WASHINGTON -- President Bush said at a press conference yesterday that he will veto the State Children's Health Insurance Program (S-CHIP) bill that Democrats in Congress hope to pass that includes tobacco tax increases because he sees the bill as an incremental step toward the goal of government-run health care.
He said that he supports reauthorizing the program, and that his 2008 budget proposed to increase S-CHIP funding by $5 billion over five years, a 20% increase over current funding levels. Democrats reportedly want to pay for the program by raising [image-nocss] the tax on cigarettes by 61 cents per pack, to $1 per pack from the current 39 cents per pack.
Answering a reporter's question, If there is a tax increase on cigarettes to fund the S-CHIP program, is that a tax increase you oppose?, the President said, We don't need to raise taxes.
He added, The legislation would raise taxes on working people.
Click here to read a transcript or view video of the President's press conference.
Democrats said they have a veto-proof majority in the Senate and that it will pass in the House with some support from moderate Republicans, but concede they may not have a veto-proof margin, reported CNN.
If the S-CHIP bill is vetoed, Congress has the option of passing a bill to temporarily extend the program at the current funding level because S-CHIP by law expires on September 30, said the National Association of Tobacco Outlets (NATO), which, in its NATO E-News Bulletin, has issued a call to action:
All NATO members need to call their U.S. Senators and U.S. Representatives in Washington, D.C., again by next Tuesday, September 25, and tell them the following:
1. These tax increases will force retailers out of business and employees will lose their jobs.
2. Black market cigarettes and tobacco products will flourish.
3. Criminals will steal high priced cigarettes and tobacco products and jeopardize the personal safety of store clerks.
All NATO members have been provided with the names and telephone numbers of their U.S. Senators and U.S. Representatives. To be directly contacted to the office of your U.S. Senator or U.S. Representative, you can also call either of the following toll-free telephone numbers:
1-877-857-8074 or 1-866-527-4494.
Please make one final round of calls by the end of this week to oppose these federal tax increases.
Click on the Download Now button below to view NATO's chart detail the tax increases most likely to be contained in the bill.
The Senate version of the bill also contains a floor stocks tax provision requiring wholesalers and retailers to pay the difference between the current and higher tax rates on all of the tobacco products they have in inventory on Jan. 1, 2008, NATO said.
Also, click here to view this week's CSP TV, in which CSP's John Callanan visits with Zane Power of ConocoPhillips, Tom Briant of NATO and UBS tobacco analyst Nik Modi to discuss challenges and opportunities in the tobacco category.
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