National Defense Authorization Act for Fiscal Year 2009 - Motion to Proceed - Continued
Floor Speech
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2009--MOTION TO PROCEED--Continued -- (Senate - August 01, 2008)
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Mr. WYDEN. Mr. President, I am heading home for town meetings this weekend. There is no question that the dominant subject is going to be all the economic hurt we are certainly seeing in Oregon and across the country. People are concerned about their gas bills and their food bills and medical bills.
Yesterday, Senator Grassley and I, in an effort to look at a fresh approach to holding down gas bills, released what we call a discussion draft, in an effort to solicit ideas and input from people who have expertise on this subject, about how we might change the tax laws so as to not encourage speculation in the oil business.
The current Tax Code gives speculators tax incentives to bid up the price of oil. Essentially, the current tax law distorts our markets. It favors one set of buyers and sellers over another. Senator Grassley and I are going to be seeking ideas and suggestions over the month-long August recess in the hope that in the fall, when the Senate reconvenes, Democrats and Republicans can come together on a bipartisan basis and come up with more sensible tax policies, so we don't have a tax system that, in effect, creates incentives to drive up the price of gasoline.
We have put out this proposal, and it is on my Web site. Again, we call it a discussion draft. It is, in fact, just that--a way to gather ideas and input and make sure people have a chance to be heard.
On another economic hot button issue that is burning a hole in the pockets of our people, I wish to spend a few minutes talking about health care. One of the reasons health care is so expensive is that we pay for so much inefficiency in our health care system. This year, we are going to spend about $2.3 trillion on American health care. Dr. Peter Orszag, the head of the CBO, estimates that about $700 billion of that $2.3 trillion is essentially spent on health care of little or no value. So we have to find ways to root out some of this inefficient health care spending if we are going to hold the costs down.
Yesterday, a very remarkable hearing was held in the Senate Finance Committee on which I serve. Senator Baucus, chairman of the committee, to his credit, made it clear that he is going to dig into these big issues. It is clear, once again, that the Tax Code, as it relates to health care, is clearly driving up the cost for American families and for our people. In effect, the Tax Code encourages inefficient expenditures in American health. We have writeoffs for employers. We have breaks for individuals but they are not shared by all. The $250 billion that is spent through these tax rules disproportionally goes to the most affluent in our society, rather than the people who need it the most.
If you live, for example, in a small town in Ohio or a small town in Oregon, here is the way it works with the Tax Code: If you are well-off and you have a fancy health care plan, you can tuck a whole lot of your compensation into that health plan tax-free. So in a town in Ohio or Oregon, if you are going to buy a pair of designer eyeglasses or get a designer smile, you can write off the cost of those Cadillac benefits. But if you are somebody in a small Oregon town or in Ohio who has no health care, you don't get those writeoffs.
It is unfair. It encourages inefficiency because the typical worker is in the dark about their health care. Even if they have a plan, most of the time they don't have the choice. Most individuals don't have a chance to hold down their health care costs the way we do as Members of Congress. As Members of Congress, we get to choose between a host of private plans. If you are lucky enough to have some employer coverage in our country, you hardly ever have a choice, No. 1, and, No. 2, if your money is being spent inefficiently, there isn't anything you can do about it as an individual. In fact, most people don't even realize the reason their take-home pay doesn't go up is because all of their potential increase in take-home pay when they are more productive seems to go to health care. In fact, Dr. Orszag of the Congressional Budget Office has said there is so much inefficiency in the health care system that nothing much is going to change until people realize they are losing out on take-home pay because their take-home pay goes to pay for their health care.
What we have said as a group in the Senate--eight Democratic Senators and eight Republican Senators--is we want to change this system that is so profoundly unfair to working people and also rewards inefficiency. What we have proposed in our legislation--the Healthy Americans Act--is to take away the Federal tax subsidies for the Cadillac health care plans and use that money instead so every family in America can get a progressive deduction of $15,000 annually to buy their health care.
It is our view that this amounts to a trifecta. Health care would be fairer because we would have taken away those Cadillac tax breaks and given them to the middle-class folks who are having difficulty affording their health care. It would be more efficient because people would have choices of their private health coverage and have new incentives to make purchases carefully. And there would be a progressive way to finance extending coverage for more of our people.
I have watched with great interest the effort in Pennsylvania where wonderful people, such as Governor Rendell and committed State legislators, have been trying to expand coverage. One of the reasons it is hard to do at the State level is there is no progressive way to finance some of the extra coverage for people who are uninsured or underinsured.
We have found that progressive financing in the Healthy Americans Act because we take away the tax breaks for those Cadillac plans used for designer eyeglasses or new smiles, or whatever, and we move that money to hard working families in Oregon and Pennsylvania and Ohio for expanded coverage.
Our approach, as was noted by the head of the Joint Committee on Taxation, would give 80 percent of the American people a tax cut. A typical family spends about $12,000 buying their private health insurance, if they can afford it. We would give a tax cut to 80 percent of the American people with our approach.
The Senator from Pennsylvania and I sat in on a very good meeting yesterday describing some of the questions that accompany making change on big economic issues. People want to know how do you make sure it is not so confusing and your family doesn't get lost in red tape. For example, in health care, people want to know: If I like what I have, can I keep it? I like the idea of looking at alternatives, but if I have a plan and I like it and my employer wants to continue to offer it, can I do it?
What we said in the Healthy Americans Act, sponsored by 16 of us in the Senate, was absolutely. If you want to keep what you have and your employer wants to keep offering it, so be it. But if your employer wants more choices and if you as a worker want more choices, we also provide that kind of opportunity. That is why I have said our proposal operates very much like what all of us--the Senator from Pennsylvania, the Senator from Ohio, and myself--have in the Congress. There is a period of time when we get to choose between the various private insurance policies. The insurers cannot cream skim. They cannot cherry pick and take only healthy people and send everybody who has a health problem somewhere else. We do that in the Healthy Americans Act. With our approach, we can get a lot more for our health care dollar. A lot of people in this country, say if they work for a small employer where they do not have much bargaining power or they are out on their own, cannot get that today.
We set this up so it looks, in terms of its operations, pretty much like the way it works for us as Members of Congress in terms of making our private choices. There are places you can call for help in choosing a plan. And giving everyone these kinds of private choices injects competition and new opportunities to hold down costs into the system.
The issue we talked about yesterday in the Senate Finance Committee, the Federal tax rules, I would guess there is probably not 1 out of 100 people in the United States who knows much about this. But this is one of the biggest programs run by the Federal Government. It comes to about $250 billion a year. And to have the money go out the door in a way that so wildly favors the most fortunate and encourages inefficiency at the same time strikes me as bizarre.
Yesterday, under the leadership of Chairman Baucus and Senator Grassley, conversation was started about a topic that I think is essential to this issue of fixing American health care. If we do it right, there is the opportunity for expanding coverage in a progressive way so that the next time, for example, the Pennsylvania legislature wrestles with this issue--this issue that Governor Rendell and Pennsylvania legislators tackled this last year and could not pass legislation on--they would be able to say some changes were made in Federal policy so as to fund in a progressive way some of the changes that need to be made.
There is no question this needs to be done in a careful and deliberate way. We are talking about changing something that started in the 1940s. In the 1940s, it probably made a lot of sense. We were not dealing with a global economy, and people would go to work in Oregon or Pennsylvania at a young age and stay put until you gave them a gold watch and a retirement dinner. The typical worker today changes their job 11 times by the time they are in their early forties. So they need a portable health plan they can take from place to place. We have done that in the Healthy Americans Act as well.
Chairman Baucus made a very important point in terms of making sure this is explained to people in a more simple and straightforward way than it has been in the past, certainly than as it was explained in 1993. Then fundamentally it has to be a commitment the Congress makes to our people to say: If you like what you have and employers want to keep offering it, they can do it. I hope they will. But nearly 7 percent of the employers have gotten out of the health business altogether in the last few years and thousands more have heaped on the copayments and the deductibles in the last few years.
We need to have more choices, and 16 Members of the Senate are working toward this goal. This is the first time in the history of this debate, in 60 years of the Senate debating this issue, there has ever been a piece of legislation where a large number of Democrats and Republicans have come together. Senator Bennett in particular, the Senator from Utah, a member of the Republican leadership, deserves enormous credit for his efforts to help find common ground.
Now we have a chance for the debate as we go into September, with Chairman Baucus holding additional hearings in September, and all our colleagues being home and folks asking: What is going to be done about health care? We have a chance now to start that discussion about what it is going to take to fix American health care.
I submit that when people talk about their bills, they are talking about their gas bill, they are talking about their food bill, they are talking about their medical bill, and that medical bill is pumped up--that is the only way you can characterize it--by $700 billion worth of spending that is inefficient and is of little or no value. The Federal Tax Code, as we heard from three of the experts yesterday, props up all that inefficiency. So reforming those Federal tax rules, as we seek to do in the Healthy Americans Act, is a key part of the solution.
I thank Chairman Baucus for his leadership for being willing to tackle an issue that lots of people, frankly, have ducked in past years. And I submit that finding a bipartisan solution to these outdated, unfair tax rules--rules that show how broken the health care system is--is a key to holding down the costs that people are so upset about and assure that we attain our goal, which is all Americans have high-quality affordable health care.
Mr. President, I yield the floor. I suggest the absence of a quorum.
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