Soda Helps Make Americans Unhealthy and Fat -- Will Soda Tax Prevail Despite Pushback by Beverage Industry?

By Christine Spolar and Joseph Eaton, The Huffington Post Investigative Fund. Posted November 10, 2009.

Washington lobbyists have been enjoying a multi-million-dollar sugar rush from the food industry.

Soft drink makers, supermarket companies, agriculture and the fast-food business have poured millions into campaigning against what they fear could be a burgeoning national movement to raise money for health care reform by taxing sweetened beverages.

During the first nine months of 2009, the industry groups stepped up their lobbying in Congress. They have spent more than $24 million on the issue of a national excise tax on sweetened beverages and on other legislative and regulatory issues, according to an examination of lobbying reports filed with the Senate Office of Public Records. The review shows that 21 companies and organizations reported that they lobbied specifically on the proposed tax on sugar-sweetened beverages – which among other things would include sodas, juice drinks and chocolate milk.

About $5 million of the money was spent on a national advertising campaign aimed at Capitol Hill lawmakers and promoting a newly formed coalition called Americans Against Food Taxes. The group bills itself on its website as a coalition of "responsible individuals, financially-strapped families, [and] small and large businesses" but its 400-plus membership list is dominated by industry heavyweights such as Burger King Corporation, Coca Cola, Pepsico and Domino’s Pizza.

Many health officials and advocacy groups have argued for years that sugary drinks, particularly those with high-fructose corn syrup, have been key contributors to a rise in obesity rates in the United States, especially among children. Some argue that the time is right for a soda tax, which they say could not only cut consumption but also generate revenue to close state budget gaps and pay for new health care programs.

A proposal for a national excise tax on soft drinks surfaced in a May funding policy options paper during the Senate Finance Committee’s deliberations on health care reform. Food lobbyists attacked then and continued their efforts in July when President Obama raised the possibility of a soda tax in an interview with Men’s Health magazine. The proposal has not emerged in any of the health care reform bills still in play on Capitol Hill.

But the issue may be gaining traction in some key states. This week, California lawmakers are holding a high-profile hearing in Los Angeles to examine the link between childhood obesity and sugary drinks. In New York, Gov. David Paterson has revived the idea of a sugared beverage tax after a previous proposal was shot down by the legislature earlier this year in the face of industry opposition.

"We are reacting to the situation we find ourselves in," said Kevin Keane, senior vice president for the American Beverage Association, which alone spent more than $7.3 million on lobbying and advertising in the third quarter of 2009, more than six times what it spent in the previous quarter. "In the fourth quarter we are on target to do as much, if not more," Keane said. "We really don’t know when the threat is over."

Lobbyists for the industry groups argue that soft drinks cannot be blamed for obesity. A beverage tax, they say, would unfairly single out one type of product and would be a particular burden on low-income people, who can least afford to pay a few cents more per can or bottle.

"To say soda is the only cause of obesity, that’s not correct. Just walk down the street and count the number of White Castles or Burger Kings or Jack in the Box," said Nelson Eusebio, executive director of the National Supermarket Association. "If we eliminate soda, would people stay away from fried food, hot dogs and all the other junk out there?"

Supporters of a beverage tax make the comparison to tobacco, saying that it makes sense to impose a levy on sugary drinks to offset health care costs. Such beverages now account for 10 to 15 percent of the calories consumed by children and adolescents, according to an April 2009 report in the New England Journal of Medicine.

"For each extra can or glass of sugared beverage consumed per day, the likelihood of a child becoming obese increases by 60 percent," said the article, co-authored by Kelly D. Brownell, a professor of psychology at Yale University, and Thomas R. Frieden, a physician who was then New York City health commissioner and now heads the U.S. Centers for Disease Control and Prevention. "Sugar-sweetened beverages … may be the single largest driver of the obesity epidemic," wrote the authors, who argued for a federal or state tax.

In the Senate, a federal beverage tax was not perceived as a deep enough well of potential revenue, some congressional aides said in interviews. Others pointed out that the members of the Senate Finance Committee are especially sympathetic to the food industry: Democratic Chairman Max Baucus hails from Montana, a large producer of sugar beets. Iowa, the home state of ranking Republican Chuck Grassley, is the nation’s largest producer of corn.

"It ran into a committee with a lot of farm members," said Chuck Marr, director of federal policy at the Center of Budget and Policy Priorities, a nonpartisan, nonprofit think tank in Washington that examines fiscal policies. "Senate Finance is a farm-dominated committee."

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