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Poll: Americans Favor Raising Cigarette Tax for Kids' Health Care

By Ryan Kelly, CQ Staff

June 19, 2007 -- Representatives from health advocacy groups Tuesday announced that a poll of 1,000 likely voters showing widespread support for increasing the federal tobacco tax to reauthorize and expand the State Children's Health Insurance Program (SCHIP).

According to the survey, 67 percent of voters support a 75-cent increase in the federal cigarette tax to fund health care coverage for uninsured children.

While members of Congress are often hesitant to raise taxes and risk incurring the wrath of voters, the poll was just the latest to show that Americans view taxing tobacco differently than other taxes, said Ron Pollack, executive director of the consumers group Families USA. Other groups at Tuesday's event included representatives from America's Health Insurance Plans, the American Medical Association, the American Hospital Association, and the American Cancer Society.

Pollack said the support for a 75-cent increase on the tobacco tax was about the same as support for a 30-cent increase, which 70 percent of voters favor. "Americans see this as a public health issue," he said. "And the support of the public does not vary with the size of the tax increase.

"We will support any increased tax on tobacco to help fund the SCHIP program and we want to let Congress know that the American people will too," Pollack said.

What does vary with the size of the increase is the number of people who take up and quit smoking, said Ronald M. Davis, president-elect of the American Medical Association. "For each ten percent increase in the cost of cigarettes, seven percent fewer teens start smoking and smoking drops in Americans in general by four percent," Davis said.

The groups said Tuesday that the decrease in smokers resulting from the increased price of cigarettes would not substantially decrease revenues, pointing to a Congressional Budget Office report that showed that a 61-cent per pack increase proposed by Sen. Gordon H. Smith, R-Ore., would produce $35 billion in additional revenue over the next five years, even with the anticipated decline in number of smokers. In March the Senate voted 59–40 vote to adjust its fiscal 2008 budget resolution to allow for an increase in federal cigarette taxes of no more than 61 cents per pack. The amendment assumes the revenue would be used to reauthorize SCHIP, but the language wasn't binding.

With the SCHIP shortfall this year estimated at $700 million, raising the tobacco tax would be a windfall for public health, said Tom Nickels of the American Hospital Association. "Fewer smokers and the $50 billion dollars saved in associated lifetime health care costs, while expanding coverage for uninsured children, is a win–win."

The coalition voiced its support of a tobacco tax at least as high as the one Smith has proposed, but expect a more modest increase to make it into the SCHIP bill that Senate Finance Committee Chairman Max Baucus, D-Mont., is currently putting together. Smith, a member of the Finance panel, told reporters Tuesday that in his view, Baucus is not quite on board with increasing the federal tobacco tax as a way to finance SCHIP reauthorization, but rather is more focused on other funding options, such as reducing Medicare payments to Medicare Advantage plans, private health insurers offering coverage to Medicare beneficiaries. A tobacco tax increase, Smith said, is "the real money for an SCHIP reauthorization" and he said he thinks the idea is gaining momentum. A Baucus aide said Tuesday the Finance chairman is "focused on finding the right policy" for SCHIP and that "the policy will determine the total cost of the bill, and he will continue to work closely with his colleagues to identify the right package of offsets."

Baucus has stated that SCHIP reauthorization is one of his highest priorities, with a bill expected to go through mark-up and be ready for floor consideration by the July 4 break.

Alex Wayne contributed to this story.

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