Bill Clinton: Soda Tax Isn't the Way to Go

PHOTO Fmr. President Bill Clinton discussed private sector solutions to global challengesFerdous Al-Faruque/ ABC News
Fmr. President Bill Clinton discussed private sector solutions to global challenges with Coca-Cola CEO and chairman Muhtar Kent on May 13, 2009, at the Brookings Institution in Washington, D.C.

Though former President Clinton has focused on reducing childhood obesity since leaving the White House, he told ABC News Wednesday he does not favor the tax on soda that a nutrition group has publicly supported to pay for health care reform.

"I'm doing everything I can on this obesity thing," Clinton told ABC News. "I think the better thing to do is to give incentives right across the board for prevention and wellness."

"That's what I would do," he said.

Clinton weighed in on the debate over taxing soda one day after the Center for Science in the Public Interest urged a key congressional panel to adopt a tax on nondiet soft drinks. The group believes a soda tax along with a tax on alcoholic beverages would both promote health and generate revenues to help fund expanded health care coverage.

"Because soft drinks have been a major contributor to obesity in recent decades, and because obesity is a major cause of diabetes, hypertension, strokes, heart attacks and cancer, Congress should impose a new excise tax on nondiet soft drinks, including both carbonated and noncarbonated beverages," said Dr. Michael F. Jacobson, the executive director of the Center for Science in the Public Interest, in written testimony submitted to the Senate Finance Committee.

Though Clinton does not favor taxing soda, his Alliance for a Healthier Generation has worked with beverage companies to reduce the caloric content of drinks sold in school vending machines. Full-calorie sodas were removed from school vending machines under a deal reached in 2006, replaced with lower-calorie, smaller-portion beverage options.

Speaking Wednesday at the Brookings Institution in Washington, D.C., Clinton characterized the beverage industry's decision to sell smaller, low-calorie drinks in schools as not only good policy but also good business.

"If we had a 9-year-old child in Harlem diagnosed with type 2 diabetes three years ago, we're at risk of having the first-generation of Americans with a shorter lifespan than their parents," said Clinton. "If you really want a healthy customer base, it's OK if you sell smaller drinks in schools, and healthier ones, and have healthier adult customers 10 years down the road."

Bill Clinton Says Contain Health Care Costs

Instead of new taxes to pay for health care reform, Clinton said the focus should remain on containing health care costs.

"We have to change the delivery system so the cost curve goes down," said Clinton. "If we don't change the cost curve, it doesn't matter what money we raise. It doesn't matter anything. We're going to be back in the soup in five years."

He then invoked a statistic that he said he learned from his daughter, Chelsea, who is currently earning a master's degree in public health from Columbia University.

"Eighty percent of the projected increase in Medicare costs are from medical inflation and not from adding population," said Clinton.

Clinton's misgivings about a soda tax put him closer to Iowa Sen. Chuck Grassley, the top Republican on the Senate Finance Committee, than to Sen. Tom Harkin, a Democrat who competed with Clinton for their party's presidential nomination in 1992.

Harkin has said that lawmakers ought to consider a special tax on soda and "junk" food. Grassley recently dismissed the idea.

"No," said Grassley, when asked if there was any chance of taxing soda. "I think, quite frankly, the only reason it's being brought up is to get it shot down early so it doesn't become part of the debate. I don't think it's going to have any legs at all."

Overcoming opposition from the beverage industry is a tough task politically as states as diverse as Maine and New York have recently learned.

In November, voters in Maine repealed a tax on soda that had been approved by the state legislature. Earlier this year, New York Gov. David Paterson (D) was forced to abandon an 18-cent tax on soft drinks that he thought would improve health while helping to plug the state's budget hole.

"We don't think it's good tax policy, and we don't think it's good health policy," Susan Neely, the president of the American Beverage Association, told ABC News.

Only two states -- Arkansas and West Virginia -- currently tax soda, and the beverage industry likes to point out that those states are among the 10 states with the highest obesity levels in the nation, according to data compiled by the Centers for Disease Control and Prevention.

"I think the president is right on," said Neely. "Obesity is a real problem. But the agreement we reached is more likely to change behavior than a tax."

Slowing Obesity?

In his written testimony advocating a tax on soft drinks, Jacobson, of the Center for Science in the Public Interest, said that a tax of 1 cent per 12-ounce can would raise about $1.5 billion per year and that a tax of 1 cent per ounce would raise about $16 billion per year.

"The higher rates would reduce consumption and slow the obesity epidemic," said Jacobson. "Each penny tax per can would lower soft drink consumption by about 1 percent."

A soda tax has been pilloried by top Republicans in the House who view efforts to use the tax code to improve people's diets as government overreaching.

"Republicans believe that the American people -- not the federal government -- are smart enough to make decisions for themselves," said Antonia Ferrier, a spokeswoman to House Republican Leader John Boehner. "If we tax soda to pay for health care, what's next? Taxing high heels for causing shin splints? Let's get real. The administration should focus first on cutting wasteful spending, not taxing anything and everything."

Leaders of the American Beverage Association have been talking to members of the Senate Finance Committee to fight the soda tax proposal. In visits with lawmakers, the industry is pointing to efforts it is making in schools and also arguing that a higher tax would have a negative impact on the industry's ability to maintain jobs.

"Even a penny tax per 12 ounce can is going to have a dramatic impact on this industry from a financial standpoint," said Neely. "We've certainly been reaching out to members of Congress and we'll decide what to do depending on whether it gets any traction."

ABC News' Elizabeth Gorman and Ferdous Al-Faruque contributed to this report.