Health Care Reform

Floor Speech

BREAK IN TRANSCRIPT

Mr. THUNE. Mr. President, I want to commend the Senator from Tennessee. I totally support his approach. I think handling health care reform in a way that reflects a more thoughtful step-by-step approach is the correct way to proceed.

The leadership, the Democratic leadership in the House of Representatives, wanted to pass a health care reform bill in the worst possible way. They succeeded on Saturday, passing it in the worse possible way. It is a 2,000-page bill which was debated for about 4 hours and passed on a party-line vote. It was a partisan bill, very limited amount of debate, very few number of amendments that were offered. I think the Republicans were able to offer one substitute during that entire debate.

They passed out a 2,000-page bill that expands the Federal Government by $3 trillion over 10 years when it is fully implemented. So you have a 2,000-page bill coming out of the House of Representatives, a $3 trillion expansion of the Federal Government, and I think what the American people are probably asking in observing this process is, What does it all mean for me?

Well, let me tell you what it means. If you are a taxpayer in this country, if you are someone who currently does not have insurance in this country, you are going to pay higher taxes. If you are somebody who has insurance, you are going to pay higher taxes. If you are a medical device manufacturer, you are going to pay higher takes. If you are a small business, you are going to pay higher taxes. If you are someone who has a flexible spending account, you are going to pay higher taxes. If you are someone who has a health savings account, you

are going to pay higher taxes. If you are someone who itemizes on your tax return and deducts your medical expenses, you are going to pay higher taxes.

So pretty much that kind of covers the gamut. Everybody in this country is going to be hit with higher taxes to pay for this monstrosity, this 2,000-page bill, which, according to the CBO, raises taxes in the first 10 years by three-quarters of $1 trillion.

What is interesting about that, when I mention that people who do not have insurance are going to pay higher taxes, there is, in this bill, what is called an ``individual mandate.'' Those who would pay the higher tax under the individual mandate--it would raise taxes by about $33 billion--are people who currently do not have health insurance coverage. What is interesting about that is that the CBO has looked at who would be impacted by the individual mandate and found that almost half of that tax burden would fall on taxpayers who are making between $22,800 a year and $68,400 a year. So about half of the individual mandate, about half of that $33 billion tax increase, would fall on individuals who, in their incomes, fall into the middle of that category, $22,800 a year to $68,400 a year. That is according to the Congressional Budget Office.

Now, it raises taxes by $135 billion on businesses through what is called a "pay-or-play mandate.'' In other words, if you do not offer health insurance, you do not offer insurance that meets the government requirement, then you pay a payroll tax starting at 2 percent, up to 8 percent of payroll. That raises $135 billion in this bill in additional taxes and taxes that are going to hit small businesses.

There are also taxes on what they call ``high-income earners.'' That raises about $460 billion in the bill. It is designed to hit people who make between $500,000 and up to $1 million a year, which is sort of the traditional ``tax the rich and pay for this thing.''

The dirty little secret in all of that is that tax hits a lot of small businesses. In fact, about one-third of that tax is going to fall on small businesses that file or are organized as subchapter S corporations or LLCs and therefore file on the individual tax return.

So we are going to be faced with a situation where next year a small business--when the tax cuts that were enacted in 2001 and 2003, the top marginal income tax rate--goes from 35 percent to up to 39.6 percent. You will add in this health care, this 2,000-page bill, a 5.4-percent surtax on those high-income earners. So if you can believe this, the top marginal income tax, Federal income tax rate in this country, will go up to 45 percent--45 percent.

That is the highest rate we have seen in 25 years. As I said, it would be one thing if it were just hitting high-income individuals who were making more than $ 1/2 million a year, but it does not. It hits small businesses, small businesses that are organized as partnerships, subchapter S corporations, LLCs, and, therefore, file an individual tax return.

So they have $460 billion of tax increases there, $135 billion in the pay-or-play mandate, $33 billion in tax increases through the individual mandate--all totaled, $752 billion in new taxes in this 2,000-page bill that are going to be passed on and paid for by the American public.

The Joint Tax Committee said of the Senate bill--by the way, this is the Senate version of the bill. This is only 1,500 pages. We do not know--as the Senator from Tennessee pointed out--what the final Senate bill is going to look like.

All we know is that this is the version that was reported out of the Finance Committee, 1,500 pages also filled with higher taxes on individuals and small businesses.

The argument was made that we will make the people who are wealthy, the affluent, pay for this. What the Joint Tax Committee found was that 87 percent of the tax burden in the Senate Finance Committee bill would be paid by wage earners making less than $200,000 a year and a little over 50 percent would be paid by those making under $100,000 a year. If one fits into those categories, there are 46 million Americans who will be hit with higher taxes under the 1,500-page Senate Finance Committee bill as opposed to the 2,000-page House bill that passed on Saturday.

I remind my colleagues that when we talk about a massive $3 trillion expansion of the Federal Government, it has to be paid for somehow. Of course in this case, it is paid for in the form of higher taxes and by way of Medicare cuts that will hit very hard on seniors, $170 billion in cuts to Medicare Advantage, cuts to providers such as hospitals, home health agencies, hospices. Everybody gets to have their reimbursements cut in order to finance this $3 trillion monstrosity of an expansion of the Federal Government.

Having said that, it would be one thing if, in fact, the goal was accomplished, which is to reduce health care costs. Ironically, after a $3 trillion expansion of the Federal Government and three-quarter trillion dollars in additional taxes in the first 10 years, we don't see any impact on insurance premiums. In fact, they will not go down; they will actually go up.

I want to read what the Congressional Budget Office said about that:

On balance, during the decade following the 10-year budget window, the bill would increase both federal outlays for health care and the federal budgetary commitment to health care, relative to the amounts under current law.

That is consistent with everything we have heard so far from the Congressional Budget Office about the impact this bill would have on overall health care costs and on the premiums average Americans would end up having to pay.

With respect to State governments, because something has been said in this bill about the expansion of Medicaid, in fact, there is a massive expansion of the Medicaid Program, to the point that a decade from now one-quarter of the entire population would be on Medicaid. This was a program that at one time was designed to assist poor, disabled people who really need assistance with health care. A decade from now, with this expansion of Medicaid, we would see one-quarter of the population on Medicaid.

The other component of that, the element I think should be so disturbing to States--as we all know, Medicaid is a State-Federal shared responsibility. I see the Senator from Nebraska, Mr. Johanns, a former Governor, who knows full well about the cost of Medicaid to State budgets. What this bill would do is increase the amount of cost passed on to States by $34 billion. States are going to have to look at how they are going to finance this thing, probably in the form of additional and higher taxes.

We have a $3 trillion expansion of the Federal Government, cuts to Medicare that will affect not only seniors but also most providers, and massive increases in taxes which will hit squarely small businesses and individuals, in particular individuals who make less than $100,000 a year. We need to do what the Senator from Tennessee suggested; that is, start over and do this step by step rather than a massive expansion of the government that raises taxes and increase health care costs.

I yield the floor.

BREAK IN TRANSCRIPT

Source