Senate Passes SCHIP Bill

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Senate Passes SCHIP Bill

WASHINGTON -- In a 66-32 vote late Thursday, the Senate passed legislation that would spend more than $32 billion over the next 4.5 years on the State Children's Health Insurance Program (SCHIP), funded by an increase in federal tobacco taxes, including a 61-cent hike on the per-pack excise tax on cigarettes, and other increases on rolling papers and other tobacco-related products.

The House passed a similar bill earlier this month, and it was not clear as of press time if it will take up the Senate's bill in a vote, or if the approved bills will go to a conference committee, according to a report on The bill will ultimately go to President Barack Obama, who is a supporter of the legislation, and is expected to sign it into law.

"As the worsening economy causes families to lose their jobs and health insurance, it is vital that we redouble our efforts to ensure that every child in America has access to affordable health care," Obama said in a statement cited by "That is why I am pleased that the Senate has joined the House in passing bipartisan legislation to provide health insurance to children whose families have been hurt most by this downturn."

The new tobacco tax rates will go into effect April 1, 2009, according to a report by the National Association of Tobacco Outlets (NATO). In addition, all manufacturers, wholesalers and retailers are required to pay a floor stocks tax on all inventory as of April 1, which is due Aug. 1, 2009, the association stated.

The current and new tax rates under the Senate bill on tobacco products are as follows:

-- Cigarettes: from 39 cents to $1 per pack;
-- Cigarette papers: from 1.22 cents to 3.13 cents per 50 papers;
-- Cigarette tubes: from 2.44 cents to 6.26 cents per 50 tubes;
-- Smokeless tobacco: from 58.5 cents to $1.50 per pound;
-- Chewing tobacco: from 19.5 cents to 50 cents per pound;
-- Pipe tobacco: from $1.09 to $2.81 per pound;
-- Roll-your-own tobacco: from $1.09 to $24.62 per pound; and,
-- Small cigars: from 4 cents to $1 per pack.

In other tobacco legislation news, a proposal granting the U.S. Food and Drug Administration (FDA) the power to regulate cigarettes and other tobacco products could come in the next few weeks, the chairman of the U.S. House of Representatives Energy and Commerce Committee, Rep. Henry Waxman of California, told Reuters.