US Representatives Vote for Massive Excise Increase

Source from:  tr.itsmyiq.com Sep 26, 2007 09/27/2007

The US' House of Representatives voted yesterday to hit tobacco consumers with massive tax increases, the revenue from which would help fund an expanded health care program for children in low-income families, according to a report by Donna Smith for Reuters. Most of the burden would fall on cigarette smokers since the federal excise tax on cigarettes would increase from 39¢ to $1 a pack. The revenue would be used to insure more children in low income families that cannot afford private health insurance but earn too much to qualify for the Medicaid program for the poor. The House voted 265 to 159 in favor of the measure, a margin of victory that fell short of the two-thirds majority needed to override a threatened veto by President Bush. However, more than two-thirds of senators are expected to vote in favor of the bill when it reaches the Senate later this week, possibly tomorrow. The House speaker, Nancy Pelosi, said the measure enjoyed widespread support within the health industry and among voters, and she threatened that Bush would find himself alone if he vetoed the bill. She said Democratic leaders would keep reaching out to Republicans until they got a veto-proof two-thirds majority. "This fight will not end this week or next," Pelosi said. "This legislation will haunt him again and again and again. It's not going away. The children are not going away." On the other side of the debate, Bush and his Republican allies say the bill goes too far and would be a major step towards government-run health care. Bush favors using tax breaks to help people to buy health insurance. "Republicans want to insure low-income children," said House minority leader, John Boehner. "What we don't want to do is expand government run health insurance to cover people making up to over $80,000 a year." Meanwhile, in opposing the measure, the US Chamber of Commerce raised the question that many people involved in the tobacco industry would ask: why should this insurance burden fall almost exclusively on cigarette smokers? According to a report by Mike Sunnucks for the Business Journal of Phoenix, the Chamber says the plan would be an economic burden and hurt Southern states that produce tobacco. "To prejudice a narrow sector of the US economy with the aim of funding a broad-based entitlement program is grossly unfair and burdensome to American businesses and consumers," said the chamber in a letter to congressional leaders on the issue. Citigroup's Bonnie Herzog reported yesterday that the company's Washington contacts had indicated that it was generally felt the final bill would propose a 45¢ per pack increase in the federal excise on cigarettes, which was in-line with the results of a survey that Citigroup had carried out among its trade contacts. Enditem