S-CHIP: Up In Smoke?

Peter Maer is a White House correspondent for CBS News.
Almost lost in the debate over President Bush's planned veto of the State Children's Health Insurance Program (S-CHIP) is the philosophical divide over how to fund an expansion of the program. Democrats and Republicans who support the plan want to pay for it with new cigarette taxes. They would raise tobacco revenues by $35 billion over five years. That would amount to an estimated 61-cent per pack cigarette tax boost.

The debate took a new turn today as White House Press Secretary Dana Perino noted, "At a time when they (Democrats) think that they want to increase funding for children's health care, they're actually wanting to pay for it with a cigarette tax." She added, "People who smoke are usually--the majority are in the low income bracket. So they're raising taxes on something to pay for a middle class entitlement." Perino proclaimed, "It's just completely irresponsible. Stop the madness on Capitol Hill!"

Perino bristled when a reporter asked why the administration would want to protect smokers in any income bracket when surveys show that cigarette sales decrease every time tobacco taxes increase.The spokeswoman responded, "I hope people do stop smoking. The government is actively trying to get people to stop smoking which is why it probably is not a good idea to have it as a funding source for children's health care." The administration contends the Democrats' formula won't fund a long term extension of the children's health program. Perino said " The majority of smokers are low income and these are the people we're trying to help with this bill. You're asking for a tax increase which disproportionately hurts low income people to pay for a middle tax entitlement. It makes no sense."

But it makes perfect sense to anti-tobacco groups. The Campaign for Tobacco-Free Kids estimates the following benefits from a 61-cent federal cigarette tax increase:

Pack sales decline in the US: -1.855 billion

Percent decrease in youth smoking : 9.2%

Increase in total number of kids alive today who will not become smokers: 1,873,000

Number of current adult smokers in the US who would quit: 1,171,000

The group also points to millions of dollars in health savings from fewer smoking-affected pregnancies and births. Add to that hundreds of millions in savings from fewer smoking caused heart attacks and strokes. The Campaign sees nearly $44 billion dollars in long-term health care savings from overall smoking declines. Of course there is no way to estimate the decreased emotional toll on loved ones of people who would quit smoking and avoid the agony of lung cancer and other smoking- related illnesses.

Perino is correct in her assertion that most smokers are poor people. Professor John F. Banzhaf, executive director of Action on Smoking and Health, told CBS News, smoking is "the highest among those in the lowest economic classes." Banzhaf says a tobacco tax increase is the best incentive for those low income smokers to kick the habit. It is certainly a point to ponder in the fiscal and philosopical debate over funding children's health care. Statistics on the financial and emotional impact from kicking the cigarette habit are always factors for smokers to consider.

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    Peter Maer is a CBS News White House Correspondent.