[Congressional Record (Bound Edition), Volume 155 (2009), Part 20]
[Senate]
[Pages 26805-26807]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. JOHANNS. Mr. President, I stand today to highlight the tax 
hammer, as I would describe it, that is being brought down on the 
American people relative to the health care bills that are making their 
way to the floor of the Senate and literally are about to be debated on 
the House side.
  In the Finance Committee bill, there are over $500 billion in 
additional taxes and fees and fines and penalties. In the House bill, 
there are over $750 billion in new taxes, et cetera. If you shrug your 
shoulders thinking: Well, that is a tax on those wealthy people; I 
don't have anything to worry about; I am not one of them--you are 
missing something. Actually, nothing could be further from the truth.
  In my judgment, these taxes will stifle small business. They are 
going to shock families who think there is no way their modest income 
could possibly be taxed more by the Federal Government.
  The House bill, let me start there. The first tax is a 5.4-percent 
surtax on what are referred to as the high-income earners. It raises 
taxes by about $460 billion. This is a gigantic tax increase. But 
supporters of it make the case that, again, this is the rich people, 
creating the feeling that somehow you don't have to worry about that if 
you are not making a lot of money. But what they don't want to 
acknowledge is that this is a tax on business and small businesses. In 
fact, I would suggest if you wanted to be fair in this debate, you 
wouldn't call it the millionaire tax; you would call it by the proper 
name--the small business tax.
  The Joint Committee on Taxation released a letter yesterday. It found 
that one-third of the tax--one-third of the tax--will be from business 
income. The Wall Street Journal has said this recently, and I am 
quoting:

       The burden will mostly fall on small businesses that have 
     organized as Subchapter S or limited liability corporations, 
     since the truly wealthy won't have any difficulty sheltering 
     their incomes.

  In the United States, there are over 6 million small businesses. Last 
count, the last available information I could get my hands on, there 
were over 41,000 small employers in my home State of Nebraska. I have 
walked through many of these small businesses. I have visited with the 
people who are trying to keep these businesses going, and they are 
facing challenges to make the payroll.
  Many of these small businesses exist in small communities in my 
State, and their employees are not just faceless people, people without 
names. These are people with whom they went to high school. These are 
people with whom they worship on Sunday, they see at the grocery store. 
Our small businesses don't want to lay off these people.
  Now, what would a 5.4-percent tax do to their bottom line, to their 
employees, to any potential of hiring in the future, to the communities 
they support? Well, one can see the impact it will have.
  Shawne McGibbon, a former Small Business Administration official, 
said it very well and, again, I am quoting:

       Nebraska depends on small businesses for jobs and economic 
     growth. During this time of financial stress and economic 
     instability, policymakers need to remember that the State's 
     small businesses provide the economic base for families and 
     communities.

  Maybe to some from big cities or States that are mostly urban, the 
loss of 50 jobs is not a big deal. I can tell my colleagues it is a big 
deal to me. It is a big deal to my State. Fifty jobs in a community of 
1,000 people is absolutely devastating. Those paychecks no longer spent 
on Main Street can literally bring Main Street to its knees.
  Making matters worse, this tax is not indexed for inflation, so what 
can

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we predict? What is the most certain thing we can predict about this 
tax? It is going to have the AMT problem all over again. Each year it 
is going to creep down, every year capturing more and more people in 
the middle class.
  The second tax I wish to talk about today is the 8-percent penalty on 
employers who don't offer insurance. Eight percent of their payroll or 
pay, at least 72.5 percent of workers' premiums, that is what they are 
faced with. Again, no matter how one sugarcoats it, this is going to 
cut into wages. For those who pay the 8 percent, that is going to total 
$135 billion more in taxes taken out of our economy.
  The Wall Street Journal, again, I think said it very well recently:

       Such ``play or pay'' taxes always become ``pay or pay'' and 
     will rise over time, with severe consequences for hiring, job 
     creation, and ultimately growth.

  I look over there at the House and they sure seem very determined to 
throttle the backbone of our economy--our small businesses. I will just 
tell them as somebody who has represented my great State as a Governor 
and now as a Senator: You take those jobs out of small communities and 
you will bring those small communities to their knees.
  I pay attention to the wisdom conveyed back home. That is why we do 
our townhall meetings and we walk in parades and we do everything we 
can to listen to the people.
  A constituent from Pierce, NE, a small community, a great community 
in our State, said it very well:

       With my husband self-employed, around 30 percent of our 
     income is required to pay income taxes. If these income taxes 
     weren't so high, we would be able to afford and choose our 
     own insurance coverage. More taxes for public health care is 
     not the answer.

  I wish to reference the Senate bill and a third tax--the penalty tax 
on individuals without insurance. It provides that if you don't have a 
government-approved health plan, you will pay a penalty of $750 for 
singles and $1,500 for married couples. The Congressional Budget Office 
has analyzed this penalty. Almost half of those paying the penalty tax 
would be between 100 and 300 percent of the poverty level. In some 
States, these good folks qualify for government assistance programs. So 
we are going to tax them or penalize them and then give them subsidies. 
Boy, only here could somebody make an argument that is rational. It 
makes no sense to the people back home.
  Listen to this: A family of four earning between $23,000 and $68,000 
in 2013 would be saddled with the new tax. We are literally talking 
about taxing not just the middle class but even below that level.
  I remember a pledge being made. Last year, President Obama said:

       No one making less than $250,000 a year will see any form 
     of tax increase.

  Yet a family of four earning $25,000 will be hit with a tax within a 
few years. Boy, that is a long way away--$25,000 from $250,000.
  Nebraskans believe they can make better decisions about their own 
health care than the Federal Government. Let me repeat that. Nebraskans 
believe they can make better decisions about their own health care for 
themselves and their families than can the Federal Government. I stand 
here today to tell my colleagues I agree with them.
  A constituent from Kearney, NE, said:

       Is there anything I can do to take a stand against what I 
     consider a huge tax burden and a loss of freedoms?

  The individual mandate--just one more example of government intrusion 
into people's lives.
  I have covered three of the tax hikes pervasive in the bills, but it 
is the tip of the iceberg. There are new taxes, penalties, and fees as 
far as the eye can see.
  There is a very fitting quote from John Marshall. He said: ``The 
power to tax is the power to destroy.'' The power to tax is the power 
to destroy.
  As the health care debate continues, all of us should remember Chief 
Justice Marshall's wise words. Make no mistake about it. These various 
bills raise taxes and put burdens upon the American people at a 
breathtaking pace. Don't be fooled that this is all about taxing the 
rich people and the millionaires. This is really about taxing and 
taking from the American people, and Americans are seeing the truth.
  Thank you, Mr. President. I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, how much time remains on the Republican 
side?
  The PRESIDING OFFICER. There is 14\1/2\ minutes remaining.
  Mr. ALEXANDER. Thank you, Mr. President. Will you let me know when 3 
minutes remain?
  The PRESIDING OFFICER. The Chair will so notify.
  Mr. ALEXANDER. I thank the President.
  Mr. President, we have a lot of unusual things happening in the 
Senate, the Congress, and the world today, but apparently we are about 
to be presented with a rare opportunity that very few Senators ever 
have a chance to vote on. The Democratic congressional health care bill 
will present Senators--it is still being written from behind closed 
doors, but from what we can tell from the other bills--with an 
opportunity to vote for one-half trillion dollars in Medicare cuts and 
$900 billion-plus in new taxes at the same time. It is very rare that 
any Senator has a chance to vote for Medicare cuts that big and new 
taxes that big all at once.
  It is not an opportunity that many, if any, Republicans will take 
advantage of, but that is the proposal that is coming. It caused my 
colleague from Tennessee to say on the Senate floor yesterday that if 
Republicans were to propose the same thing--a one-half trillion dollars 
cut in Medicare, a 60-percent increase in premium costs, which is the 
estimated increase to Tennesseans who have insurance premiums, 
according to Senator Corker, plus taxes of $900 billion when fully 
implemented, it wouldn't get a single Democratic vote. I think Senator 
Corker is probably right about that.
  Whenever we say this, this brings a deep concern from the other side 
of the aisle. The Senator from Ohio came to the Senate floor and 
engaged in a colloquy with the assistant Democratic leader yesterday 
after I left the floor and said:

       Imagine this, the Republican Senator from Tennessee is 
     saying that Democrats are about to cut Medicare. Why would 
     they say that? It makes me incredulous to hear the Senator 
     say that Democrats are going to cut Medicare and we are going 
     to use Medicare cuts to pay for health care reform.

  The only reason we and everybody else who reads their bill is saying 
that is because it is true. The proposal is to cut grandma's Medicare 
and spend it on their proposal, to cut nearly one-half trillion dollars 
in Medicare spending and not spend it on making Medicare solvent.
  We know the Medicare trustees have said the program is going to go 
broke in 2015 to 2017, yet we are going to spend that money on a new 
government program into which many Americans who now have employer-
based insurance will find their way. It is not Republicans who are 
scaring seniors about Medicare cuts; it is the Democratic health care 
bills that are scaring seniors about Medicare cuts. They have a right 
to be concerned.
  Just in case anybody who might be listening thinks we are making this 
up on the Republican side of the aisle, I brought with me a few 
articles from reputable sources that describe the Democratic health 
care proposals and their proposed Medicare cuts.
  Here is the New York Times on September 24, an article by Robert 
Pear, who writes about this subject regularly. It says:

       To help offset the cost of covering the uninsured, the 
     Senate and House bills would squeeze roughly $400 billion to 
     $500 billion out of the projected growth in Medicare over 10 
     years.

  That is the New York Times, Mr. President.
  From the sanfranciscogate.com, this is an Associated Press article of 
September 22:

       Congress' chief budget officer on Tuesday contradicted 
     President Obama's oft-stated

[[Page 26807]]

     claim that seniors wouldn't see their Medicare benefits cut 
     under a health care overhaul.
       The head of the nonpartisan Congressional Budget Office, 
     Douglas Elmendorf, told senators that seniors in Medicare's 
     managed care plans could see reduced benefits under a bill in 
     the Finance Committee.
       The bill would cut payment to Medicare Advantage plans by 
     more than $100 billion over 10 years.
       Elmendorf said the changes ``would reduce the extra 
     benefits that would be made available to beneficiaries 
     through Medicare Advantage plans.''

  Then there is the CBO, which in its October 7 letter to Senator 
Baucus talked about in detail the proposed Medicare cuts. Then there is 
the Associated Press article of July 30, 2009, which says:

       Democrats are pushing for Medicare cuts on a scale not seen 
     in years to underwrite health care for all. Many seniors now 
     covered under the program don't like that one bit.

  That is not the Republican National Committee. That is the Associated 
Press reporting on what the bills say. It also says:

       The House bill--the congressional proposal that has 
     advanced the most--would reduce projected increases in 
     Medicare payments to providers by more than $500 billion over 
     10 years, a gross cut of about 7 percent over the period. But 
     the legislation would also plow nearly $300 billion back into 
     the program, mainly to sweeten payments to doctors.
       That still leaves a net cut of more than $200 billion--

  Says the Associated Press, describing the Democratic health care 
plan--

     which would be used to offset new Federal subsidies for 
     workers and their families now lacking health insurance.

  In other words, we are taking money from Medicare and spending it on 
someone else.
  The Senator from Kansas said it is like writing a check on an 
overdrawn bank account to buy a big new car. That is a pretty good 
description.
  I have a couple more. This is the Los Angeles Times, which is not a 
Republican publication. The headline on June 14 was, ``Obama to Outline 
$313 Billion in Medicare, Medicaid Spending Cuts.''
  That is what Democratic Senators have always called such proposals, 
that is what the Los Angeles Times calls the proposals, and that is 
what we call it because that is what they are. The article says:

       Reporting from Washington--Under pressure to pay for his 
     ambitious reshaping of the nation's healthcare system, 
     President Obama today will outline $313 billion in Medicare 
     and Medicaid spending cuts over the next decade to help cover 
     the cost of expanding coverage to tens of millions of 
     America's insured.

  This is from an October 22 NPR report:

       Over a decade, the committee would cut $117 billion from 
     the Medicare Advantage plans.

  This is from an article in the Washington Post on October 23:

       $500 billion in cuts to Medicare over the next decade.

  That is the Washington Post.
  This is the Wall Street Journal on September 8:

       Other sources of funding for the Finance Committee plan 
     include cuts to Medicare.

  Mr. President, the question is not whether there are going to be cuts 
to Medicare; that is the proposal. Maybe it is a good idea; maybe it is 
a bad idea. But we don't need to come to the Senate floor and say that 
something that is, is not.
  The proposal in these large expansive health care plans--the 2,000-
page bill coming from the House soon--is that it is basically half 
financed by cuts in Medicare--not to make the program solvent--a 
program which has $37 trillion in unfunded liabilities over the next 75 
years--but to spend it on a new government program. Those are the 
facts. That is why it is important that the American people have an 
opportunity to read the bill and know what it costs and know how it 
affects them.
  The Republican leader and Senator Johanns have talked about taxes in 
the bill. Rarely does a Senator have an opportunity to vote on so many 
Medicare cuts and so many new taxes, as we apparently will have when 
this bill comes to us.
  The taxes include a tax on individuals who don't buy government-
approved health insurance. The Joint Committee on Taxation, our joint 
committee, and the CBO estimate that at least 71 percent of that 
penalty, that tax, will hit people earning less than $250,000. So it is 
not just taxes on rich people. When you impose, as the Senate Finance 
Committee bill would, $900 billion-plus in new taxes, when fully 
implemented, on a whole variety of people and businesses that provide 
health care, what do they do?
  According to the Director of the CBO, most of those taxes are passed 
on to the consumers. Who are the consumers? The people who are paying 
health care premiums--250 million Americans. What does that mean? That 
would mean that instead of reducing the cost of your health care 
premium, we are more likely to increase it.
  I ask, Why are we passing a health care reform bill that increases 
the cost of your health care premiums, raises your taxes, and cuts 
Medicare to help pay for that? There are increased taxes on health care 
providers, manufacturers and importers of brand-named drugs, medical 
device manufacturers--these will all be passed on to consumers, 
according to the Joint Committee on Taxation and CBO. The Finance 
proposal raises the threshold for deducting catastrophic medical 
expenses, but eighty-seven percent of the 5.1 million taxpayers who 
claim this deduction earn less than $100,000 a year. They are not 
millionaires. They earn less than $100,000 a year. In fact, data from 
the Joint Committee on Taxation and the former Director of the CBO 
shows, by 2019, 89 percent of the taxes--these new taxes--will be paid 
by taxpayers earning less than $200,000 a year.
  The 2,000-page proposal from the House of Representatives would raise 
taxes by $729 million. There is a tax on millionaires, but we know what 
happens to that when it is not indexed. Forty years ago, we were 
worried about 155 high-income Americans who were avoiding taxes, so the 
Congress passed the millionaires tax--the alternative minimum tax. 
Today, if we hadn't patched it, as we say, in 2009, that tax would have 
raised taxes on 28.3 million Americans. The millionaires tax will hit 
you if you keep earning money.
  I have said quite a bit about Medicare cuts and taxes. I want to 
conclude my remarks by quickly saying what Republicans think should be 
done. We believe the American people do not want this 2,000-page bill 
that is headed our way. We want, instead, to start over in the right 
direction, which means reducing costs and re-earning the trust of the 
American people by reducing the cost of health care step by step.
  Specifically, we would start with the small business health care 
plans. That is just 88 pages that would lower premiums, according to 
the CBO. It could cover up to 1 million new small business employees, 
and it would reduce spending on Medicaid. Then we could take a step to 
encourage competition by allowing people to buy health insurance across 
State lines, and we can take measures to stop junk lawsuits against 
doctors.
  More health information technology could be a bipartisan proposal. We 
can have more health exchanges. The number of pages are very small. 
Waste, fraud, and abuse are out of control--$1 out of every $10 spent 
in Medicaid. Our proposal would offer a choice--a couple hundred pages, 
not 2,000--reducing premiums and debt and making Medicare solvent 
instead of cutting it, with no tax increases instead of higher taxes, 
and reducing costs.
  That is the kind of health care plan Republicans have offered and the 
kind we believe Americans will want. We hope over time that will earn 
bipartisan support.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Ms. MIKULSKI. Mr. President, how much time is remaining on both sides 
for morning business?
  The PRESIDING OFFICER. The majority has 2\1/2\ minutes of morning 
business. The minority's time has expired.

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