WASHINGTON -- Moving quickly to try to give president-elect Barack Obama an early victory on an important healthcare issue, the U.S. House of Representatives is set to vote today to expand the State Children's Health Insurance Program (SCHIP) and increase cigarette taxes to pay for it, said a Reuters report. The bill is similar to legislation twice vetoed by President George Bush, who opposes raising tobacco taxes and argued that the bill, which at the time received broad bipartisan support, would push children into government-run health care instead of private plans.
The [image-nocss] latest bill aims to provide healthcare coverage for more than 11 million children and pay for it by raising the cigarette tax to $1 a pack from the current 39 cents. Taxes on cigars and other tobacco products would rise as well.
SCHIP currently covers 6.7 million children in low and moderate income families unable to afford private insurance.
The Senate is also moving fast to act on legislation, said Reuters. The Senate Finance Committee plans to draft its version of the bill on Thursday. That bill also would finance the expanded program through higher tobacco taxes.
In mid-December, in anticipation of today's vote, the National Association of Tobacco Outlets (NATO) sent an alert to members urging them to call their senators and representatives to oppose the federal cigarette and tobacco tax increases.
"If the new SCHIP bill is virtually the same as the 2007 version, there will also be a potentially devastating floor stocks tax that retailers and wholesalers will have to pay on their cigarette and tobacco inventory (excluding large cigars)," the group said in its latest newsletter. "The floor stocks tax is the difference between the current tax rate and the new higher tax rate on all inventory as of the date the higher taxes would become law."
NATO coordinated an effort with five other national trade associations to fax a letter to all 535 members of Congress urging them to oppose the SCHIP tax increases. The associations that joined with NATO include the American Wholesale Marketers Association (AWMA), the Southern Association of Wholesale Distributors (SAWD), the National Association of Convenience Stores (NACS), the Petroleum Marketers Association of America (PMAA) and the National Association of Truck Stop Operators (NATSO). It also sent the letter to 300 major newspapers nationwide for publication.
Also, NATO, AWMA and SAWD are placing a full-page advertisement in the Roll Call, a major Washington newspaper that is delivered to every member of Congress, all Congressional staff members, the White House and president-elect Obama's new administrative staff. "The advertisement clearly points out the devastating impact that the cigarette and tobacco tax increases will have on retailers, wholesalers and manufacturers in terms of decreased sales, lost jobs and increased crime while also reminding president-elect Obama of his campaign promise that he would not raise taxes on any American earning less than $250,000," NATO said.
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