Service Members Home Ownership Tax Act Of 2009--Motion To Proceed
Floor Speech
SERVICE MEMBERS HOME OWNERSHIP TAX ACT OF 2009--MOTION TO PROCEED -- (Senate - November 20, 2009)
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Mr. THUNE. Mr. President, Wyoming is not a lot unlike the States of South Dakota or Nevada, as the Senator knows, although they have a few larger businesses in Nevada. But the people who get hit hardest under this bill are small businesses.
We heard the Senator from Maine, Ms. Collins, point out the impacts on small businesses. The ironic thing about that is a lot of small businesses, where you would want to encourage them to offer health insurance to their employees, will be discouraged from doing so under this bill. In fact, what most of them are probably going to do is pay the $750 penalty and then push everybody off into the government plan.
The assumption that is being made in here is that the government plan--it will grow over time, obviously. I think 5 million people will lose their private insurance, according to CBO. My guess is that number is going to be much higher because I think what is going to happen is small businesses that are impacted the most by these tax increases are going to find themselves less and less able to provide health insurance coverage to their employees.
The other thing I want to point out, as to what my colleagues from Wyoming and Nevada have said, is that I would be somewhat, I guess, interested in what is being proposed by the other side if it did anything to impact cost. But it does not. The whole purpose of this exercise, at least in the minds of most Americans, is to drive the cost curve down. I heard my colleagues on the other side get up and talk about, well, their plan is going to decrease costs for people in this country.
Well, here is the cost curve, as shown on this chart. The blue represents the cost curve; that is, what would happen if we do nothing. That is the expected increase in health care costs in this country if we do nothing.
What is ironic is, the red represents what happens under this bill. So instead of bending the cost curve down, it actually increases the cost curve. So we are going to spend $160 billion more on health care in this country by enacting this bill, this monstrosity of a bill right here, which, as my colleagues have pointed out, is 2,074 pages. The Senators from Nevada and Wyoming both also have the House version, which is 2,200 pages. But look at this thing. You would think somewhere in here, in all this volume of paper, there would be a way to actually do something to actually bend the cost curve
down. But all that represents more spending.
In fact, if you look at the amount of spending in the bill when it is fully implemented, it is much more than what the CBO estimated it would cost. There was all the publicity when they unveiled this health care plan a couple days ago that it is going to be under $1 trillion. Well, in fact, we all know they have used a lot of accounting gimmicks, a lot of scoring tricks, a lot of ways to obscure the true cost. In fact, even in the first 10 years it understates the cost, which is over $1 trillion. But the 10-year fully implemented cost of this bill is $2.5 trillion--a $2.5 trillion expansion in the size of the Federal Government.
If you look at how that plays out and how it is paid for over the fully implemented phase--we all talked about $ 1/2 trillion in Medicare cuts. For 10 years, fully implemented, it is over $1 trillion they have to cut Medicare to pay for this thing, and then to raise taxes by another $1 trillion. So you are talking about not only cutting Medicare to senior citizens, as the Senators have talked about, but also raising taxes substantially on small businesses. But at the end of the day, after all is said and done, what do you end up with? You end up with an increase in cost above and beyond what we would see if we did nothing. Tell me how you can call that reform.
The other point I will make before I yield back to my colleagues is, if you are someone who already has insurance--and 182 million people in this country have insurance--you are not going to be able to participate in the exchange.
You get no more options out of this. There are 19 million Americans who would, perhaps, benefit from being part of an exchange. But if you are one of the 182 million people in this country who currently have insurance, you cannot get into an exchange and you cannot get any subsidy. What you get are big fat tax increases and increases in your insurance premiums, for all the reasons that have been mentioned. Because when you tax the health insurance companies--as this bill does--when you tax the medical device manufacturers--as this bill does--when you tax the pharmaceutical companies--as this bill does--and create all new kinds of mandates on insurance companies, including changing these age band ratings, going to a 3-to-1 age band rating, you are going to raise premiums for a lot of people in this country, and you are going to raise them the most for people who are age 18 to 34. The people who are age 18 to 34 do not realize what is coming at them today, but it is about a 69-percent increase in their insurance premiums. They are the ones who get stuck the hardest.
But if you are any of these 182 million people, your taxes are going to go up, your insurance premiums are going to go up, and you are not going to see any benefit from being able to participate in any sort of an exchange. These are the cold, hard facts.
I have heard countless Democratic colleagues come down here and talk about bending the cost curve down and reducing premiums for people in this country. As shown on this chart, this is the Congressional Budget Office number. This is not anything the Republicans put together. This is the CBO cost estimate of what it would do to the cost curve. As I said before, the red represents the increase: a $160 billion increase in health care spending over 10 years--all of which is going to be borne by those 182 million Americans in this country who already have insurance.
Mr. ENSIGN. If the Senator from South Dakota would yield, I wish to get your comments--maybe from both of my colleagues--on a couple of quotes from the Congressional Budget Office as well as the Joint Committee on Taxation dealing with these premium increases and who is actually going to bear the taxes. Because a lot of people think that: Well, let's tax the insurance companies. Let's tax the medical device companies. Let's tax somebody else. Well, this is what the Congressional Budget Office says. Let me read a couple quotes. One quote is:
Although the surcharges would be imposed on the firms, workers in those firms would ultimately bear the burden of those fees, just as they would with pay-or-play requirements. ..... Many of those workers are more likely to have earnings at or near the minimum wage.
So it is the low-income people who are going to end up paying when you actually put some of these taxes that we have talked about in.
Here is another quote from the Congressional Budget Office. Let's remind folks, the Congressional Budget Office is nonpartisan. It is not Republican, not Democratic. They are kind of the objective scorekeeper around here. They say, these taxes ``would increase costs for the affected firms, which would be passed on to purchasers and would ultimately raise insurance premiums by a corresponding amount.''
The last economic quote is this. This is by the Joint Tax Committee:
Generally, we expect the insurer to pass along the cost of the excise tax to consumers by increasing the price of health coverage.
I say to the Senator, this is what you are talking about on that other chart you have up. I wish to hear your comments on that.
Mr. THUNE. Well, the Senator is absolutely right. I think what the CBO has pointed out is--and I have the Joint Tax Committee there; the data they produced is very similar to what CBO said--84 percent of the tax burden is going to fall on people making less than $200,000 a year. And half of the families making under $100,000 a year are going to get hit with new taxes under this bill. So it is going to fall on those people in this country. And I think they like to think they are taxing medical device manufacturers and everybody else, but at the end of the day, a lot of this gets passed on. And the taxes in the bill, the premium increases in the bill, are all going to be borne by the people who are probably least able to absorb that and take that, and it is going to be the people in the lower income categories.
So the Senator from Nevada is absolutely right. I again come back to the basic premise of this whole purpose of health care reform, which should be to get health care costs down, not raise them. The Senator from Wyoming has alluded to a number of things we believe would do that, that actually do put downward pressure on health care costs in this country. It is done in a step-by-step way. It is done in a way that does not call for throwing out everything that is good about the health care system in this country, creating this massive new expansion of the Federal Government here in Washington, DC, with $2.5 trillion in costs over a 10-year period when it is fully implemented.
And probably--who knows--if a lot of these things do not happen, if the tax increases, for some reason, do not happen, if the Medicare cuts do not occur, it means borrowing from future generations. They talk about reducing the deficit by $130 billion only because they did not include the physician fee fix in this, only because they added $72 billion in revenue from something called the CLASS Act, which we know is never going to become law--and even if it does, it is a huge money loser in the outyears.
So you have all these things that they did, including delaying the implementation date by 5 years so it understates the true cost of this thing--all these things that have been done to try to make this turkey look like something other than what it is, which is a massive increase in spending, massive tax increases on the American people, and increased premiums for Americans, particularly those 182 million Americans who already have health insurance who are going to get hit the hardest by this.
Mr. ENSIGN. Maybe we could have the Senator from Wyoming comment. One of the big things Republicans have been talking about--instead of driving premiums up, which this bill does--is driving premiums down. Maybe the Senator can discuss medical liability reform, which the Congressional Budget Office, which is a very conservative estimate, has said would save about $100 billion in medical costs in this country.
As a practicing physician, maybe the Senator could talk about the unnecessary tests that are ordered, the huge increases in medical liability insurance costs that physicians face today.
Mr. BARRASSO. Mr. President, if you do a poll of doctors, with the question: Have you ever ordered a test that was not going to help that person get better, that patient get better, but you were doing it because you did not want to miss something for fear of a malpractice suit, every hand will go up of
every physician. The Massachusetts Medical Society did a poll and 87 percent of doctors said that. Massachusetts has their new health care plan.
As an aside, the dean of the Harvard Medical School had an editorial in one of the major national publications this week, and he gave this whole thing--he said: I give this whole thing a failing grade. He said people who support this--the legislation that is being proposed--are engaged in collective denial. We need to do some things that will help with cost, with access, with quality. All this bill is going to do is drive up the cost, with no improvement at all in quality.
So there are step-by-step things we can do: letting people buy insurance across State lines, getting the same tax breaks as others. The Senator talked about helping people stay healthy--exercising, getting down the cost of their care by getting their cholesterol down.
But also you have to deal with lawsuit abuse. It is out there. You could do a thing as easy as loser pays. Obviously, there are great objections to trying to do that. There are people who would oppose that all the way. But it would help eliminate--eliminate--a lot of the unnecessary tests and certainly a lot of the costs of the system. Because two-thirds of the cost of that whole liability system goes to the system, it does not even go to the injured person. If somebody is injured, you want to take care of them. But this does not do it at all.
One of the things the Senator from South Dakota mentioned, fairly quickly in passing, was age band ratings, which flies in the face of the things we have been talking about: individual responsibility, opportunities for people to stay healthy. The big problem is that we know 50 percent of all the money we spend on health care on this country is on 5 percent of the people--the people who eat too much, exercise too little, and smoke. But yet under this government-forced insurance, where people are going to be forced to buy insurance--and if young people do not buy it, they are going to be listed as either tax cheats or criminals because they are going to get fined or they are going to get taxed an amount for not buying the insurance--they are going to have to buy insurance.
As the Senator from South Dakota talked about a 3-to-1 ratio--and the Senator from Maine mentioned the same thing--what that means is for the youngest, healthiest person buying insurance--that kid out of college who is staying healthy or might be working construction, who is in good shape, going to the gym--what they are doing on a 3-to-1 ratio is that person has to pay a lot of insurance compared to the person who does eat too much, exercises too little, and smokes. The ratio of their insurance premiums--this person can pay no less than one-third of what this person pays, when you might have 100 young people where their total health care bills for a year would be equal to that one person who exercises too little, eats too much, and smokes.
So these young people are going to end up paying the cost. And it is their premiums--and I think we heard that from the Senator from South Dakota--their premiums are going to go up--did I hear 69 percent?
Mr. THUNE. Mr. President, 69 percent. If you are 18 to 34, that is what you are looking at in the form of premium increases, not to mention the fact that future generations are going to deal with all of the debt we continue to pile on them, which I think bears heavily on this debate right now, when you are looking at trillion-dollar deficits as far as the eye can see. This is not a good deal if you are a young person in America.
Mr. BARRASSO. It is the wrong prescription for America.
I am going to continue to speak on the floor about the things that I think are problems with this bill. I think it is the wrong approach. I think it costs way too much. I think it raises taxes on all Americans. It cuts Medicare. What we have heard now, and what we know for sure, is it is going to raise premiums for people who have insurance, who like the insurance they have, who want to keep the insurance they have; and their costs are going to continue to go up if this becomes law, at a rate faster than, as we saw from the graph, if nothing was passed at all.
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