COMBINED. AND AND THAT WOULD BE $100,000,000 THAT WE WOULD GIVE
           THEM THAT AMOUNT OF MONEY BECAUSE THEY MIGHT BE AFFECTED BY
           THIS TOBACCO BILL. WE DON'T KNOW THAT THEY WILL BE. WE DON'T
           KNOW FOR CERTAIN WHAT ELSE WILL HAPPEN, WHETHER DEMAND WILL GO
           DOWN OR NOT. OTHER THINGS BEING THE SAME, IT SHOULD. SO YOU
           MIGHT SAY WELL LOOK, WHY DON'T WE JUST OFFER THEM THE AMOUNT WE
           GAVE EVERY OTHER CROP COMBINED?

           WELL, HOW CAN OUR COLLEAGUES FROM TOBACCO STATES, WHEN THEY
           HAVE BEEN DEBATING GIVING PEOPLE $22,000 AN ACRE AND $21,000 AN
           ACRE AS BEING THE PARAMETERS OF THEIR DEBATE, HOUR CAN THEY GO
           BACK AND SAY WE ARE ACTUALLY GOING TO GET 1/20TH OF THAT AMOUNT?
           WELL THEY CAN'T GO BACK. BECAUSE ONCE YOU LET THE FEEDING

           FRENZY START, AND ONCE YOU GET EXPECTATIONS BUILT UP, ANYONE
           WHO WENT TO TOBACCO FARMERS A YEAR AGO AND SAID I, AS YOUR
           SENATOR, HAVE ARRANGED FOR YOU TO GET THE AMOUNT OF MONEY EQUAL
           TO THE PER ACRE PAYMENT OF ALL THE OR SEVEN MAJOR COPS
           COMBINED, YOU WOULD HAVE GOTTEN A STANDING OVATION. BUT TODAY,
           WHEN WE ARE TALKING ABOUT PAYING 20 TIMES THAT AMOUNT, YOU

           WOULD GET STONED. SO WE ARE NOT GOING TO BE ABLE TO BREAK THAT
           IMPASSE AS HONK AS PEOPLE BELIEVE THAT THIS BLOATED -- LONG AS
           PEOPLE BELIEVE THAT THIS BLOATED BILL IS AT ALL POSSIBLE. HOW
           ARE YOU GOING TO NOW GO BACK AND SAY TO PEOPLE WHO HAVE
           SUFFERED FROM ASBESTOS POISONING THAT WE ARE NOT GOING TO GIVE
           YOU ANYTHING?
           WELL THE BILL NEVER HAD ANYTHING TO DO WITH THEM, BUT
           NEVERTHELESS, NOW THERE IS A BIG CONSTITUENCY THERE. WE
           CONTEMPLATED IN THE BILL THAT WE WOULD SET SOME LIMITS ON

           ATTORNEYS FEES. WE ARE GOING TO HAVE A VOTE ON $1,000 AN HOUR.
           THAT IS NOT A MINUSCULE AMOUNT. BUT EVEN IF YOU COULD BE
           SUCCESSFUL ON THAT, AND I AM NOT SURE WE COULD, YOU'VE GOT
           EXPECTATIONS SO HIGH THAT I DON'T KNOW HOW YOU ULTIMATELY PUT
           THIS TOGETHER. NOW LET ME TELL YOU WHAT I THINK THE FINAL
           SOLUTION WOULD LOOK LIKE IF YOU COULD GET THERE. YOU HAVE GOT
           TO THROW ALL THESE ADD-ON SPEND WILLING PROGRAMS OVERBOARD.
           THEY SHOULD NEVER HAVE BEEN THERE IN THE FIRST PLACE. THIS IS

           AN INSANE FEEDING FRENZY. ALL THESE X, Y, Z, BUREAUCRACIES,
           COMMUNITY PROGRAMS, INTERNATIONAL SMOKING ALLIANCES, ALL OF
           THESE PAYMENTS FOR OTHER PURPOSES, ALL THAT'S GOT TO GO.
           SECONDLY, IF WE ARE GOING TO RAISE PRICES AND WE ARE NOT GOING
           TO BEAT BLUE COLLAR WORKERS INTO PULP ECONOMICALLY, SOME OF THE
           MONEY THAT COMES IN HAS GOT TO BE GIVEN BACK TO THEM IN OTHER
           TAXES WHERE WE DISCOURAGE THEM FROM SMOKING BUT WE DON'T

           IMPOVERISH THE PEOPLE THAT ARE ADDICT TODAY CIGARETTES AND
           EITHER WON'T BE ABLE TO QUIT OR AT LEAST WILL TAKE AN EXTENDED
           TIME TO QUIT. SENATOR DOMENICI AND I IN OUR BILL FUND THROUGH
           MEDICAID, MEDICARE AND THROUGH TAX DEDUCTIBILITY, SMOKING
           CESSATION PROGRAMS. THOSE ARE THE KIND OF THINGS THAT IT SEEMS
           TO ME WE OUGHT TO BE FOCUSING ON HERE. BUT A BILL IS GOING TO
           HAVE TO BE BACK WITHIN THE RANGE THAT WE COULD EVER HOPE TO

           COLLECT; SECONDLY WE ARE GOING TO HAVE TO BE AWARE OF FACT AND
           I HEARD MY COLLEAGUE TALKING ABOUT BLACK MARKETS, BUT YOU KNOW
           THE CANADIANS ARE PROBABLY ABOUT AS SMART AS WE ARE; WE MIGHT
           NEVER ADMIT IT, THEY MIGHT NEVER SUGGEST THERE COULD BE A
           COMPARABLE BETWEEN
           
           THE TWO, BUT THEY TRIED THIS: THEY RAISED THE PRICE OF
           CIGARETTES ABOUT THE PRICE INCREASE WE ARE TALKING ABOUT. --
           TALKING ABOUT. THEY HAVE HIGHLY-EDUCATED PEOPLE, THEY HAVE LAW
           ENFORCEMENT, BUT WHAT HAPPENED IS, AFTER THEIR EXPERIMENT HAD

           FAILED, THE HEALTH MINISTER, DIANE MALRLOW SAID THE FOLLOWING.
           THE GOVERNMENT DECISION TO CUT TAXES WOULD ACTUALLY REDUCE
           CONSUMPTION AMONG YOUNGSTERS BECAUSE IT WILL END THE SMUGGLING
           TRADE AND FORCE CHILDREN TO RELY ON REGULAR STORES FOR
           CIGARETTES WHERE THEY ARE FORBIDDEN TO BUY THEM UNTIL THEY ARE
           19. NOW MAYBE WE ARE SO MUCH SMARTER THAN THE CANADIANS THAT WE
           HAVE WILL BE ABLE TO KEEP OUT THESE CIGARETTES. INTERESTINGLY
           ENOUGH, THE CANADIANS ARE NOT BUYING OUR CIGARETTES. THEY ARE

           BUYING CIGARETTES THAT ARE BOUGHT IN CANADA, REPACKAGED HERE,
           SENT BACK INTO CANADA. THE BRITISH HAVE 50% OF THEIR MARKET FOR
           CIGARETTE NOW BLACK MARKET. NOW MAYBE WE HAVE BEEN INDEPENDENT
           OF BRITAIN FOR OVER 200 YEARS. MAYBE WE NOW ARE SO SMART THAT
           WE CAN SOLVE THE PROBLEM. BUT I WOULD JUST LIKE TO POINT OUT TO
           MY COLLEAGUES THAT MAYBE WE ARE THAT SMART, BUT THAT OUR
           FRIENDS AND OUR KIN FOLKS, IF YOU GO BACK A FEW GENERATIONS IN

           PLACES LIKE BRITAIN, AND SPAIN, AND ITALY, EASTERN EUROPE, THEY
           ARE ALL PLAGUED WITH MASSIVE BLACK MARKETING OF CIGARETTES. SO
           IF THERE IS A SOLUTION TO THIS PROBLEM, IT SEEMS TO ME THAT THE
           SOLUTION LIES IN THE
           
           FOLLOWING THING: THAT NUMBER ONE, WE HAVE GOT TO THROW ALL THIS
           FEEDING FRENZY OVERBOARD, WE HAVE GOT TO CUT BACK THE
           REIMBURSEMENT FOR TOBACCO FARMERS AND TO LAWYERS TO REASONABLE
           FEES. WE HAVE GOT TO THROW OUT ALL THIS EXTRANEOUS MATERIAL

           WHERE WE ARE SPENDING HUNDREDS OF BILLIONS OF DOLLARS ON
           PROGRAMS THAT HAVE NOTHING TO DO WITH SMOKING. WE HAVE GOT TO
           RAISE THE PRICE OF TOBACCO AND GIVE THE MONEY
           
           BASICALLY TO TWO THINGS: ONE, SMOKER CESSATION PROGRAMS, AN
           ATTENDANT HEALTH-RELATED MATTERS SUCH AS THE HEALTH PROVISION
           THAT IS SENATOR DOMENICI AND I HAVE WHERE MEDICAID AND MEDICARE
           WILL BE ABLE TO FUND SMOKER CESSATION PROGRAMS, WHERE PEOPLE

           CAN GET A TAX CREDIT IN THEY GO TO THE PROGRAMS TO TRY TO HELP
           MODERATE INCOME PEOPLE BREAK THEIR ADDICTION, BUT BEYOND THOSE
           MODEST THINGS, WE HAVE GOT TO GIVE THE MONEY BACK, IF OUR
           PURPOSE IS NOT TO IMPOVERISH PEOPLE BUT IN TURN TO GET THEM TO
           QUIT SMOKING. IT IS NOT CLEATO ME HOW WE ARE GOING TO GET
           EVERYBODY HAVE LAWYERS TO TOBACCO FARMERS TO ASBESTOS
           BENEFICIARIES TO WHOEVER THESE THOUSANDS -- HUNDREDS OF

           THOUSANDS OF PEOPLE WHO HOPE TO PEOPLE THESE AGENCIES FOR
           MASSIVE COMMUNITY ACTION FOR THESE WORLD ORGANIZATIONS AND ALL
           THE PEOPLE WHO HOPE THAT THIS COULD BE THE WINNING OF THE
           LOTTERY FOR EVERYTHING FROM CHILD CARE TO YOU NAME IT. HOW DO
           WE GET EVERYBODY TO BACK OFF THOSE THINGS SO THAT WE MIGHT
           REALLY HAVE A BILL HERE TO DO SOMETHING ABOUT SMOKING TO THE
           EXTENT THAT WE CAN?
           WE OFTEN, IT SEEMS TO ME, OVERSTATE OUR ABILITY TO REALLY MAKE
           PEOPLE DO THINGS OR GET THEM TO DO THINGS. BUT I SIMPLY DESPAIR

           AT FIGURING OUT HOW WE ARE GOING TO GET A BILL THAT IS FOCUSED
           ON SMOKING, THAT DISCOURAGES SMOKING, BUT AT THE SAME TIME DOES
           NOT IMPOVERISH BLUE COLLAR WORKERS, AND THAT DOESN'T SET OFF A
           MASSIVE WAVE OF HUNDREDS OF BILLIONS OF DOLLARS OF NEW
           SPENDING. IF WE COULD DO THAT AND COMBINE IT WITH AN EFFORT TO
           DO SOMETHING ABOUT ILLEGAL DRUG USE ALONG WITH ILLEGAL
           CIGARETTE USE FOR CHILDREN, THEN I THINK WE WOULD HAVE SAVED --
           SERVED THE PUBLIC WELL. BUT I'M NOT SURE HOW WE DO IT. AND

           THERE IS A LOT OF DEAD WEIGHT IN THIS BILL THAT HAS GOT TO BE
           GOTTEN OUT. I HOPE THAT AS WE GO THROUGH THE DEBATE THAT WE
           REASON AND RESPONSIBILITY WILL PREVAIL ON EVERYTHING HAVE THE
           TOBACCO FARMER TO THE LAWYERS' FEES TO ASBESTOS TO ALL THESE
           XYZ BUREAUCRACIES, BUT TODAY IN MY STATE, THE PEOPLE THAT HAVE

           ANY AWARENESS OF THIS ISSUE BABY SICKLY HAVE CONCLUDED TWO
           THINGS THAT NUMBER ONE, WE ARE PROBABLY NOT GOING TO GET
           CHILDREN NOT TO SMOKE BY RAISING THIS TAX, AND THAT NUMBER TWO,
           THE TAX IS ABOUT REVENUE TO FUND A WHOLE BUNCH OF NEW
           GOVERNMENT PROGRAMS THAT THE TAX IS NOT ABOUT GETTING PEOPLE
           NOT TO SMOKE. IF WE ARE GOING TO CONVINCE PEOPLE, I HAVE ALWAYS
           FOUND THAT TELLING THE TRUTH DOESN'T ALWAYS CONVINCE PEOPLE,
           BUT IT IS EASIER WHEN YOU ARE TELLING THE TRUTH. AND IF THIS IS

           REALLY NOT ABOUT MONEY, THEN LET'S DON'T CREATE ALL THESE
           SPENDING PROGRAMS THAT AREN'T DIRECTLY-RELATED TO SMOKER
           CESSATION, LET'S TAKE THE MONEY FROM THE TAX AND GIVE IT BACK
           TO TO WORKERS BY CUTTING THEIR TAX, LET'S THROW ALL THIS
           SUBSIDIARY STUFF OVERBOARD AND HAVE A REAL BILL. IF WE DON'T TO
           THAT, I DON'T SEE HOW IN THE END WE ARE GOING TO CONVINCE
           PEOPLE THAT RAISING TAXES BY $700 BILLION AND CREATING
           LITERALLY DOZENS AND DOZENS OF NEW PROGRAMS THAT HAVE VIRTUALLY

           NOTHING TO DO WITH SMOKING, I DON'T SEE HOW WE CONVINCE PEOPLE
           THAT WE ARE DOING ANYTHING OTHER THAN THE OLD FASHIONED TAX AND
           SPEND, BUT WE HAVE FOUND A NEW WRINKLE, AND THE NEW WRINKLE IS
           TO FIND AN INDUSTRY THAT DESERVES VILIFY INDICATION, VILIFY
           THEM, THEN TAX THEIR VICTIMS, AND THEN TAX AND SPEND. IF THAT'S
           NOT OUR OBJECTIVE WEDNESDAY WE ARE GOING TO HAVE TO CHANGE THIS

           BILL DRAMATICALLY TO ACTUALLY ACHIEVE THE GOALS WE SOUGHT. NOW
           I HAVE COVERED A LOT OF THINGS HERE, BUT I THOUGHT ABOUT THIS A
           LOT OVER THE RECESS IN TRYING TO FIGURE OUT HOW WE CAN GET FROM
           WHERE WE ARE TO HAVING A REAL BILL, AND I JUST WOULD LIKE TO
           SAY THAT I HAVE CONCLUDED THAT IT IS GOING TO BE HARD. VERY
           DIFFICULT. BECAUSE WHEN WITH YOU -- WHEN YOU HAVE CONVINCED ALL
           THESE SPECIAL INTEREST GROUPS THAT WE ARE GOING TO GIVE THEM
           $700 BILLION, AND YOU START TAKING THE MONEY BACK BECAUSE IN

           REALITY WE CAN'T IMPOSE A TAX THAT BIG, PEOPLE ARE GOING TO BE
           DISAPPOINTED AND YOU ARE GOING TO HAVE PROBLEMS. SO NOW IF THE
           SENATOR FROM MASSACHUSETTS WANTED ME TO YIELD, I KNOW IT HAS
           BEEN A LONG TIME, MART OF THE PROBLEM WITH OUR PROCEDURE, BUT I
           WOULD BE HAPPY TO YIELD FOR A MINUTE AND I HAVE TO GO BACK TO
           THE SOCIAL SECURITY COMMISSION.
           

           MR. KERRY: I THANK THE SENATOR FROM TEXAS. MADAM PRESIDENT I
           HAD A COUPLE YES, SIR QUESTIONS. ONE CAME UP MOMENTARILY. I
           WANT TODAY UNDERSTAND, THE SENATOR HAS SUGGESTED THREE WAYS
           THAT WE CAN SOLVE THE WHOLE PROBLEM, AND THAT WAS THROWING THE
           QUOTE, FEED "FEEDING REIGN FRENZY OVERBOARD," THROWING OUT THE
           EXTRANEOUS PROGRAMS.
           

           MR. GRAMM: I DIDN'T HEAR THE SECOND ONE.
           

           MR. KERRY: THROWING OUT THE QUOTE, "EXTRAIN YAUS PROGRAMS," THE
           THIRD WAS PO TO RAISE THE PRICE OF TOBACCO. I WANTED TO ASK THE
           SENATOR HOW HE INTENDS TO RAISE THE PRICE OF TOBACCO?
           
           

           MR. GRAMM: WHAT I WAS SAYING IS IF WE BELIEVE THAT BY RAISING
           THE PRICE OF TOBACCO WITH CAN DISCOURAGE CONSUMPTION AND BEING
           A PERSON WHO USED TO BE AN ECONOMIST I BELIEVE THAT DEMAND
           CURVES ARE DOWNWARD SLOPING AND OTHER THINGS BEING THE SEEM
           THAT WE COULD PRODUCE SOME RESULTS THERE. WHAT I AM SAYING IS
           THAT I THINK WE MIGHT PUT TOGETHER A BILL THAT RAISED THE PRICE
           OF TOBACCO PRODUCTS, EITHER WITH A HIDDEN EXCISE TAX OR ONE OUT
           FRONT, BUT WHERE I DISAGREE IS, SINCE YOU GOT ALMOST 60% OF THE

           PEOPLE PAYING THE TAX WHO MAKE LESS THAN $30,000 A YEAR, RATHER
           THAN USING THIS AS A PIGGY BANK TO FUND MASSIVE NEW PROGRAMS, I
           THINK WE NEED TO RAISE THE PRICE OF TOBACCO AS PART AFTER
           COORDINATED EFFORT, AND I WOULD LIKE TO INCLUDE AN ANTIDRUG
           EFFORT WITH IT, BUT I WOULD LIKE TO GIVE MOST OF THE MONEY WE
           RAISE BACK TO LOW INCOME PEOPLE SO THAT WE DON'T END UP
           PUNISHING THE VICTIMS WHICH IS WHAT I SEE HAPPENING.
           

           MR. KERRY: LET ME COME BACK TO THE SENATOR AGAIN, MADAM
           PRESIDENT. I UNDER WHERE HE WANTS TO PUT THE MONEY. HE DIDN'T
           ANSWER THE QUESTION. I WOULD ASK HIM TO ANSWER THE QUESTION.
           HOW DOES HE PROPOSE TO RAISE THE PRICE OF TOBACCO?
           
           

           MR. GRAMM: I JUST SAID, IT MAY WELL BE THAT IN SOME COMPROMISE
           I COULD SUPPORT THE METHOD IN YOUR BILL. IT IS NOT SO MUCH THE
           TAX THAT I OBJECT TO, IT IS WHAT WE ARE DOING WITH THE MONEY
           AND WHAT THE TAX IS DOING TO MODERATE-INCOME PEOPLE. AND IF WE
           TOOK YOUR REVENUE FIGURE, AND WE THREW OUT ALL THESE SPENDING
           PROGRAMS AND QUESTION GAVE THE BULK OF THE MONEY BACK TO
           MODERATE-INCOME PEOPLE BY DOING FOR EXAMPLE REPEAL A MARRIAGE
           PENALTY FOR MODERATE-INCOME AMERICANS, MAKE HEALTH INSURANCE

           TAX DEDUCTIBLE FOR MODERATE-INCOME AMERICANS, AND MAKE THAT
           DEDUCTIBILITY SUBJECT TO THE EARNED INCOME TAX CREDIT SO THAT
           WE ARE RAISING THE PRICE OF TOBACCO BUT WE ARE NOT BRUTALIZEING
           MODERATE-INCOME PEOPLE, BLUE COLLAR INCOME PEOPLE ECONOMICALLY,
           IT MAY BE YOU CAN GET MORE PEOPLE TO SUPPORT THAT.
           

           MR. KERRY: MADAM EMPTY I WOULD ASK THE SENATOR FURTHER THEN,
           HAVING ACKNOWLEDGED THEN THAT TO RAISE THE PRICE OF TOBACCO YOU
           BASICALLY WIND UP ESSENTIALLY WHERE WE ARE IN THIS LEGISLATION,
           OR SOMEWHERE NEAR IT BECAUSE ANY TIME YOU RAISE THE PRICE OF
           TOBACCO AND BEING AN ECONOMIST THE SENATOR FROM TEXAS I KNOW
           WILL AGREE THERE IS NO WAY A TOBACCO COMPANY IS SIMPLY GOING TO
           ABSORB THAT PRICE. THEY ARE GOING TO PASS IT ON. AND ULTIMATELY
           WHATEVER RAISING OF THE PRICE OF
{END: 1998/06/01 TIME: 15-45 , Mon.  105TH SENATE, SECOND SESSION}