[Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (2000-2001, Book III)]
[October 26, 2000]
[Pages 2333-2334]
[From the U.S. Government Publishing Office www.gpo.gov]



Letter to Congressional Leaders on Bipartisan Tax Cut Legislation
October 26, 2000

Dear Mr. Speaker:  (Dear Mr. Leader:)
    Thank you for your letter yesterday responding to my proposed 
consensus tax package. As I said yesterday, I believe we all have a 
responsibility to make every possible effort to come together on a 
bipartisan agreement on tax relief and Medicare/Medicaid that will 
maintain fiscal discipline and serve the interests of all the American 
people. That is why I put forward a good faith offer yesterday that 
sought to reflect our differing priorities in a balanced manner. I was 
disappointed, however, that, without any consultation with me or 
Congressional Democrats, you chose to put forward a partisan legislative 
package that ignores our key concerns on school construction, health 
care, and pensions policy. If this current tax and Medicare/Medicaid 
package is presented to me, I will have no choice but to veto it.
    While we have already reached substantial agreement in important 
areas, such as replacement of the Foreign Sales Corporations regime, 
your legislation has substantial flaws in several key areas.
    As I stated yesterday, I believe it is absolutely essential that we 
do as much as possible to meet America's need for safe and modern 
schools. It is estimated that there may be as much as a $125 billion 
dollar financing gap in meeting the school construction and 
modernization needs of our children. The bipartisan Rangel-Johnson 
proposal to finance $25 billion in bonds to construct and modernize 
6,000 schools is, quite frankly, the very least we should do, given the 
magnitude of this problem and its importance to America's future. 
Unfortunately, your proposal falls far short of the mark. We should not 
sacrifice thousands of modernized schools to pay for inefficient tax 
incentives that help only a few. For example, the arbitrage provision 
encourages delay in urgently needed school construction and would 
disproportionately help wealthy school districts.
    On health care, my offer sought to lay a path to common ground by 
coupling both of our priorities on health and long-term care. 
Unfortunately, your health care proposal completely ignores our proposal 
to cover millions of uninsured, working Americans. Instead you put 
forward a series of tax cuts that, particularly when standing alone, 
would be inequitable, inefficient, and even potentially 
counterproductive health care policy. For example, while our FamilyCare 
proposal would expand coverage to 4 million uninsured parents at a cost 
of slightly over $3,000 per person, your proposal would provide 
additional coverage to one-seventh the people at six times the cost per 
person. Moreover, your proposal would give the least assistance to 
moderate-income families that need help the most, while even raising 
concerns that those with employer-based coverage today could lose their 
insurance.
    Similarly, on long-term care, I offered to embrace your proposed 
deduction for long-term care insurance in exchange for inclusion of my 
proposal to give families, who are burdened today by long-term care 
needs, a $3,000 tax credit. Unfortunately, your legislation ignores the 
bipartisan package I suggested and instead would provide half the 
benefits of my proposal for financially pressed families trying to 
provide long-term care for elderly and sick family members. Surely we 
can agree on this bipartisan compromise that has already been endorsed 
by a broad array of members of Congress, advocates for seniors and 
people with disabilities, and insurers. Similarly, I am perplexed that 
we cannot agree to include the bipartisan credit for vaccine research 
and purchases that is essential to save lives and advance public health.
    I also am disappointed that you have made virtually no attempt to 
address the concerns my Administration has expressed to you about the 
pension provisions of your bill. By dropping the progressive savings 
incentives from the Senate

[[Page 2334]]

Finance Committee bill, you have failed to address the lack of pension 
coverage for over 70 million people. Moreover, employers may have new 
incentives to drop pension coverage for some of the low- and moderate-
income workers lucky enough to have pension plans today.
    Finally, I remain deeply concerned that your Medicare and Medicaid 
refinement proposal continues to fail to attach accountability 
provisions to excessive payment increases to health maintenance 
organizations (HMOs) while rejecting critical investments in 
beneficiaries and vulnerable health care providers. Specifically, you 
insist on an unjustifiable spending increase for HMOs at the same time 
as you exclude bipartisan policies such as health insurance options for 
children with disabilities, legal immigrant pregnant women and children, 
and enrolling uninsured children in schools, as well as needed payment 
increases to hospitals, academic health centers, home health agencies, 
and other vulnerable providers. Congress should not go home without 
responding to the urgent health needs of our seniors, people with 
disabilities, and children and the health care providers who serve them.
    A far better path than the current one is for Congressional 
Republicans, Democrats, and my Administration to come together in a 
bipartisan process to find common ground on both tax relief and 
Medicare/Medicaid refinements.
         Sincerely,

                                                      William J. Clinton

Note: Letters were sent to J. Dennis Hastert, Speaker of the House of 
Representatives, and Trent Lott, majority leader of the Senate. An 
original was not available for verification of the content of this 
letter.