Climate Change

Floor Speech

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Mr. SANDERS. What I wanted to do is to get back to an issue that is of great importance to the American people, in addition to everything Senator Franken appropriately pointed out; that is, as we proceed forward on this legislation, there is a provision in the Senate bill that I think needs to be changed. I have offered an amendment to do that. I am delighted Senator Brown and Senator Franken and Senator Begich, who is not here, and Senator Burris, who is also not on the Senate floor, are in support of that amendment, as I think the vast majority of the American people are.

Madam President, this bill is going to cost some $800 billion to $900 billion, and the American people want to know where that money is going to come from. Is it going to come from the middle class whose incomes in many ways are shrinking, who have lost their jobs, are having very serious financial problems, or is it going to come in a more progressive way?

The amendment that we are supporting would simply say we will get rid of the 40-percent excise tax on health care benefits above a certain limit and move toward a more progressive way of funding, which is close to what exists in the language in the House.

Essentially, what we would be doing is addressing the fact that the so-called Cadillac plan is not a Cadillac plan because in a relatively few years, millions of workers with ordinary health care benefits are going to be impacted by that. According to a major health care consultant, the Mercer Company, this tax would hit one in five health insurance plans by the year 2016--one in five. The Communications Workers of America have estimated that this would cost families with a Federal employees health benefit--Federal employees with a standard plan with dental and vision benefits--an average of $2,000 per year over the 10-year course of this bill.

So what this issue is about is do we sock it to the middle class again, with the heavy tax that over a period of years is going to impact more and more ordinary families, or do we say that at a time when we have the most unequal distribution of wealth and income, when President Bush gave huge tax breaks to the wealthiest people, that maybe we ask people who have a minimum income of $2 million a year to start picking up their fair share?

I yield to my friend from Ohio.

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Mr. BROWN. Madam President, I thank my colleagues for kicking off this debate. My understanding is that this amendment would eliminate the tax on people's health insurance plans, even people who have pretty generous union-negotiated--obviously, not just union, but when a union negotiates a good plan, the white-collar workers in those same plants, those same companies often get decent plans too. It would take away the tax for them, and it would then tax 1 percent, 1/2 percent of wealthy people?

Mr. SANDERS. Interesting that the Senator asks that. What this amendment does is it imposes a 5.4-percent surtax on adjusted gross incomes above $2.4 million for individuals and $4.8 million for couples.

What that means, I would tell the Senator from Ohio, is that this impacts the top two one-hundredths of 1 percent, which means 99.98 percent of the American people would not pay one penny in additional taxes. It is the top two one-hundredths of 1 percent, and I think that is in fact the proper thing to do.

Mr. BROWN. So that would be 2 out of 10,000--1 out of every 5,000 families would pay that or 1 out of 5,000 of the wealthiest families would pay that; is that what the Senator is saying?

Mr. SANDERS. That is true. Of the approximately 134 million individual tax returns filed in 2005, which is the latest data we have available, only two one-hundredths of 1 percent or about 26,000 individuals reported adjusted gross incomes over $2.4 million.

Mr. BROWN. So 26,000 out of 134 million people would pay this.

Mr. SANDERS. That is right.

Mr. BROWN. As opposed to millions of families who have good health insurance that they have negotiated or been provided by their employer.

This brings me back to the discussion we had earlier this year; that when people talk about legacy costs, about pension and health care, which many people have, fortunately, almost always these health benefits and pensions people earn by giving up pay today. They say: I will take a little less pay today if I get a good pension and good health insurance. So that is why the Senator from Vermont is arguing that we shouldn't be taxing this insurance, I assume.

Senator Franken.

Mr. FRANKEN. Let me go into this term ``Cadillac.'' You know, I never had a Cadillac, but that was the thing, right?--a Cadillac? That was an incredible extravagance--a gold-plated extravagance. But, in fact, this would be taxing plans that provide basic comprehensive coverage for thousands of middle-class workers and their families. One of the problems with the excise tax is that it categorizes plans based on their actuarial cost, not solely on the generosity of their benefits. Plan characteristics explain only a small percentage of the differential in cost. Some reports suggest only 6 percent of the difference in cost is explained by generosity of benefits.

Let me give an example: A small business that employs many older workers is going to face--actuarially, it is going to be considered higher than a business with a young workforce.

So even if both of these employers provide the exact same benefits, their costs will be different. The employer with the older workforce faces a higher risk of falling under this tax--not due to the richness of the benefits but due to the age of its employees.

The same goes for small workforces. If a small business offers one set of health benefits and a large company offers the exact same set of benefits, the cost for the smaller employer is higher because its risk pool is smaller.

Do we really want to penalize small businesses or workplaces that retain older workers?

Senator Sanders.

Mr. SANDERS. Let me pick up on the point the Senator from Minnesota made. When you use the term ``Cadillac,'' the implications are that maybe we will get some of those guys at Goldman Sachs who have this off-the-wall outlandish benefit package.

The reality is, the CWA--Communications Workers of America--has done a bit of work on this. What their estimate is, as health care costs continue to rise--and we are seeing 6 percent, 7 percent, 8 percent increases every year--obviously, the way the language of this legislation is written, it will impact more and more health care plans. By the year 2019, it will burden one out of three health care plans in this country. Does that sound like a Cadillac plan, one out of three plans? And eventually, as health care costs continue to rise, it will impact virtually every plan in this country.

The bottom line we are talking about is, yes, we need to raise money. How do you do it? Do you do it by socking it to the middle-class and working families? And as the Senator from Ohio has indicated, many of these workers have given up wage increases in order to maintain a strong health care benefit. Are those the people we are going to tax or do you tax the top two one-hundredths of 1 percent, many of whom have received generous tax breaks in recent years?

Mr. BROWN. If the Senator will yield, I want to talk for a moment about the people who will be paying more taxes. The Senator said their income is over a couple of million a year, those who will pay these taxes.

During the last 10 years--during the 8 years President Bush was in the White House, the tax system changed pretty dramatically during that time. It is my understanding--maybe the Senator can shed some light on this, either colleague--my understanding for sure is that the tax system, as it changed, had much more of a tilt toward the wealthy; that is, President Bush's tax cuts always included a few middle-class people, so a family making $50,000 might get $100 in tax savings over a year but, on the other hand, if you made millions of dollars, you got huge tax cuts.

I remember Warren Buffett, one of the most successful businesspeople in America, who generally likes what we are doing here and wants a fairer tax system, Warren Buffett said he pays a lower tax rate than his secretary and he said he pays a lower tax rate than a soldier coming back from Iraq.

Talk, if you would, either Senator, Senator Franken or Senator Sanders, about what happened over the last decade to taxes for the group of people, the wealthiest, who we think should pay a little more under this plan.

Mr. SANDERS. I think the evidence is overwhelming that one of the reasons we have seen recordbreaking deficits and we have a $12 trillion national debt--it is not just the war in Iraq but also the huge tax breaks that have been given to the very wealthiest people in this country. As the Senator from Ohio indicated, the facts are very clear. Yes, the middle class may have gotten some benefit, but the lion's share of tax breaks went to the people on top.

What we are seeing in this country is a growing gap between the very wealthy and virtually everybody else. In many ways, the middle class is shrinking. Poverty is increasing. It makes zero sense to me that in the midst of all of that, we ask the middle class to pay more in taxes to provide health care to more Americans and we leave the top one-hundredth of 1 percent alone.

Let me also say this: There is a lot of support out there for the amendment Senator Brown, Senator Franken, Senator Begich, Senator Burris, and I are offering. Let me just read one. This is from the president of the Fraternal Order of Police. These are cops out on the street. Most people do not think the police are getting extravagant health care benefits.

This is what he said:

I am writing to you on behalf of the membership of the Fraternal Order of Police to express our support for your amendment which would eliminate the excise tax on high cost insurance plans.

Et cetera, et cetera.

This provision is intended to tax the health plans of the wealthiest Americans, but it will also tax the plans of many law enforcement officers who need high cost and high quality insurance due to the dangerous nature of their profession. The Fraternal Order of Police strongly supports your amendment, because health care reform legislation should not increase the tax burden for those who fearlessly risk their health, and even their lives, to keep our communities safe.

Mr. FRANKEN. Again, let's think about what these folks, these union folks who negotiated these health care policies and sacrificed in salary--what are they getting? They are getting affordable deductibles. They are getting affordable co-pays. Sometimes, they are getting vision and dental care. This is comprehensive health care we want Americans to get. That is who is going to get hit.

Over the last 20, 30 years, we have seen a squeeze on these people. We have seen a squeeze on the middle class, a shift in the risk to people. That is what this whole bill is about. We are trying to eliminate the risk of losing your health care if you have a preexisting condition; we are trying to lose the risk of going bankrupt. That is the whole point of this bill. Let's not shift more risk onto these folks who are doing these kinds of jobs and supporting their families with their salaries and their benefits.

Mr. BROWN. Exactly right. Think about that. We want to give incentives for people to do the right thing. We are glad when people have good health insurance because then they do not rely on Medicaid or they don't show up in the hospital or the emergency room and get the care for free, while other people have to pay for that care--others who use the emergency room and have insurance, others who use the hospital. So the hospitals don't get stuck with the costs. If they have dental care, they are getting the right kind of preventive care so they do not have more expensive care later.

Ideally, we want everybody to have one of these ``Cadillac'' plans. We want people to have insurance that includes vision, that includes eye care, that includes catastrophic coverage, that includes preventive care. If more people had this, there would be a lot less burden on taxpayers to take care of everybody else.

It is clear the arguments here are not just it is the right thing for police officers, as Senator Sanders said. It is the right thing for the person Senator Franken talked about who is getting dental and vision care, but it is good for society as a whole, that people are willing to give up some of their wages to get a good medical plan.

Mr. SANDERS. If I could jump in, a moment ago Senator Brown asked me a question about the extent of the tax breaks given to the wealthiest people, and I do have that information. Since 2001, I say to Senator Brown, the richest 1 percent of Americans received $565 billion in tax breaks. In 2010 alone, the most wealthy 1 percent of Americans are scheduled to receive an additional $108 billion in tax breaks. That is point No. 1.

Point No. 2--let me be a little political here. In the Presidential election of 2008, one of the candidates said that it was a good idea to tax health care benefits. That candidate--Senator McCain--lost the election. The other candidate said it was a bad idea to tax health care benefits. That was Barack Obama; he won the election.

Let me quote from what then-Senator Obama said when he was running for President. On September 12, 2008, he said:

I can make a firm pledge, under my plan no family making less than $250,000 will see their taxes increase, not your income taxes, not your payroll taxes, not your capital gains taxes, not any taxes. My opponent, Senator McCain, cannot make that pledge and here is why. For the first time in American history--

This is Senator Obama speaking about Senator McCain's plan.

For the first time in American history, he, Senator McCain, wants to tax your health benefits. Apparently, Senator McCain doesn't think it's enough that your health premiums have doubled. He thinks you should have to pay taxes on them, too. That's his idea of change.

I agree with what Senator Obama said in 2008. I disagree with what Senator McCain said then. Right now, we are in a position to follow through on what Senator Obama said at that point and make sure the middle class of this country does not pay taxes on their health benefits.

Mr. BROWN. If the Senator will yield, I say thank you. I think that made it very clear.

Earlier, the Senator talked about what the tax cuts for the wealthiest citizens during the Bush years did to our national debt. He mentioned the war in Iraq, the trillion-dollar war in Iraq and Afghanistan, not to mention the huge cost it is going to be to continue to take care of the men and women who served us courageously with their physical and mental injuries from Iraq.

Senator Franken is so familiar with this because of tours he made as a private citizen to battle zones, year after year, to talk to our troops and entertain our troops. He didn't get a lot of credit for that, but he didn't care about the credit for that. He was there, always doing that.

One of the things that is pretty interesting, listening to my Republican friends on the other side of the aisle talk about this bill now, which the Congressional Budget Office says is paid for and more, while they continue on their side to talk about the budget deficit, it was that group who passed--Senator Sanders and I were both House Members at that time and voted against it--passed the Medicare Privatization Act, and the people who were on the floor talking to us voted for cloture for the Medical Modernization Act. That bill was not paid for. That bill was a giveaway to the drug industry and the insurance industry. It has added tens and tens of billions of dollars to our national debt.

On the one hand, they support these tax cuts that are not paid for, they support the Iraq war which was not paid for, and they now want us to go into Afghanistan and not pay for it, yet increase the number of troops. They continue down this road when we are on this bill doing the right thing. Even with our amendment here to eliminate the Cadillac--the taxing Cadillac plans, we are saying we are going to find another way to pay for it. We are not just going to eliminate that cut in taxes. We want to, but we are going to pay for it some other way.

I yield for Senator Franken.

Mr. FRANKEN. We are actually addressing that doughnut hole that was in the Medicare Part D bill. We are closing it by half. Do you know when it starts? Next year.

Mr. BROWN. I thought Senator Thune said none of the benefits started then.

Mr. FRANKEN. Senator Thune did say none of the benefits started next year, but I guess he just hasn't read the bill. I have so many constituents come to me and say: Read the bill, read the bill. I ask----

Mr. BROWN. If the Senator will yield, perhaps if you are going to vote against it, you do not need to read it? Is that the way to think about it?

Mr. FRANKEN. I do find that many of my colleagues with whom I am very friendly have not read the bill and are not very familiar with it. I think if you are going to get on your feet and debate and make assertions, you should really be familiar with the content of the bill. That is what I thought. I have only been here a while, so maybe I am naive, but I think when you say none of the benefits are going to start next year, you should be right.

Mr. SANDERS. If I could just add to the point Senator Brown and Senator Franken have made regarding concern about the national debt, every day there is a Republican coming up here to say we have a $12 trillion national debt and we have to cut this and cut that--all that. Yet I think virtually every one of them is in support of the repeal of the asset tax, which would benefit solely the top three-tenths of 1 percent and would cost the Treasury $1 trillion over a 20-year period--$1 trillion over a 10-year period. I am sorry, $1 trillion over a 10-year period.

I am really concerned about the deficit, I am concerned about the national debt, but I am prepared to vote for repealing the entire estate tax which only impacts--gives $1 trillion in tax breaks over a 10-year period to the top three-tenths of 1 percent.

Some may question the sincerity about their concern about the national debt.

Mr. FRANKEN. In fairness, I am not sure they are all for that. I think I have heard some soundings from the other side to extend what we have this year because this runs out on January 1 and we do not want to see a lot of plugs pulled.

Mr. SANDERS. I am talking about what happens now. Overall, the vast majority of our Republican friends----

Mr. FRANKEN. Yes, in theory.

Mr. SANDERS. Want to abolish the estate tax, which is $1 trillion in tax breaks.

Mr. FRANKEN. I just want to bend over backward to be fair to my colleagues on the other side.

Mr. SANDERS. The Senator is so nice.

Mr. FRANKEN. Maybe I do that to a fault, and I apologize to our side.

Mr. SANDERS. Madam President, polls show there is overwhelming support among the American people for what we are discussing today. Organizationally, it has the support of the AFL-CIO, the National Education Association, the Fraternal Order of Police, the United Steelworkers of America, AFSCME, the American Postal Workers Union, and a number of other organizations representing millions of working people. This is not a complicated issue. Somebody will have to pay for this bill. Should it be the middle class and working families or should it be the people at the top two one-hundredths of 1 percent who, over the period of the last 8 or 9 years, have enjoyed huge tax breaks? This is kind of a no-brainer.

The good news here is that our friends in the House have moved correctly in this area. The bill before us in the Senate does not. What we are trying to do is to get an amendment to take out the tax on health care benefits and replace it with similar language, not exactly the same as exists in the House.

Mr. FRANKEN. Let's get back to the excise tax and what it is purportedly supposed to do. It is supposed to bring down costs and generate revenues. Those are both necessary objectives. I have been submitting stuff over and over again to bring down costs, including a 90-percent medical loss ratio, including uniform standardized insurance forms which will save billions of dollars. I don't think this excise tax is the best way to bring down costs and generate revenue. We should be focusing on actually bringing down the cost of services instead of trying to limit the availability of care.

One way to actually bring down the cost of services is the value index in the bill, which Senator Cantwell introduced in the Finance Committee and which is still in this bill, and which Senator Klobuchar fought for, and many of us from high-value States. That will change the Medicare reimbursement rates to incentivize value. Another unintended consequence of the excise tax is its effective penalty on comprehensive benefit packages secured for workers by their unions. Again, I come back to these unions who gave up salary benefits, who gave up earning benefits. As soon as this gets going, this is going to be returning year after year as we see medical inflation go up and up. This is the cost of living index plus 1; right?

Mr. SANDERS. Right.

Mr. FRANKEN. Plus 1 percent. That is not what we have seen from medical costs.

Mr. SANDERS. That is the point. The point is that medical costs are going up substantially more than inflation. In fact, general inflation is actually going down. There is no question but that as medical inflation continues to remain high, millions and millions more workers are going to be forced to pay this tax. One of the other side effects of this tax is that many employers, in order to avoid it, are going to start cutting the health care benefits that workers receive. Today it may be dental; tomorrow it will be vision. The next day it will be more copayments, more deductibles. This is grossly unfair to working families.

Mr. BROWN. Again, it is making the choices. Unlike the Medicare Modernization Act, which Republicans pushed through in 2003--I know Senator Ensign voted against that although he voted for cloture, but he actually opposed that, to his credit--that was legislation that wasn't paid for. It was a giveaway to the drug insurance industry. It wasn't paid for. Our legislation is, and our amendment is. We made a choice. Do you charge the middle class? Do you say to the middle class, you are going to pay a tax on your health care benefits, or do we have someone else pay who has gotten a lot of advantages in the last few years? Since 2001, the richest 1 percent of Americans, because of the Bush tax cuts, got $565 billion in tax breaks. This year that same wealthiest 1 percent of Americans are scheduled to receive an additional $108 billion in tax credits. It is clear we want to go to the right place in this. We want to keep it fiscally sound. We want to keep it balanced. We want to pay for it, something my friends on the other side of the aisle rarely do when it comes to war, when it comes to tax breaks for the rich, when it comes to giveaways to the drug and insurance companies.

We are doing it that way. That is why the Sanders-Franken-Begich-Brown amendment makes so much sense.

Mr. FRANKEN. One last word on the deficit and the debt. May I remind everyone that when the Republicans were in the majority and President Bush came to Washington, we had a surplus, a record surplus. At the time the Chairman of the Fed, Alan Greenspan, testified to Congress that we had a new problem. The new problem was that because of the projected surpluses, we were, in a number of years, going to have too much money, that we were going to pay off the debt and the Federal Government would be forced to buy private equities and that this would not have a maximizing effect on our economy. That is what he said, after Bush became President. That was what he said. He said we were going to have too much money. That is what the Chairman of the Fed said. So we handed the ball off to President Bush, and we handed the ball off to these Republicans. The problem was, we were going to have too much money. That is not a problem anymore, is it? Now you hear them screaming about the deficit. Think about the deficit they left us. Think about the economic circumstances they left us in. We are talking about getting rid of this excise tax, but we are talking about paying for it. The CBO has scored this bill as cutting the debt in the next 10 years by $179 billion and then $500 billion in the next 10. That is responsible.

What we saw in the years that we had a Republican President and a Republican House and a Republican Senate was an explosion in the deficit. I don't want to hear lectures about the deficit. When I hear presentations from my colleagues, I want them to remember what Senator McCain said when he said facts are stubborn things.

When we debate in this Hall on this floor, let's stick to the facts. So many of the benefits in this bill start immediately. It is simply not fact to say they don't.

Mr. SANDERS. Madam President, how much time do we have remaining?

The PRESIDING OFFICER. There was no time limit on the colloquy.

Mr. SANDERS. I think we are coming to the end of it. I hope, focusing on the issue of the excise tax, the Senate is prepared to support our amendment. If that is not the case, certainly support what the House has done in the conference committee. Taxing middle-class workers is not the way we should fund health care reform.

Mr. FRANKEN. I thank the Senator. I thank both of my colleagues from Vermont and Ohio, and urge my colleagues to support amendment No. 3135.

I yield the floor.

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