Taxes and Health Care

TAXES AND HEALTH CARE

Mr. WYDEN. Mr. President, while Senators talk about prebuttal and rebuttal speeches before the State of the Union speech, I hear middle-class folks saying ``drop the buts and make our lives easier.'' I know because in January, when I was home, I held 21 community meetings. The big issues then were those where the second word was ``bill''--medical bills, gas bills, heating bills, mortgage bills, college bills, and especially tax bills.

It is not hard to see why those are the issues. Middle-class folks in this country are not keeping up. Even their wages do not keep up with inflation. And while they want a better life for their kids--the way their parents wanted for them--they stay up nights worrying that they cannot make it happen.

So today I want to spend a few minutes discussing just two issues: taxes and health care. I believe in each of these two issues Congress could work on a bipartisan basis for genuine relief for the middle class. We may not hear about it tonight, but as middle-class folks begin pulling together their 1099s, their W-2s, their schedule this and schedule that, and all of what they have to do to comply with filling out their tax forms, I simply wanted to come to the floor and say it does not have to be this way.

I brought, today, just part of what constitutes the regulations and rules for complying with taxes in America. One of the experts in the field told me there have been more than 14,000 amendments to the Tax Code since the last major overhaul in 1986. It comes to almost three for every working day in America.

This year, Americans are going to spend $140 billion on tax compliance. Americans are going to spend more money complying with the tax rules than the Federal government is spending on higher education in our country.

I have come to the floor today because I want to make it clear I do not think it has to be that way. I have developed an alternative. My one-page 1040 form is just 30 lines long. Take your income from all sources, subtract your deductions, take your credits, send it off to the IRS, and you can even add a note: I'm done. Have a nice day.

I filled this out myself, and that in and of itself is a little bit of a revolution because it has been a long time since a member of the Senate Finance Committee or someone in the other body on the Ways and Means Committee could fill out their own tax form.

What happens today? More than three million people, for example, have to essentially fill out their taxes twice. They have that alternative minimum tax staring at them. Scores of families are pulling together shoe boxes full of receipts, shouting across the living room, ``Honey, can you find that receipt for the copier that we bought months ago?'' because part of it is for business and part of it was used for the family. I say it does not have to be this way.

I have shown that you can have a one-page 1040 form. The President's advisory committee report that came out in the fall had a similar form--I do not happen to agree with all they did, but their one-page form isn't that much longer than mine. For purposes of Government work, we could put the two of them together and really do something meaningful on a bipartisan basis to simplify the Tax Code, to use that $140 billion now spent on compliance on something I know the Presiding Officer has a great interest in--education and infrastructure and other areas that are of great importance to our country.

But on top of simplifying the Tax Code, there is more that has to be done to help the middle class. I suspect we are not going to hear about it tonight, but Warren Buffett, the second wealthiest man in America, pays a lot lower tax rate than his receptionist. That is because there is a double standard.

We hit people a lot harder when they work for wages than when they make their money off investments. I am not interested in soaking anybody. I believe in markets. I believe in creating wealth. But something is out of whack when middle-class folks have to spend the time to figure out how to wade through all of this and spend literally much of the money they want to spend on their families on just filling out their taxes--it is not right to hammer people who work for a living.

Here is the way it works. If a cop working outside the Capitol gets a little bit of a pay raise--maybe $500--that cop pays 25 percent of the pay raise to the Federal Government in income taxes and pays Social Security payroll taxes on top of it. If, however, you make your money on investments--we want everybody to do well in that area also--you pay 15 percent of what you make on your investments in income taxes and you do not pay any Social Security payroll taxes.

There is a double standard. We discriminate against people who work for a living. In Ohio, in Oregon, across the country, if you work hard, play by the rules, and work for a wage, you get hit a lot harder than the people who make their money on investments.

I have already said I am not interested in soaking anybody. I happen to believe marginal rates are a big deal. And because I do, I have not raised the top rate in my proposal. I have three tax brackets: 15, 25, and 35 percent. So it is progressive. I have said to colleagues on the other side of the aisle, folks in the administration, there is plenty of flexibility in my proposal. If we want to make it 13, 23 and 33, I am up for that, too.

We can do that in a bipartisan way.

But tonight, I suspect, instead of hearing that we ought to take on the tax bureaucracy embodied in a few of these volumes, in effect we are going to be told to re-up for business as usual. I don't think it has to be that way. I refer colleagues to what happened in 1986, 20 years ago. Then we had a Republican President, revered by millions of Americans, Ronald Reagan, who worked with Democrats, Dan Rostenkowski, Bill Bradley, Dick Gephardt. They found common ground in a proposal that has many of the same features I bring to the Senate today.

They were concerned about marginal rates. There were Democrats, such as myself, who think marginal rates are a big deal. They worked together with a Republican President to achieve a significant success. They removed a lot of clutter from the Tax Code. I wish we hadn't gone back over the last 20 years since that historic legislation and added it all back, those more than 14,000 provisions. But it happened. We all know it has a little bit to do with the lobbyists, because the lobbyists all come and ask for this particular break or another. I had one of our colleagues say to me: Ron, I don't agree with every part of your proposal, but you are right, probably every 20 years you ought to automatically cleanse the Tax Code. You automatically ought to give it a bath.

So I come tonight to say I am interested in working on a bipartisan basis to do something about all this dead wood. I would rather preserve the trees that go into all these volumes and simplify the life of middle-class folks. We have our folks talking on cell phones all day and pagers and practically tethered to the Internet. I know of young people trying to get ahead. They work 12, 14 hours a day. They come home and they are still checking their e-mail. Do we want to put them through another 30 hours of preparing their taxes?

I filled out my one-page 1040 form. I already said the President's Advisory Panel on tax reform had some good ideas. We could come up with an alternative. But we have to want to lead. We have to want to lead as President Reagan did, as Bill Bradley did. We have to say we want to do it on a bipartisan basis.

I am hopeful that if we hear tonight about business as usual on taxes, I can join with colleagues on the other side of the aisle. I have already talked to some on the Finance Committee where I am honored to serve. I have discussed it both with Chairman Grassley and Senator Baucus, two who frankly are role models for bipartisanship.

I came today to particularly talk about how this could help middle-class folks. I am going to put in the RECORD examples of how various middle-class people would be affected. I will ask unanimous consent to print in the RECORD some examples of how my proposal would help the middle class.

Under my proposal we will have a lot of middle-class people, people making $70, $80, $90,000 a year--there are a lot of them in Ohio and Oregon--will get a significant amount of relief. Essentially, all those families who make up to $150,000 a year, primarily on wage income, maybe a little bit of investment thrown in, they are going to get real tax relief or they are going to stay about the same. I want to see us do it in a fiscally responsible way. I know this is of great concern to the Senator from Ohio. The Congressional Research Service said that it is possible to get the tax relief to millions of middle-class people that is outlined in my legislation, the Fair Flat Tax Act, and pay down the Federal deficit by $100 billion. That is clearly not all you have to do to stop the hemorrhaging of the Federal budget, but at least it is a downpayment.

The Senator from Ohio has done an awful lot of good work in terms of pay-as-you-go budgeting and taking on health care costs and some of the skyrocketing cost of entitlements. My proposal doesn't pretend to deal with all of the red ink we see in the Federal budget, but it does get real tax relief to middle-class people and does it in a fiscally responsible way, with the Congressional Research Service saying that it would pay down the Federal deficit by $100 billion over the next few years.

I will be back on the floor over the next few days and weeks trying to make the case for bipartisanship to overhaul the tax system. I don't think it is possible to continue to add a piece here and a piece there and make any sense out of all this. We will only be adding more and more volumes. For example, virtually every Senator I have talked to wants to deal with the alternative minimum tax. We know there are a lot of people being swept up in the alternative minimum tax who certainly don't consider themselves fat cats. They weren't the kind of people anybody was talking about when the AMT came into being. But we are getting to the point now where it is almost impossible to put a patch on the AMT without having that change ripple all the way through the system.

What we ought to say, on a bipartisan basis, is we can make the code simpler, flatter, and fairer. I have described today how it can be made simpler. I have a one-page 1040 form. The President's advisory commission has one that is a bit longer, but they are close enough for purposes of Government work. I have three brackets in my tax proposal: 15, 25, and 35. It is fine with me to adjust the numbers a little bit, particularly the idea of going down a couple of points for each of the brackets. The biggest challenge in terms of working out a bipartisan proposal is on the issue of fairness, because that is obviously in the eye of the beholder. What is fair to one person may not be fair to somebody else.

I want to close on one point with respect to taxes. Ronald Reagan signed a bill in 1986 that treated investment income the way wage income was treated. Ronald Reagan in 1986, working with Bill Bradley, Dick Gephardt, a host of Democrats, signed a bill that treated investment income as it treated wage income. He did it because he thought the overall set of tax brackets made sense. I happen to think mine do as well. Colleagues may have other approaches. What we know for a fact is what was done in 1986 worked. The stock market was not hampered. For colleagues on the other side of the aisle, a Republican got elected President in 1988 so no Republican was hurt by tax reform, where there was bipartisan leadership.

I come to the floor with my first comments, that while, unfortunately, we are not going to hear about comprehensive tax reform tonight, this Senator wants to make it clear that this is a cause I am not giving up on. I am going to push this at every possible opportunity. I am going to work with colleagues on the other side of the aisle. We know that you can't get anything important done unless it is bipartisan. I am going to do it because I don't think you can defend business as usual with this tax system. The simplification that I have come to argue for makes sense. Frankly, that ought to be a no-brainer for everyone. We can make the code flatter.

Let's role up our sleeves and try to come up with a system that is fairer for everybody, the way it was done back in 1986. If we can get it done--and I have the good fortune of being able to stay on the Senate Finance Committee, if the people of Oregon honor me with a chance to continue to serve there--this time I am going to fight those lobbyists who will try to go back and clutter it up. Frankly, that is what happened in 1986. Nobody really said ``no'' after that historic reform.

How much time do I have remaining?

The PRESIDING OFFICER. There is 10 1/2 minutes.

Mr. WYDEN. I want to conclude on another pocketbook issue for the middle class by talking about health care. I am a Senator who believes there ought to be private choices in American health care. There are some who think that all the health care ought to be privatized, some who think that Government ought to do everything. I am one who believes there is a role for both the private sector and for Government in health care.

Unfortunately, I voted for the Medicare prescription drug program. As a former director of the Oregon Gray Panthers, I still have the welts on my back to show for it. I never conceived that the administration of this program could be so bungled. We have bedlam out there right now with seniors with advanced degrees trying to sort all this out. Again, it did not have to be this way. If, for example, the administration had at least standardized the policies a little bit so that people could compare the various prescription drug coverages available, we could have avoided this chaos. There is a model for this as well, a model used for the private health insurance supplements that seniors bought to add to their Medicare.

Before I came to Congress, I was director of the Gray Panthers. It was not uncommon for a senior to have 10, 15 private health insurance policies. We drained that swamp. Now seniors for the most part have only one Medigap policy. It meets their needs. The insurance industry has indicated it works for them. We ought to be trying to standardize or at least make more understandable the private health policies that seniors are looking at now to meet their prescription drug needs.

I have suggested this to the Secretary of Health and Human Services. To his credit, he has indicated that he is interested in pursuing it. The administration of this program didn't have to roll out this way. It could have been simpler and more understandable, if the choices that were made available to seniors had simply been structured in a clearer, more understandable way.

There is a second thing that needs to be done on health care. Senator Snowe and I got 51 votes late last year for our legislation to lift the restriction on Medicare's right to bargain to hold down the cost of prescription medicine. The way Medicare is buying this medicine defies anything that goes on in the private sector. It is similar to somebody going to Costco and buying toilet paper one roll at a time. Nobody would shop the way Medicare is purchasing these prescription drugs.

By my count, Senator Snowe and I now have 53 votes for our legislation to lift the restriction on Medicare bargaining. I commend a number of colleagues who have been involved. On our side of the aisle, Senators STABENOW and FEINSTEIN have done a lot of heavy lifting. Senator McCain has been a wonderful supporter. We ought to pass that legislation. We ought to make it possible for Medicare to bargain to hold down the cost of medicine. I look forward to talking to our colleagues further, including the distinguished Senator in the chair.

There are other steps that ought to be taken to hold down the costs in health care. I hope we will hear about them tonight. One of the best is to make more accurate information available about how doctors and hospitals price their services.

It is possible to shop for just about anything in the United States, but you cannot shop very much for health care. It makes no sense at all. Senator Cornyn, the distinguished Senator from Texas, has a great interest in this issue. Other colleagues do as well. But if we are serious about holding down costs--I think the President will talk about cost containment tonight--let's get better, more understandable, more usable information about doctors and hospitals out to the American people. That is step No. 2.

Step No. 3 involves end-of-life care--one of the most controversial issues in American health care. As my colleagues know, I was the one who blocked the original Schiavo legislation from coming up on the floor. Let me talk about something all of us can agree on, and that is we ought to expand hospice and comfort care to deal with end-of-life services because this is something which will help us save money, will avoid some of the family tragedies that result in these horrible, polarizing kinds of problems such as we saw in the tragic Schiavo case.

There is no reason, given the fact that a growing fraction of the health care dollar gets spent in the last few months of an individual's life, that to be both compassionate and hold down health care costs, Republicans and Democrats cannot join hands on expanding hospice care as an alternative to what our citizens face now with end-of-life choices.

The fourth step is an area the Chair has a great interest in, and that is health care technology. We know many communities have multiple technologies, such as MRI machines. There are some very exciting and tremendous new products that are available. Many communities have lots of these technologies, and some have none at all. There is a maldistribution of health care resources. So an area I have a great interest in is, making it possible in communities in Minnesota and Oregon for health care providers to share these technologies, perhaps even giving them a waiver of antitrust restrictions, so that rather than everybody having to keep up with the Joneses and adding to health care expenses in an area that has fueled our costs, let's figure out a way that will not freeze innovation. Nobody wants to do that.

The Senator from Minnesota has been a leader in that field. We don't want to freeze innovation, but we want to hold down costs and make sure there is access. I think there are ways in which we can create incentives to share these exciting health care technologies. I have suggested just one this afternoon. That is a way to hold down health care costs.

Mr. President, to recap, let's clean up the Medicare prescription drug benefit. Let's figure out how to get better and more accurate information about doctors and hospital costs and services out. Let's expand hospice and compassionate end-of-life care. And let's make sure there are incentives to better use health care technology.

Those are four practical steps which can hold down health care costs and improve health care services in our country.

I close by way of saying that I came to the Senate floor today because I had those 21 town meetings at home. I heard middle-class people talk about all the issues where the second word was ``bill''--medical bill, tax bill, mortgage bill, gas bill, home heating bill. They are concerned about economics and their pocketbooks. We don't need all this dead wood in our tax system. We can come up with a 1-page alternative. I proposed one, as have others. We can work in a bipartisan way to hold down health care costs.

Tonight, we may not hear about some of what I have discussed this afternoon, but I look forward to working with colleagues on both sides of the aisle and with the Bush administration because on both the tax issue and the health care issue, we can do better.

Mr. President, I yield the floor.

http://thomas.loc.gov/