Senate panel votes big tax hike on smokers

Tom Curry National affairs writer • Profile • E-mail

WASHINGTON - Steady your hands as you light that cigarette and get ready for a 156 percent tax increase.

The Senate Finance Committee voted Thursday to impose a 61-cent increase in the 39-cent per pack federal cigarette tax.  Four Republicans on the panel voted no; 17 senators including six Republicans voted for the tax increase.

If the full Senate and the House concur, it will result in more than a doubling of the tax on 47 million smokers.

On larger cigars the bill would impose up to a $10-per-cigar tax.

The purpose of the tax hike is to help pay for expanding the State Children’s Health Insurance Program (SCHIP), which insures 6.6 million children and teenagers whose parents have low incomes, but who aren’t poor enough to be eligible for Medicaid.

SCHIP expires if Congress doesn’t act before Sept. 30.

Supporters of the tax hike would need veto-proof majorities in both houses of Congress since President Bush has pledged to veto the tax increase.

Political calculations for 2008
But Republican members are aware that a Democratic president in 2009 — who might be interested in moving toward a national health insurance plan — would only need a filibuster-proof majority of 60 in the Senate.

And Democrats, now with 51 senators, might have that majority after the 2008 elections.

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This calculus will make some GOP senators more willing than Bush is to strike a deal now on SCHIP — especially since GOP candidates for re-election can expect that in next year’s campaigns, their foes could run ads saying, “Call Sen. X and ask him/her why he voted against insuring poor children.”

“It's clear to me that this bill has huge momentum and it will not be filibustered," Finance Committee chairman Sen. Max Baucus, D-Mont., told reporters immediately after the committee vote.

As for a veto threatened by Bush, Baucus said, "I don’t think it really changes much. There are a few members of the Republican Party who will do almost anything the president suggests but there are many Republicans on this issue especially who are voting their own conscience.”

But Senate Minority Whip Trent Lott, R-Miss., one of the four Republicans on the panel who voted against the bill, predicted that there will be enough votes to sustain a veto.

“This is Hillary-care through the back door and if people want that, they should vote for somebody who will do that," Lott said.

“But, look, the American people elected a Democratic majority — and this is the kind of thing you're going to get, more tax increases and more spending. If that’s what the American people want then they can keep this bunch in charge,” he said.

Will smoking be outlawed in most of America?

Lott's party-line interpretation was somewhat undercut by the fact that the tax increase won the votes of six committee Republicans, including ranking member Sen. Charles Grassley, R-Iowa. "This bill helps the kids that need to be helped," Grassley said, celebrating the committee's approval of the bill with Baucus.

Very unpopular in Kentucky
One of the GOP senators up for re-election next year, Senate Minority Leader Mitch McConnell, R-Ky., said, “There will be alternatives offered on the bill when we get to the floor and we’ll see where the votes are.”

“SCHIP is a very popular program, but to this particular way of doing it, I think there’ll be substantial opposition,” McConnell said. The tax increase on cigarettes and cigars “would be very unpopular in my state. I have a very unusual state where we grow tobacco,” he noted.

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