Tobacco Documents Online

SEN. : Let him take as much time as he wants, Mr. Chairman. SEN. : Be happy to yield my time. SEN. STEVENS: As a matter of fact, it is a hearing on the military aspects of our SEN. : Of Alaska. SEN. STEVENS: -- of our medical problems. This is -- we are going to listen to the people from the Department of Defense to deal with the medical problems of the Department of Defense, and I appreciate that and I thank you. I will be very brief. Mr. Chainuan, I have given you an unqualified proxy. I don't remember doing that very often in my career. I just want everyone to know I believe this bill has to get to the floor. Yesterday one of the presidents of one of the tobacco companies called me and asked me about this bill, for my advice, and I gave him this advice. This bill must get to the floor. It is the first bill I have seen in this whole controversy that has bipartisan support. I congratulate you for holding the hearings. I congratulate Senator Hollings for working with you and the others on both sides of the aisle -- Dr. Frist -- and I know that Senator Ford has been involved. If we can get this bill to the floor and we can get the leadership to give us time to have a bipartisan sort of conference to select some people who will work with you from the other committees and get a task force now to round this out and see if we can get a bill and a semblance of an agreement as to how we could limit the amendments on the floor and really have a real dialogue on the floor, this is the kind of bill that all 100 Senators ought to be there for a couple of days and we could find a way to answer the demand of the public that we act on this. The public is asking up my way for legislation that tries to deter future generations from going down the same path as we have had in the past, so I want you to know, and I hope my colleagues will understand. The Chairman may vote my proxy against an amendment that I support. He knows I support the asbestos and black lung provisions and some of the other things, but those can be worked out once we get to the floor if we get a decent bill that has bipartisan support for a substantial portion of the final bill that must be passed by the Senate and sent to the House for a conference. It is a long, tortuous road. It's an election year. Unless it gets started now, there is no hope, so I congratulate you and hope that you get it done. 11

I want to personally thank you for including the personal responsibility provisions that were important to me. You have done that and I appreciate that and I pledge to work with you and other members of this committee in getting a bill to the floor that we can act upon. SEN. MCCAIN: Thank you very much, Senator Bryan, and we appreciate all your efforts. SEN. Ashcroft? SEN. ASHCROFT: Thank you, Mr. Chairman. I have a statement that I would like to make, and in the event that it goes beyond the time allowed -- SEN. MCCAIN: Without objection. SEN. ASHCROFT: -- would you please accept the rest of the statement in wl7ting ) SEN. MCCAIN: Without objection, it will be part of the record. SEN. ASHCROFT: I want to thank you because I realize that a lot of people have worked very hard to bring this bill before the committee, and don't think that means it is time for the rest of us not to work. I thiiilc it means that the entire committee will have to work very hard to ensure that we develop both sound and principled public policy. I am deeply concemed about teen smoking in this country, but I have also a number of concerns about provisions in this legislation. I am concerned about the Congress intervening on behalf of tobacco companies and limiting their liability to $6.5 billion dollars a year. To me the fact that class actions still would be allowed under this is of consequence on the issue of limiting liability. There is still a cap that would have the effect of cutting off people's rights to collect even compensatory damages. While I support a framework for those injured by a product sold in interstate commerce to adjudicate their claims and quickly recover for their injuries caused by dangerous products, I believe that it is Congress' duty to establish a reasonable and rational process. On the other hand, it is truly remarkable that these tobacco companies will engage in outrageous behavior and then come to this body to say our behavior has been so 14

SEN. McCAIN: Without objection, thank you, Senator. SEN. Dorgan? SEN. DORGAN: Mr. Chainnan-- SEN. McCAIN: Excuse me. Thank you, Senator Ashcroft. I'm sorry. SEN. Dorgan? SEN. DORGAN: Mr. Chairman, thank you very much and thank you for the work you have done. All of us have indicated the stakes here are very high. The issue of tobacco use and public health is very important, and the fight to stop the addicting of our children to tobacco cries out for a legislative solution today. I hope to offer some amendments that will make some improvements in this legislation, but I want to say that at the end of the day, in my judgment, this committee will have failed if we have not reported a bill to the Floor of the Senate. We must move this process along. I have heard this morning the warning that the industry or some groups may prevent passage of a tobacco bill, and I simply want to say that the message coming from this room is that this committee does not seek or need the consent of the tobacco industry to pass comprehensive tobacco legislation or, for that matter, any other interest group in this town or this country. We ought to do the right thing. Our job is not to satisfy, it is to do the right thing. There are a number of provisions in the Chairman's mark which I will attempt to change and improve. At the end of the day, I want very much for us to have been seen as having done something successful to advance this issue of a comprehensive tobacco bill. Mr. Chairman, thank you very much. SEN. McCAIN: Senator Dorgan, I want to thank you for that very thoughtful statement. I know you have very strongly-held views on this issue. We have appreciated your commitment to moving this process forward, and I know that your amendments will be very seriously considered by the entire conunittee. Thank you, Senator Dorgan. 16

outrageous that to pay all the damages will bankrupt the company; therefore, you must limit my liability so I can compensate some of those injured by my product; then to go on to say, if you do this, I will be good and responsible as a corporate citizen; if you don't, I'll continue to peddle my deadly product to the youth of America. What is even more remarkable is that members of this body will bow to such demands while refusing to allow reasonable limitations on liability for hard-working Americans who are making safe products, products to heal and not to hurt, products that, by their nature, do not kill people, such as those confessed and sold by the tobacco companies. In fact, niany of these companies are in the business of trying to save lives. Today I will offer three amendments. One would curb liability for charitable organizations. In fact, this would curb liability, and this is not curbing the ability of anyone to get compensatory damages -- would curb liability for some of the organizations represented here today, organizations that have been fighting to stop teens from smoking rather than luring them into a lifetime of addiction. The second would limit liability for those companies who provide biomaterials for lifesaving medical devices such as brain shunts and heart patches. If limiting liability is appropriate for merchants of death, it should be more appropriate for merchants of life. Finally, the third amendment would provide some liability for product sellers and would limit punitive damages and establish a statute of repose. None of these proposals would go as far as the proposal in this bill to limit the liability of the tobacco companies by capping their liability even for compensatory damages. Without these reasonable limitations on liability for honest product and biomaterial manufacturers and charitable organizations, I do not believe I can support any limitation on liability efforts currently before this committee. In fact, due to the lack of providing reasonable legal reform in these reforms, and if the committee does not support these niodest proposals, I intend to offer an amendment to strike all of the liability provisions in the bill. I hope senators will join me in recognizing the inherent unfairness before this committee today and vote in favor of these amendments. I believe that it would be appropriate to extend the kind of fair framework in which companies need to operate in order to provide healing biomaterials and certainly as long as we are not even limiting the compensatory damages of those companies, it seems to me that that is a must-do as compared to limiting even the compensatory and punitive damages of the tobacco companies. I see that my time has expired. I would like to submit the rest of my remarks for inclusion in the record. 15

Thank you very much. SEN. MCCAIN: Thank you very much, Mr. Chairman. I hope every member on both sides will take your words very seriously. SEN. Rockefeller -- and I apologize for the delay, Senator Rockefeller. SEN. ROCKEFELLER: Not at all, Mr. Chairman, and I also want to congratulate you because this is a very, very, very difficult task, and often in this Congress we do our best or our worst legislating under the greatest pressure at the very close of the time. I am not yet at all convinced that I a n going to vote for this, but that spirit is not to be taken as derogatory on my part towards the effort or the intent of ending up with a bill that we can all support. I think it is very important when people are rushing things towards -- and understandably and properly rushing things towards solution -- for there to be a few people to remind us that there are areas where the bill needs to be better. Philosophically in a way I almost have the feeling that getting the tobacco part of this done, the information out, all the FDA stuff decided, trying to decrease the dependency of our youth -- which the teenagers was actually only 2 percent of the smoking population -- but there's all the other too, that this is a problem large enough that I think that its solution really looms even over the spending aspects of the bill itself, although I will have, along with Senator Kerry, Senator Dorgan and others, a couple of amendments, but I think getting the tobacco part done and reducing the difficulties and tremendous health problems associated with it is the most important part. To the extent that we can work the other things out, then that's good, but I thinlc the tobacco part should be the main thing. The tobacco companies say that they are going to take a walk on this. I don't think that's very wise judgment on their part. Senator Ford has indicated they might go broke, and he has previously indicated that others might take their place which wouldn't have the liability, and we will see about all of that, but I think the American people are fed up with the whole smoking thing, and I think the American people are ready to act on it, and they will stay that way until the figures start going down dramatically. So I do congratulate you. You know, the liability clause is -- I don't know whether it 30 pages, 40 pages or 50 pages -- it was 70 pages I think yesterday, but this is something we haven't yet looked at entirely. 12

I mean who would have thought that five years ago, perhaps, or 10 years ago, that we would be where we are today? Looking at legislation that settles millions of dollars of claims against tobacco companies, both for Medicare claims that have been paid out over the years and Medicaid claims that have been paid out over the years. Who would have thought that we would have ever been talking and legislating a bill that makes nicotine regulated as a drug by FDA? Nobody would have thought that. Nobody would have thought that we would have been able to get tobacco companies to be subject to FDA regulation as a drug delivery device. That would have been impossible five years ago. Who would have thought that we would have a situation where companies have agreed to spend millions of dollars to restrict advertising that is targeting the children? Who would have ever thought that they would have agreed to major restrictions on advertising and bans on advertising in most places? Who would have ever thought that we would be talking about large penalties i f a company does not reduce the sale of its product to a segment of our community, a major financial penalty? Nobody would have thought that would have been possible. And yet today that is exactly what we are talking about doing with the legislation. I think all of that is very laudable, I think it is all very important, I think that the goal that we are trying to accomplish is all expressed in what I have just said we are actually doing here today. But I think that we are engaging in a rush to see who can be the hardest on tobacco companies. No matter what this committee produces, there will be other committees that will say it's dead on arrival. There will be others that say it's not nearly enough and it's faulty in that sense. And I understand that. I understand that mood to say we are going to be tougher than anybody else and don't challenge us on that issue. But I am concerned that in trying to be tougher than the other guy, we are going to be missing the target of accomplishing what this legislation is attempting to accomplish in real terms and in the real world. Now I have no tobacco companies in Louisiana, zip, zero, none. I have no tobacco farmers in Louisiana to speak of; I mean maybe less than ten. But I mean nothing, there's not -- I don't come at this from a constituent standpoint other than the victims and the problems related to smoking. My father-in-law died of lung cancer from smoking and related to asbestos in the work place. My mother died of lung cancer related directly to smoking all of her life. I have no sympathy for people who sell these products, but I am very concerned if you look at what we are attempting to do, I want to make sure it stays. I want to make sure that all these restrictions are here a year from now and not just when it leaves this committee. If you look at the restrictions that we have, one of the most important things we do is the restrictions on advertising. You can raise the price, but, folks, the price in 19

SEN. DORGAN: Mr. Chairman, I failed to mention that Senator Conrad, who has headed a task force on this area, has worked with me on a couple of amendments as well, and I appreciate very much his assistance. SEN. MeCAIN: Thank you. And I know that we don't want to waste too much time, but Senator Conrad's appearance before this committee was a remarkable performance and one that I think was extremely helpful in this process, and knowing you and Senator Conrad will not be the last that you are heard from as we move this bill to the Floor, and we thank you. SEN. Snowe? SEN. SNOWE: Thank you, Mr. Chairman. First of all, I want to commend you, Mr. Chainnan, for your tireless efforts and superb leadership on this legislation. You have certainly done yeoman's work on what is an extraordinary piece of work, and I just want to say I want to congratulate you for bringing it to this point. Mr. Chairman, recent history has revealed hundreds of tobacco company documents providing incontrovertible evidence of an unprecedented assault on health and welfare of the American people, most especially our children. And so today, we will take an equally unprecedented step towards addressing the wrong of the past and hopefully it will be an attempt to protect our children. I represent a state that has one of the highest teen smoking rates in the country, the highest smoking rate of any state for young adults between the ages of 18 and 30. In Maine, a full 38 percent of high school students smoke cigarettes. That is the fourth highest in the nation. And 16 percent of high school boys use smokeless tobacco. Mr. Chairman, this is a death sentence for many Maine kids. According to the CDC, more than 31,200 Maine kids, under the age of 18, will prematurely die as a result of tobacco-related diseases. The unveiling of industry documents has provided us with a disturbing glimpse into the mindset and tactics of the tobacco industry over the past few decades. From this paper trail, we have learned of repeated efforts by these companies to manipulate scientific research, target their products to children, racially stereotype minorities in marketing plans, contrived the nicotine levels in cigarettes, and generate research that would downplay the risk of smoking. All of these tactics have triggered thousands of lawsuits, but it has also resulted in the deaths of 420,000 Americans every year, and another 3000 children every day become addicted to a tobacco habit. So today, Mr. Chainnan, we have a choice between changing the status quo or taking the risk of depending on the outcome of litigation over the next few years or 17

What resemblance does the bill before us today bear to the agreement of June 20? I know that Chris agrees with me when I say that we have killed the patient. The AGs' deliberate and constitutional removal of a pound of flesh set off a feeding frenzy on Capitol Hill. Everyone wanted a cut and every demand was made with a voice dripping with moral authority and indignation that the mere suggestion that Congress would protect tobacco companies and not continue to exact more money. We should have expected this, it's human natures. Charged as we are, however, with making good public policy, we should not meet all demands. But the bill before us unfortunately has rejected very few demands. Concerns about Constitutionality, about the continued solvency of the tobacco companies, the effects this could have on claimants, about the effects of a thriving black market on youth smoking, about the impact of this bill in tens of millions of adult smokers -- these concerns have all been subsumed by the desire for more -- more money, more punishment. To raise the funds that the President has already spent in his budget before the legislation was even conceived, the committee did not say no to the White House, and this bill incorporates the Treasury Department's stream of payments from tobacco companies over the next five years. This payment schedule, coupled with a $10 billion up-front payment, is designed to meet the President's spending requirements, but bears no relationship to actual demand for tobacco products and the companies' ability to pay these assessments when demand drops. To understand just how carefully the Administration considered the feasibility of the assessments, I think it is telling that the Administration predicts a huge decrease in youth consumption in the first year, even before many of the controll provisions will have been put into effect, but allows for absolutely no drop-off in consumption by adults during the first five years. Because that assumption would not give the Administration the money it wants to spend on other non-tobacco-related programs. The committee did not say no to a stream of payments from tobacco companies that could bankrupt them. The committee did not say no to draconian penalties on look- back if the companies did not meet huge consumption reduction targets. And the committee did not say no to the seemingly legal and statistically impossible task of assessing these penalties on a brand-by-brand basis. Unless these look-back penalties are voluntarily agreed to, I seriously doubt that they can survive a challenge on the grounds that they violate the companies' due process rights and the excessive fines clause of the Eighth Amendment. v 0 a• 4~ The committee did not say to eviscerating the civil liability restrictions so surgically crafted in the AGs' June 20th agreement to ensure the tobacco companies were DO ~ 0r o+ 23

however long it takes that may or may not alter the conduct of companies, let alone reduce smoking in America. I don't happen to think the status quo is acceptable. I think this is an historic opportunity to shape and influence the tobacco culture in America and to reduce smoking in a meaningful way. This legislation begins the process of taking the first major step by Congress -- perhaps it will be our only opportunity -- to discourage young people from starting smoking, to encourage those young people who are smoking to stop smoking, and hopefully to bring to an end the abhorrent practices of the companies and, yes, in the end hopefully we can get young people to grow up free of tobacco addiction. And that's why I happen to believe this legislation moves in the right direction, because we haven't been a party to the negotiations, we weren't at the table, but we have to do what is right and what is in the best interests of the American people, and the modifications proposed tobacco settlement, I think, brings it closer in line to the interests of this country, by raising substantially the cost of cigarettes, to reduce its attractiveness, to deglamorize what is an unglamorous habit, by expanding the marketing and advertising restrictions, by increasing the penalties to companies that fail to meet their targets in reducing teen smoking, and also to expand the role of the FDA. That is all bringing us in the right direction, at the same time removing the immunity provisions. And albeit that this isn't a perfect document, as you said, Mr. Chairman, I think it is taking us in the right direction. And several of us will be offering amendments to make further improvements, but the bottom line is this is a rare occasion for Congress to craft and enact legislation that in the final analysis willl resonate and have a profound impact on the future of this country which is, of course, our young people. This is such legislation, and I hope that this committee will act accordingly. SEN. Iv1cCAIN: Thank you very much, Senator Snowe. I would remind my colleagues that there were a lot of contentious issues. The two most difficult were FDA and the other liability. Senator Breaux was a key and vital player on this issue, and without whom we could not have gotten where we are. SEN. Breaux, thank you again for all you have done on this entire issue, but especially on the issue of liability. SEN. BREAUX: Thank you very much, Mr. Chairman, and I, too, would join all of our colleagues on the committee and commend you for the tireless effort that you have made to try and bring a consensus. It is clear, in my opinion, the only way we are going to get a bill that is going to ever become law is that we do it working together in a bipartisan fashion, and you have really tried a great deal to do that. I8

That is considered to be an important part of legislating -- the craftsmanship aspect of it -- and I enormously respect the work that has been put in on this very, very critical matter for the future of health care in our country. Thank you. brief SEN. MCCAIN: Thank you very much, Senator Rockefeller. Senator Abraham. SEN. ABRAHAM: Thank you, Mr. Chairman. In the interest of time, I will be I wouldjust add my voice to those who have complimented you on your efforts. It is pretty easy to take a strong stance against tobacco. It is much more difficult to put your name on a bill, draft the legislation, and put it before the American public. You are certain to be criticized and I know you have been from a variety of directions, which suggests the fairness of the efforts that you have engaged in. It is in fact even feasible to put a bill before the public if you just try to satisfy one side versus all sides, and you have done your very best I think to consult people on a bipartisan basis, and I compliment you. Everything in the bill doesn't satisfy me. I am sure it doesn't satisfy anyone 100 percent, but I look forward to working with you because I think the Senate and the American public deserves a very full debate on this. That can't happen if it just proceeds at the committee level. It has to be before the entire Senate and I hope we can get there soon. Thank you. SEN. MCCAIN: Thank you very much, Senator Abraham. I believe Senator Bryan was here before Senator Dorgan, is that -- Senator Bryan. SEN. BRYAN: Thank you very much, Mr. Chairman. Let me join with my colleagues in commending you for your leadership and to congratulate you for your tenacity. Without your leadership, we would not have moved the ball as far down the field as we have. As you pointed out in your opening statement, we are not yet into the end-zone, but I think we are close, and I commend you for that. The goal is simple, and that is to reduce underage smoking, to limit access to tobacco products to those who are under the age, and to make young people aware that their decision to smoke carried with it lifetime health consequences, and I think we can all agree on those objectives. 13