[UPDATE: Vote postponed until Thursday, July 19, 2007.]
WASHINGTON -- The U.S. Senate Finance Committee is scheduled to vote today on the proposed 61-cents-per-pack federal cigarette tax increase and possibly on a 156% increase in the federal excise tax on cigars, little cigars, pipe tobacco, roll-you-own (RYO) and smokeless tobacco to fund an expansion of the State Children's Health Insurance Program (SCHIP).
The National Association of Tobacco Outlets (NATO) is urging its members to call every U.S. senator, urging them to oppose [image-nocss] these tax increases.
Click the Download Now button below to view a letter from NATO to The Billings Gazette.
Members of the Senate Finance Committee said last week that they have reached an agreement on the framework for SCHIP expansion. Under the bipartisan agreement, the expansion would cost $35 billion over five yearssignificantly short of the $50 billion increase sought by Democratic congressional leaders and included in the congressional budget resolution. The expansion would be funded with the 61-cent increase in the 39-cent federal cigarette tax, to an even $1 per pack, according to NATO, citing the Congressional Quarterly report.
There is general bipartisan support on the committee for the SCHIP agreement, said Sen. Gordon H. Smith(R-Ore.), who has pressed for a tobacco tax increase to pay for the program's expansion. Senator and Finance Chairman Max Baucus (D-Mont.), who has been negotiating a compromise on the bill for months, said his committee would likely vote on the bill July 17.
SCHIP is a state-federal insurance program covering about six million children and about 600,000 adults, said the report.
It provides health insurance to children living in families not poor enough for Medicaid, but still unable to afford private health insurance. The Senators' plan will maintain coverage for all children in the program at this time, including 1.9 million who would have lost SCHIP coverage without these additional funds, and will provide dependable health coverage to an additional 3.3 million low-income, uninsured American children, said Baucus in a press statement.
Bush administration officials have warned that if lawmakers proposed a huge expansion of the program, the president's senior advisers would recommend a veto, said the Associated Press. Bush administration officials have questioned how many children are uninsured and would actually gain coverage through a large investment in SCHIP. The administration notes that researchers at the Urban Institute estimated that about 4.9 million children under the age of 19 were uninsured for the entire year. That's a much lower estimate than the one compiled by the Census Bureau, which counts more than 8 million uninsured children. Of that group, the researchers said only 1.1 million children uninsured for the entire year were eligible to participate in either Medicaid or SCHIP.
Debate on the program provides a foretaste of a much larger struggle over the future of the nation's health care system, as Mr. Bush and Democrats argue about the proper role of government and private insurance, said The New York Times. The Senate plan was negotiated by Baucus and Senators Charles E. Grassley (R-Iowa), the senior Republican on the Finance Committee; John D. Rockefeller IV (D-W.Va.); and Orrin Hatch (R-Utah).
Meanwhile, R.J. Reynolds Tobacco Co., a subsidiary of Reynolds American Inc., laid out its position against a new federal tax on its NoCigTax.com website. Among other information, it offers 10 Reasons Increased Tobacco Taxes Don't Work:
1. Tax revenue is not always allocated as expected.
2. States will lose millions in tax revenue.
3. Employees' safety could be in jeopardy.
4. Higher cigarette taxes burden low-income and working-class families.
5. Cigarette taxes are an unreliable source of income.
6. American workers will lose jobs and paychecks.
7. Smokers may go out of their way to purchase untaxed cigarettes.
8. Higher cigarette taxes increase gang and other organized crime.
9. Higher taxes alone do not prevent youth smoking.
10. Tobacco farmers may suffer.
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