Proposal Funds Child Health Care with Tobacco Tax Some Senators hope to pay for expanded health insurance for low-income children by boosting taxes on tobacco products. That proposal produced some unusual discourse at a committee meeting last week.
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Proposal Funds Child Health Care with Tobacco Tax

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Proposal Funds Child Health Care with Tobacco Tax

Proposal Funds Child Health Care with Tobacco Tax

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This is ALL THINGS CONSIDERED from NPR News. I'm Jacki Lyden.

Congress got down to serious work this week on legislation to renew the State Children's Health Insurance Program, better known as SCHIP. President Bush wasn't happy with the bipartisan bill approved by the Senate Finance Committee. In a speech in Nashville on Thursday, he took issue with lawmakers' efforts to expand the program to include children from families higher up on the income scale.

President GEORGE W. BUSH: Which really means, if you think about it, that there will be an incentive for people to switch from private health insurance to government health insurance. I view this as the beginning salvo of the encroachment of the federal government on the health care system.

LYDEN: NPR's Julie Rovner was covering the story for us up on Capitol Hill. She found that sometimes the most serious legislative debates can take unexpected detours.

JULIE ROVNER: The mood was pretty tense by the time the Finance Committee finally got together Thursday to vote on the SCHIP bill. Senators had pulled an all-nighter debating Iraq Tuesday. The meeting had already been delayed twice by Republican procedural objections. And President Bush had threatened to veto it.

Then Mississippi Republican Senator Trent Lott started complaining about the way the bill would pay for the $35-billion expansion of the children's health program. Most would come from a 61-cents-per-pack increase in the federal cigarette tax. But there's also a cigar tax increase Lott didn't quite seem to understand.

Senator TRENT LOTT (Republican, Mississippi): So for a pack of cigarettes, it's 61 cents. But for one cigar, it's $10?

ROVNER: Finance Committee Chairman Max Baucus tried to explain that the levy isn't a flat $10 increase. On the least expensive cigars, the tax is as low as 5 cents.

Senator MAX BAUCUS (Democrat, Montana; Chairman, Finance Committee): It's a percentage tax. And some cigars are very expensive.

ROVNER: An exasperated Lott, who said he doesn't smoke cigars, finally just gave up.

Sen. LOTT: I think we ought to just shoot people that resume to smoke cigars in our presence and get it over with.

(Soundbite of applause)

ROVNER: Iowa Republican Charles Grassley, who helped write the bill, tried to justify the tax increase.

Senator CHARLES GRASSLEY (Republican, Iowa): I wouldn't worry about it. People who would pay that much for cigars are smoking something else before they smoke the cigars anyway.

(Soundbite of laughter)

ROVNER: But cigar sellers aren't amused by the prospect of charging their customers more.

Mr. JOHN SULLIVAN (Manager, JR Cigar Store): My name is John Sullivan and we're at the JR Cigar store in Washington, D.C.

ROVNER: Which is, conveniently, just a block from K Street, home of the Capitol's well-healed(ph) lobbying community.

Mr. SULLIVAN: We like the lobbyists, then lawyers and - but this store is great because you get everybody come in here, from truck drivers, policemen, a lot of, you know - Tom DeLay is a customer. Joe Wilson is a customer.

ROVNER: As in the husband of former CIA agent Valerie Plame. Sullivan says he doesn't sell very expensive cigars, but the ones he does sell would a lot more expensive if the new tax becomes law. Still, customer Larry Rooshie(ph) says it wouldn't stop him.

Mr. LARRY ROOSHIE (JR Cigar Patron): Well, when they raise the taxes on the cigar, we just got to do what we got to do. I guess we got to pay it.

ROVNER: Senator Lott proposed, as a compromise, taxing whatever Senator Grassley says people smoke before they smoke their expensive cigars. He seemed to be joking.

Julie Rovner, NPR News, Washington.

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