Family Smoking Prevention and Tobacco Control Act
On June 12th, the House passed the final version of the Family Smoking Prevention and Tobacco Control Act, H.R. 1256. The President signed the legislation into law on June 22nd. This bill grants the Food and Drug Administration authority to regulate the advertising, marketing, and manufacturing of tobacco products.
Tobacco is currently the number-one cause of preventable death in America. It is responsible for about 1 in 5 deaths annually, or about 443,000 deaths per year according to the CDC. Smoking-related deaths account for more deaths than AIDS, alcohol, cocaine, heroin, homicide, suicide, motor vehicle crashes, and fires combined. Approximately 8.6 million Americans also suffer from chronic illnesses related to smoking.
In addition to the lives lost to tobacco, the financial losses amount to billions of dollars. CDC estimates that cigarette smoking costs more than $193 billion annually, based on lost productivity ($97 billion) and health care expenditures ($96 billion).
Every day, more than 3,500 youth try a cigarette for the first time, and another 1,000 will become new, regular daily smokers. One-third of these youth will eventually die prematurely as a result.
This legislation is supported by more than 1,000 public health, faith, and other organizations, including the American Cancer Society Cancer Action Network, American Heart Association, and American Lung Association. In addition, it is supported by Phillip Morris USA and the U.S. Smokeless Tobacco Company, as well as six small tobacco product manufacturers.
The bill fully funds FDA tobacco activity through user fees on tobacco product manufacturers. However, CBO has determined that the bill would reduce federal tobacco tax receipts over the next 10 years because its enactment is projected to reduce smoking. In order to ensure that the tobacco control provisions meet PAYGO, the bill includes a modified version of H.R. 1804, Federal Retirement Reform Act, which generates net savings for the federal government.
Following is an overview of some of the bill’s provisions.
Grants FDA authority to regulate tobacco products. The bill grants the FDA the authority to regulate the advertising, marketing, and manufacturing of tobacco products, such as cigarettes, cigars and smokeless or “chewing” tobacco.
Includes authority to restrict tobacco marketing. Under the bill, the FDA is given authority to develop regulations that place restrictions on the advertising and promotion of a tobacco product consistent with, and to the full extent permitted by, the First Amendment to the Constitution.
Requires detailed disclosure of tobacco product ingredients. The bill requires tobacco companies to disclose to the FDA the ingredients in each tobacco product, giving the FDA the information needed to begin reducing the harm caused by tobacco products and educating the public about the health effects of tobacco use.
Allows FDA to require changes in tobacco products to protect the public health. FDA would be granted authority to require changes in current and future tobacco products to protect public health, such as the reduction or elimination of harmful ingredients, additives and constituents. FDA would be granted authority to reduce nicotine, but would not be allowed to require the reduction of nicotine in a tobacco product to zero or to ban a class of tobacco products.
Strictly regulates “reduced harm” products. The bill prohibits the use of misleading descriptors, such as “light,” “mild,” and “low” on labels or in advertising. FDA would have the authority to review the marketing of such products and determine if the applicant demonstrates that the product, as actually used by consumers, will significantly reduce harm and the risk of tobacco-related diseases to individual tobacco users.
Imposes new requirements on health warnings, including making warnings larger. The bill requires health warnings to cover the top 50% of the front and rear panels of the cigarette package. The same health warning labels would be required in advertising and must comprise 20% of the advertisement’s area. The bill also requires the FDA to issue regulations within 24 months of enactment to require graphic warning labels on cigarette packs depicting the health consequences of smoking.
Reinstates FDA’s 1996 rule, which restricted tobacco marketing and sales to youth. In 1996, FDA made its first attempt to address the public health concerns associated with tobacco use – issuing a rule aimed at reducing underage smoking. The tobacco industry challenged this rule in court; in 2000, the Supreme Court upheld the challenge, ruling that Congress had not given the FDA authority over tobacco products. This bill now reinstates the 1996 FDA rule. The rule includes several provisions aimed at reducing underage smoking, including: 1) banning all outdoor tobacco advertising within 1,000 feet of schools and playgrounds; 2) banning all remaining tobacco-brand sponsorships of sports and entertainment events; 3) restricting vending machines and self-service displays to adult-only facilities; and 4) requiring retailers to verify age for all over-the-counter sales and providing for federal enforcement and penalties against retailers who sell to minors.
Requires scientific review of menthol and an action plan. The bill directs the new FDA Tobacco Products Scientific Advisory Committee to issue recommendations on the use of menthol in cigarettes within one year of its establishment. Additional provisions require FDA to publish an action plan to enforce restrictions on the advertising and promotion of menthol and other cigarettes to youth, with priority given to minority communities, and to assist State, local, and Tribal governments in preventing underage tobacco use, particularly in communities with a disproportionate use of menthol cigarettes by minors.
Requires report on dissolvable tobacco products. The bill requires a report within two years of enactment by the Tobacco Products Scientific Advisory Committee regarding the dissolvable tobacco products and their impact on public health, including use among children.
Fully funds FDA tobacco activity through a user fee on tobacco manufacturers. All tobacco-product-related FDA costs are allocated among the manufacturers of cigarettes, cigarette tobacco, and smokeless tobacco products sold in the U.S., based on the manufacturers’ respective shares of the entire U.S. market.
Has the result of reducing federal tobacco tax receipts. The Congressional Budget Office has determined that the FDA tobacco bill would reduce federal tobacco tax receipts over the next 10 years, because its enactment is projected to reduce smoking. In order to ensure that the FDA Tobacco bill meets PAYGO, a modified version of H.R. 1804, Federal Retirement Reform Act, which generates net savings for the federal government, are included in this legislation (see below).
Federal Retirement Reform Provisions
Includes a modified version of H.R. 1804, Federal Retirement Reform Act, which generates net savings and ensures the tobacco control provisions meet PAYGO. In order to ensure that the tobacco control provisions meet PAYGO, the legislation includes a modified version of H.R. 1804, Federal Retirement Reform Act, which the House passed on April 1. The provisions in this modified version are described below.
Provides for automatic enrollment in TSP. The bill provides for automatic enrollment for federal employees who are eligible to participate in TSP, with an option to “opt-out” instead of “opt-in.” In the case of uniformed members of the armed services, the decision is left to the military departments.
Creates within the TSP a Roth-style investment retirement account option. The bill creates within the TSP a Roth-style investment retirement account option that allows workers to invest after-tax dollars; since those choosing the Roth option would be taxed in the near term, rather than on withdrawal, revenue would increase. This option could be attractive to federal employees at both the lower and upper ends of the wage scale, and is particularly beneficial to some members of the armed forces.
Provides for additional mutual fund investment options. The bill provides the TSP Board with the authority to add mutual fund options similar to those available in the private sector.
Beginning in 2014, makes further progress in ending the Military Families Tax. The Military Families Tax unfairly penalizes the 55,000 survivors, most of them widows, of those who died as a result of their service-connected injuries. Currently these widows lose most of their survivor benefits if they also receive Dependency and Indemnity Compensation benefits (because their spouse died of a service-connected injury), but this measure increases the special survivor indemnity allowance enacted in 2007 to make progress in ending this tax – increasing the allowance by $50 per month in FY 2014, rising to an increase of $310 per month in FY 2017.