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We understand why this bill was enthusiastically endorsed by the Republican Members of this Committee. It advances two of their long-term objectives. It is another in a series of reckless tax cuts designed to deny needed funds for education, veterans, health, anti-poverty, and other programs. It also furthers their long-term objective of destroying employer-provided health care. We do not share those objectives and, therefore, strongly oppose this bill.
The Committee bill will cost $71 billion over the next ten years. The ten-year estimate understates the long-term costs of the bill. In the later years of the budget window, the Committee bill will cost in excess of $10 billion per year. Its cost will accelerate just at the time when the baby boom generation retires, denying resources to meet our commitments to the Social Security and Medicare systems.
The entire cost of the Committee bill will be funded by borrowing, increasing our national debt. The reckless tax cut agenda of this Republican Congress will create one of the largest spending increases in the history of this country. Two years ago, there was talk of actually paying off the entire national debt. As a result of the Republican fiscal policies, now the national debt, instead, will be increased dramatically every year. Interest on that debt will be an ever increasing Federal spending program. Future taxpayers will be faced with the obligation of funding those increased interest payments, but not one dollar of those interest payments will provide any benefit to the average individual.
The Republicans have long been hostile to employer-provided health care coverage. They seem intent on destroying both government and employer-provided health insurance coverage. In the past, the Chairman of the Committee has expressed his interest in dismantling the employment-linked health insurance system on the grounds that it has proven unsuccessful in extending coverage to all or even most Americans, and that it shields individuals far too much from the cost of care and coverage they use (Medicine and Health, May 13, 2002).
The Committee bill is an ingenious way of undercutting employer-provided health care coverage. It will provide tax-free savings accounts to individuals but only if the individuals have no health insurance or are covered by policies with relatively high deductibles. Individuals covered by traditional employer-provided health care plans will not be eligible for the new benefits. The Committee bill deliberately creates disincentives for traditional employer-provided health care.
If the Committee bill becomes law, employers currently providing health insurance coverage could use the tax benefits contained in the Committee bill as an excuse for reducing their health care costs. The tax benefits contained in the Committee bill will be available to individuals covered by employer-provided health care coverage only if the employer plan provides no coverage for at least the first $1,000 of medical expenses. That deductible is greater than the deductible in most employers’ plans. As a result, employers can increase the deductible required under their plan and argue that the employees will be benefitted through access to the Committee bill’s tax benefits. The Committee bill provides incentives to reduce, not increase, coverage. The insurance cost savings will be enjoyed by the employer because there is no requirement that those savings be passed on to the employee.
For many American families, the tax benefits are worthless. The only thing they will receive from the Committee bill is reduced health care coverage. Not surprisingly, the same six million families deliberately excluded from the recent tax cut also would be excluded from the benefits of the Committee bill. Many other American families with higher incomes cannot take full advantage of the Committee bill because they do not have $4,000 annually in additional savings. The bill is designed to benefit employers, not rank-and-file employees.
It would be our desire to work together on a bipartisan basis with the goal of expanding, not reducing, health care coverage. Unfortunately, our Republican colleagues do not share that goal. Therefore, we are left simply to oppose reckless attacks on current health care coverage.
CHARLES B. RANGEL
PETE STARK
ROBERT T. MATSUI
SANDER LEVIN
JIM MCDERMOTT
JERRY KLECZKA
JOHN LEWIS
RICHARD E. NEAL
MIKE MCNULTY
WILLIAM J. JEFFERSON
XAVIER BECERRA
EARL POMEROY
MAX SANDLIN
STEPHANIE TUBBS JONES
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