[Congressional Record Volume 140, Number 145 (Friday, October 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
        THE 25 PERCENT SELF-EMPLOYED HEALTH INSURANCE DEDUCTION

  Mr. ROTH. Mr. President, I am removing my objections to proceeding 
with the Securities and Exchange Commission's 1995 fiscal year funding 
bill. The only objective I have had is salvaging the 25-percent health 
insurance deduction for the self-employed that expired at the end of 
1993.
  This issue is very misunderstood, and I think it is essential that 
people understand how vitally important an extension of the self-
employed health insurance deduction is. The Congress' failure to pass 
this measure, which expired at the end of last year will potentially 
mean that millions of farmers and small business people will lose this 
benefit. It may also mean that they will have considerably more 
paperwork because when we retroactively reinstate the deduction for 
1994 next year, millions of farmers and small business people will have 
to file amended returns. In short, the loss of this tax provision means 
a loss of millions of dollars every day to small business and farming, 
and new bureaucratic nightmares from Washington.
  In addition, it is incredibly unfair that these businesses do not get 
to deduct 100 percent of their health insurance just like every 
corporation in America. The 25-percent deduction is something that must 
be extended at a minimum. At a time when we are urging employers to 
provide health insurance for their workers, we should not be pulling 
the rug out from under those who do buy health insurance.
  Earlier this week, I asked that a number of proposals I have been 
working on to improve the Earned Income Tax Credit be estimated by the 
Joint Committee on Taxation. I would consider these proposals to be 
loophole closers, because, quite frankly, there is a lot of waste in 
this $20 billion a year program. I received back my estimates today. 
They raise plenty of money, not only to pass the 25-percent health 
insurance deduction, but a number of other expiring provisions as well. 
And by passing my Earned Income Tax Credit reforms, we will put to an 
end a number of unfair and abusive things that are currently allowed.
  Right now, unfortunately, we are at a very late hour. The House is 
going to adjourn shortly, and has no hope of considering my proposals 
to fix these problems. It is clearly good tax policy for us to pass my 
whole package to extend these expiring tax provisions, and I would hope 
we could get a commitment to do just that when we come back early next 
year.
  Mr. MOYNIHAN. Senator Roth has worked tirelessly to try to solve the 
problem faced by the self-employed small businesses and farmers in this 
country regarding their health insurance. I have supported him in his 
efforts to resolve this issue, but he is absolutely right that it is 
now impossible for us to act, and have any hope that the House could 
also complete action before their adjournment.
  Senator Roth has a splendid record on our Committee, the Finance 
Committee, and I commend him for his efforts. He has an astute 
understanding of our tax laws. I would like to assure him and all of 
the other Members of the Senate, that as soon as it is possible--early 
next year--I will convene the Finance Committee and see to it that the 
self-employed get their 25-percent tax deduction retroactively back to 
January of 1994. I will also promise you that we will take a very close 
look at his proposals to improve the earned income tax credit.
  I have been working to solve the tax inequity for self-employed 
individuals for many years. The Finance Committee passed a bill in July 
of this year that would have raised the deduction from 25 percent to 
100 percent of the health insurance costs of the self-employed. That 
continues to be my goal. Early next year, I will work to reinstate the 
25-percent deduction as a starting point to getting a full deduction 
for these costs.
  Mr. ROTH. Mr. President, I know that we have no other choice in this 
matter for this session. I am very happy to have the Chairman's 
commitment to take up the self-employed health insurance deduction. I 
would emphasize that I feel we must do this right away--in January--so 
that farmers and small business people do not have to amend their tax 
returns. I look forward to working with him early next year to solve 
this problem.

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