Health Care and Education Reconciliation Act of 2010

Floor Speech

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Mr. CORNYN. Madam President, my amendment is a motion to commit the reconciliation bill back to the Finance Committee to report the bill back without a brandnew tax on savings and investment for certain taxpayers. This is an additional 3.8-percent tax on savings, which includes dividends, capital gains, ordinary savings for many consumers, many Americans who have not had to pay before but which this bill imposes. This is a $123 billion tax hike on those categories of income.

This is a mistake for a lot of reasons. One, it will discourage the very thing we need to be doing more of, which is saving. It will reduce productivity, and it depresses wages and the standard of living for millions of Americans. Simply put, increasing taxes, particularly during a recession, on the very sectors of the economy that we want to invest and to create jobs is a terrible mistake.

According to forecasts by the Institute for Research on the Economics of Taxation, a 2.9-percent tax increase--not 3.8 percent but a 2.9-percent previously proposed--would depress economic growth by 1.3 percent and reduce capital formation by 3.4 percent.

The damage to jobs and economic growth during a recession when unemployment is at 9.7 percent would be even greater under the current proposal because we are talking about a 3.8-percent tax, not a 2.9-percent tax, which was the subject of a Wall Street Journal article and this report from the Institute for Research on the Economics of Taxation.

Not only will this motion protect jobs and the investment security of taxpayers, it will also make sure the reconciliation bill does not break yet another one of President Obama's promises. This is just another one of the President's promises that have been broken by this bill when he said, talking about this bill:

Everyone in America--everyone--will pay lower taxes than they would under the rates Bill Clinton had in the 1990s.

But the truth is, this additional tax on savings and investment will make taxes higher than they were even back in the 1990s when Bill Clinton was President of the United States.

I ask my colleagues to support my motion to commit this bill to the Finance Committee.

I also ask unanimous consent to have printed in the Record at the conclusion of my remarks two articles--a March 17 Wall Street Journal article entitled ``ObamaCare's Worst Tax Hike'' and the report I referred to a moment ago from the Institute for Research on the Economics of Taxation.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1.)

Mr. CORNYN. Madam President, this is not the only job-killing provision in this bill, this brandnew 3.8 percent tax increase that will attack savings and investment. Other examples of job-killing proposals in this bill include increasing the hospital insurance payroll tax. This tax is increased to 3.8 percent. It will hit thousands of small businesses that file as subchapter S corporations and pay taxes at individual rates. In addition, this revenue will not be used to pay for Medicare but will be used to fund a brandnew entitlement.

Another job-killing proposal in this bill includes new taxes and fees on health care consumers. That is right, the very people for whom we are trying to lower costs and trying to make health care more affordable, many will have to pay additional taxes and fees to the tune of $100 billion which both the Congressional Budget Office and the Joint Tax Committee have confirmed will inevitably be passed down to consumers.

Then there are the higher premiums for individuals who do not get their health coverage from their employer but have to go into the group market. We are talking about a lot of small businesses, individuals, partnerships, sole proprietors, and the like. One consulting firm concluded that premiums in the group market could go up as much as 20 percent because of the mandated, government-approved insurance that has to be sold under this bill. CBO said they concluded a somewhat lower level--between 10 and 13 percent. But still, if the purpose of health care reform is to make health care more affordable, this bill simply goes in the wrong direction.

Then there is the employer mandate. I met this morning with representatives of the Hispanic Chamber of Commerce. The Hispanic Chamber told me something I knew before but reiterated--the important role of small businesses in terms of job creation--and pointed out to me how many Hispanics and minority business owners are engaged in the very kind of job creation we should be encouraging, not discouraging. This employer mandate will kill jobs because the additional cost of health insurance will be passed along to workers in the form of lower wages or result in reduced hours or layoffs. In a July 2009 report entitled ``Effects of Changes to the Health Care Insurance System on Labor Markets,'' the CBO concluded that the employer mandate is ``likely to reduce employment.''

At a time when unemployment is at 9.7 percent, people are losing their jobs, and they cannot pay their mortgages, so they are being kicked out of their homes due to foreclosure, we are making things worse with this bill, not better.

All told, this bill that has been signed into law by the President and the bill before the Senate, this reconciliation bill, include more than $500 billion in tax increases. It makes no sense, except in the rarefied air under this dome, for Congress to even consider raising taxes, imposing new mandates on employers and individuals at a time when unemployment is so high and when that is the most pressing issue confronting the Nation today. Congress is making this worse, not better. Why Congress would pass a new tax on investment that will act like a wet blanket on the economy to further exacerbate unemployment and make recovery harder is, frankly, beyond me.

Madam President, I yield the floor.

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Mr. CORNYN. Mr. President, mine is a motion to commit the reconciliation bill back to the Finance Committee to report the bill back without the brandnew, whopping 3.8 percent tax on investment and savings. This is a $123 billion mistake. It will discourage savings and investment and decrease the standard of living for millions of Americans. Simply put, increasing taxes on investment income and savings income is a job killer. It is just one of many job-killing provisions of this bill, $100 billion of new taxes and fees on health care consumers, an employer mandate that will kill jobs.

My motion will also make sure the bill does not break another one of the President's promises when he pledged that everyone in America will pay lower taxes than they would under the rates Bill Clinton had in the 1990s.

I ask my colleagues for their support.

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