UP IN SMOKE? June 17, 1998 The NewsHour with Jim Lehrer Transcript

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The tobacco bill died in the Senate after supporters twice failed to get the votes needed to keep it alive. After this background report, Senators on either side of the aisle discuss the contentious points.

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A RealAudio version of this segment is available. NEWSHOUR LINKS: June 17, 1998 The death of the tobacco bill. June 10, 1998 The debate over the tobacco legislation bill. May 21, 1998 Should tobacco companies be liable for a maximum of $8 billion in any one year? May 19, 1998 Republicans make last minute changes to the new tobacco legislation. April 8, 1998 The tobacco industry withdraws its support for the Congressional tobacco legislation. March 12, 1998 President Clinton endorses the bipartisan tobacco proposal. January 29, 1998 Steven Goldstone, the CEO of RJR Nabisco, acknowledges the health risk of tobacco products. January 16, 1998 Texas and Minnesota have suits pending against the tobacco companies. January 15, 1998 Documents show R.J. Reynolds used Joe Camel to attract young smokers. Online Forum Congressman Waxman and Connecticut Attorney General Blumenthal debate the tobacco settlement. Browse the NewsHour's coverage of congress and health. OUTSIDE LINKS: The Food and Drug Administration .

JIM LEHRER: Two senators join us now: Republican Phil Gramm of Texas and Democrat Dianne Feinstein of California. Senator Feinstein, is there any question that the tobacco bill is, in fact, dead now?

Sen. Feinstein: "The Republicans essentially loaded up the bill and then found reason to vote against it."

SEN. DIANNE FEINSTEIN: No question in my mind. The Republicans essentially loaded up the bill and then found reason to vote against it and did, and the bill is essentially dead. It's really-it's really a sorry mess, because there could be a bill. There are points that I think we all could unite around, we could put together a bill, I was hoping McCain's bill, as it was, would go to conference, could be rewritten in conference, and could come out as something that we could all overwhelmingly support. That's not going to happen, so it's kind of back to ground zero.

JIM LEHRER: Back to ground zero, the bill is dead, Sen. Gramm, do you agree?

SEN. PHIL GRAMM: Well, I think the bill is dead. I think there was a bill that could have been passed, but I think we never could get that bill put together. I think in the end, Jim, what happened is, is the American people, despite all the efforts to point to the evil tobacco companies, realized that the tax was not borne by tobacco companies but the tax was borne basically by blue collar Americans and that the money was used for a massive expansion in government spending, and in the end the bill never sold to the American public. They weren't for this bill; they didn't see it as having much to do with teenage smoking, but they saw it as having everything to do with tax and spend.

How important was public opinion?

JIM LEHRER: So you think the public opinion caused this to happen today?

SEN. PHIL GRAMM: I don't think there's any doubt about the fact that despite the best efforts of the White House, despite the best efforts of those who were for the bill over a month-long debate, the American people never came to support the bill because they never believed that it would do anything substantial about teenage smoking. But in the end the question the Democrats could never answer was: if smokers are the victim why do they have to pay these taxes, and in the end they couldn't answer it, and that's why the bill died, in my opinion.

JIM LEHRER: Why do you think the bill died, Sen. Feinstein?

SEN. DIANNE FEINSTEIN: Well, let me give you an example. There are two big amendments, one of which the distinguished senator from Texas presented to the senate, that took $26 billion of public health money and essentially said instead of going to public health programs to prevent smoking, it'll go to reduce the marriage penalty. Then there was another amendment-

JIM LEHRER: And that was passed, wasn't it, that amendment was passed.

SEN. DIANNE FEINSTEIN: It was passed, and it was voted on by all the people that just voted to kill the bill. That's the irony of it. Now, you know, I think in anybody's town you can't have it both ways. It's what's called loving something to death, and the bill got so kind of puffed up with this that the basic intent of the bill was substantially diluted. Those of us were still prepared to vote for it, to send it to conference, to enable some of these things, hopefully, to be taken out in conference and get a bill that we could support. Now it goes back to the committee where this bill came out. I think there is a vehicle. Senator Hatch and I have written something. It's my understanding there may be other efforts, I hope it isn't dead, but the action tonight very clearly signifies that the Republicans have killed tobacco reform.

JIM LEHRER: Sen. Gramm, on your amendment specifically, the Democrats and those who supported the bill went with you on that, and I remember you and others said, well, that means this bill will now pass. Why then did you and others not favor the bill after they did favor-in other words they did give you your amendment, but it still wasn't enough is what Sen. Feinstein is saying, so what's the answer?

SEN. PHIL GRAMM: Let me first say, Jim, they didn't give me my bill. We fought for over a week on it, and I ended up winning by two votes.

JIM LEHRER: Right.

Sen. Gramm: "The bill is a massive tax increase."

SEN. PHIL GRAMM: The answer is that the bill is a massive tax increase. The argument for the amendment was to basically try to give some of the money back to blue collar workers. The proponents of the bill said it's not about money; we don't want money; we want to raise the price of cigarettes. I said if we're going to raise the price of cigarettes, why not give the money back? The problem is all I could do is give 1/3 of it back, and the net result was still a massive increase in taxes and spending.

JIM LEHRER: So even with your amendment-in other words, even with your amendment, you still didn't support the bill?

SEN. PHIL GRAMM: No. And I never loved this bill to death, because I never loved it. I can't love a bill that lets attorneys get $92,000 an hour, that pays people $39,000 to stop smoking, and that pays tobacco farmers $23,000 an acre and they can still grow tobacco.

JIM LEHRER: Sen. Feinstein, Sen. Kerry and others said today that this was a victory for the tobacco companies. Is that correct?

A victory for tobacco companies?

SEN. DIANNE FEINSTEIN: Well, absolutely. You know, there's all this advertising going on out there. I haven't personally seen one of these ads, but, nonetheless, people believe it has an effect, and, you know, sometimes perception is reality. I think the tobacco companies do themselves a great disservice. I think they think the American people are stupid; and they're not. The point is this: There are two things that help that are important in this bill. One is the FDA regulations, that they go into force. The second, in my view, is cutting teen smoking, and the way you cut teen smoking is by eliminating advertising and increasing the per pack cost, enlisting the help of the tobacco companies-that was the purpose of the look-back. All of these things in balance work together, and the trick is to do it in a way that it doesn't accomplish a black market and that the American people can see that over time it can reduce teen smoking. You know, you've still got 3,000 kids a day that start smoking. A thousand of them die of tobacco-related disease. So the need for this is clear, and it's a very disappointing day under the dome.

Reducing teen smoking.

JIM LEHRER: Sen. Gramm, do you-tax issue aside-do you challenge Sen. Feinstein's point that this bill might have, in fact, reduced teen smoking?

SEN. PHIL GRAMM: I don't know whether it would or would not. 73 percent of the American people in the USA Today poll thought it wouldn't. There's one thing we agree on. The American people are not stupid. And I think in the end the bill failed because it never had a constituency. The only constituency for this bill was a large number of special interest groups that thought they were going to get tens of billions of dollars to spend. The American people never bought into the idea that this bill was going to really reduce teen smoking. They saw it for what it was, and that is a tax bill. None of the taxes were paid by the tobacco company. All the taxes were paid for by American workers, about 75 percent of whom make less than $50,000 a year. That's why it died.

JIM LEHRER: Did the tobacco industry's lobbying and advertising have any effect on this vote today?

SEN. PHIL GRAMM: Well, who would know? I would just simply say this: I find in my state, which I'm somewhat of an expert on, not an expert on California, but I'm somewhat of an expert on Texas, I found in my state no support for this bill whatsoever. I was back in my state for a week. I held over 50 meetings, not one single person raised this issue. Despite the best efforts of the President and proponents, in the end the American people saw this as tax and spend. They're against it.

JIM LEHRER: And you don't think the tobacco industry's lobbying had any effect at all?

SEN. PHIL GRAMM: I don't know whether it did or not. I assume it did have effect, but I believe there was never a base of support for this bill to begin with.

JIM LEHRER: Let me ask Sen. Feinstein about that. Did you find that to be a different situation in California?

SEN. DIANNE FEINSTEIN: Yes. I think there was considerable support for the bill. I think one of the problems was that it became very confused with all these amendments, and that had a dilution effect. Additionally, when compiled with the tobacco industry and those that were saying, you know, if you raise the price of cigarettes, that this just simply constituted a major tax, I think that was confusing to people. I have no doubt that the goals are there. I think you can have a bill-for example, Sen. Hatch and I have a bill that is $428 billion, instead of the six or seven hundred billion dollars of this one, that doesn't raise the price per pack as much. It has some liability caps; it has a good look back, that we hope that advertising can be prohibited and that strengthens the FDA's hand. It's a much more moderate bill than this, but I think there could be a consensus built around it if it's ever given an opportunity.

What next?

JIM LEHRER: Is that going to happen, Sen. Gramm?

SEN. PHIL GRAMM: Well, I think it's too early to say when it's going to happen. I think it's going to depend on the willingness of people to go back and re-evaluate it. What Dianne is really saying is, is there's a lot in this bill she's not for. I think in the end, for whatever reason, despite a lot of improvement in the bill, in my opinion, from the time it came to the floor. It was so far away from what anybody thought really was the final solution that the best proponents could say is adopt it and send it to conference and hope for the best. Well, the problem is we're shooting with real bullets here; we're talking about $800 billion of taxes; and I can't bet on what a few people in some dark, dank room in the basement of the capitol are likely to do. I have to vote on and take action based on what is before us, and this bill was a bad bill. It deserved to be defeated, and it was defeated.

JIM LEHRER: And, yes, go ahead, Sen. Feinstein.

SEN. DIANNE FEINSTEIN: I was just going to say, you know, it would have been a better bill had all these amendments not been put on it. Now there's a way-this isn't the first time that's happened-that can be remedied. The point I have is there's so much of the senate's time invested in this to let it come to naught is such a letdown of all of the public health causes that all of the American people enter into. Anybody that has seen a loved one die of cancer of the lung knows that tobacco produces it, and to drop it at this stage I think is the worst of all worlds. I am hopeful that both leaders will be able to get together, that the White House will exert some leadership, and that we will drop all these extraneous measures, drug programs, choice programs, marriage taxes from the bill, and put together a concise, easily understood package to which hopefully sane people can agree can deter teen smoking and can provide the necessary public health dollars to be able to get the educational program done.

JIM LEHRER: Would you support that, Sen. Gramm?

SEN. PHIL GRAMM: Well, I'd have to see what the bill does, but you have to remember we're talking about $800 billion. Nobody believes $800 billion was for teenage smoking, and, in fact, it funded literally dozens and dozens of new programs.

SEN. DIANNE FEINSTEIN: It wouldn't be an $800 billion-it'd be half that.

SEN. PHIL GRAMM: The bill-that wasn't the bill that was before us, Diane. The bill that was before us is the one we loaded on, not one we would like to have been there, and I think maybe that's the problem.

JIM LEHRER: Okay. And our problem is we have to go. Thank you both very much.

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