Tobacco Documents Online

-A V -REP. MICHAEL HUFFINGTON (R-CA) TESTIMONY BEFORE THE U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON WAYS AND MEANS November 18, 1993 Mr. Chairman, members of the Committee, I appreciate the time and patience of the Committee in listening to the heart-felt concerns _ of Members of Congress, public citizens, and all interested parties relating to this very important issue. I asked to be heard today on what has become one of the most - hotly contested provisions of the health care reform debate -- the question of financing. In securing the most equitable system to pay for a new health care program, good law would dictate that health care costs should be financed, in part at least, with revenues from the deadliest of habits -- cigarette smoking. America has been focused, and rightly so, on the illegal drug problem rampant throughout our country. In fact, illegal drugs left 30,000 people dead last year. However, as tragic as that number may be, more than 400,000 Americans die annually as a result of cigarettes; and 500 million people now living all around the world ~ ~ will die from tobacco use alone. W CJ'i -- O ~ CD Tobacco is not only an effective killer, it is an economic drain whose consequences are shared by all Americans, smokers and non-smokers alike. Cigarettes rob the U.S. economy of $68 billion in health care costs and lost productivity every year. A University of

California, San Francisco study found that in my home state of California, smoking costs the state more than $7.6 billion a year. I would now like to respond to the claim of job loss resulting _ from a tax increase on tobacco. First, one must understand that the much-quoted figure of 776,000 tobacco jobs that may be lost as a result of a decrease in tobacco consumption is a statistic derived purely by the Tobacco Institute, the lobbying arm of the tobacco - industry. Given the tobacco industry's claim that 55 percent of U.S. tobacco is exported as leaf or cigarettes, the U.S. job impact would appear to be significantly lower. Nevertheless, we should be committed to retraining these workers and to farming alternative crops instead of allowing thousands of kids to get hooked on tobacco to keep a single industry economically strong. Tobacco manufacturing and farming jobs have been steadily declining over the past decade due to the natural effects of the marketplace. As the demand for tobacco decreases, these jobs will continue to decline with or without a tobacco tax increase. I am happy to see tobacco growing areas, such as North Carolina, becoming less dependent on tobacco and more diversified. ~ ~ ~ The issue I find most repulsive in this debate is the tobacco ~ 4 industry's luring of America's youth. The industry knows very well 0 that cigarette consumption has declined 37 percent in the past 25 years in this country. New recruits, therefore, are "a must" to keep the industry "alive and well," as they say. Given the fact that the 2

i i • average age of initiation to cigarettes is 11 years old, the industry's marketing plan is right on target. To counter this new strategy, Canada raised cigarette taxes to more than $3 per pack. As a result, smoking by the young has dropped by 60 percent. In my home state of California, voters raised state cigarette taxes from 10 to 35 cents. The results were a 17 percent decline in cigarette smoking and an increase in new state revenues of_- $550 million in the first year. However, the primary benefit of increasing tobacco taxes, as I see it, is to discourage the 3,000 children who begin smoking each dav from starting in the first-place. The one disappointment I have, Mr. Chairman, is that the tobacco industry was able to lobby the.excise tax down to 75 cents per pack. The originally-planned tax of $2 per pack would have raised $25 billion and saved almost 2 million lives. The success of the tobacco lobby and the 75 cent compromise will cost the nation $14 billion in federal revenue and, most important, one million lives. Mr. Chairman, I want to suggest a new revenue source that I have not yet heard discussed. I have introduced legislation that awaits action from your committee. My bill, entitled Tobacco ASHES (H.R. 2534), disallows tax breaks for advertising or promotion of 00 ~ tobacco products. ~ W C!1 O CO ~A 3

f I introduced this bill because the tobacco industry seems to have plenty of its own money for advertising and promotions. In fact, Dr. Janet Benner of the Tri-County Tobacco Education and Prevention Team, headquartered in my hometown of Santa Barbara, California, recently said that "the tobacco industry spends over $7 000 every minute of every day on tobacco promo and advertising." It's safe to say the industry doesn't need any help from the U.S. taxpayers. The Joint Committee on Taxation estimates that Tobacco ASHES will generate $3.5 billion in new federal revenues over 5 years. The question before us is simply whether this $3.5 billion should continue to subsidize tobacco advertising or whether it should be used to promote healthy living for us and especially our children. I thank •the committee for their time. 4