Bush Gets It Right XIII: President Signs Bill to Save Children’s Health Insurance

Author: Norman Kjono
Article Published: 2 January 2008

This is the final commentary in a thirteen-part series about Congress’ ill-advised and unsuccessful attempt to levy billions per year in new taxes on “Target” American consumers to fund health care. The conclusive defeat of that agenda in Congress follows on the heels of similar defeats for state cigarette tax initiatives during 2006 in California and Missouri, as well as Oregon in 2007.

From MSNBC News, December 29, 2007, Bush OKs Children’s Health Insurance Extension:


CRAWFORD, Texas - President Bush on Saturday signed legislation that extends a popular children's health insurance program after twice vetoing attempts to expand it. Politically, the move was a victory for Bush, although Democrats say it will come back to hurt Republicans at the polls. The extension of the State Children's Health Insurance Program is expected to cover 6.6 million children and provide states with enough money to cover those enrolled through March 2009. . . . ‘We're pleased that the program will be extended and that states can be certain of their funding,’ White House spokesman Tony Fratto said. Yet many Democrats — with help from other Republicans — wanted to give the program a significant cash infusion and broaden coverage to an estimated 4 million children. They overwhelmingly supported use of a tobacco tax increase to pay for the expansion. . . . The Democratic-pushed bills would have expanded the program by $35 billion. Bush said the legislation did not put the neediest children first. He opposed the tax increase and, more broadly, fought against what he saw as a movement toward more government health coverage. Democratic lawmakers plan to try again to expand enrollment.” (Underline added.)


The above article is very good news for working families who currently depend on the State Children’s Health Insurance Program (SCHIP), 46 million tobacco consumers who were targeted by Democrats to fund a vast expansion of federal payment obligations, and all taxpayers – persons who choose to smoke and nonsmokers alike – who would have been required to fund through new taxes the $35 billion expansion of SCHIP in the future. This resounding defeat of the Tobacco Control Enterprise’s attempt to once again manipulate public law to puff the bottom line profits of its pharmaceutical sponsors through smoke and mirrors tax legislation is also richly earned and just deserts for so-called public health advocates who feed off new cigarette tax and tobacco settlement cost revenues to sustain their anti-competitive effprts. An event that is unusual in today’s political environment – the failure of special-interests to mandate at the people’s expense what works for their bottom lines -- fosters hope and inspires belief that one day soon tobacco control, too, shall pass.


Not only does tobacco control now consistently fail in its attempts to legislate corporate subsidies and profits by levying new taxes on citizens but it has also revealed itself for what it is: the front organization for pharmaceuticals to employ complaint, opportunistic politicians in the willful looting of American consumers. As anti-tobacco has done in the past, so anti-obesity will predictably do in the future. Higher taxes and tobacco settlement costs for target tobacco products predictably inspire higher costs and new taxes on target food items. As discriminatory health insurance costs are promoted for persons who smoke, the same is advocated for those who do not meet the policy-wonk-proscribed Body Mass Index. Perhaps this humiliating defeat of anti-tobacco will slow the rate at which those tax-sniper’s sights shift from the shirt pocket of a citizen who dares to carry a pack of smokes to the well-rounded posterior of those who have the temerity to fail in their quest for tight buns.


The same leading Democrats who sponsored bills to expand to expand SCHIP on the backs of their tobacco consumer “Target Group” of choice have also sponsored bills to grant the U.S. Food and Drug Administration (FDA) authority to regulate tobacco. Should that bill pass, when tobacco control exercises its undue influence with the FDA to reduce the nicotine content of cigarettes as authorized by that bill the consumer nicotine market will predictably tilt to pharmaceutical Nicotine Replacement Therapy (NRT) delivery devices such as NicoDerm CQ patches and Nicorette gum. Those products pay ZERO federal and state excise taxes, so cigarette tax revenues as touted to pay for the $35 billion expansion of federal payment obligation will predictably not be there are represented by politicians sponsoring SCHIP and FDA regulation of tobacco bills. That phenomenon – politicians such as senators Hillary Rodham Clinton (D-NY), Patty Murray (D-WA) and representative Jay Inslee (D-WA) holding out with their left hand cigarette taxes to fund children’s health insurance, while hiding behind their back in the right hand FDA regulation of tobacco bills that would severely reduce or eliminate the tax revenue to fund it – makes the SCHIP bill one of the most transparent attempts to foist a “Bait and Switch” tax-scheme on gullible voters. It is a classic lesson in the truth that those who can be hooked in the nose with their own well-nourished intolerance of choice to tax their neighbor who smokes can, and will predictably be, manipulated dip their pointy blue nose in the trough of their own tax increases. Those who are ignorant enough to believe that politicians intend to ultimately fund increased federal expenditures with a tax source they vow to eliminate deserve the treatment they get from opportunistic elected representatives.


Johnson & Johnson (stock symbol JNJ) manufacturers NicoDerm CQ patches through its ALZA Corp. subsidiary. With its purchase of Pfizer Consumer Healthcare in 2006, the company also has an interest in Nicorette. GlaxoSmithKline distributes NicoDerm CQ and Nicorette. As of September 30, 2007 Johnson & Johnson’s namesake nonprofit foundation, the Robert Wood Johnson Foundation, reportedly owned 45.7 million shares of JNJ valued at $3 billion-plus. The foundation reports that it had invested $446 million in tobacco control 1992 to 2005, through $99 million in grants to its Smokeless States and other programs. At least $84 million in foundation grants were awarded to the Campaign for Tobacco Free-Kids, which aggressively promotes increased cigarette taxes. The foundation also reported that it will invest $500 million in anti-obesity grants over five years. As cigarette costs increase due to new tobacco taxes the price for Nicorette and NicoDerm CQ has been increased by similar amounts (see Parity Pricing.) I briefly explained how that process works in an Op-Ed published by the Los Angeles Daily Journal on November 2, 2006. Since NRT manufacturers and distributors pay ZERO federal or state excise taxes on their products, but charge artificially inflated prices for nicotine replacement delivery devices, increased cigarette taxes translate to taxpayer-financed subsidies of Johnson & Johnson and GlaxoSmithKline. The same process that has been so successfully employed to articifially inflate pharmaceutical profits through advocating cigarette taxes and substituting NRT products could be employed in the War on Obesity through taxes on food products with GlaxoSmithKline’s Alli diet pill.


The anti-obesity monkey sees the anti-tobacco simian grow fat on a new tax food source and mimics accordingly. Meanwhile, the mum is the word for mainstream media writing about that now-predictable behavior. When the powers that be decide they can see no evil, hear no evil and speak no evil about self-serving and opportunistic behavior by special-interests we the people observing one of the most trusted servants of special-interests touting her senator from New York credentials to vouch for her presidency campaign in the name of alleged change. Judging by the grab for taxpayers funds that SCHIP represented, there will be change with such candidates in higher office: the rate at which special-interests consume the pocket books of everyday citizens will dramatically accelerate.


There is not much more that needs to be written about the ill-fated and fatally-flawed SCHIP legislation for now. Both the proposed legislation and the filthy consumer-looting process that is supports speak for themselves. The behavior of some politicians to willingly support that process also speaks to their fitness for public office. Those who enjoy serving their neighbors who smoke up on a social marketing platter to special-interests should be joyous at the prospect of herding overweight members of their communities to the same looting machine. Nonsmokers who are slim, trim, young and racy and believe that cigarette taxes and discriminatory health insurance for the overweight are a good thing because “it doesn’t effect me” are in for a very special treat when they face the companion mental health program gauntlet. Good for them! Who but a mentally unbalanced, gullible fool could truly believe that sacrificing one’s neighbor’s interests supports their own in the long term?


Normal folks, however, may find my recent short story "About Frogs and Foxes," to be of interest.

My best for the New Year,

Norman E. Kjono


The other commentaries in this series are:


September 23, 2007, Bush Gets it Right: Vows to Do the Right Thing
October 10, 2007, Bush Gets It Right II: A Look at Reconciled SCHIP Bill
October 19, 2007, Bush Gets It Right III: SCHIP Veto Upheld
October 22, 2007, Bush Gets It Right IV: Democrats Push For Pharmaceutical Subsidies
October 26, 2007, Bush Gets It Right V: Seeking Republican SCHIP Converts
November 5, 2007, Bush Gets It Right VI: Dick Morris Promotes Hillary Health Care
November 10, 2007, Bush Gets it Right VII: The People Get It About SCHIP
November 15, 2007, Bush Gets It Right VIII: Correspondence with Congress About SCHIP
November 16, 2007, Bush Gets It Right IX: More Congressional Correspondence About SCHIP
November 28, 2007, Bush Gets It Right X: Dialog With a Member of Congress
December 7, 2007, Bush Gets it Right XI: Two Members of Congress Speak about SCHIP
December 13, 2007, Bush Gets It Right XII: President Saves Consumers, Taxpayers on SCHIP

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