Tobacco Documents Online

Committee on Ways and Means Statement of Representative Tom Barlow (D-Ky 1st) November 18, 1993 Our people are in need-of wise and careful leadership in putting their medical accounts in order'for the sake of their families and for the sake of themselves as individuals and as taxpayers. Our President and First Lady have rendered the American peop"le a truly historic service by devising an "All People" health care program that provides health care access for everyone. We as representatives of our people, must ensure that the final structuring best serves our people's needs and provides for health care delivery choices not from a national central point, but as close to the local level as possible. Over the past decades, health care research has developed a stunning array of medical technologies and applications that have made our lives better. Due in major part to the development of these technologies, health care costs are rising rapidly. These costs, however, are not evenly distributed, but are accumulating at points that cause severe economic imbalances in our government budgets, our business economy and cause severe strains in our family finances. Medical insurance premiums are soaring for individuals and families. In our increasingly competitive world, businesses are less able to afford medical insurance for their employees and retirees. Rising worker compensation costs are weighing down balance sheets. Expenditures of taxpayer funds through medical entitlements are soaring at both federal and state levels. Government budget deficits will increase in coming years unless we are able to bring this surging entitlement growth under control. The history of inedical -care delivery since the early 1940's has been that the business sector, where willing, has served as the key provider of inedical_care for a great portion of our people. It is time for us to carefully study this traditional approach. I would urge that we not feel "tied" to this traditional provider mechanism. Medical care has become such a large factor in the lives of our citizens that we must relieve business of the growing financial burdens of medical care. In our increasingly competitive world, we must not keep increasing the financial weight on business. We must lift this burden of expense from the shoulders of business so that business can get on with the business of employing Americans and keeping the - economies of our towns and cities, states and our Nation growing. The proposal made by the President's Health Care Security Act to secure funding for medical reform by taxing large businesses and subsidizing small businesses will create financial imbalances in our business communities. As a small business might grow, when does a small business that needs a subsidy 1

become a large business that incurs a tax? Might we see a proliferation in the number of small businesses to secure the subsidy and escape the levies of large businesses? We do not want to send the economic warning to hardworking business people, that warning being "Don't Grow" because it will cost you money. In order to reach all Americans and have a health care system that will be adequately and properly financed for years to come, the financing mechanism must be broad based. Deriving the finances for medical care by focusing taxes on "life style choices" sets us on a very troubling public policy course. Taxing a life style on the basis of the probability that it will lead to the need for expensive medical care leads us very logically to taxes on many pursuits that are fraught with probabilities for incurring medical care. Examples include using automobiles, eating burgers and fries, skiing, playing football, and motorcycling. Quite simply, having to debate degrees and levels of risk and associated taxes related to risk levels will put us in a public policy quagmire. Thousands of families in my Western and Southern Kentucky District raise tobacco. They till the soil, raise the crop and cure it like Americans have for nearly 400 years. Much of the type of tobacco known as "dark fired tobacco" produced in our nation and, indeed, the world is grown in my District. The Health Security Act proposes to increase the tax for dark-fired tobacco products--that includes cigars, pipe tobacco and snuff-- by 3,500 percent. Many of my farmers also grow burley tobacco which the Administration is also proposing to tax at a very high rate. The farmers in my District are reeling in shock and anger at these tax proposals. They are very deeply concerned that their livelihoods are at stake. The last time that they faced a challenge of such devastating magnitude was a hundred or so years ago when the Duke Tobacco Trust tried to intimidate them into selling only to the Duke Trust at criminally low prices. To subject a single industry to such an oppressive tax increase is blatantly unfair, and I ask that you not place such a burden on this important industry and our families. Medical care must not only be financed as broadly as possible but must also enable each of us to be saving ahead to meet our individual and family medical needs. We need an actuarially sound pay-as-you-go system. Just as we now share with the States the responsibility and expense of medical care for our citizens, we must better share with the States the collection from our people of the monies needed to finance their care. We should consider incorporating the existing funding pool ~ of worker compensation into the medical reform program. CO %I In our legislative work, let us not take the approach of W attempting to mislead the American people into believing that we p can have something for nothing. They know better. Health care ~ is not free. But it should be affordable for each of us. We must provide health reform with a funding structure that is both adequate and broad based. Thank you. 2