Newspaper article THE JOURNAL RECORD

Panel OKs Cigarette Tax for Health Reform

Newspaper article THE JOURNAL RECORD

Panel OKs Cigarette Tax for Health Reform

Article excerpt

WASHINGTON (AP) _ A $1.25-a-pack increase in the cigarette tax was approved by a U.S. House of Representatives subcommittee Tuesday to finance health reform, including subsidies to help small businesses insure their employees.

But the fate of the substitute bill patched together by Rep. Pete Stark, D-Calif., remained in doubt. Although Stark's Ways and Means health subcommittee was expected to reject Republican versions of health reform, he appeared shy of the six votes needed to carry his plan.

Stark's bill would expand Medicare to cover the uninsured and require all employers to help buy insurance for workers and their families by 1997. Firms with more than 100 workers would have to provide coverage by 1995.

Meanwhile, new reform ideas floated by Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, were stealing attention from the Ways and Means subcommittee.

The plan drafted by Dingell's staff also would require employers to buy coverage for workers. But it would soften the sting by letting businesses with 10 or fewer employees pay a payroll tax of just 1 percent to 2 percent to cover their workers.

There would also be subsidies for small firms with low average wages and no more than 75 workers. Companies with more than 1,000 workers would pay a 1 percent payroll tax, but could self-insure.

Under Dingell's draft, workers would pay more health costs out of their own pockets, and President Clinton's mandatory insurance purchasing alliances would be made voluntary.

Both the Clinton plan and the original Stark proposal called for a 75-cent increase in the 24-cent federal tax on cigarettes to raise $10 billion a year.

Rep. Mike Andrews, D-Texas, won a 6-5 vote to make the cigarette tax $1.49 a pack. "Tobacco is a killer and the tax needs to be raised to offset some of its cost to society," argued Andrews.

He would use the extra $6 billion raised to provide subsidies for small businesses, anti-smoking campaigns and $100 million to retrain tobacco farmers. …

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