Service Members Home Ownership Tax Act Of 2009 - Resumed

Floor Speech

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Mr. CRAPO. Later today, Mr. President, we are going to vote on my motion to refer the bill to the Finance Committee and have the Finance Committee simply make the bill comply with the President's promise with regard to taxes.

As I have said a number of times on the floor, this bill does not correct so many of the problems we need to deal with in health care. It drives the cost of health care in premiums up, not down; it raises hundreds of billions in taxes; it cuts Medicare by hundreds of billions of dollars; it grows the Federal Government by over $2.5 trillion in the first 10 years of full implementation; it forces the needy uninsured into a failing Medicaid system and does not give them access to insurance; it imposes damaging unfunded mandates on our struggling States; it still leaves millions of Americans uninsured; and it establishes massive government control over our health care. Frankly, even if the so-called government option or government health care insurance company that is created by the bill were to be removed, there would still be massive government intrusion into the control and management of our health care system.

Well, as we were facing the prospect of dealing with this bill, the President made a pledge to the American people, and in his terms the pledge was:

I can make a firm pledge, 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 of your taxes. You will not see any of your taxes increased one single dime.

Yet what we have in this legislation is a whole array of new taxes--about $493 billion in new taxes to start with. And that is assuming you just start with the beginning of the bill and go for the first 10 years. If you actually compare the number of taxes that will be charged by this bill to the American people with that first full 10-year implementation period, that is $1.28 trillion in new taxes.

This chart shows taxes and fees, not just the specific taxes but taxes and fees--fees which our Congressional Budget Office and our Joint Tax Committee have said repeatedly will be passed on to the American consumer. Yet the President said nobody's taxes will be increased.

Let's see the next chart. Here we have further analysis of just four of the major tax provisions in the bill. There are many more, but if you look at the four major tax provisions in the bill, the Joint Committee on Taxation has said that by 2019 at least 73 million American households earning below $200,000 will face a tax increase, and when you break these numbers down further, it is not just the people making between $100,000 and $200,000, or the upper income earners, but massive tax increases falling upon people who are making well under $100,000 a year.

The response has been: Wait a minute, this bill also has some tax cuts in it, and when you offset the tax cuts against the tax increases, there are more tax cuts than there are tax increases.

I dispute that in a couple ways. First of all, even if you accept as fact that there are tax cuts in this bill, which is arguable and I will point that out in a minute, they do not offset all the taxes and fees, so it is still a net increase in taxes. But there is a subsidy in this bill to provide insurance to a group of Americans who do not have the financial capacity today to purchase their own insurance. As I mentioned earlier, the most needy of this group did not get access to insurance. They got put on Medicaid. But some in America will get some access to insurance and that subsidy will be provided by the Federal Government. The other side is saying that is a tax cut.

I disagree with that for a couple reasons. First of all, it is called, in the bill, a refundable tax credit and it is administered by the Internal Revenue Service--which, by the way, is going to need to grow by 40 to 50 percent in order to accommodate these new roles in managing the health care system. But it is a refundable tax credit in only the way Congress could put it together. It is nothing other than a government payment to individuals, most of whom pay no taxes. In fact, between 2014 and 2019, 73 percent of the people receiving the subsidy, or $288 billion of the subsidy, goes to taxpayers who pay no taxes. You can call that a tax cut if you want, but CBO, our Congressional Budget Office, does not call it a tax cut. The Congressional Budget Office scores it as Federal spending, as exactly what it is, spending by the Federal Government. It is a subsidy being provided by the Federal Government. You can argue about whether it should be provided, but to call it a tax cut is a stretch.

Even if you accept that is a tax cut, there are still 42 million American households earning below $200,000 per year who will pay more taxes. No matter how you cut it and no matter how you define tax cut, the reality is this bill imposes hundreds and hundreds of billions of dollars of new taxes squarely on the middle class in violation of the President's promise that nobody in America who makes less than $250,000 as a family or $200,000 as an individual, in order to fund this bill, would be required to pay more taxes.

Some of those who have responded to this have said this is our opportunity and, if we support this amendment, we will be killing a bill that provides tax relief to the American people. As I have pointed out, the amendment does not do anything to the subsidy that is called a tax cut. The amendment leaves the subsidy in place. So it is simply wrong to say the motion I have asked to have passed would do anything to remove this so-called tax relief--or properly called subsidy--from the bill. What my motion does is simply to say the bill should be referred to the Finance Committee so the Finance Committee can make sure it complies with the President's pledge that it does not raise taxes on those who are in what the President has described as the middle class. It is very simple and straightforward. If there are no such taxes, then the motion is irrelevant. But we all know there are--Joint Tax, Congressional Budget Office, many private organizations have squarely pointed it out. In fact, we are still studying it. If we get past the first four big taxes in the bill, these numbers I have talked about, the 42 million net or the 73 million in reality, in America--and those are households, not individuals, who will be paying more taxes--are squarely going to be hit by this bill.

Let me give a different perspective on it. If you take all those who are supposedly getting tax relief but are really getting a direct subsidy, accept the fact that this is truly a tax cut, they represent 7 percent of the American public. The rest of the American public does not get a subsidy. The rest of the American public pays the taxes for the establishment of a huge $2.5 trillion new entitlement program that will bring that much more of the Federal Government into control of the health care economy.

We are coming back now from a 2 1/2 -hour break because the Democrats were at the White House meeting with the President. We do not know what was said there. There was apparently a negotiation behind closed doors, yet once again, of some other new changes in the legislation, some other new portions of the bill. No C-SPAN cameras were there, to my knowledge. But we now have an opportunity to talk in the next few hours about what will happen with regard to this amendment.

The President could have asked his friends in the Democratic caucus to support this amendment, which simply requires that the bill comply with his pledge. I hope he did. I hope it can be accepted. But the reality is, this legislation violates not only this pledge but a number of the President's other pledges--for example, the pledge that if you like what you have, you can keep it. Americans all over this country have heard that pledge repeated a number of times. If you are one of the employees who has employer-provided insurance and that insurance happens to fit in the so-called higher insurance packages that are taxed 45 percent by this plan, you are not going to get to keep it. Both CBO and Joint Tax have made it very clear that you are going to see your health care cut by your employer in order to avoid this tax. Then what is going to happen is your employer might--probably will--give you a little bit more wages to compensate for the cut in your employment benefits. Your net package of compensation will not change in value, but you will get at more of it in wages and a little less in health care. But the kicker is, the wage portion is taxed but the health portion is not so your taxes are going to go up and your net package is going to go down. You are going to have a less-robust health care plan and you will have a lower overall compensation package. Does that comply with the President's promise that if you like what you have, you can keep it? What about the 11 million Americans, I believe it is, who have Medicare Advantage policies today who clearly are going to lose about half of that extra Medicare Advantage benefit under the Medicare cuts in the bill? If they like what they have, can they keep it? No.

What I am asking is simply that the Senate vote to require that the President's pledge in this one case be honored; namely, let's send the bill to the Finance Committee, it can be turned around in the Finance Committee overnight, take out the provisions that impose taxes on people in America earning less than $250,000 as a family or $200,000 as an individual and bring it back to the floor.

You will hear it said this is a killer amendment, that it will kill the bill. It will not kill the bill unless it is necessary in the bill to tax Americans to the tune of the hundreds of billions of dollars that are included in this bill. What it will do is expose that this bill cannot be claimed to be deficit neutral or to even reduce the deficit unless three things happen: the Medicare cuts of hundreds of billions of dollars are imposed; the tax increases of hundreds of billions of dollars are imposed, and the budget gimmicks are implemented.

Let me tell you about the most significant of those budget gimmicks. In order to make it so they could say this bill does not increase taxes or does not increase the deficit, the crafters of the bill have had the taxes go into effect on day one, the Medicare cuts go into effect by day one, but the subsidy program or the spending part of the bill is delayed for 4 years. So we have 10 years of revenue and 6 years of spending.

I, personally, think the way they picked 2014 to be the year in which they implement the spending part of the bill is they said: How many years do we have to delay the spending impact until we can claim there is a deficit-neutral bill? It turned out they had to delay it for 4 years out of the 10. If it took 5, they would have delayed it 5 years. That is a budget gimmick. The reality is we all know if you have the spending go into place on day one and the taxes go into place on day one and the Medicare cuts go into place on day one and took the gimmicks out, this bill would generate a deficit, another promise the President pledged not to do.

There are so many problems with this bill. But most important today, as we will have an opportunity around 6 o'clock, is to vote to at least have the bill comply with the President's pledge.

I ask how much time remains.

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Mr. CRAPO. Mr. President, I would like to respond to a couple of the points made about whether this bill truly does address what the American people are asking it to address. If you ask most people in America what they want out of health care reform--and they do want reform--they will tell you they want to see control of the skyrocketing cost of health care, particularly the cost of insurance premiums. They would like to see increased access to quality medical care. It has been said a number of times by the proponents of this legislation that this bill accomplishes those objectives, but let's look at exactly what the Congressional Budget Office has told us on the core issue; namely, what is going to happen to your insurance premiums if this bill is passed.

What the Congressional Budget Office very clearly said, which is also backed by 7, 8, 9 or 10 other studies from the private sector as well as the Joint Committee on Taxation and backed by the Chief Actuary for the Center for Medicare and Medicaid Services, is that for at least 30 percent and the most vulnerable people in America, if you are looking at whether your insurance premiums are going to go up or down, they are going to go up, not down. If you are a member of the 17 percent of Americans who get your insurance in the individual market, your insurance is going to go way up. In fact, it is going to go up by as much as 10 to 13 percent in addition to what it would have gone up without the bill. If you are someone who gets your business from small groups, from a small group market, your insurance costs are going to go up from 1 to 3 percent. If you are one of the Americans who is able to get your insurance in the large group market, then you can basically expect that the bill will have no significant impact on you. There is a possibility of a slight reduction, but the potential is, it is going to have no impact at all.

What does the bill do? For 17 percent of Americans in the individual market and for 13 percent of Americans in the small group market, it clearly makes your health care premiums go up. For those who are in the remainder of the market, it basically doesn't achieve the objective of health care reform--and at what price? We often hear we need to bend down the cost curve. As I have indicated, this legislation doesn't bend down the cost curve Americans are talking about; namely, the price of their health care or their health insurance. What does it do with regard to the Federal Government? It is going to increase the cost to the Federal Government on health care by $2.5 trillion in a massive new entitlement program. So that price curve is not bent down.

Then what are we left with? Some say the deficit will go down under this bill. There is only one way the deficit can go down under this bill; that is, if you take away the budget gimmicks, massive tax increases, and massive Medicare cuts. But I will just talk about the budget gimmicks because of a lack of time. The spending side of this bill is delayed for 4 years. The taxing and cutting Medicare side of the bill is implemented on day one. So we have 10 years of tax increases to offset 6 years of spending. I think that is the way the number was reached. You have to figure out how many years to delay the spending start before you can say there was a deficit-neutral bill. The reality is, this bill doesn't deal with any of those spending curves.

The matter we will be voting on in a few minutes is my motion that would address the tax side of the bill. All it says is: Let's change the bill to comply with the President's promise; namely, that people making less than $200,000 a year or $250,000 as a couple would not pay more taxes. What we found from the Joint Tax Committee is, 73 million Americans in that category will pay more taxes. In fact, it is not 73 million Americans, it is 73 million American households who will pay more taxes and see a tax increase under this bill and not just a small one. It is massive, hundreds of billions of dollars of new taxes that will be imposed by this bill.

In response, the proponents of this bill say: But this bill is a tax cut. The only way they can say this bill is a tax cut is by looking at the subsidy that is going to be provided as a tax cut. It is called a refundable tax credit, although three-fourths of it, 73 percent to be accurate, goes to people who do not pay taxes. Yet it is called tax relief because it is administered through the Tax Code and is described as a refundable tax credit. The CBO gets this and Americans get it. The Congressional Budget Office says these aren't tax cuts. This is spending, and it is scored that way by the CBO as it analyzes the bill. The only way you can say this bill involves these kinds of tax cuts is if you say that a provision that will simply result in the payment of a check by the Federal Government to an individual who has no tax liability to assist them with their health care costs is a tax cut. Let's accept that.

Even in that case, only 7 percent of Americans qualify for that subsidy, and the rest qualify for the tax increases. To say the President's promise was that I will not cut your taxes more or I will not increase your taxes more than I will cut someone else's taxes and, by the way, I will call a direct subsidy a tax cut, is not exactly what I think the President meant. It is not what the American people thought he meant when he said Americans making less than $200,000 or $250,000 as a family would not pay more taxes under this bill.

My proposal simply says send this bill back to the Finance Committee. They can turn it around quickly, if they want to. Have them take out the provisions that violate the President's pledge on taxes.

I retain the remainder of my time.

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Mr. CRAPO. Mr. President, I will just take 1 minute on this, and then I think we will probably be ready to vote.

Again, I think there are two contrasting amendments here. The Senator from Montana has indicated that my motion, which would simply ask the Finance Committee to make this bill comply with the President's pledge, would somehow kill the bill--that is not at all true--and, secondly, that it would stop the tax relief in the bill that the Senator from Montana has identified, the refundable tax credits. The bottom line is, my amendment does not even address the refundable tax credits. They remain in the bill.

All my amendment does is say: Let's have the President's pledge to the American people honored in this legislation. Let's take out the taxes that 73 million American households will pay under this legislation--hundreds of billions of dollars of new taxes.

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Mr. CRAPO. Madam President, this is a very simple vote we are going to have. This is a vote that will correct the bill to comply with the President's promise not to tax anyone who makes under $200,000 as an individual or $250,000 as a family.

I think the vote we just had was a unanimous vote for it. It said not to take tax relief out of the bill. We have had plenty of debate about tax relief--whether it is in the bill or not in the bill. This motion says let's fix the bill and take out the hundreds of billions of dollars of taxes that will fall squarely on the middle class.

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