[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 369-371]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         TAXES AND HEALTH CARE

  Mr. WYDEN. Mr. President, while Senators talk about prebuttal and 
rebuttal speeches before the State of the Union speech, I hear middle-
class folks saying ``drop the buts and make our lives easier.'' I know 
because in January, when I was home, I held 21 community meetings. The 
big issues then were those where the second word was ``bill''--medical 
bills, gas bills, heating bills, mortgage bills, college bills, and 
especially tax bills.
  It is not hard to see why those are the issues. Middle-class folks in 
this country are not keeping up. Even their wages do not keep up with 
inflation. And while they want a better life for their kids--the way 
their parents wanted for them--they stay up nights worrying that they 
cannot make it happen.
  So today I want to spend a few minutes discussing just two issues: 
taxes and health care. I believe in each of these two issues Congress 
could work on a bipartisan basis for genuine relief for the middle 
class. We may not hear about it tonight, but as middle-class folks 
begin pulling together their 1099s, their W-2s, their schedule this and 
schedule that, and all of what they have to do to comply with filling 
out their tax forms, I simply wanted to come to the floor and say it 
does not have to be this way.
  I brought, today, just part of what constitutes the regulations and 
rules for complying with taxes in America. One of the experts in the 
field told me there have been more than 14,000 amendments to the Tax 
Code since the last major overhaul in 1986. It comes to almost three 
for every working day in America.
  This year, Americans are going to spend $140 billion on tax 
compliance. Americans are going to spend more money complying with the 
tax rules than the Federal government is spending on higher education 
in our country.
  I have come to the floor today because I want to make it clear I do 
not think it has to be that way. I have developed an alternative. My 
one-page 1040 form is just 30 lines long. Take your income from all 
sources, subtract your deductions, take your credits, send it off to 
the IRS, and you can even add a note: I'm done. Have a nice day.
  I filled this out myself, and that in and of itself is a little bit 
of a revolution because it has been a long time since a member of the 
Senate Finance Committee or someone in the other body on the Ways and 
Means Committee could fill out their own tax form.
  What happens today? More than three million people, for example, have 
to essentially fill out their taxes twice. They have that alternative 
minimum tax staring at them. Scores of families are pulling together 
shoe boxes full of receipts, shouting across the living room, ``Honey, 
can you find that receipt for the copier that we bought months ago?'' 
because part of it is for business and part of it was used for the 
family. I say it does not have to be this way.
  I have shown that you can have a one-page 1040 form. The President's 
advisory committee report that came out in the fall had a similar 
form--I do not happen to agree with all they did, but their one-page 
form isn't that much longer than mine. For purposes of Government work, 
we could put the two of them together and really do something 
meaningful on a bipartisan basis to simplify the Tax Code, to use that 
$140 billion now spent on compliance on something I know the Presiding 
Officer has a great interest in--education and infrastructure and other 
areas that are of great importance to our country.
  But on top of simplifying the Tax Code, there is more that has to be 
done to help the middle class. I suspect we are not going to hear about 
it tonight, but Warren Buffett, the second wealthiest man in America, 
pays a lot lower tax rate than his receptionist. That is because there 
is a double standard.
  We hit people a lot harder when they work for wages than when they 
make their money off investments. I am not interested in soaking 
anybody. I believe in markets. I believe in creating wealth. But 
something is out of whack when middle-class folks have to spend the 
time to figure out how to wade through all of this and spend literally 
much of the money they want to spend on their families on just filling 
out their taxes--it is not right to hammer people who work for a 
living.
  Here is the way it works. If a cop working outside the Capitol gets a 
little bit of a pay raise--maybe $500--that cop pays 25 percent of the 
pay raise to the Federal Government in income taxes and pays Social 
Security payroll taxes on top of it. If, however, you make your money 
on investments--we want everybody to do well in that area also--you pay 
15 percent of what you make on your investments in income taxes and you 
do not pay any Social Security payroll taxes.
  There is a double standard. We discriminate against people who work 
for a living. In Ohio, in Oregon, across the country, if you work hard, 
play by the rules, and work for a wage, you get hit a lot harder than 
the people who make their money on investments.
  I have already said I am not interested in soaking anybody. I happen 
to believe marginal rates are a big deal. And because I do, I have not 
raised the top rate in my proposal. I have three tax brackets: 15, 25, 
and 35 percent. So it is progressive. I have said to colleagues on the 
other side of the aisle, folks in the administration, there is plenty 
of flexibility in my proposal. If we want to make it 13, 23 and 33, I 
am up for that, too. We can do that in a bipartisan way.
  But tonight, I suspect, instead of hearing that we ought to take on 
the

[[Page 370]]

tax bureaucracy embodied in a few of these volumes, in effect we are 
going to be told to re-up for business as usual. I don't think it has 
to be that way. I refer colleagues to what happened in 1986, 20 years 
ago. Then we had a Republican President, revered by millions of 
Americans, Ronald Reagan, who worked with Democrats, Dan Rostenkowski, 
Bill Bradley, Dick Gephardt. They found common ground in a proposal 
that has many of the same features I bring to the Senate today.
  They were concerned about marginal rates. There were Democrats, such 
as myself, who think marginal rates are a big deal. They worked 
together with a Republican President to achieve a significant success. 
They removed a lot of clutter from the Tax Code. I wish we hadn't gone 
back over the last 20 years since that historic legislation and added 
it all back, those more than 14,000 provisions. But it happened. We all 
know it has a little bit to do with the lobbyists, because the 
lobbyists all come and ask for this particular break or another. I had 
one of our colleagues say to me: Ron, I don't agree with every part of 
your proposal, but you are right, probably every 20 years you ought to 
automatically cleanse the Tax Code. You automatically ought to give it 
a bath.
  So I come tonight to say I am interested in working on a bipartisan 
basis to do something about all this dead wood. I would rather preserve 
the trees that go into all these volumes and simplify the life of 
middle-class folks. We have our folks talking on cell phones all day 
and pagers and practically tethered to the Internet. I know of young 
people trying to get ahead. They work 12, 14 hours a day. They come 
home and they are still checking their e-mail. Do we want to put them 
through another 30 hours of preparing their taxes?
  I filled out my one-page 1040 form. I already said the President's 
Advisory Panel on tax reform had some good ideas. We could come up with 
an alternative. But we have to want to lead. We have to want to lead as 
President Reagan did, as Bill Bradley did. We have to say we want to do 
it on a bipartisan basis.
  I am hopeful that if we hear tonight about business as usual on 
taxes, I can join with colleagues on the other side of the aisle. I 
have already talked to some on the Finance Committee where I am honored 
to serve. I have discussed it both with Chairman Grassley and Senator 
Baucus, two who frankly are role models for bipartisanship.
  I came today to particularly talk about how this could help middle-
class folks. I am going to put in the Record examples of how various 
middle-class people would be affected. I will ask unanimous consent to 
print in the Record some examples of how my proposal would help the 
middle class.
  Under my proposal we will have a lot of middle-class people, people 
making $70, $80, $90,000 a year--there are a lot of them in Ohio and 
Oregon--will get a significant amount of relief. Essentially, all those 
families who make up to $150,000 a year, primarily on wage income, 
maybe a little bit of investment thrown in, they are going to get real 
tax relief or they are going to stay about the same. I want to see us 
do it in a fiscally responsible way. I know this is of great concern to 
the Senator from Ohio. The Congressional Research Service said that it 
is possible to get the tax relief to millions of middle-class people 
that is outlined in my legislation, the Fair Flat Tax Act, and pay down 
the Federal deficit by $100 billion. That is clearly not all you have 
to do to stop the hemorrhaging of the Federal budget, but at least it 
is a downpayment.
  The Senator from Ohio has done an awful lot of good work in terms of 
pay-as-you-go budgeting and taking on health care costs and some of the 
skyrocketing cost of entitlements. My proposal doesn't pretend to deal 
with all of the red ink we see in the Federal budget, but it does get 
real tax relief to middle-class people and does it in a fiscally 
responsible way, with the Congressional Research Service saying that it 
would pay down the Federal deficit by $100 billion over the next few 
years.
  I will be back on the floor over the next few days and weeks trying 
to make the case for bipartisanship to overhaul the tax system. I don't 
think it is possible to continue to add a piece here and a piece there 
and make any sense out of all this. We will only be adding more and 
more volumes. For example, virtually every Senator I have talked to 
wants to deal with the alternative minimum tax. We know there are a lot 
of people being swept up in the alternative minimum tax who certainly 
don't consider themselves fat cats. They weren't the kind of people 
anybody was talking about when the AMT came into being. But we are 
getting to the point now where it is almost impossible to put a patch 
on the AMT without having that change ripple all the way through the 
system.
  What we ought to say, on a bipartisan basis, is we can make the code 
simpler, flatter, and fairer. I have described today how it can be made 
simpler. I have a one-page 1040 form. The President's advisory 
commission has one that is a bit longer, but they are close enough for 
purposes of Government work. I have three brackets in my tax proposal: 
15, 25, and 35. It is fine with me to adjust the numbers a little bit, 
particularly the idea of going down a couple of points for each of the 
brackets. The biggest challenge in terms of working out a bipartisan 
proposal is on the issue of fairness, because that is obviously in the 
eye of the beholder. What is fair to one person may not be fair to 
somebody else.
  I want to close on one point with respect to taxes. Ronald Reagan 
signed a bill in 1986 that treated investment income the way wage 
income was treated. Ronald Reagan in 1986, working with Bill Bradley, 
Dick Gephardt, a host of Democrats, signed a bill that treated 
investment income as it treated wage income. He did it because he 
thought the overall set of tax brackets made sense. I happen to think 
mine do as well. Colleagues may have other approaches. What we know for 
a fact is what was done in 1986 worked. The stock market was not 
hampered. For colleagues on the other side of the aisle, a Republican 
got elected President in 1988 so no Republican was hurt by tax reform, 
where there was bipartisan leadership.
  I come to the floor with my first comments, that while, 
unfortunately, we are not going to hear about comprehensive tax reform 
tonight, this Senator wants to make it clear that this is a cause I am 
not giving up on. I am going to push this at every possible 
opportunity. I am going to work with colleagues on the other side of 
the aisle. We know that you can't get anything important done unless it 
is bipartisan. I am going to do it because I don't think you can defend 
business as usual with this tax system. The simplification that I have 
come to argue for makes sense. Frankly, that ought to be a no-brainer 
for everyone. We can make the code flatter.
  Let's role up our sleeves and try to come up with a system that is 
fairer for everybody, the way it was done back in 1986. If we can get 
it done--and I have the good fortune of being able to stay on the 
Senate Finance Committee, if the people of Oregon honor me with a 
chance to continue to serve there--this time I am going to fight those 
lobbyists who will try to go back and clutter it up. Frankly, that is 
what happened in 1986. Nobody really said ``no'' after that historic 
reform.
  How much time do I have remaining?
  The PRESIDING OFFICER. There is 10\1/2\ minutes.
  Mr. WYDEN. I want to conclude on another pocketbook issue for the 
middle class by talking about health care. I am a Senator who believes 
there ought to be private choices in American health care. There are 
some who think that all the health care ought to be privatized, some 
who think that Government ought to do everything. I am one who believes 
there is a role for both the private sector and for Government in 
health care.
  Unfortunately, I voted for the Medicare prescription drug program. As 
a former director of the Oregon Gray Panthers, I still have the welts 
on my back to show for it. I never conceived that the administration of 
this program could be so bungled. We have bedlam out there right now 
with seniors with advanced degrees trying to sort

[[Page 371]]

all this out. Again, it did not have to be this way. If, for example, 
the administration had at least standardized the policies a little bit 
so that people could compare the various prescription drug coverages 
available, we could have avoided this chaos. There is a model for this 
as well, a model used for the private health insurance supplements that 
seniors bought to add to their Medicare.
  Before I came to Congress, I was director of the Gray Panthers. It 
was not uncommon for a senior to have 10, 15 private health insurance 
policies. We drained that swamp. Now seniors for the most part have 
only one Medigap policy. It meets their needs. The insurance industry 
has indicated it works for them. We ought to be trying to standardize 
or at least make more understandable the private health policies that 
seniors are looking at now to meet their prescription drug needs.
  I have suggested this to the Secretary of Health and Human Services. 
To his credit, he has indicated that he is interested in pursuing it. 
The administration of this program didn't have to roll out this way. It 
could have been simpler and more understandable, if the choices that 
were made available to seniors had simply been structured in a clearer, 
more understandable way.
  There is a second thing that needs to be done on health care. Senator 
Snowe and I got 51 votes late last year for our legislation to lift the 
restriction on Medicare's right to bargain to hold down the cost of 
prescription medicine. The way Medicare is buying this medicine defies 
anything that goes on in the private sector. It is similar to somebody 
going to Costco and buying toilet paper one roll at a time. Nobody 
would shop the way Medicare is purchasing these prescription drugs.
  By my count, Senator Snowe and I now have 53 votes for our 
legislation to lift the restriction on Medicare bargaining. I commend a 
number of colleagues who have been involved. On our side of the aisle, 
Senators Stabenow and Feinstein have done a lot of heavy lifting. 
Senator McCain has been a wonderful supporter. We ought to pass that 
legislation. We ought to make it possible for Medicare to bargain to 
hold down the cost of medicine. I look forward to talking to our 
colleagues further, including the distinguished Senator in the chair.
  There are other steps that ought to be taken to hold down the costs 
in health care. I hope we will hear about them tonight. One of the best 
is to make more accurate information available about how doctors and 
hospitals price their services.
  It is possible to shop for just about anything in the United States, 
but you cannot shop very much for health care. It makes no sense at 
all. Senator Cornyn, the distinguished Senator from Texas, has a great 
interest in this issue. Other colleagues do as well. But if we are 
serious about holding down costs--I think the President will talk about 
cost containment tonight--let's get better, more understandable, more 
usable information about doctors and hospitals out to the American 
people. That is step No. 2.
  Step No. 3 involves end-of-life care--one of the most controversial 
issues in American health care. As my colleagues know, I was the one 
who blocked the original Schiavo legislation from coming up on the 
floor. Let me talk about something all of us can agree on, and that is 
we ought to expand hospice and comfort care to deal with end-of-life 
services because this is something which will help us save money, will 
avoid some of the family tragedies that result in these horrible, 
polarizing kinds of problems such as we saw in the tragic Schiavo case.
  There is no reason, given the fact that a growing fraction of the 
health care dollar gets spent in the last few months of an individual's 
life, that to be both compassionate and hold down health care costs, 
Republicans and Democrats cannot join hands on expanding hospice care 
as an alternative to what our citizens face now with end-of-life 
choices.
  The fourth step is an area the Chair has a great interest in, and 
that is health care technology. We know many communities have multiple 
technologies, such as MRI machines. There are some very exciting and 
tremendous new products that are available. Many communities have lots 
of these technologies, and some have none at all. There is a 
maldistribution of health care resources. So an area I have a great 
interest in is, making it possible in communities in Minnesota and 
Oregon for health care providers to share these technologies, perhaps 
even giving them a waiver of antitrust restrictions, so that rather 
than everybody having to keep up with the Joneses and adding to health 
care expenses in an area that has fueled our costs, let's figure out a 
way that will not freeze innovation. Nobody wants to do that.
  The Senator from Minnesota has been a leader in that field. We don't 
want to freeze innovation, but we want to hold down costs and make sure 
there is access. I think there are ways in which we can create 
incentives to share these exciting health care technologies. I have 
suggested just one this afternoon. That is a way to hold down health 
care costs.
  Mr. President, to recap, let's clean up the Medicare prescription 
drug benefit. Let's figure out how to get better and more accurate 
information about doctors and hospital costs and services out. Let's 
expand hospice and compassionate end-of-life care. And let's make sure 
there are incentives to better use health care technology.
  Those are four practical steps which can hold down health care costs 
and improve health care services in our country.
  I close by way of saying that I came to the Senate floor today 
because I had those 21 town meetings at home. I heard middle-class 
people talk about all the issues where the second word was ``bill''--
medical bill, tax bill, mortgage bill, gas bill, home heating bill. 
They are concerned about economics and their pocketbooks. We don't need 
all this dead wood in our tax system. We can come up with a 1-page 
alternative. I proposed one, as have others. We can work in a 
bipartisan way to hold down health care costs.
  Tonight, we may not hear about some of what I have discussed this 
afternoon, but I look forward to working with colleagues on both sides 
of the aisle and with the Bush administration because on both the tax 
issue and the health care issue, we can do better.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.
  (The remarks of Mr. Lautenberg are printed in todays Record under 
``Morning Business.'')
  Mr. LAUTENBERG. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Durbin are printed in today's Record under 
``Morning Business.'')
  Mr. DURBIN. Mr. President, I yield the floor and suggest the absence 
of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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