Last modified: Tuesday, July 31, 2007 12:19 AM EDT
A smoker who gave her name as Beverly Butterflies, of New Zealand, said most smokers will continue to smoke, no matter the cost. She was interviewed Monday while smoking outside the Dunkin' Donuts on Attleboro's North Main Street. (Staff photo by MARK STOCKWELL)

The rising costs of a smoke

The cost of a pack of cigarettes would jump under a congressional proposal to have smokers finance an expansion of a health care program for children.

The proposal has gotten little attention, but it passed a procedural vote in the Senate Monday and Congress is expected to vote on the matter this week.

The Senate is considering a plan to slap a 61-cent increase on the federal tax on cigarettes while the House is mulling a bill calling for a 45-cent hike.

In either case, the 39-cent federal tax on cigarettes would more than double to pay for health care for an estimated 9.8 million children.

The idea reportedly has strong support in both chambers.

"I'm for it," U.S. Rep. Barney Frank said. "I think the single greatest social and economic problem in the country is health care."

Frank, D-Newton, said he would prefer to pay for the health care coverage by ending tax breaks for the wealthy, but will accept the tobacco tax since it is the only proposal being considered.

U.S. Rep. James McGovern, D-Worcester, said the country has a moral obligation to provide health care for children. Congress, he said, has to make a tough choice on how to pay for it, rather than run up the budget deficit.

It is reasonable to tax tobacco to pay for health care because smoking is a leading cause of cancer and heart disease, and treating those diseases are a major burden on people with health insurance, McGovern said.

"If someone has a better idea, I'm all ears," he said.

Frank dismissed arguments that the tax unfairly singles out smokers, saying smoking is a choice and tobacco is a significant health problem.

Raising the cigarette tax will encourage more people to quit smoking, he said.

The tobacco industry is fighting the proposals. Tobacco firm R.J. Reynolds provided a link on its Web site for smokers to send messages to Congress opposing the tax increase.

Some local grocery stores have placed signs at their counters warning customers of a 156 percent increase in the tobacco tax.

Steve Kottak, a spokesman for parent company Reynolds American, said there are several problems with the tax proposals.

He said the tax increases unfairly target low- and middle-income people because they are the ones who smoke the most.

The tax increase will also be counterproductive, he said.

Raising the tax will result in a drop in cigarette sales, which in turn will reduce the revenue states receive from their tobacco taxes, he said.

The tobacco tax is an unreliable revenue source for the health care program, he said, because cigarette sales are decreasing while health care costs are skyrocketing.

The Bush administration is also opposed to the plan and the president has threatened to veto it.

The administration says the health care program was originally intended for poor children, but is being expanded to wealthier families, including adults.

Democrats counter that states determine the eligibility for coverage. Any state that provides coverage to adults would get less funding.

The income level for eligibility for the program would be increased from 200 percent of the federal poverty line to 300 percent so that more children can be covered, Democrats have said.

The program is federally funded, but administered by the states. It already covers 6.6 million children. The program, however, expires Sept. 30.

Bush wants to reauthorize the program as it stands now.

Democrats and some Republicans in Congress want to expand the program. The Senate would cover an additional 3.2 million children who lack insurance. The House would expand coverage by 5 million children.

The expansion would also provide more mental health and dental coverage and do more outreach to get families enrolled.

The cigarette tax would pay for it all, according to Democrats.

One potential problem is the differences in the House and Senate plans.

The House bill not only covers more children, it makes several changes to the Medicare program that covers senior citizens.

The House would provide more preventive care for the elderly, cut drug prices for low-income seniors and cut payments to private Medicare providers.

Some senators have said they will not accept the House version.

While the program under debate is designed mostly for children, Frank said he believes the larger health care problem could be addressed with more government coverage, as opposed to insurance provided by employers.