Se­nate tax plan re­peals Oba­macare’s man­date

Repub­li­cans see sav­ings; in­sur­ers fear high costs

The Washington Times Daily - - FRONT PAGE - BY DAVID SHERFINSKI

Se­nate Repub­li­cans said Tues­day they will in­clude a re­peal of Oba­macare’s in­di­vid­ual man­date in their tax cut bill in a bold move that frees up more money for deeper tax cuts and takes a whack at the health care law they have re­peat­edly tried but failed to re­peal.

Pres­i­dent Trump had been push­ing the idea for weeks, eye­ing the more than $300 bil­lion in sav­ings over the next decade that could be pumped into more tax cuts for av­er­age Amer­i­cans.

Repub­li­can lead­ers on Capi­tol Hill had re­sisted, but with lit­tle hope of get­ting Democrats on board and look­ing to rally their own troops to pass the bill, the Se­nate’s top brass re­lented.

“We’re op­ti­mistic that in­sert­ing the in­di­vid­ual man­date re­peal would be help­ful,” said Se­nate Ma­jor­ity Leader Mitch McCon­nell, Ken­tucky Repub­li­can.

Democrats blasted the move, say­ing it adds in­sult to an al­ready in­ju­ri­ous tax cut pack­age that de­liv­ers most of its bang to busi­nesses.

In­sur­ers also ob­jected, say­ing end­ing the Oba­macare man­date will chase younger, healthy peo­ple out of the mar­kets, leav­ing them with only older, sicker cus­tomers and thus ruin the

eco­nom­ics of the 2010 health care law.

“Repub­li­cans just can’t help them­selves. They’re so de­ter­mined to pro­vide tax give­aways to the rich that they’re will­ing to raise pre­mi­ums on mil­lions of mid­dle-class Amer­i­cans and kick 13 mil­lion peo­ple off their health care,” said Se­nate Mi­nor­ity Leader Charles E. Schumer, New York Demo­crat.

He pre­dicted that the bill would sour more Amer­i­cans on the Repub­li­cans’ plans.

But Repub­li­can lead­ers are count­ing on the move to win over wa­ver­ing se­na­tors, say­ing the sav­ings from nix­ing the man­date can be pumped back into even big­ger tax cuts for the mid­dle class.

Be­fore the man­date, the Se­nate plan amounts to a $1.5 tril­lion tax cut over 10 years, with about 60 per­cent go­ing to busi­nesses and the rest go­ing to in­di­vid­ual tax­pay­ers. The plan slashes the cor­po­rate tax rate from 35 per­cent to 20 per­cent and low­ers the top in­di­vid­ual rate from 39.6 per­cent to 38.5 per­cent while ad­just­ing other in­di­vid­ual tax brack­ets so they kick in at higher in­come thresh­olds.

“This is a good bill,” said Sen. Or­rin G. Hatch, Utah Repub­li­can and Fi­nance Com­mit­tee Chair­man. “It will give real tax re­lief to mid­dle-class fam­i­lies. It will grow our econ­omy, in­crease wages and cre­ate jobs.”

The plan also elim­i­nates a num­ber of de­duc­tions, such as the one for state and lo­cal taxes paid, and uses the sav­ings to pay for low­er­ing the rates.

With the plan bump­ing up against the $1.5 tril­lion cap set in the 2018 bud­get for tax cuts, law­mak­ers were left search­ing for new ways to free up money to do even more for the mid­dle class.

En­ter the in­di­vid­ual man­date plan, which the Con­gres­sional Bud­get Of­fice said would save the gov­ern­ment more than $300 bil­lion over the next 10 years by free­ing peo­ple from the obli­ga­tion to have health care cov­er­age — and the gov­ern­ment from the re­spon­si­bil­ity of sub­si­diz­ing much of that cov­er­age.

Some 13 mil­lion fewer peo­ple would have cov­er­age in 2027 with­out the pres­sure from the man­date.

Some Repub­li­cans had long pushed for the move, say­ing it was the nat­u­ral so­lu­tion to their fail­ure this year to re­peal Oba­macare.

Sen. Pa­trick J. Toomey, Penn­syl­va­nia Repub­li­can and a mem­ber of the tax-writ­ing fi­nance com­mit­tee, said the man­date is based on a “flawed premise” that the fed­eral gov­ern­ment should force Amer­i­cans to buy a prod­uct they might not want.

“In­clud­ing the re­peal of the tax penalty in our pro-growth tax re­form bill gives di­rect re­lief to hard­work­ing Penn­syl­va­ni­ans and as­sists in mak­ing per­ma­nent des­per­ately needed changes to our out­dated tax code so Amer­i­can busi­nesses can be glob­ally com­pet­i­tive once again,” said Mr. Toomey.

Democrats, though, framed the move as cut­ting a gov­ern­ment ben­e­fit for av­er­age Amer­i­cans in or­der to give cor­po­ra­tions a tax re­duc­tion.

“This is a con job on the Amer­i­can peo­ple and proves that Repub­li­cans’ only agenda is putting an eco­nomic dou­ble stan­dard into black let­ter law,” said Sen. Ron Wy­den of Ore­gon, the rank­ing Demo­crat on the Se­nate Fi­nance Com­mit­tee.

Repub­li­cans hope to move their broader bill through com­mit­tee this week, with pos­si­ble floor ac­tion the week af­ter Thanksgiving, as they look to get a fi­nal pack­age to Mr. Trump’s desk by the end of the year.

The ad­mit­tedly am­bi­tious time frame comes as some Repub­li­cans view the tax over­haul ef­fort as the party’s last real chance to give vot­ers a rea­son to turn out in next year’s midterm elec­tions, af­ter their month­s­long ef­fort to re­peal Oba­macare in its en­tirety stalled out over the sum­mer.

The House tax bill that ad­vanced out of the Ways and Means Com­mit­tee last week did not in­clude a re­peal of the man­date, though some Repub­li­cans said they would like it to be part of the dis­cus­sion as lead­ers prepare for a floor vote in the House this week.

House Speaker Paul D. Ryan, Wis­con­sin Repub­li­can, said Tues­day that the House is push­ing the bill “as we have it,” though he de­scribed things as a work in progress.

He said dif­fer­ences be­tween the House and Se­nate ver­sions can ul­ti­mately get ham­mered out in a bi­cam­eral con­fer­ence com­mit­tee once each cham­ber passes its re­spec­tive plan.

“So we are just get­ting this process go­ing. We think it’s very, very im­por­tant we pro­duce this. And we feel good where we are,” Mr. Ryan said.

The House plan also low­ers the cor­po­rate tax rate to 20 per­cent im­me­di­ately, while the Se­nate ver­sion de­lays it for one year.

The House also in­cludes a full re­peal of the es­tate tax on in­her­i­tances, while the Se­nate dou­bles the ex­emp­tion rate but leaves the tax in place, and par­tially re­stores part of the state and lo­cal de­duc­tion for prop­erty taxes.

ASSOCIATED PRESS PHOTOGRAPHS

House Speaker Paul D. Ryan, Wis­con­sin Repub­li­can, pointed to boxes of pe­ti­tions sup­port­ing the Repub­li­can tax re­form bill, which is set for a vote later this week. He said the House is push­ing the bill “as we have it” but de­scribed things as a work in progress.

Se­nate Mi­nor­ity Leader Charles E. Schumer, New York Demo­crat, said Repub­li­cans are de­ter­mined to give tax cuts to the rich at the ex­pense of the mid­dle class.

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