity in my own home State of Rhode Island to visit and look at the efforts that are undertaken to eliminate these exposures to children. They are important. What is most important is ensuring that we have the resources so that we can protect the health of all of these young children. As I stated before, this is a problem that is terribly frustrating. We know that children, if they ingest lead into their system, will suffer some type of health effect. This health effect will usually result in poor intellectual development and behavioral problems. We will be paying later through special education and through the lifetime of these children who then become adults. We can at this point take an effective step to ensure that these problems are addressed. It is preventable. It is a pediatric disease we can prevent if we simply get the lead out. My amendment this evening will increase the resources to the Office of Lead Hazard Mitigation so that we can, in fact, help local communities ensure that the housing these young children are living in is lead free. Oftentimes, the families of these children have no choice. They must go to homes that is the best available housing, but in providing a shelter for their child, in some cases unwittingly they are exposing their child to a hazard which will claim not only their health, but also their intellectual development. I urge all of my colleagues to support this amendment. I am prepared to yield to the chairman at this time. Mr. BOND addressed the Chair.

Mr. REED

Mr. REED. Mr. President, I rise in strong support of Senator Harkin's amendment. I am pleased to be a cosponsor of this amendment. As the Senator indicated, last year this Senate strongly supported a virtually identical measure which would increase the enforcement ability of the Food and Drug Administration dramatically. We all know that in every State in this country it is illegal for children to buy cigarettes, but we also know it is very easy for children to buy cigarettes from vending machines and retail outlets. And last year, there were a staggering total of 256 million packs of cigarettes sold to children under the age of 18. That is an enormous amount of cigarettes, as Senator Harkin indicated, roughly $500 million, a huge market, a very lucrative market. And we all know if we don't take effective steps to provide for the enforcement of existing State laws and education of children and, just as importantly, the retail salespeople, this staggering total will go on and on and on, with dreadful consequences to the health of our children. Our effort today is to provide the resources to ensure that illegal tobacco sales to children are stopped if at all possible. Our amendment would fully fund the FDA's youth in our tobacco efforts by raising an additional $100 million by imposing a user fee on tobacco companies based on their market share. The pending bill, the bill that we are considering today, provides only $34 million, which is roughly one- quarter of the request submitted by the administration, to fully and effectively enforce the tobacco laws in the United States against sales of tobacco products to children. Let's put this total in perspective, that we are asking for, this $100 million. It has already been eclipsed by the amount of money spent by the tobacco industry in advertising against comprehensive tobacco legislation this year in the U.S. Senate. Just, in fact, a few moments ago in the cloakroom, I saw another advertisement being run by the big tobacco companies. They have already spent much more than that in trying to prevent effective legislation that will curtail teen smoking in the United States. Another aspect we should consider: This $100 million is just roughly 2 percent of the $5 billion that the industry spends each year in advertising its products, and, as we well know and has been well documented, too much of this advertising is directed at children. We have to in some way, some small way, counteract this constant fusillade of advertising aimed at children, and one way we can do it today--far short of the comprehensive debate that we had weeks ago--one way we can do it is ensuring FDA has the resources to adequately support State efforts to suppress childhood access to tobacco products. In terms of the money we are requesting, a total of over $100 million, it is also small compared to the health consequences of tobacco smoking in the United States. It has been estimated that over $50 billion a year is drained from our health care system because of tobacco and its effect on children. As Senator Harkin so well indicated, this is a pediatric disease; it begins with young people. Mr. President, 90 percent or more of individuals who begin to smoke do so before they are 18 years of age. Smoking begins around 12 or 13 year old. Regular smokers are regular smokers by the time they are 14. It is a pediatric disease. It is costing us billions of dollars a year, and we have to take effective steps to stop it. This is one way that we can do it, one way I hope we can do it. We know, too, enforcement of these laws is a significant way of curtailing access to tobacco products for children and, we hope, curtailing their exposure to tobacco and nicotine. One of the significant aspects of this amendment is, it will allow the FDA to put more resources into State efforts to curtail access to tobacco products by young people. We all were lobbied heavily by different groups--industry groups and public health groups--about the comprehensive legislation. There is not one group that came into my office, be they public health advocates or industry representatives, that did not emphatically and unhesitatingly say, ``We are in favor of strong enforcement of existing laws that curtail teen smoking. We want this. We will do this.'' Now we have an opportunity to fulfill their desire by giving resources to the FDA to ensure that these laws are strictly and effectively and efficiently enforced. We are talking about a situation in which we can provide resources to bolster the laws that are already on the books. As I indicated, as my colleague indicated, every State in this country curtails teen smoking. Every quarter of this country speaks out against underage smoking. It is not just public health advocates, it is the industry. Everyone says this is wrong. Yet, unfortunately, we are seeing a tremendous rise in smoking among teenagers. It is rising dramatically. It has increased by over a third since 1991. It is one of the unfortunate health statistics related to children in America today. Again, unless we take effective steps, it will continue to rise. We know that most young people buy their cigarettes themselves. This is not some great conspiracy where adults are out supplying kids. These are young people walking into these stores or getting access to a vending machine and buying it themselves. We know we can cut down this abuse, we know we can cut down this access, if we have stronger, better laws. More enforcement, though, of the existing laws, is certainly the first place to start. FDA evidence indicates, if we thoroughly enforce the compliance laws of the United States, we can significantly reduce teenage smoking. We can do it without entering into some of the more extensive proposals that were entertained just weeks ago here. We can do it by providing the resources of the FDA to support the States so they can both educate their salespeople in retail categories and also to ensure that we are checking on what they are doing. This is a terribly lucrative product. Talking to convenience store owners, many of them indicated this is the most lucrative product they have in their stores in terms of the margin on the sales they make. There is tremendous incentive to backslide, to ignore the regulations, to do anything you can to make these sales, to do anything you can to avoid the laws against selling tobacco products to minors. Unless we check them, unless we supervise them, unless we give real incentives to the States to do that, that is exactly what will happen, because that is exactly what is happening today. We have to, I think, find a way, not just each year coming to this floor and arguing for additional resources, but in the future I hope we can find a way to permanently fund sufficient resources to fully implement State laws and other provisions that will curtail the access to tobacco products by young people. But today we have the opportunity, the real opportunity, to provide more resources so we can do in deeds what we all say in words we want done: To stop young people from buying tobacco products, to give them a chance to grow up, to give them a chance later, if they wish, as adults, to make a decision about smoking. This is the moment for us to stand up and to literally put our money where our mouth is. I urge passage of the amendment, and I yield back my time.

Mr. REED

Mr. REED. Mr. President, I rise to express my support for the conference report on the IRS reform legislation, but also to raise concerns about several provisions in the bill. Mr. President, I believe this legislation goes a long way in making a number of important organizational and management reforms at the IRS that will enable the agency to become more efficient and taxpayer- friendly. Such steps are welcome and should help to address the concerns of millions of taxpayers. In addition, the bill includes provisions to encourage electronic filing and promote the use of digital signatures--advances which will substantially improve tax administration for filers and the IRS. However, Mr. President, I am concerned about the long-term cost of provisions in the bill that will make it easier for the wealthiest Americans to convert traditional IRAs to Roth IRAs which allow tax-free withdrawals. Under last year's budget agreement, individuals with an annual adjusted gross income of less than $100,000 are permitted to convert traditional IRAs into Roth IRAs. Currently, individuals over the age of 70\1/2\ must withdraw a minimum amount from an IRA each year and these withdrawals count toward the income threshold for conversion to a Roth IRA. Provisions in the conference report, however, would exclude required annual withdrawals when determining an individual's eligibility to convert a traditional IRA into a Roth IRA. As a result, some of America's wealthiest will be able to rollover large IRA balances into Roth IRAs, thus exempting themselves and their heirs from future taxes. While the Roth IRA provisions will raise tax revenues initially because they will encourage taxable conversions, the long-term costs resulting from foregone revenue will be significant. In fact, in recognition of this issue, the conferees delayed implementation of the conversion provision until 2005, thereby putting the revenue losses outside of the 10-year budget scoring window. Mr. President, I am also concerned about provisions that reduce the holding period for investments from 18 months to 12 months to qualify for a lower capital gains rate. In the Taxpayer Relief Act passed in 1997, Congress reduced the capital gains tax rate, but lengthened the holding period necessary to take advantage of the new lower rate. It was thought that lengthening the holding period would discourage churning, and encourage long-term savings and investment. By reducing the holding period, we are abandoning one important condition of last year's capital gains reduction, and we may be encouraging short-term profit-taking at the expense of long-term investment. I believe such a provision is unwise and costly in view of the dismally low savings rate which currently exists in the U.S. Finally, I am concerned that the conferees knowingly failed to close a loophole accidentally created in the Taxpayer Relief Act which benefits several hundred of the wealthiest Americans. Specifically, the loophole benefits the heirs of individuals whose estates are worth more than $17 million, saving each estate approximately $200,000 in taxes. The cost of this loophole is $880 million over 10 years. In view of its significant cost and limited benefit, I believe the conferees should have used the IRS reform legislation as an opportunity to close this loophole, not affirm it. Again, Mr. President, on balance I believe this is a good bill. However, I would hope that my colleagues consider the concerns I have raised when the Senate debates tax legislation in the future.

Mr. REED

Mr. REED. Thank you, Mr. President. I believe the Senator from Iowa has introduced a very worthy amendment that is consistent with the overall thrust of the legislation to provide more affordable access to college for hundreds of thousands of American students. I hope that his amendment will prevail. It also, I believe, compliments many other portions of this legislation which is particularly directed at providing more opportunities for Americans to go on to higher education. One aspect that I think it compliments is the existing State Student Incentive Grant Program. This is a program that has been operating for years to provide Federal resources to local communities, to States, which they match dollar for dollar, which provides grants and work- study programs for students. As you recall, last year this provision was threatened with extinction because of no appropriations. But we in the Senate were able to rally support by an overwhelming vote and restored this program. I am pleased to say that the legislation that we are debating today, the underlying bill, makes significant improvements in the State Student Incentive Grant Program. It strengthens it, provides more flexibility for the States. And I hope we will provide further support, not only here but in the other body, so that we can continue to fund this very worthy program. Once again, this program, like the Senator's amendment, is designed to provide particularly low-income American students access to higher education, to make higher education more affordable. Also, having this opportunity to speak briefly for a moment, I would like to point out another aspect of the underlying legislation which I think is very important, and that is the strengthened provisions for teacher education. I was very pleased to note that many provisions of legislation introduced to strengthen teacher education have been incorporated in the underlying legislation. In particular, I was very pleased to introduce legislation under S. 1169, the Teacher Excellence in America Challenge Act, or the TEACH Act. This legislation was based upon a national commission to report what matters most, teaching in America, which essentially pointed out that we have a long way to go to ensure that every child in this country has a high-quality teacher in the classroom. Yet, we can take steps to get us to that worthy objective. One step we can do is to force partnerships between schools of higher education and actually elementary and secondary schools and other participants, essentially incorporating a model of education much like medical education. We would never think about going to a physician that had no extensive clinical training, yet we send young teachers into the classroom that have barely weeks of actual classroom experience. So I hope building on this commission's report, building on the language of this particular legislation, that we can improve dramatically the quality of education and teachers in this country. Just as an aside, several weeks ago, Massachusetts conducted its first intensive testing of prospective teachers. They found, in a shocking way, that 59 percent of these teachers failed an examination which was designed to test a strong 10th grader, basically focusing on simple grammar, English, writing, and mathematics. This is a shocking indication of how far we have to go to improve teaching in America. And the underlying legislation has provisions which I have introduced separately which have been incorporated which will do that. By and large, this is an excellent piece of legislation. I, of course, commend Senator Jeffords and Senator Kennedy for their leadership, and Senator Coats and Senator Dodd, and all the members of the committee. And, once again, I hope that we will quickly not only adopt the amendment of the Senator from Iowa, but also the underlying legislation which is a strong bipartisan attempt to further increase and strengthen the access to college for American students. In doing so, I think we will go a long way in keeping faith with a very important part not only of our country, but making sure that the future of our country is strong. With that, I yield back my time. Mr. COATS addressed the Chair.

Mr. REED

Mr. REED. Mr. President, at 5 p.m. the Senate will vote on my amendment, which would deny advertising deductions to the tobacco industry if they do not follow the FDA rules and regulations with respect to advertising to children. We are here debating a large, comprehensive tobacco bill because our major goal, our overriding interest, is to prevent children from being enticed into smoking. We know from the industry's own records that they have relentlessly, over decades, deliberately mounted promotional advertising campaigns aimed at children as young as 12 or 13 years old. We know from the effects of this record that in a survey of 3-year-old children, 60 percent or so recognize Joe Camel as a symbol of smoking; 6-year-old children, first grade, 91 percent recognize Joe Camel as a symbol of smoking. Advertising and the promotion of cigarettes are inextricably linked. My amendment goes to the heart of that. The FDA has proposed narrowly based and narrowly focused regulations. The amendment would say if the tobacco industry does not want to abide by these regulations, they lose their tax deductions for advertising. Taken by itself, my amendment does not even preclude them from saying anything or doing anything. What it simply says is they will do it on their own nickel. Now, we have a great support from the public health community. The following organizations and individuals are supporting it: C. Everett Koop, the former Surgeon General, the American Lung Association, the Center for Tobacco-Free Kids, ENACT Coalition, and many others. Cosponsors of this legislation include my colleagues Senator Boxer, Senator Wyden, Senator Kennedy, Senator Daschle, Senator Durbin, Senator Wellstone, Senator Feinstein, Senator Bingaman, Senator Conrad, and Senator Johnson. This amendment is a logical way to strengthen and make effective the major goal of this legislation. It also is constitutionally permissible under the Central Hudson test, the Supreme Court case that outlined permissible limits on commercial speech. It meets that test. First of all, we are advancing a substantial national interest. According to the FDA documents and their research and the rulemaking, if we have effective controls on advertising to children, we can save approximately 250,000 children a year from becoming addicted to nicotine. It is also directly related to the substantial national interest. In fact, the industry itself is the best evidence of this. They spend $6 billion a year on advertising. We are subsidizing them to the tune of $1.6 billion, but they know and they have demonstrated that advertising is the way they entice young people to smoke. If we stop this linkage, we will do more than anything else to ensure that we protect the children of America. The final aspect of the Central Hudson test is that this legislation is narrowly constructed and focused. As I mentioned before, it does not absolutely forbid any ban on speech. What it does do, however, it essentially restricts their ability to put posters near schools and to do many other things. This legislation is both constitutionally sound and is a public policy which will support what we are here to do--to prevent children from smoking.

Mr. REED. Mr. President, again, the vote before us is a vote on my amendment which would restrict the deduction of advertising expenses for tobacco companies which do not choose to follow FDA rules and regulations. There are many reasons why this is appropriate. The most compelling reason is simply the record of tobacco itself. It is a record that has shown over many, many decades a consistent attempt to market to children. There have been some objectives with respect to the first amendment. Let me suggest, first, that commercial speech under the doctrine of the Supreme Court is not afforded the same level of protection as pure political speech. This is clearly a case of commercial speech. Second, the test of the leading case, Central Hudson, clearly states that if there is a substantial governmental interest, if the proposed legislation addresses directly that interest, and if it is done by means that are narrowly focused and no more than is necessary, that it would pass the test. I submit that this legislation does that. There can be no more compelling national interest than curbing teenage smoking. Under the record of the FDA, they have demonstrated that if we take effective advertising restrictions and put them in place, we could on an annual basis save 250,000 children from addiction to nicotine. That is a direct, material, significant correlation between the substantial national interest and this legislation. Finally, this legislation is narrowly focused. I also submit that this legislation does not spring up de nova. We have had a long record of trying to constrain access to tobacco products to children. In the 1970s and 1960s, we put warning labels on cigarettes. That has proven ineffective. In the early 1970s, we banned TV advertising on tobacco products. That has proved ineffective. We have reached an intellectual consensus that in order to get the job done--that is what we are here to do--in order to effectively prevent the children from the addiction of nicotine, we have to have reasonable constraints on advertising. This legislation does it. I should also point out that many States in the United States already impose certain restrictions on advertising to children. For example, the State of Utah precludes the placement of billboards or other types of visible advertising for cigarettes within that State. To point out that in many other jurisdictions--Texas, for example-- there are limits on how close one can place a billboard within a school. All of these have been in effect for many, many years. They have been tested. They are constitutionally permissible. We can do it. And, indeed, we must do it. We have literally within our power the opportunity to save 250,000 children a year from the ravages of smoking. That is the conclusion of the FDA after their extensive, detailed rulemaking process. We can and we must insist on this type of regulatory authority. I think it will provide a device that will lead the companies to do what they have yet been unable to do; that is, stop marketing cigarette products to children. We see it in every manner in every form. I have been for the last several days pointing out an advertisement, a mail solicitation that a 16-year-old junior high school student received in Providence, RI. It was slick. It was sophisticated. It was based upon a rock concert that he attended several months before, a concert attended by many people under 18 years of age. It was not coincidental. It was a deliberate, calculated, focused attempt by the industry using the talents of advertising executives, focus group directors, people who understand psychology and the dynamics of youth addiction, to figure out how they could get the message right in the hands of a 16-year-old that smoking is good; not only good, it is socially desirable. We shouldn't stand for that. We don't have to stand for it. We know that for years and years and years the tobacco industry has been misleading the American public. That is objectionable. But when we discover, as we do from all of these documents and all of this litigation, that their target has been young children as young as 12 and 13 years old, that becomes unconscionable. And the conscious of this country and the conscious of this Senate will be tested today. Will we take effective steps to preclude access to tobacco products of children? This amendment is constitutionally sound. This amendment will, in fact, provide decisive and effective controls on tobacco access by young people in this country. We shouldn't shrink from this responsibility. We should pass this legislation to ensure that when we finish this great debate, and as we look ahead, we will be confident that we have taken effective, practical steps to prevent children from being addicted to nicotine and tobacco. If we don't do that, many, many young people--the estimate is 5 million young people under 18--will die prematurely. We can stop that if we vote today to support this amendment. I retain the remainder of my time. I yield the floor.

Mr. REED. Mr. President, I move to reconsider the vote by which the amendment was agreed to.

Mr. REED. I thank the Chair.

Mr. REED. Mr. President, in whatever time I have remaining, I would like to respond. First of all, I do not want to let stand the suggestion that this has anything to do with checking IDs at a retail store. That is not part of the FDA regulation.

Mr. REED. Mr. President, I propose a unanimous consent that we begin the debate on my amendment at 5 o'clock, to conclude at 10 minutes past, and to begin the vote at 5:10.

Mr. REED. Mr. President, first I thank the Senator from South Dakota for his fine words and support of this amendment and also for his effort in this legislative process. He has been there every step of the way, working very closely to ensure that we develop legislation that will work for the children of this country, their parents, and for all Americans. I thank him for that and for his kind words today. Again, continuing to respond to some of the issues that were raised today with respect to my amendment, there are suggestions that under the latest case, 44 Liquormart, there has to be a material showing that the regulation proposed, the proposed restriction on speech, will significantly and materially advance the underlying Government objective. Once again, in that particular case they do not find such significance. In this situation, the significance is obvious and compelling. The FDA, after its extensive rulemaking, concluded that limits on advertising will avert the addiction of anywhere between 25 percent and 50 percent of the children at risk. So, literally, we have within our power the ability to save 250,000 a year from the ravages of smoking. That is not hypothetical. That is not conjecture. That is based upon sound analysis by the FDA. And that is material and significant. Consequently, all the criticism directed to the amendment with respect to the first amendment, and particularly with respect to 44 Liquormart, failed, I believe, and we are left with legislation that is focused, that deals with a very substantial national interest--the reduction of teen smoking--that directly affects that interest, that will produce significant material beneficial results, and also one that is used now after several other attempts have failed--noticeably warning labels, noticeably banning certain types of advertising, television advertising. So I believe we are on sound constitutional grounds and very, very sound policy grounds, because intuitively I think we all grasp that this barrage of advertising images has an overwhelming and upsetting effect on children. If 90 percent of 6-year-olds recognize Joe Camel and smoking, then that is pretty compelling evidence that we have to do something to restrain the way cigarettes are advertised and marketed in this country. That is what this amendment proposes to do. Let me also suggest that within the FDA regulations there are provisions which are not particularly novel. All of these discussions about restricting speech, I think, fail to recognize the fact that many States already put significant restrictions on cigarette advertising. For example, in California the State prohibits advertising of tobacco products within 1,000 feet of any public or private school playground. The statute also allows local ordinances to be more restrictive. A second statute makes it clear that one cannot sell, lease, rent, provide any video game which will primarily be used by minors if the game contains any paid commercial advertisement for tobacco products. In Indiana, the State prevents non-point-of-sale advertisements for tobacco within 200 feet of a school. In Kentucky, the State has banned tobacco billboard advertising within 500 feet of a school. In Texas, the State prevents tobacco advertising within 1,000 feet of a school or church. In Utah, the State law bans all tobacco advertising on ``any billboard, street car, sign, bus placard or any other object or place of display.'' In fact, the Utah statute originates from 1929. All of these States have, by their State laws, imposed restrictions on tobacco advertising. The justification, of course, is that they are protecting children. They have been on the books, in some cases, as in the case of Utah, for 60-plus years. So we are not breaking new ground. What we are doing, finally, is assembling a coherent set of rational regulations based on extensive findings by the FDA which will, we hope, for the first time ensure that children are not the objects of tobacco advertising. The other aspect or complaint that has been made about the amendment is that it might not work out well, it is using the Tax Code to enforce a public policy. Lately, this body has been preoccupied with using the Tax Code to enforce public policy positions of the various parties, so that is not a novel idea. But one aspect of this legislation which I think is very commendable is that essentially what will happen is that the industry itself will have to police itself. Today, the FTC, the Federal Trade Commission, could come in and take any one of these ads and say, ``This is false and misleading. You have no evidence to say it's smooth. This is just totally misleading.'' They can do that. It will take 2 years of administrative procedures to work through the administrative law judge level. And at the end of those 2 years, if the company is distressed with the outcome, they will simply sue and go to the court of appeals, claiming that the ALJ's decision was arbitrary, capricious, et cetera, and that appeal will be stretched out. In the world of advertising, the product life of an advertising campaign is measured probably in a month, maybe a year; there are perennials that last a long time. But that particular advertising will be old hat in a matter of months, so there is every incentive, when there is a question about whether they are pushing across the line or not, to go ahead and advertise, because, remember, if you hook that 16- year-old, you have a faithful customer for 30 years maybe. In this situation, they are going to have to look very carefully, because the consequence of violating this amendment is that they lose their tax deduction, it goes right to the bottom line, and it is something that if they choose to litigate for years or months and, at the end, they are found liable, not only do they pay the taxes owed, but also interest and penalties. They are very much concerned, as they should be. This is an effective enforcement device. I believe we need effective enforcement devices. We have tried other approaches--the advertising ban on television, the warning labels, even FTC jurisdiction to ferret out individual ads--but still we are seeing our young people deluged by these advertisements and, again, remarkably, 90 percent of 6-year-olds being able to recognize Joe Camel as a symbol for cigarette smoking in the United States. So I believe we need this amendment very, very much. Let me suggest also there has been another general argument against the amendment, and that argument has essentially been: Well, the sky's falling, the slippery slope; if you do this, you will enforce every Federal regulatory policy with the Tax Code, and that will be a terrible thing. Again, I think that is more alarmism than rational. The reason I am here today is that central to the business of tobacco is the business of promoting it through advertising. People smoke cigarettes like this not because they have, I think, some need to do it, but they have been subjected to this type of advertising over many, many years. Advertising and cigarette promotions have been hand in hand for as long as anyone can remember. If you go back far enough, the industry was much more aggressive in some respects, and blatant. They put in magazines pictures of doctors smoking away, suggesting that cigarette smoking was really good for them; they put in photographs, pictures, drawings of very attractive, sophisticated young women, suggesting that smoking was good to control weight--none of which, of course, was buttressed by the fact that smoking is an addiction that ultimately prematurely kills people. There is such a logical connection, an inextricable connection, between advertising, the way they do it, and the promotion of a tobacco product that it is logical to take this step. It is not logical to suggest that FDA regulations will be enforced by denying deductibility or any other type of regulatory policy. So the whole issue of, this is just the first step on a very slippery slope is, I think, refutable on its face. We have before us the opportunity to pass significant legislation which will materially, effectively improve the public health of this country. We have to recognize--I think so many of us do--that cigarettes probably are the No. 1 pediatric disease in the country. It affects kids adversely. It takes it a while to catch up with them, but it affects kids adversely. Ninety percent of smokers begin before they are 18 years old. This is a pediatric health crisis, and we are responding. The fear I have is, if we don't respond in this manner, that we really won't be able to effectively accomplish what we want to do. Even if we pass this legislation--and Senator McCain has done a remarkable thing moving this legislation through; his perseverance and strength, along with Senator Kerry and along with so many of my colleagues, has been remarkable--even if we pass legislation that has increases on the price of cigarettes, that has effective funding for a public health program, if we do that and yet we still have no real check on advertisements like this aimed at young people, I believe we will end up not doing what we are setting out to do: to restrict smoking among underage Americans. I think we should do it, I think we must do it, and I urge careful consideration and support for this amendment. Mr. President, I yield the floor.

Mr. REED. Mr. President, before this body today is my amendment which would deny the deductibility of advertising expenses to the tobacco industry if they did not follow the FDA rules with respect to advertising. The FDA, after very careful rulemaking, promulgated a series of rules which would proscribe advertising directed at children. Among these rules are limiting tobacco billboards to a distance further than 1,000 feet from a school. It will require the publication of advertisements in youth-oriented magazines to be in black and white text only. It would dispense with some of the other staples of advertising that the industry is using. As the Senator from North Dakota has pointed out and as I pointed out in my remarks last Friday, there is clear, convincing, overwhelming evidence that for decades the tobacco industry has deliberately, relentlessly, and ruthlessly targeted children in their advertising. It is not an accident. It is not a coincidence. It is not the collateral effect of trying to reach the 21- to 25-year-old market. It is very purposeful, very deliberate, and, regrettably, very effective. In the course of the debate over the last several weeks we have taken diversions through many different areas. We are talking about tax policy. We are talking about child care policy. We are talking about how we spend these resources, whether this is an inappropriate tax. I think it is helpful to refocus why we are here. We are here because the tobacco industry, as I mentioned before, has, over decades, targeted young people for their advertising. They are attempting, and succeeding too well, to literally entice young people as young as 12 and 13 years old into smoking cigarettes and using other tobacco products. I think that is wrong. I think the vast majority of the Americans think that is wrong. I think the vast majority of my colleagues in the Senate feel it is wrong. We can do something about it. As we have discussed all of these different issues of tax policy, fiscal policy, regulatory policy, it sometimes helps to remind all of us what the industry is doing. I had a very graphic reminder sent to me by one of my constituents from Rhode Island. I mentioned this last week. This is a very slick, sophisticated, mailing piece, sent to his son, a 16-year-old junior in high school. I have blown it up here so the audience can see in larger detail what I am talking about. Again, this was sent to a 16-year-old. It was sent addressed to him, personally. It wasn't ``occupant,'' or ``resident.'' It was addressed to him. As a first point, I can recall as a youngster when I ever got mail it was a big occasion. To think that someone would actually want to send me a letter, particularly a big company like the Brown & Williamson Tobacco company was a big occasion. The first part of it grabs your attention: ``We know you like it loud.'' How do they know they like it loud? Because he essentially was contacted and solicited because this young man went to a rock concert which Brown & Williamson sponsored the preceding summer. This is not coincidence, either. Their decision to sponsor a rock concert that attracts, as the father said in the letter, a majority of the audience being 18 or younger, much younger in some cases, was very deliberate. It wasn't spur of the moment. They sat around a conference room on Wall Street and Madison Avenue saying, ``How do we get our target population? How do we reach them and make contact with them? And, oh, by the way, how do we draw them into this addiction of smoking?'' So he received this mailing at home. You open it up. It is three dimensional. I know in the course of some of my campaigns I have used them in mailings to my constituents. This is a very expensive, very professional, and very sophisticated mailing. It is a very targeted mailing. Then you read the narrative. ``You like it loud''; and ``very, very smooth.'' ``Kick back today and enjoy a bold treat. Refreshing menthol, and a coupon to save you some change. Relax with Kool, and slip into something smooth.'' You are overwhelmed by this message. The message is not about the statistics, or the smoking, or the dangers of smoking, the information he or she would want as a rationale consumer if he or she were making a decision to smoke. You are being overwhelmed by I would argue misinformation. Oh, yes, there is the required Surgeon General warning here. ``Warning: Smoking greatly increases serious risk to your health.'' If you are 16 years old, do you really believe that, when everything else is talking about your favorite rock group, talking about how ``we support'' that rock group in the concert, how you are part of this ``loud'' generation, how you like it ``smooth'' personally directed to you? I don't think so. And the most ironic part of all of this is this message says ``quitting smoking'' will help your health. This message down here says, ``We will give you a buck, kid, if you buy two packs of our cigarettes.'' What a deal. This is what we are talking about in this tobacco bill. We are talking about an industry that has deliberately, repeatedly attempted to market the kid shamelessly; without shame. This took place 6 months ago at the same time they were talking about their arrangement with the attorneys general; at the same time they knew we were going to be debating tobacco legislation on the floor of the U.S. Senate. And yet they continued to try to sell their ware to kids. You know, people get addicted to cigarettes. I think the industry is addicted to children. They just can't leave them alone. They just have to keep selling to them, even when common sense would say let off while the smoke clears. No pun intended. They can't stop because their customer base is hooking these kids. You hook a 16-year-old child, and that is 10, 20, 30 years of customer for your brand. Of course, we know that one out of three of these children will die prematurely. We know that 5 million people under 18 years of age today will die prematurely because they are addicted to cigarettes and other tobacco. But they don't want you to know that. They want you to think this is cool, this is smooth, and there is the whole adult world opening up for you. ``You can be as successful and as attractive and as desirable as any rock star. You just have to smoke our cigarettes.'' That is wrong. This is just one example of what goes on. It is ubiquitous throughout. This is a promotion by Winston. Winston's, by the way, are the new health food of America. You see their ads. Smoking it is like eating health food; no additives; no anything; it is macrobiological; whatever. Again, they are taking an approach now with their campaign, which is making their product look like it is healthy for you; it is what you would buy if you were a research scientist trying to develop the best diet in the world. But they have sponsorship for NASCAR racing, which is a venerable tradition in this country. For the Winston Cup, they are sponsoring it. Not all; you could not argue that all of the people who attend these races are young people. But we also must recognize that this is a very attractive event for young people. There must be something here. I read a few weeks ago in the New York Times that Mattel, Inc., is thinking of creating a NASCAR Barbie doll, the most popular toy in the world, because they figured it out, too. There are lots of young girls who are attracted to this whole scene of NASCAR racing and a NASCAR Barbie is going to be a very popular toy. The same type of calculations that are going on at Mattel are going on in some cases up in the cigarette headquarters of the world. But one should say, of course, that the Barbie doll is a much more benign figure in American life than cigarettes. But this is ubiquitous. Our children are being subjected to this constantly. My amendment simply says, listen, the FDA, after rulemaking at length, has come up with very reasonable restraints on tobacco advertising. If you follow those restraints, you will receive your full deduction. But if you violate them, you will lose your deduction. I believe most of my constituents would say the same thing, that we should not be subsidizing the tobacco industry as they attempt to lure our children into smoking. The industry spends about $5.9 billion a year on advertising. We kick back, if you will, about $1.6 billion through the deduction. That is money that, I think, is poorly spent. But as long as the industry is willing to refrain from targeting children I don't think we can object because it is available to other industries. But if they persist in targeting children and not following FDA regulations, then I believe we should act very strongly, very vigorously, and deny them this deduction. By the way, too, independently, my amendment would not restrict speech whatsoever. Of course we have tobacco concerned any time the Government attempts to invoke any type of restriction on speech. But taken by itself, my amendment would simply say you can say anything you want. You can even promote your product using this. But don't charge the Government for your deduction. You can do it on your own money. My amendment has been criticized on a couple of points, which I would like to respond to. First, there are many of my colleagues who say we shouldn't really do anything unless it is voluntary, because, if we do, the tobacco industry will sue us and we will be tied up in court for 10 years. The reality is the tobacco industry is already suing the FDA, and not just the tobacco industry, but the advertising interests are all there, and it is absolutely their right. They feel strongly that not only commercial interests are at stake but also constitutional interests. But to deflect or defer from doing something today vigorously about tobacco access to children simply because we might be sued is absolutely, I think, an implausible and inappropriate comment. We will be sued perhaps, but we have to act to ensure that we do what is right for the children of America. The other approach is suggesting that the Supreme Court decisions place a much higher standard when you come to restricting commercial speech. Specifically, the case of 44 Liquormart, Inc. versus Rhode Island. I feel somewhat familiar with the case. It originated in my home State. Actually it originated and the legislation was passed in 1956 in Rhode Island. Although I served in the assembly in Rhode Island, I was not there in 1956. I was in grammar school in 1956. But this legislation that Rhode Island passed prevented the publication of price information with respect to liquor advertising. Stepping back a bit, I think the judges probably got the same sense that I did when I read the statute in this case and realized what might be afoot; that it is equally likely that this legislation was passed 40 years ago not so much to increase temperance in Rhode Island but simply to prevent discount liquor stores from encroaching on established liquor stores. So right away, there is a suspicion about the underlying statute in 44 Liquormart. But, first, let me say something about that case. The Supreme Court reaffirmed the doctrine associated with Central Hudson, which is the leading case on commercial speech, and they said essentially one may restrict commercial speech, first, if it is unlawful; or, it misrepresents significantly the product. Even if it doesn't do so, one may restrict it if there is a substantial governmental interest at stake. The legislation directly affects that interest. And the means are no more restrictive than necessary to accomplish the governmental interests. So the Central Hudson test is in place and remains. In 44 Liquormart, the Court found essentially that the State of Rhode Island made no showing that their proposed legislation materially and directly advanced the goal of decreasing the consumption of alcohol. In fact, there was no evidence submitted in the record to show that this would have any effect at all on alcohol consumption in the State of Rhode Island. Alternatively, the Court discussed the fact that there were other means possibly available that had not even been used. On those factual bases, together with the Central Hudson doctrine, they declared that the statute was impermissible encroachment on commercial speech. The case is much different here. The FDA has established a record that advertising decisively affects children's choices to begin to smoke cigarettes, and by maintaining appropriate restrictions on advertising, we can, in fact, directly affect the behavior of children with respect to cigarettes. This is not based upon whimsy. The FDA relied on at least two major studies: a study at the Institute of Medicine in 1994, and the Surgeon General's report in 1994. Both concluded that advertising was an important factor in young people's tobacco use. Moreover, these reports indicated that advertising restrictions must be a part of any meaningful approach to reduce underage smoking. So this is not a situation of trying something that has not been tested or has not been tried by other means. Their conclusion authoritatively is that these types of restrictions must be in place. I should also remind you that we have tried other ways to moderate the consumption of tobacco products in this country. In the early 1970s, we banned television advertising of tobacco products. But as Robert Pitofsky, the Chairman of the Federal Trade Commission, pointed out, what happened is the industry simply shifted to other forms of advertising. When I was a kid back in the 1950s and the 1960s, you would see TV advertising, but you would be very, very shocked if you could have a record of direct mail pieces sent to 16-year-olds, as happens today. And the sponsorship of NASCAR racing--all of these things are a direct result. In fact, cigarette advertising has exploded. From 1975 to 1995, 20 years, it has increased manyfold--going into not only these types of promotions, but also all the gadgets and all the other rigmarole that the industry is promoting. This is a Camel cash collectible. Now you can get Joe Camel T-shirts, and Joe Camel lighters, and Joe Camel dart boards, and Joe Camel posters, and Joe Camel everything--wristwatches, you name it. That, too, is part of the ubiquitous promotion of tobacco. And although it says very precisely, ``Offer restricted to smokers 18 years of age or older,'' I dare say I see more kids with Joe Camel T-shirts and bicycle caps and things like that than I do 40-year-olds, 30-year-olds, or even 20-year-olds. So what the intent is, we will let the consumer decide. Furthermore, when the FDA promulgated its regulations, they went on very clearly to state what was happening here. Collectively, the studies show that children and adolescents are widely exposed to, aware of, respond favorably to, and are influenced by cigarette advertising. One study found that 30 percent of 3-year-olds and 91 percent of 6-year-olds identified Joe Camel as a symbol of smoking. Thirty percent of 3-year-old toddlers knew that Joe Camel, that cuddly cartoon character, was associated with smoking. Ninety-one percent of 6-year-olds, in the first grade of school, might not know their ABCs, but they know that Joe Camel and smoking go together. That is not good. That is what we are talking about here, and that is why, unless we effectively and dramatically affect the advertising of tobacco products to children, we will never turn the table on this epidemic of smoking among young people. Mr. President, I have other comments I wish to make, but I notice that my colleague, the Senator from South Dakota, is here, and I yield the floor.

Mr. REED. Mr. President, first let me commend my colleague, the Senator from North Dakota, for his fine words and also for his commendation. He has been, also, a leader in this effort to try to pass a balanced, yet very effective, tobacco legislation. Amendment No. 2702

Mr. REED. As an initial point, I ask unanimous consent to add Senator Tim Johnson as a cosponsor of the Reed amendment, amendment numbered 2702.

Mr. REED

Mr. REED. Mr. President, I rise today to honor the extraordinary work of nine fifth graders and their teacher from the Oak Lawn Elementary School in Cranston, Rhode Island. On Friday, June 5, these students became the first civilians in the 223-year history of the U.S. Navy to name a naval ship. In February, the Navy challenged America's school children to name its newest oceanographic survey vessel. Out of 1,600 submissions, the Navy ultimately chose the name proposed by these young Oak Lawn students: the USNS Bruce C. Heezen. Bruce C. Heezen was a pioneer in oceanographic research. During his career, Heezen identified the rift at the center of the Mid-Atlantic Ridge, discovered ocean turbidity currents and formulated theories about ocean crust formation. He dedicated his life to exploring the world's oceans, providing future oceanographers with an invaluable knowledge base upon which to build. Heezen died in 1977 while aboard the Navy's nuclear research submersible enroute to further study the Mid-Atlantic Ridge. These fifth graders dedicated tremendous time and energy to this project. Not only did they learn about oceanography, but they also shared their new knowledge with their fellow students at Oak Lawn Elementary. Now, with the naming of this new vessel, the USNS Bruce C. Heezen, the work of these outstanding young scholars will enlighten all those who look upon this great ship. I commend Amanda Baillargeon, James Coogan, Meagan Durigan, Stephen Fish, Patricia Gumbley, John Lucier, Sara Piccirilli, Dana Scott, Rebecca Webber. I also want to recognize their teacher, Ms. Marilyn Remick, who has been expanding the minds of students for 28 years. The USNS Bruce C. Heezen is a fine and fitting name for the Navy's newest oceanographic survey vessel. Rhode Islanders and all Americans should be proud that students like those at Oak Lawn Elementary are keeping Heezen's memory alive to inspire future oceanographers. I hope the fifth graders of Oak Lawn Elementary will inspire others in search for knowledge.

Mr. REED

Mr. REED. Mr. President, thank you. Amendment No. 2702

Mr. REED. Mr. President, today I rise to continue my discussion of the amendment I offered last evening, an amendment which would deny the tax deduction for advertising expenses for those tobacco companies which disregard and violate the FDA rule with respect to advertising to children. This is an amendment that is being cosponsored by my colleagues: Senator Boxer, Senator Wyden, Senator Kennedy, Senator Daschle, Senator Durbin, Senator Wellstone, Senator Feinstein, Senator Bingaman, and Senator Conrad. In addition, it has received the widespread support of the public health community. In a recent editorial in the Journal of the American Medical Association, Dr. C. Everett Koop, David Kessler, and George Lundberg wrote about the history of the tobacco industry in the United States. In their words: For years, the tobacco industry has marketed products that it knew caused serious disease and death. Yet, it intentionally hid this truth from the public, carried out a deceitful campaign designed to undermine the public's appreciation of these risks, and marketed its addictive products to children. Numerous, numerous studies have implicated the tobacco industry's advertising and promotional activities as the cause of a continued increase in youth smoking in the United States. Research on smoking demonstrates that increases in youth smoking directly coincide with effective tobacco promotional campaigns. My amendment addresses this critical issue in this ongoing debate about how we can control teenage smoking in America. It targets the industry's ceaseless efforts to market to children. It is time for Congress to put a stop to the tobacco industry's practice of luring children into untimely disease and untimely death. This amendment is based on a bill that I introduced earlier this year, along with Senators Boxer, Chafee, and Conrad. I would also like to recognize the leadership of many of my colleagues in prior congresses. Senator Harkin, along with former Senator Bill Bradley, has made continuous efforts to try to eliminate in total the tax deduction for tobacco advertising. While I concur with Senator Harkin that this deduction is of questionable value, I would like to emphasize today that my amendment does not attempt to eliminate the entire deduction for tobacco manufacturers. Indeed, under my amendment, they maintain the deduction as long as they do not advertise to children. Eliminating the promotion of tobacco products to children is a necessary part of any comprehensive effort to prevent tobacco use by minors. My amendment offers a constitutionally sound way to enforce strong tobacco advertising restrictions. Under my amendment, if tobacco manufacturers do not comply with the advertising restrictions promulgated by the Food and Drug Administration, the manufacturers' ability to deduct the cost of advertising and promotional expenses will be disallowed in that particular year. The restrictions promulgated by the FDA are appropriately tailored to prevent advertising and marketing of tobacco products to minors. Key components of the FDA regulation include the banning of outdoor advertising within 1,000 feet of a school; black and white text-only advertisements in youth publications--and those are publications which have a readership of more than 15 percent of young people under 18-- banning the sale or giveaway of branded items--caps and trinkets, and all sorts of T-shirts--and the prohibition of sponsorship of sporting or entertainment events by brand name. The FDA has already promulgated these regulations. They are being contested as we speak in the fourth circuit. Today, my amendment offers an additional enforcement mechanism, an enforcement mechanism that I think will put real teeth into the restrictions. We will put on notice to the companies that they themselves have to carefully watch what they spend on advertising for young people. If they fail to adhere to the FDA rules, they will pay, and they will pay immediately because they will lose their advertising deduction. Support for this amendment is broad based in the public health community. It is supported by Dr. C. Everett Koop, former Surgeon General of the United States. It is supported by the American Lung Association, by the Center for Tobacco-Free Kids, and by the ENACT Coalition. This is a coalition comprised of leading public health groups, including the American Cancer Society, the American Heart Association, and many others. The importance of this issue is enormous. The facts speak for themselves. Today, some 50 million Americans are addicted to tobacco. One of every three of these long-term users of tobacco will die prematurely from diseases related to their tobacco use. Tobacco is also clearly a problem that begins with children. Almost 90 percent of those people who smoke today started before they were 18 years old. The average youth smoker in the United States starts at 13 and is a regular smoker by the age of 14\1/2\. This is the greatest pediatric health care problem in the United States today. We have not only the opportunity but the obligation to stop it. A key component in that campaign to give children a chance to avoid smoking is effectively controlling advertising aimed at children. Each year, 1 million children become regular smokers and one-third of these children will die prematurely of long cancer, emphysema, and similar tobacco-caused diseases. Unless current trends are reversed, 5 million children today under the age of 18 will die prematurely from tobacco-related diseases. More and more, we are learning that children are being enticed into smoking because of industry advertising and promotional efforts. A recent study by John Pierce and others found evidence that the tobacco industry's advertising and promotional activities actively influenced children who have never smoked to start smoking. Among the findings, tobacco industry promotional activities in the mid-1990s will influence almost 20 percent of those who turn 17 and try smoking. At least 34 percent of youthful experimentation with cigarettes is attributed to advertising and promotional activities. This is an industry which has a sordid record when it comes to dealing with the children of America. We have to learn from their past record to adopt appropriate means of controlling their future conduct. They have made money ruthlessly by marketing to children. They have shown no concern for the children of America. They have only shown concern for the bottom line. And they will continue to target children unless it affects their bottom line. The culture of big tobacco is one that has yielded incredible revenue by capitalizing on the vulnerabilities of our children. The story of tobacco and their promotional activities is a story of our century and beyond. In the 1920s, the cigarette industry, knowledgeable, of course, that their products were not safe, had the temerity to enlist physicians--or people dressed up like physicians--to be models in their advertising, to suggest that smoking was not only harmless, it was in some way beneficial. Lucky Strikes advertised ``20,679 Physicians Say Luckies are Less Irritating'' and ``For Digestion's sake, smoke Camels,'' another advertising jingle of the 1920s and 1930s. In 1950, the Federal Trade Commission found that Camel advertising was deceitful, that they were suggesting that their products weren't harmful, and they, in fact, took action against them for false and deceptive advertising. So for more than 50 years--indeed, for as long as you can recall the history of the tobacco industry--there has been a constant attempt to deceive the American public about what they are selling. That record is one that has to be countered by our legislation in this Congress. Today, we have Winston ads that are trying to suggest that tobacco products are like health foods, proclaiming ``no additives.'' We have a new Camel campaign, ``Live Out Loud,'' which is a not-so-subtle stand in for the ``cool'' Joe Camel target of so much criticism. We know from the documents released by the industry itself they consciously, deliberately, and consistently targeted children. In 1973, a memorandum written by a Claude Teague of RJR said, ``if our Company is to survive and prosper, over the long-term we must get our share of the youth market.'' Another memorandum from a vice president of marketing at RJR, in 1974, C.A. Tucker, concluded, ``this young adult market, the 14-24 age group * * * represent(s) tomorrow's cigarette business.'' What responsible group of people would describe 14- and 15- year-olds as ``young adults''? This is what has been going on for years now with respect to the tobacco industry and their conscious, deliberate attempts to entice children to smoke. In 1982, the then-chairman and chief executive officer of R.J. Reynolds Tobacco Co., Edward Horrigan, testified before the Commerce Committee and tried to dismiss suggestions that they were going after children by simply saying, ``No''--in his words --``[p]eer pressure and not our advertising provides the impetus for smoking among young people.'' Yet, just a few years later, in 1986, a R.J. Reynolds' Joe Camel advertising memo said this: Camel advertising will be directed toward using peer acceptance/influence to provide the motivation [to] target smokers to select Camel. Specifically, advertising will be developed with the objective of convincing target smokers that by selecting Camel as their usual brand they will project an image that will enhance their acceptance among their peers. What could be more cynical, what could be more hypocritical, than an industry objective trying to dismiss their advertising, saying it has no effect at this time--it is peer pressure--and internally, in their boardrooms, consciously plotting to use that peer pressure tied into their advertising to force children to smoke. That is the record of this industry. That is why we are here today to enact comprehensive tobacco control legislation. I argue that without appropriate restrictions on advertising, it will not be successful. The documents that we have seen from all of these different litigations around the country reveal, time and time again reveal they have consciously targeted the young adult smoking market. A 1987 document discussed the ``Project LF (Camel Wides), and it states: ``Project LF is a wider circumference non-menthol cigarette targeted at younger adult male smokers (primarily 13-24 year old male Marlboro smokers.)'' Executives were sitting around in the boardrooms, concocting schemes, so that 13-year-olds will begin to smoke. That is what the record of the industry is. I am deeply skeptical that this tobacco industry is willing, even today in the glare of publicity with adverse court rulings, to change their behavior unless we act appropriately and with great vigor to ensure that they do what is right and not try to addict children in this country. Every year the industry spends billions and billions of dollars to find new ways to hook kids into smoking. Examples of what they do are endless. We know from the research and we know from our own experience that pivotal in the decision of a young person to smoke is the advertising they are seeing constantly. Eighty-six percent of underage smokers prefer one of the three most heavily advertised brands-- Marlboro, Newport and Camel. That is not a coincidence. That is the effect of a repeated, unending assault on their minds and bodies by tobacco advertising, aimed at getting them to smoke. One of the advertising campaigns most criticized is the Joe Camel campaign by R.J. Reynolds. When they introduced this campaign, their market share among underage smokers leaped from 3 percent to 13 percent in 3 years--a huge increase. Once you have someone hooked on a brand at 13 or 14 years old, they will probably be your smokers for life, representing to them billions of dollars in profit. They did it deliberately. They did it consciously. They were prepared to accept the criticism because they knew they were hooking these kids, they were hooking them for life, and it was going right into their bottom line. And although the Congress banned television advertising in 1970, tobacco companies routinely circumvent this restriction through the sponsorship of events that give their products television exposure. You can see that their advertising expenditures have been exploding over the last several years. As this chart indicates, from 1975 until today, their advertising expenses have increased tenfold. In 1975, the industry was spending about $491 million a year on advertising. In 1995 alone, tobacco manufacturers spent $4.9 billion on advertising and promotional expenses, and we are subsidizing these expenses through the tax deduction. In 1995, American taxpayers subsidized $1.6 billion of these expenses that are used in a concerted, conscious effort to hook our kids. We are helping to write the check for that. (Mr. SMITH of New Hampshire assumed the Chair.)

Mr. REED. In effect, we are subsidizing their advertising costs. In 1995, the amount of our subsidy, the $1.6 billion, paid for all of their efforts to send coupons, to have multipack promotions, to have retail value-added items such as key chains, hats, T-shirts--all the things the kids really like to wear. I don't see many adults running around with them, but I see lots of kids with Joe Camel T-shirts, and key chains, and all the cool things they get. In effect, we paid for that through this subsidy. You can see the record on this chart of their expenditures and our support of those expenditures through this deduction. As I said, they are spending a huge amount of money trying to get kids to smoke. In ironic contrast, we spend a pittance trying to help people who are afflicted with the diseases caused by smoking. In 1995, that $4.9 billion was double the amount of money we spent for the National Cancer Institute. It was four times the amount of money we spent for the National Heart, Lung and Blood Institute. It represents 40 times what was spent at the National Institutes of Health on lung cancer research. Those are the proportions. That is the huge amount of advertising expenditures that are being bombarded on the American public, but particularly on the children of this country. We know the cost to our society is significant: $100 billion a year in health costs and lost productivity is estimated. In 1993, health care expenditures directly caused by smoking totaled about $50 billion; 43 percent of those costs were paid for by Medicare and Medicaid. We are paying both ways. We are helping them sell their products, and then we are taking care of the people who are ill because of their products. We have to do much more. We have to go ahead and ensure that the advertising ban that has been enacted by the Food and Drug Administration is supported with real force and real effect. That is the purpose of my amendment. Of course, any time you talk about a situation where you are attempting to affect the commercial speech of anyone in this country, you have to reckon with the first amendment to the Constitution, and I do recognize that. Let me again remind you that the story of the tobacco industry in America is a story inextricably linked to advertising. For decades, the tobacco industry ingeniously promoted its products and has done so with total disregard for the health of its customers. The industry relied upon image rather than information to sell its product. The tobacco industry has taken an addiction that prematurely kills and dressed it up as a glamorous symbol of success in all manner of endeavor. All of this is unsettling, but with the revelation that the industry has deliberately and ruthlessly targeted children, it becomes unconscionable, and we should not and need not accept it. Now, as I said, we do and must and should recognize that any time you attempt to suggest restraints on commercial speech, you have to reckon with the first amendment. But the amendment I am proposing today combines the narrowly drafted and focused restraints of the FDA rule to prevent marketing to children with the recognized and broad-based authority of Congress over the Tax Code to create a provision that conforms to the first amendment. First, let's be clear that the Constitution affords a much lesser degree of protection to commercial speech than to other constitutionally guaranteed expression. In 1975, the leading Supreme Court case on the subject of commercial speech essentially said that the Constitution imposed no restraint on Government with regard to ``purely commercial speech.'' Today, commercial speech may be banned in advertising an illegal product or service, and, unlike fully protected speech, pure speech, it may be banned if it is unfair or deceptive. Even when it advertises a legal product and is not unfair or deceptive, the Government may regulate commercial speech more than fully protected speech. The record of the tobacco industry clearly demonstrates that this industry, over decades, has deliberately carried out a scheme to violate the laws of every State in the Union. All 50 States bar the sale of tobacco products to minors. But as I have shown in these documents, those laws were carelessly and callously disregarded by the industry in their attempt to, as they say, ``get the young adult market''--13-, 14-, 15-, 16-, and 17-year-olds. Since this advertising campaign consciously sought to illegally market their products to children, there should be no protection. The first amendment does not give them the right to engage in illegal marketing schemes. Thus, the most basic reason that this amendment will pass constitutional muster is the fact that it is designed to prevent tobacco companies from promoting illegal transactions. Even if one were to invoke the constitutional test applied to the legal sale of commercial products, this would still pass muster. In the Central Hudson case, the Supreme Court established the standards for evaluating a purported restraint on commercial speech. As a preliminary point, the Court drew a distinction between legal activities and unlawful activities or misleading speech. As I have already indicated, if the commercial speech in question involves unlawful activities or it is misleading, then the Government may restrict it. Or, as the Supreme Court indicated in Central Hudson, there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity. Now, assuming for the sake of argument, despite the rapidly accumulating evidence to the contrary, that tobacco advertising would be treated as routine commercial speech and the Court would ignore the inherent illegality of their plans to market to children, the proposed restriction still meets the standards of Central Hudson. First, there is a substantial governmental interest in restricting advertising aimed at minors. Second, the proposed restraints directly advance this governmental interest. Finally, the proposed legislation is no more extensive than necessary to serve this substantial governmental interest. Now, what could be of greater interest to the American people than the prevention of 3,000 children a day from becoming addicted to cigarettes? I daresay that every Member of this Senate would concur that this is not only a valid governmental interest, it is a compelling one--1 million children a year become addicted to cigarettes, and one- third of these children will die prematurely as a result. The FDA has concluded in extensive rule-making that limits on advertising will avert the addiction of anywhere between 25 percent and 50 percent of these children at risk. Literally, we have it within our power to save 250,000 children a year from the ravages of smoking. Prevention of childhood smoking is clearly and unequivocally a substantial governmental interest. The second prong of the Central Hudson test requires a showing that the proposed restraints directly advance this substantial public interest. Perhaps the most compelling evidence to establish this point is the behavior of the tobacco industry itself. They certainly feel that advertising and marketing is an important part of their strategy to addict children. The industry, overall, spends $5 billion a year on advertising; that is $13 million a day. We know from the internal documents I have shared with you that much of this effort is directed at ensnaring children. I can remind you of the numerous documents I have cited. They indicate a deliberate and calculated attempt to addict children. Unless we restrain advertising directed at children, we will never effectively prevent the use of tobacco products by children. All of this evidence is substantiated by the research underlying the FDA rule. In its rule-making, FDA relied on two major studies summarizing the effects of advertising on youthful tobacco use--the study of the Institute of Medicine in 1994 and the Surgeon General's Report in 1994 concluded that advertising was an important factor in young people's tobacco use. Moreover, these reports indicated that advertising restrictions must be part of any meaningful approach to reduce underage smoking. In promulgating its rule, the FDA declared: Collectively, the studies show that children and adolescents are widely exposed to, aware of, respond favorably to, and are influenced by cigarette advertising. One study found that 30 percent of 3-year-olds and 91 percent of 6-year-olds identified Joe Camel as a symbol of smoking. Other studies have shown that young people's exposure to cigarette advertising is positively related to smoking behavior and their intention to smoke. All of this shows that the FDA rules and my amendment are directly related to achieving the substantial government interest. And the final issue that has to be addressed with respect to the Central Hudson test is to ensure that the proposed restrictions are no more extensive than necessary to accomplish the governmental objective. In the realm of commercial speech, the court requires there be a ``reasonable'' correlation between the proposed restraint and the policy outcome sought. Now, it is important to note that the proposed restrictions under the FDA rule do not absolutely prohibit the advertising of tobacco products. They have been carefully tailored to allow continued promotion of cigarettes to adults. Their objective is to prevent marketing to children. The FDA regulations retain the informational value that such advertising has for adults, but affects in a positive way access to these images by children. It is also important to note that we have, over several decades, tried other means short of advertising restrictions to stem the epidemic of underage smoking. Warning labels have not worked. They are ignored by children in the clutter of the ``live out loud,'' rock-and- roll imagery, or the Joe Camel character, all of those things. In fact, ironically, the only one the warning labels seem to have helped at least for a while is the industry itself, because they use them in their defense to say that smokers assumed the risk when they picked up a pack of cigarettes because of that label. We tried to ban advertising on television. That has not worked either. As Chairman Robert Pitofsky of the Federal Trade Commission pointed out in his testimony before the Senate Commerce Committee: After cigarette manufacturers were prohibited from advertising on television and radio in 1969 (a prohibition that was intended, in part, to protect children), they put tens of millions of dollars in print advertising to sell their products. In more recent years, the cigarette manufacturers have shifted an increasing amount of money away from traditional advertising and into sponsorships and so- called ``trinkets and trash''--T-shirts, caps, and other logo-adorned merchandise--that some believe are very attractive to young people. We simply cannot rely on the good faith of this industry to do what is right. Today, as we debate this legislation, they continue to target children. Just a few weeks ago I received a letter from a constituent in Rhode Island. He wrote me and said: As you consider legislation regarding tobacco company advertising aimed at children, I thought you might like to see a mailing piece that my oldest son, Mark, a junior in high school, recently received. Brown & Williamson Tobacco Company evidently got his name because he attended a concert last summer in which the group featured in the advertisement performed. I suspect that the great majority of the audience was under 18 years of age. And this is the flier that a high school junior, a 16-year-old child received in Providence, RI. Here it is: This is the first piece, and this is a very sophisticated piece of direct mail. This was individually addressed to the child, not to occupant, not to parent. This was individually addressed to him. It is his own mail. And we all know, when you are a youngster and you get your own mail, that is a big deal to think that you are so special that a big company like Brown & Williamson would write to you directly. Here is what it said: ``We Know You Like It Loud,'' the rock concert motive which they might well have sponsored. Again, as Pitofsky pointed out, they have shifted a huge amount of money away from the traditional advertising to go into rock concerts and trinkets and direct mail, and everything else. And this is the bulk of the advertising: ``You like it loud, and very, very smooth, Kool Milds, Kool Filters. Kick back today and enjoy bold taste, refreshing menthol.'' And a coupon: ``Relax with Kool and slip into something smooth.'' ``Slip into something smooth,'' a lifetime addiction to tobacco. That is what they want. It is happening today, directly targeted at children. That is what we are about in the Chamber. It is not about taxes. It is not about lawyer's fees. It is about an industry that continues to go after our kids without any letup, ruthlessly, relentlessly, and they are doing it today, and they will continue to do it today unless we make them understand. And the only way we do it is through the bottom line, that they can't keep doing this again and again. We have been debating on this floor the last few weeks whether we are going to increase the price of cigarettes $1.10 or $1.50. What do they do in their promotions? They are cutting a buck. Here is one dollar off the two-pack package. Any style of Kool you want, young man. You are 16. You should be smoking. We will give you a break. That is what this is about. We want to raise the price per pack because we don't want kids to go out there and smoke cigarettes. They want to cut cigarette prices to addict children. It is happening today, shamelessly happening today. We can stop it. We must stop it. We have to go ahead and ensure that this type of activity doesn't take place. Now, this whole promotion--and I am not the expert on this. This is the whole rock-and-roll series of concerts that are directed at kids. Sure, there might be some college kids there, but this is what is hot in high school. They want to be grown up. They want to go to the rock concert. They are sponsoring the concerts. They are tracking the kids down afterwards. They are sending them promotional materials. They are giving them coupons. Absolutely shameless. We shouldn't accept it. We can't accept it. Now, the proposed FDA regulations have been carefully tailored to prevent this type of activity, to allow them to market to adults, to make conscience choices, that we can't stop, that we don't want to stop. But we have to, I think, ensure that they are not allowed to continue this type of behavior. My amendment will do that. Now, moving away from the issue of the constitutionality, and very quickly, with respect to the tax law consequences, the Supreme Court has held that Congress is not required to subsidize first amendment rights through a tax deduction, but a first amendment question would arise if Congress were to invidiously discriminate in its subsidies in order to suppress ``dangerous ideas.'' Now, the appropriateness of this denial of a deduction which touches upon first amendment issues rests fundamentally on the underlying propriety of the proposed restraint. And as I indicated, the proposed FDA regulations do not ``invidiously discriminate.'' They have been narrowly drafted to conform to the ``commercial speech'' doctrine of Central Hudson. They will, in fact, stand the test of a court. And in addition, denying of a deduction as I propose would not ban any speech. The standing bill itself, my amendment, would not require the companies to say anything or refrain from saying anything. But if they violate these rules, they will have to do it on ``their own nickel.'' It won't be subsidized to the tune of $1.6 billion a year by the taxpayers of the United States. Let me mention something else which I think is appropriate in this context. It is that we have to be realistic and understand that this industry has avoided any type of real regulation for as long as we all can remember. There are laws on the books of the FTC for misleading in advertising. And what happens, the FTC brings a case, it takes 2 years to go through the administrative appeals, they might get an adverse decision. They will appeal it to the courts, and by that time the advertising campaign is gone anyway. They are not going to run a campaign for 100 years. It is the game they are playing. This approach, my approach will make them each year look at what they have done because they have to file their taxes. It will put their auditors and their accountants and their tax attorneys on notice that they can't claim these deductions if they are violating these rules. No messy FDA bureaucracy. No FDA agents running around scouring the countryside measuring the distance between schools and billboards. They are going to have to do it. They should do it. This enforcement mechanism, I think, is another positive aspect of this legislation. Now, in another context this Senate has voted to deny tax benefits for those groups that engage in speech activities. The most prominent one is the fact that we have denied tax-exempt status to nonprofit groups if they engage in lobbying activities. Lobbying activities-- political speech has the strictest scrutiny of the Supreme Court. It is pure speech, not commercial speech, yet we in our wisdom have said: Listen, if you are going to use your tax advantage to go ahead and engage in lobbying, you lose that tax advantage. If we do that to not- for-profit groups, where we do that to groups that are trying to affect positively the health of youth in this country, why should we be reluctant to go ahead and deny this group tax deductions if they are engaged in this type of shameless behavior? I think we should move aggressively to do that. Let me emphasize my proposal is very narrowly tasked. It is targeted very closely along the lines of the FDA regulations to prevent access of children to this type of tobacco advertising. Let me make another point about the context of the legislation and how it fits within the particular McCain bill. I commend the Senator from Arizona for his effort toward the goal of this legislation. Indeed, his perseverance, his strength, his endurance has carried us this far along, along with many other colleagues. But this legislation is designed to prevent children from smoking. It is not about taxes. It is not about big government. It is about making the companies stop soliciting kids to smoke. There are two ways in which the bill does it. First, it reaffirms the full authority of the FDA to promulgate these rules. In effect, it supports the FDA's advertising bans that are being tested now by the industry. A second part is a protocol, a contractual relationship between the industry and the government, which actually imposes further restrictions on what they can do. My amendment affects only the first part of the McCain legislation. It would deny tax deductibility if the industry violated the FDA rule. Again, it is narrowly tailored, it is consistent with the Constitution, and it is something that will effectively stop the industry from doing what they are doing. We have witnessed, for years and years and years, the industry's unrelenting attempts to addict children to nicotine. They are doing it today. They are doing it through rock concerts, through promotional giveaways, through T-shirts, through every other method of advertising. We know that. We can stop this assault on America's children. We can stop it by supporting the FDA rules and we can stop it, I think, much more decisively and definitively by adopting the amendment I propose, by telling the tobacco companies very straightforwardly: If you choose to advertise to children, you will lose your tax deduction. You will feel it in the bottom line. You will have to pay, as these kids and our society pay for their addiction. I urge my colleagues to support this amendment.

Mr. REED

Mr. REED. Mr. President, this amendment would disallow the deduction for advertising expenses for tobacco companies who violate the Food and Drug Administration rules with respect to advertising. It is a sensible and constitutionally sound way to reinforce the important provisions that are necessary to prevent easy access to smoking by teenagers. The record has shown very clearly that the history of the tobacco industry is a history of advertising that invites, entices, some would even say seduces youngsters into smoking. If we are serious about preventing teenage smoking, underage smoking, we must have effective ways to curtail the advertising to marketing that is directly targeted to youngsters in our society. The record from numerous documents released in the ongoing litigation suggest strongly, overwhelmingly that the tobacco industries have for years deliberately targeted youngsters as young as 12, 13 and 14 years old to get them to start smoking. If we are serious about our primary goal, which is to eliminate access to smoking by underage smoker, then we must pass this amendment. In anticipation of further debate tomorrow on this particular measure, I yield the floor and I suggest the absence of a quorum.

Mr. REED. I ask unanimous consent reading of the amendment be dispensed with.

Mr. REED. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. REED

Mr. REED. Mr. President, I rise today to submit an editorial on U.S. policy toward Cuba written by my esteemed predecessor, the Honorable Claiborne Pell. The editorial was printed in the May 5, 1998 edition of the Providence Journal Bulletin. Senator Pell served in the United States Senate for thirty-six years. While in the Senate, he served as Chairman of the Committee on Foreign Relations for eight years. Senator Pell's remarkable career also included eight years of service as a State Department Official and Foreign Service Officer as well as the United States Representative to the 25th and 51st Sessions of the United Nations General Assembly. Senator Pell's positions have taken him to Cuba on three occasions, most recently in early May. Senator Pell's observations of American foreign policy toward Cuba have led him to the conclusion that continuing the 38 year embargo on Cuba will not destabilize the Castro regime and is hurting the Cuban people. In his editorial, Senator Pell makes a number of insightful points. I hope all my colleagues will take the opportunity to read this piece by an expert in foreign relations and seriously consider his observations regarding relations with our neighbor. Mr. President, I ask that the editorial from the Providence Journal Bulletin be printed in the Record. The editorial follows: [From the Providence Journal-Bulletin, May 5, 1998] Our Cuba Policy Has Not Worked One can only hope that the small but significant changes in U.S. policy toward Cuba that President Clinton announced in late March portend more sweeping changes in the months ahead toward a more rational, more self-interested and more effective U.S. policy. Having just returned from a five-day visit to Cuba with a distinguished group of Americans, I am more convinced than ever that our existing policy, built around the 38-year-old embargo of Cuba, simply doesn't work. The embargo upsets the Cuban government and hurts the Cuban people, but, from our discussions with an array of Cuban government officials, religious and dissident leaders and foreign diplomat observers, one thing emerged clearly: The Cuban economy is strong enough to limp along for the foreseeable future. There is no evidence at all to suggest that U.S. economic sanctions are any more likely to destabilize the Castro regime in the near future than they have been over the past 38 years. Cuba is now some six years into what the regime euphemistically calls the ``special period,'' the time of economic distress that began with the collapse of the Soviet Union. Cuba lost its preferential trading arrangement with Moscow and the other former communist republics of Eastern Europe, and was left to fend for itself. If U.S. economic pressure was ever to work, that was the time. But Cuba has muddled through. In moves that must have been bitter pills for Castro to swallow, Cuba ``dollarized'' its economy, allowed private farmers' markets and other small-scale private enterprises, and offered more favorable terms for foreign investment. As a result, the Cuban economy, in free fall during 1993, has started to come around. The evidence abounds in Havana. Not only tourists, but all Cubans can purchase an array of consumer goods in ``dollar stores'' that are prevalent in Havana. When we asked one government official how Cubans with no access to dollars can survive, he shot back: ``Who doesn't have dollars?'' One exquisite irony is that this dollar-focused Cuban economy is now in part propped up by an annual deluge of dollars, estimated at $600 million to $1 billion, that arrives in Cuba from the United States, primarily from Cuban- Americans anxious to make life easier for their relatives. Whatever pain the embargo causes is offset by this dollar flow, which they will likely increase with the restoration of legal remittances. Tourism has expanded greatly since I last visited Cuba 10 years ago, and brings both much needed hard currency and less desirable consequences, including prostitution, which seems widespread in parts of Havana after dark. Our delegation visited only Havana and we were told that times are tougher in the smaller cities and the countryside. But the Cuban economy has clearly recovered and, while it could benefit from many more reforms, there is no sign it will collapse. Cuba is still very much an authoritarian state with tight state control over all aspects of society, including public debate. One day, I visited a showplace medical campus where very interesting neurological research is being conducted. The center was equipped with what appeared to be sophisticated computers and has its own ``web site.'' Next, I sat with a group of dissidents and asked about their access to the Internet. ``We can't use the Internet,'' one said. ``We cannot even have computers; they just take them away.'' Yet I felt a much greater openness in Havana this time than in my last visit, and certainly than in 1974, when Sen. Jacob Javits (the late U.S. Republican senator from New York) and I were among the first members of Congress to visit since the revolution. Back then, we were shadowed everywhere we went, were confident our hotel rooms were bugged, and sensed a real oppressiveness in the city. In those days, the infamous Committees for the Defense of the Revolution were an effective neighborhood spy network; today, they seem more a network of aging busybodies. Havana is certainly not a free city, but it has a liveliness and verve that startled me. On this trip, everywhere we went people still were abuzz about the visit of the Pope. Church leaders do not know yet whether the visit, of which virtually all Cubans seemed immensely proud, will lead to much greater openness. But colleagues of mine went to Mass on Sunday at a Jesuit church in a rundown section of the city, and described a vibrant community with an abundance of young adults worshipping with pride and intensity. The dissidents we met reported that a substantial number of political offenders have been freed and the atmosphere seems to them ``more relaxed.'' Cuba's repressive communist regime has survived, if not thrived, for 38 years in economic isolation from the United States. When a policy has failed that long, isn't it time to try something else? In my view, a policy of contact, trade, cultural exchanges and dialogue, just as we had with the communist states of Europe, could well lead to a more open, free-market economy and more political diversity in Cuba. Even if it doesn't, it won't be any less effective than the policy we've been following these past 38 years.

Mr. REED

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

Mr. REED. I rise today to speak on the amendment proposed by Senators Durbin and DeWine which would, in fact, strengthen the look-back penalty with respect to the tobacco legislation which we are considering today on the floor. The key element to changing the tobacco legislation is providing for a very strong, very tough, and a very appropriate look-back provision which essentially would extract additional payments from the tobacco industry if they fail to meet the goals in reducing teenage smoking. This is at the heart and soul of the whole tobacco debate--preventing children from getting easy access to tobacco products, preventing them from engaging in an addiction which will lead to their premature death in too many cases. When the tobacco industry announced their initial agreement a year ago with the attorneys general, they indicated a sincere desire, we hoped, to change the culture of tobacco, to change the culture of the way they deal with this product. Unfortunately, for many, many years, perhaps the whole history of the tobacco industry, they have been targeting young people as a means to boost their sales, as a means to enlist and, indeed, addict a whole generation of young people to be their customers. This approach, this marketing approach over many, many, many years, has led to the premature deaths of thousands of Americans. We have the opportunity now to stop that, if we do, in fact, legislate strong protections like a good, solid look-back provision. The tobacco industry has, as I indicated, spent billions of dollars trying to ensure that children become addicted to tobacco. In many respects, sadly, the tobacco industry has become addicted to children. They just can't seem to thrive economically without them. We want to change that addiction. We want to change the addiction that affects children, and we would like to change the addiction that has affected the industry. We would like them, if they are to market their product, to do so to adults. At the core of ensuring this happens is the requirement of having stiff assessments against the industry if they fail to meet the goals we have set out. That is at the core of the amendment proposed by Senator Durbin and Senator DeWine. I commend them for this amendment. It would strengthen significantly the protections and strengthen significantly the look-back assessments that the industry would pay if they fail to meet the goals of reducing teenage smoking. We have seen, over the course of many, many years, the deliberate attempt on the part of the industry to attract young people, to attract teenagers, to get them smoking early, so that by the time they thought about it, they were already addicted to tobacco products. The most revealing source of information about the industry's tactics has been the industry itself. In various litigation proceedings around the country, documents have been discovered and released publicly that indicate the systematic and very deliberate attempts by the industry to addict children. Documents obtained through the Mangini litigation further document these efforts. A presentation from a C.A. Tucker, vice president of marketing for RJR Industries, concluded, ``This young adult market, the 14 to 24 age group, represents tomorrow's business.'' Only, I think, would the industry think of ``young adults'' as 14-year- old children. And it is quite clear and quite obvious they were targeting these young children. They have done it in so many different ways. They have also indicated in documents released by the Mangini litigation that they conducted extensive surveys of smoking habits of teenagers. They were trying to find out essentially what makes teenagers tick and how they can use those psychological forces to addict children to cigarette smoking. This hasn't changed and won't change this until we have a good, strong look-back provision. The improvements which Senator Durbin and Senator DeWine are suggesting are just the right approach to make this look-back assessment a positive and forceful one. For example, they will move away from the industry-wide assessment contained in the underlining McCain bill and have more company-specific assessment. This makes sense, because if a company thinks that they can act inappropriately, they can take chances, play loose with the rules, market to kids, and their competitors will help bail them out because the penalty is assessed across all the companies--the good and the bad equally--there will be no real incentive to change the behavior of individual companies, to change the marketing approaches, to change the advertising approaches, to assume and to ensure that what we have is a situation where children are no longer subject to this type of advertising. This company-specific approach is going to be, I think, the key. That is what is so critical about this amendment. If we don't have an industry-wide standard for the look-back assessment, we will never effectively change the behaviors of these companies. And, frankly, that is what we should be about. This legislation should not be about simply racking up huge payments from the industry. It should not be about how we spend those payments, necessarily. It should be quite a bit about changing behavior and the incentive of the industry so they stop trying to market tobacco products to children. Another important aspect of this amendment that is critical is that this amendment would increase the target the industry must reach in 10 years from 60 percent to 67 percent. In essence, this amendment would require a 67-percent reduction in teenage smoking in 10 years. That is comparable to what the industry itself agreed to when they settled with the attorneys general. These two provisions--the company-specific approach, together with increasing the target reduction rate for teen smoking--are absolutely essential to having comprehensive tobacco legislation that will work and actually produce results. They will save the lives of thousands and perhaps hundreds of thousands of young people today, who otherwise will continue to be the targets of tobacco advertising, will continue to be the targets of the industry and will, I fear, fall under the sway of this tobacco addiction prematurely, shortening their lives and impacting the public health of America. I urge my colleagues to do all they can to ensure that this amendment passes, and that we move from this amendment to consider other amendments that will also control the access of information that kids have about tobacco. I will propose an amendment that will condition the receipt of tax deductibility of advertising expenditures in compliance with the FDA rules for advertising. These amendments, together, are steps that we can and should take immediately to ensure that we succeed in changing the culture of the tobacco industry, that we succeed in ensuring that we take historic steps so that children in America will no longer be the victims of an industry that has preyed on them for too long. I urge my colleagues to join myself, Senator Durbin, Senator DeWine, and the other cosponsors, in passing this act. I yield the floor and suggest the absence of a quorum.