tv Ways and Means Committee Marks Up Health Care Bill as Congress Awaits Cost... CSPAN March 8, 2017 10:32am-12:33pm EST
g. good morning. thank you for being here. we're considering repeal and replacement of obamacare. while it has helped some, it has inflicted tremendous harm on more families, more workers and more job creators nationwide. as president trump said in his address to congress last week, obamacare is collapsing. decisive action must be taken to protect all americans. this morning we will answer president trump's call to action, and we will send a clear message to all who are hurting because of this law. that message is, relief is on the way. working in conjunction with our colleagues on the energy and commerce committee, we will not only take action to repeal obamacare, we will also lay a strong and stable foundation, the patient-centered healthcare
system that americans truly deserve. the legislation before us today represents one half of the american healthcare act which is the full reconciliation bill we will deliver with our colleagues at energy and commerce. this bill as health and human services secretary tom price wrote to us yesterday aligns with the president's goal of rescuing americans from the failures of the affordable care act. secretary price praised the bill's proposals as a necessary and important first step toward fulfilling our promises to the american people. and we are fulfilling these promises in a very transparent and thoughtful manner. unlike obamacare, where members of this committee were presented a 794-page bill at midnight for voting mere hours later, this 57-page bill before us today was posted two days ago for all of america to read. it follows nearly 200 hearings
held in the house since obamacare's enactment, over 35 in our committee alone, as well as numerous ways and means bills considered and approved by the u.s. house, not to mention the builds upon a better way proposal we released months ago. the ways and means portion of the american healthcare act takes action on two primary objectives. first it repeels and dismantles many of obamacare's most crushing burdens for patients and healthcare providers. legislation will provide relief from obamacare taxes and eliminate the tax penalties associated with the individual and employer mandates. without these penalties, washington will no longer be able to strong-arm workers, families and job creators into obamacare plans they do not want and cannot afford. the second objective of this
legislation is to empower individuals and families by providing them, not washington, with control over their healthcare dollars and decisions. our committee's proposals will help accomplish this in a number of keys ways. one is by enhancing and expanding health savings accounts or hsas, the bill nearly doubles the amount that americans can contribute to an hsa. it also broadens them so they can be used to cover more expenses, including over the counter medications. ultimately this will allow americans to save more healthcare dollars for the future and spend them based on what they want and need instead of what washington prescribes. but the legislation does not stop there. it will preserve and protect health insurance for the more than 150 million americans who receive coverage through their employer, and the bill also creates a monthly tax credit
immediately usable to help low and middle income americans purchase coverage if they do not get it through work or a federal program. these credits which are based on age and family size, will give millions of people greater flexibility and freedom to buy insurance that is tailored to their needs, not washington's. with americans in charge of how they use these credits, there will be enhanced competition, lower costs, and better options for patients, workers and job creators to choose from. finally, i want to make clear the full reconciliation bill will preserve a number of vital patient protection. young americans will be able to remain on their parents' health plans until they are 26 years old. insurance companies will be prohibited from denying people with pre-existing conditions or charging them more. these two protection are under energy and commerce jurisdiction, so they will not
be considered in our committee markup this morning. i want to reassure all americans that house republicans are committed to keeping these vital provisions in place. i also want to reinforce to all americans that we are committed to making the american healthcare act fiscally responsible. we are currently waiting for a cost estimate from the congressional budget office as everyone on this committee understands this is not out of the ordinary for a markup and we will wait for a deliberate comprehensive score from cbo as the process moves forward. the most important thing for all americans to know is that we will ensure our fiscally responsible legislation meets all the reconciliation instructions before it reaches the house floor. we're dedicated to getting these crucial details right for the american people so that we can provide them with the relief they need without any more delays. in closing, i want to thank all
the members who helped craft the solutions today. this bill represents years of hard work and a number of bipartisan ways and means bills. thank you all for your leadership. today's markup is a critical step in providing all americans with affordable patient-centered healthcare that's tailored to their needs. this is a top priority for all members of our committee. i hope we can all work together to deliver the solutions that our constituents want and deserve. with that, i'll now yield to ranking member neil for his opening remarks. >> thank you, mr. chairman. i am disappointed we are here today to consider legislation that reflects not only bad policy but bad process. in a number of important groups agree. aarp, the american medical association, and the american hospital association all oppose this bill. this bill suffers from an identity crises. is this healthcare or is this a
tax cut bill? does it lower costs, no. does it bend the cost curve, no. does it cover more americans, no. does it cut the deficit, no. even president trump wants more information. earlier this year -- this week he called it an unbelievably complex subject. nobody knew healthcare could be so complicated. this republican bill which they cleverly broke into separate parts to try to distract the american public fails to protect 152 million americans with pre-existing conditions and would allow insurers to charge older people five times as much as younger people, essentially implementing an age tax. it forces millions to pay more to get less healthcare. i guarantee you having come from local government in the early stages of my career, that by turning this over to governors
they will use healthcare money for the purpose of paving streets, patching budget deficits, fixing highways, and not using it for the prescribed purpose of providing healthcare. transparency is clearly lacking in this process. as recently as last week, i called upon house republicans to provide an open and transparent process when they consider any healthcare legislation aimed at repealing or replacing the affordable care act. the goal, to ensure all americans had the opportunity to fully understand and consider how many and how much this republican healthcare plan will cost and how it will impact them. instead, republicans hid a draft bill somewhere in the basement of the capitol with armed police officers. that is a far cry from the notion of transparency. the american people deserve better. also, to consider a bill of this
magnitude without a cbo score is not only puzzling and concerning, it's also irresponsible. when we created the affordable care act, it was a thoroughly transparent and open process. let me give you the numbers, fact, not opinion. there were 79 bipartisan health insurance hearings and markups over two years. there were 100 hours of hearings, 181 witnesses from both sides of the aisle. 239 republican and democrat amendments, of which 121 were accepted. there was a 30-day online review of the house bill before the markup. 3,000 healthcare town hall meetings and public events were held. in the senate, 53 health insurance reform hearings occurred in the senate finance committee. 8 days of markups with 135 amendments considered in the senate finance committee, 47
bipartisan hearings and other open dialogues with 300 amendments during a 13-day markup in the senate committee. 25 consecutive days they were in session to discuss healthcare reform in the senate. 160 hours in total the senate spent considering reform legislation, and there were 147 republican amendments in the final senate bill. this bill sabotages the market places where close to 10 million americans today get coverage and starts a death spiral from which it will be very difficult to recover. healthy people won't bother with coverage, or instead will buy bare bones policy. sick people who need coverage would buy policies if they're available but that will undoubtedly become more expensive, more unaffordable and harder to get. the most egregious part of the republican plan slashes medicaid funding to pay for tax cuts that
benefit the rich. medicaid helps pay the cost for more than 60% of all nursing home care residents nationwide and helps families afford quality nursing home care for their elderly parents and family members with disabilities. the republican medicaid proposal makes it harder and more costly for families to find long-term care for elderly parents or children with severe disabilities. in addition, it would end the medicaid expansion, a move that would have devastating consequences in my state of massachusetts where it's been a critical tool for thousands of individuals and families with loved ones in long-term care facilities who have dementia. it also provides rehabilitation options for individuals and families in the grips of the opiate addiction. that will be curtailed. the reality is that medicaid is now a middle class benefit.
the measure would also cut the span of medicare by two years at a time when millions of baby boomers are joining and will rely upon this critical initiative. it's a $170 billion tax giveaway to the wealthy while starving the medicare trust fund. hospitals would face crippling debt based on increases in uncompensated care and lower reimbursement rates. in turn, this would lead to job losses in many hospitals and have a negative ripple effect in communities where hospitals are the largest employers. in western massachusetts, bay state health center provides 12,000 jobs and has a $4 billion state-wide economic impact. let's call this bill what it is, a plan to create chaos in insurance markets that directly impacts patients and providers. it will hurt hospitals and the communities they serve and their regional economies. before concluding, i would like to note that today's markup is really the republicans' first step at tax reform.
this legislation is a tax bill. almost every provision amend the internal revenue code. through this lens, we could see clearly that the bill fails the test set out by secretary of the treasury mnuchin for tax reform when he said, quote, there will be no absolute tax cut for the upper class. >> thank you, mr. neil. the gentleman's time has expired. try to add as much time as possible. at this point i would like to take a moment and welcome the members of the audience and remind them they are here as our guests. house rules give the chairman responsibility for maintaining order during committee proceedings and disruptions will not be tolerated. audience members who cause a disruption will be asked to leave. with that, the committee will now proceed with consideration of the budget reconciliation recommendations. we'll take up each of the five sub-titles separately.
our first order of business is the committee print of budget reconciliation relating to a remuneration -- >> mr. chairman -- >> without objection -- >> it's read and open for amendment at any point. >> mr. chairman, i do object and i would -- >> the gentleman objects and the clerk will report. >> as indicated to you previously, i have a privileged motion under clause 4a of house rule 16 that i'll offer in writing to you at this point and asked to be heard on my motion. >> mr. chairman, thank you -- >> table that. >> original amendment -- >> questions on -- >> i'd like to hear the motion read at least. if the idea is to shut down debate on it. >> absolutely not. so, the clerk will report the motion. >> will you pass the motion.
>> the motion is to postpone consideration of the subtitle related to reconciliation, legislative recommendations relating to remuneration for certain insurers to thursday, next march 23rd, 2017 pursuant to clause 4a of house rule 16 offered by the representative. >> would the gentleman like to be heard? >> thank you very much for your courtesy, mr. chairman.
this motion simply requests that we reconvene this markup next week. the objective is insight, not delay. i ask unanimous consent to place in the record at this point a request sent to you last week and signed by every democratic member regarding this matter. >> without objection. >> incredibly, for a legislation of this magnitude, this plan, the particular plan we are considering today, even its principles, has never had a single public hearing anywhere. unlike the affordable care act for which the house heard 181 witnesses in 79 public hearings, republicans reportedly planned to jam this bill through committees today, pass it through the house this month, bring the house bill directly to the senate floor without any senate public hearing. the entire legislative process unlike anything you may have seen in the civics books, all
without a single public hearing. this motion simply asks for a single public forum. indeed, you have kept your lamp under a under a bushel for seven years so secret that last week this bill was under armed guard in the capitol next to secrets of donald trump's tax returns. with the momentous occasion that we join today to replace obamacare, it is surprising that you are so determined to hide your panacea. read the bill. how many times have we heard that with the original affordable care act, and well, that rallying cry was met this week with the response that there was no bill to read until the night before last. this motion asks for one week in which the expert witnesses can be summoned here to evaluate the far reaching provisions and to determine how many families will
suffer because of the hidden fine print. importantly, we also have been seeking to have a representative president trump to come forward and be questioned about how this bill satisfies his promise of insurance for everybody that offers more and costs less. health kcare is too important. it impacts too many lives to have a bill jammed through as president trump's bungled immigration order rushed into effect before any meaningful review and creating chaos at the airports. what this bill needs is extreme vetting. frankly, any vetting at a all would be an improvement, because it has not been vetted in any public forum. when any american buys something new whether it is a new pair of pants or a new car or new
appliance, usually helps to ask two question, how much does the it cost? what is its size? on this new insurance plan, we are asked to vote without knowing how much it costs or what size it s and how much it covers and how many millions of americans are once again being left out. if you have nothing to hide, a week will not impair yourt effort. it will afford an opportunity to carefully scrutinize this legislative surprise package that deserves a great deal of scrutiny. trust me, it is going to be great, isn't a plan. we cannot trust this plan with no administrative witness who has the courage to come to sit at that table, and defend and explain it. we don't know the cost. we don't know what it covers. and we don't know who it leaves out. further, this tactic of shutting
out the public entirely of refusing public hearings, of secreting legislation appears to be a new tactic of what speaker ryan has called unified republican government. as ranking member neal has explained what we are considering in this committee is a $600 billion tax cut, the same tactic is the approach that is apparently planned for the next tax cut, and i guess for any not only the trump tax break bill that we expect and have been told will be here before a august, but anything else in which you have weak, and really loser legislation that requires a heavy hand, because the legislation is so weak that you are unwilling to have it vetted in the public light up till the very last moment. it is sad. it is really sad. today at the outset of this
process of shutting tout public from the democratic process, it is important that we put a stop to this crumbling of democracy and h hence this motion sum pli asking postponement to next thursday to allow the type of consideration at least in a small way that this legislation des deserves and i move the adoption, thank you, mr. chairman. >> thank you. mr. teaberry, you are recognized. >> motion to table. >> motion is to table, and those in favor, aye. >> and opposed? >> no. >> and the ayes have it. >> and on that, mr. chairman, i ask for a roll vote. >> okay. the clerk is requested to call the roll. >> mr. johnson. mr. johnson, aye. mr. nunes, aye.
mr. tea berry, aye. mr. rye kert, aye. mr. roskum, aye. mr. buchanan. aye. mr. smith of nebraska. aye. ms. jenkins. mr. paulsen, aye. mr. marchant, aye. ms. black. aye. mr. reade. aye. mr. kelly, aye. mr. rennaise, aye. mr. meehan, aye. ms. nome, aye. mr. hold iing, aye. mr. smith of missouri, aye. mr. rice, aye. mr. swi kert, aye.
ms. ma lar ski, aye. mr. car bellow, aye. mr. bishop? aye. mr. neil, no. mr. levin, no. mr. lewis, no. mr. dagt, -- mr. doggett, no. mr. thompson, no. mr. larson, no. mr. blumenauer, no. mr. kind, no. mr. pas are cell, no. mr. crowley, no. mr. davis, no. ms. sanchez, no. mr. higgins, no. ms. sewell, no.
>> committee print, budget reconciliation of recommendations relating to remuneration for certain insurers subtitle, remuneration for certain insurers and title one, remuneration for certain insurers and paragraph 162-m of the internal revenue code of 1986 is amended by adding at the end of the following new paragraph. one, termination. this paragraph shall not apply to taxable years beginning after des december 31,2017. >> so at this time, the measure is read open for any amendment. an amendment offered in substitute was distributed in advance along with the green sheet explaining it and -- >> mr. chairman, i object.
>> the gentleman objects and the clerk will report. amendment in the nature of the substitute to the committee print relating to remuneration for certain insurers offered by mr. brady of texas. in lieu of the proposed recommendations, insert the following. subtitle remuneration for certain insurers and section one remuneration for certain insurers and paragraph 6 of 162-m of the internal revenue code of 1986 is amend ed by
adding at the end of the following sub paragraph, one, termination. this paragraph shall not apply to taxable years beginning after december 31,2017. >> the amendment in the nature of substitute is considered read and open for amendment at any point, and considered the base tax for purpose of the amendment, and now i turn to tom bartho, the chairman of the committee on taxation to provide an amendment in the substitute. i ask the members to hold the questions until after his presentation. >> thank you, mr. chairman, mr. neal and members of the committee, you have before you two documents jcx-6 and jcx-7 describing the underlying proposal and the chairman's amendment. under present law any employer can deduct general compensation for the services if the employees is a ordinary conduct of the business, but however, in
the law, the deduction attributable to the labor services performed by individuals of certain health insurance companies is limited to no more of a deduck shn than 500,000. the proposal before you as amended by the chairman's amendment in the nature of a substitute would repeal this provision for taxable years beginning after descember 31st, 2017 and effective in 2018, and we have estimated that this proposal will lose approximately 400 mi$400 million over the bud period through fiscal year 2026. that concludes my brief descrip shun and happy to answer question questions of the members. >> thank you. any questions for mr. bartle? mr. neal, youed. >> i find it odd that the republican friends decided to start the debate on health reform with a provision that is excessive compensation.
our current law limits to employees and service provides in a taxable year to $500,000, and publicly traded corporations are subject to a similar rule with respect to executive compensation. the republican plan is a broken promise. president trump promised lower costs and better coverage for everyone. but yet this is massive cost and increased cost to consumers and deductions in needed care and reduces help for the middle-class to purchase insurance while giving handouts to those again at the very top. but instead of focusing on the middleel class to have quality health care, our republican friends would like to start the debate to provide a tax break for health insurers who provide executive excessive compensation, and would you again repeat the cost of this
provision? >> the joint committee staff has estimated over the fiscal years 2017 through 2026, this will lose approximately $400 million. >> thank you, mr. bar thol. >> any other members? >> million, mr. crowley. million. >> mr. bartlele, mr. levin? >> thank you, mr. chairman. as mr. neal has said, we are starting off with a tax provision that will benefit certain people. could you tell me since this is part of the overall set of tax provisions how much of the tax provisions will go to people with incomes over $200,000 a year? the total al tax provisions? >> mr. levin, the joint
committee staff is working with the congressional budget office on this, and so in terms of all of the provisions that you have scheduled before you today, some of it involves the new credits for health insurance, and that depends on the coverage and the take-up rate, and that analysis is notm complete at this time. so i can't answer your question with respect to all of the proposals that are under consideration today. >> how about the specific tax provisions before us though? we have not undertaken a distribution analysis of this specific piece. remember, in terms of the working, it is related to the denial of deduction for compensation. and so it affects the tax liability at the business, at t the business level.
it may also affect the level of net compensation received by the affected individuals, but as i say, we have not undertaken an analysis of how this would affect the tax liability of the owners of the insurance business. >> okay. but i was asking for example the provisions for the investment income tax and what is the loss there and to whom does it go to? >> i did not real ize that you were asking for one of the provisions before the committee. later. if you will give me a moment, i will pull out that piece of paper. >> mr. bartle will be focusing on that section on that inv investalment tax in a moment. so at this point, i'd like to focus on the the section before us. >> and mr. secretary, i want to know the overall tax impact as
we are taking this first wone, t is pretty clear who it is going to benefit. i wanted to know how it fits into the overall picture in terms of the tax cuts. so could you please answer that? >> well, mr. levin, as i have explained, i don't have distributeional analysis for the overall package and i also don't have a distributional analysis for each of the individual components. i have prepared some distributional analysis on the individual provisions in particular with the net inv investment tax that you require, but mr. brady said that it would be the subject of discussion later in terms of the overall -- >> can you tell us what it is now?
>> the estimated budgetary effect of the tax, the joint committee has estimated $176.6 billion over the budget years 2017 through 2026. >> what is the distribution of tha that? >> mr. levin, i recall that you were asking for the overall view of the tax provisions in here, and this section deals with the remuneration related to insurers which we welcome those questions, but the specifics on this, i think that would be best delayed until we tackle this section in depth in a few moments. >> and let me just ask him if he has the answer, because as we look at one, we should look at all of them to see the overall picture, because there is going to be $600 billion in lost
reven revenue, and as we are starting on this, i think that dangerous path, we need to know the overall picture. so if you are -- >> thank you. but we will be examining this in depth in a moment. and the focus at this point for mr. bartlele ll lle -- bar tho question before us. >> do you have a that? >> mr. levin, my colleagues have calculated the appeal on the net investment income and it is a five-page analysis and i will ask my colleagues to prepare copies for all of the members of the committee, and i will make it available a little bit later to ask my colleagues to do that. >> and the time has expired. anyone else wish to inquire about the amendment and the nature of the substitute. mr. doggett? >> thank you mr. barthol, do i understand that you are the only human being to come before us
today to discuss any of these five provisions? >> i have been asked to describe the provisions before you. >> and you are the sole person to be here to explain these provisions and respond to the technical questions. >> i will draw on the assistance of the colleagues. >> there is no one else here, a staff member or anyone else who is going to be explaining the pro, i have and you are the only person to whom we can ask questions. >> i think that he will do, mr. barthol. >> well, it is good to know that we have one human being here to respond n. that regard, mr. barthol, this one-page bill that is the only thing before us at this moment of your testimony is part of a 53-page bill, is it no not? >> i think that the 53 pages that you are describing is the entirely separate. this is not part of that bill. you'd have to talk to the
chairman about the plans for the entire reconciliation plan and how it would be put together. it will result, i am sure in a somewhat -- superfrom ta techni standpoint, any reason that the five bills before us today could not have been joined as one? >> terms of of the legislative drafting, i can not think of that. >> well, it does have some advantages in preventing the amendments and narrowing the discussion rather than looking at the larger picture. >> i am not familiar with the parliamentary rules. >> i am sure that is outside of the area of your expertise. as far as the 53-page bill, have you had a chance to e view it? >> es y. >> and focusing entirely on this provision and the other five provision, i wanted to ask you if there are provisions in the bill that despite all of the rhetoric criticizing obamacare that really salute the spirit of
obamacare such as the provision of page 37 that says to the greatest extent practical, the methods and the procedures to administer the affordable care act are to be retain ed ed to t tax credits. does this provision or any of the other provisions that you are about to talk about, do they salute the spirit of obamacare? >> mr. doggett whi, while i appreciate the question, this provision relates to compensation in the insurance area and i have asked you the refine your questions to that area. >> and my question to the witness is if this provision or the other titles that i will ask him the same question on those titles, whether it includes any of the same salute to the spirit and preserving of elements of obamacare like that op page 37 that says to the greatest extent
practicable, and use the affordable care act as your lead star. >> thank you, mr. doggett, again, that question is beyond the technical scope of this -- >> it is right there, and i am asking him if this includes anything similar or the spirit ofm obamacare, and someone who has been alleged to be a law mamake er but within the past weekend, but as former president barack obama, anything in this title similar to page 37 tries to follow the spirit of obamacare? >> so, again, mr. doggett, thank you for repeating the question. and mr. barthol is to answer technical questions about this section. >> i am only asking about him about this section -- >> no, you are asking him to salute the obamacare and he is here to answer questions about the technical aspects --
>> well, you are confining me to this, and is there anything in the title that the contains a reference to the affordable care act or the desire to follow that act to the greatest extent practicable, similar to what we find on page 37 of the chairman's bill? >> mr. doggett, this provision amends section 162 of the internal revenue code relating to allowable deductible costs as business expenses. >> so it does not contain the reference to the greatest extent practicable to the affordable care act? it is about the measurement of the tax breaks. >> will all of the benefits of this bill flow to insurance industry? >> i did not hear you. >> will all of the benefits of this bill flow to the insurance industry? >> as i was explaining to mr. levin, the distributional effect of this depends upon what
happens one to the compensation of individuals who may be subject to the bilks to the provisions of the present law, and since it goes to the determination of the net income of the business, it will affect the net returns of the owners of that, ownerers of that business. >> so. thank you, mr. barthol, time hahas expired. >> thank you for being here, mr. barthol. a number of people have been mentioning the lack of the cbo report on this legislation. as you know, and i think that everybody here knows that that document is incredibly important, and it provides not only this members of this committee, but the public that we represent with some sense of whether the provisions of this bill were expected to cause americans to lose their health insurance, how much their premiums would increase or how
much out of pocket expenses they would experience. do you have a copy of the estimate of the cbo that you can show to us? >> mr. thompson, if the congressional budget office had prepared an estimate, it would have given it to the members of the committee probably before they would have given it to me. >> so you don't have one either? >> the cbo said they put out a statement last night that cbo is in the process of preparing the estimate for the house health care bilks andly add to that several of my colleagues are actively working right now with the counterparts of the congressional budget office on the interrelationship between the tax provisions that you are looking at today and how it affects coverage in terms of the employer market, in terms of the individual market, and who would qualify and who would choose to purchase the insurance, and who would choose
not to purchase insurance. the cbo released the estimate as soon as it is ready, and that is going to be ellie next week. and the impact is going to be the effects on the federal budget as well as the effects on the health insurance coverage and premiums, but i have no specific information on any of those points right now. >> do you know if there was a cbo report on any previous drafts that the republicans have prepare and refused to share with us? >> well, mr. thompson, as you kno know, when we, when we the congressional budget office, when we work with members and inp developing the legislation and when we work with your office, we never tell anyone else about any preliminary work. >> and have you seen any previous draft of the cbo report? >> i should not comment on anything that i have seen or not seen to show to same respect that we offer your office, sir.
>> and so, going back and this question was asked, but in regard to insurers is it true that the repeal of this prohibition and this particular bill on the windfalls for the insurance company executives will cost the taxpayers $400 million for lost avenue? >> that is the provision estimate prepared by colleague, yes. >> if this bill were passed it would drive up the costs for the middle-class to pay for massive tax breaks for the wealthy? >> i shouldn't make any judgmental statement of that. >> is $400 million tax cut consider considered a massive tax cut? >> could you repeat the question, i am sorry. >> is a $400 million tax cut
that the insurance companies would receive if this bill passed be considered a massive tax cut? >> i would say that 400 mi$400 n is one of the smaller numbers that we deal with. >> so 400 million here and 400 million there, and pretty soon it is $593.7 billion over ten year years? that is pretty massive. it is unpaid for, is that correct? >> you have the estimates that you have before you, and again, it is not complete, because the overall analysis will include changes to the existing premium assistance. >> so we don't have a cbo report to tell us exactly how much it cost, and we don't have a cbo report that tells us how many people will lose their coverage, and we don't have a cbo report that tells us that your numbers
of 600 billion is what the american people would be charged or this bill that we only got last night. thank you, mr. barthol. >> mr. higgins, you are recognized. >> thank you, mr. chairman. i just, as i understand it, it would allow the insurance companies to claim exorbitant business compensation for business expense for deduction from the taxes. this is what i think is fundamental to the whole health care debate. that we are engaged in today. sir, are you familiar with united health care. >> am i familiar with -- -- >> united health kcare. >> somewhat. >> the cbo earned $66 billion in 2016. and in 2010, that same ceo earned $210 -- sorry, $102
million with stock options. cigna's ceo earned $17.3 million and the aetna ceo earned $17.3 million and an them's ceo earned 13.6 milli$13.6 million. so the real response of the replacement is that we should repeal this provision, and add it to the admonishment to the insurance companies to bring your salaries in line with the re reality. united health care ceo, $66 million in 2014. also disclosed last month that united health care, the nation's largest provider of medicare advantage services is being sued by the department of justice for fraud. united health care $46
million of fraud in the third quarter, and they are improperly charging the medicare program by hundreds of millions of dollars, and likely billions of dollars, and we are sitting here talking about giving big insurance companies a tax break on the exorbitant compensation that they pay their executives. you can be on one side of this debate, and you are either with the people in america that work hard every single day, follow the rules and pay health insurance premiums that are too high and expect one thing, and that is that at end of the day, when they or their family needs health insurance it is going to be there for them, and they won't get screwed by private insurance companies or you're with the private insurance
companies who want to embrace provisions in this bill to protect consumers and in particular the elderly. so when we are talking about executive come ppensation, and deductibility, where in the bill, exorbitant executive compensation, it says it all. so, i don't think that this provision is justifiable, and it is morally rep rehensible. i yield back. >> so, in order of hands being raised, i will recognize mr. kind and then mr. larson, and mr. couey and mr. davis. >> just so we are clear about what this subtitle entails, it is my understanding that
insurance companies can deduct a business expense of up to $100 million of executive compensation, is that correct? >> it is more than executives covered by the provision, mr. kind, but yes, that is correct. the individuals covered are all officer, employees, drirectors, and other workers and service providers such as consultants that the company may -- >> and so basically anybody who is working for the insurance company? >> pretty much, sir. >> right down to the janitor being overcompensated $500,000. >> yes, that is permitted. >> so what is this is going to do is to lift the current cap and the sky is the limit that they can deduct all employee expenses? it would conform treatment of health insurance providers to that of all other businesses. remember, there is still for all businesses a $1 million
limitation of the code section 162-m. >> so they would currently even with the sub title passing a $1 million cap on the employee insurance. >> the health insurance would be subject to the general rules that apply economy-wide. >> so removing the $500 cap and moving back up to $1 million -- >> the $1 million, and remember that 162-m is a narrower group, and it is only the top five officers. the ceo and the next three higher paid are the 162-m rule. >> so the $1 million would then apply to the ceo and the next three highest paid employees. >> that is the general rule that applies across all businesses in the united states, sir. >> of this sub title, do you know how many insurance companies would be affected by this, and what the number is? >> i do not off of the top of my
hea head, but i will ask my colleagues to check and see if i can get that information to you. >> do you know how many individuals that this lifting of the 500 cap would affect of those insurance companies. >> without knowing the number of company, i dont n't know the nur of individuals, but i will check. >> we know it is a ten-year cost of $400 million? >> that is the current estimate, yes, sir. >> do you know the policy behind that, and why a policy to put $500,000 cap on insurance companies? >> i would have to review, but it was a part of the affordable care act. >> and is that so if they were to benefiter or increase the profits under health care reform they would not pass it on as higher compensation to then dedu deduct for tax perhaps.
>> perhap, mr. kind, but the code section 162-m, the $11 million limit, which we were reviewing a couple of moments ago has been part of the law since 1993, so well pre-dated this. >> so with your general knowledge of the insurance company, and the employee compensation, are there a number of people who work for insurance companies who exceed a $1 million insurance package. >> well, mr. higgins did cite some. >> well, he cited just ceos. >> in the united states, it is not uncommon to see among high ranking officers compensation in excess of $100 million. >> when you see the analogy of the fixed medicare of u roughly 3% or 4%, versus what you will
get in the private insurers in the marketplace being closer to 18% fixed operating cost, part of it is employee compensation that the insurance companies dish out to the employees. is that correct? >> yes, sir. >> so, one of the reasons why almost 1 of 5 dollars going to the insurance companies is going to the fixed operation cost is because of to employee compensation packages which under this legislation, they could deduct even more for tax purposes? is that correct? >> the legislation would remove the current law cap leaving in place the current law cap on the narrow universe of the covered employees. >> all right. thank you. >> thank you. mr. crowley, you are recognized. >> thank you, mr. chairman. mr. barthol, thank you for coming before the committee again, and if this bill were to become law, and that is a big
if, would the modifications made by this committee be updated jct baseline? >> if the congress passes a, any change to existing health care legislation, the jint joint committee, and the congressional budget office would update the baselines for receipts and the outlets. >> so it would have an impact? >> yes. >> does that mean that the tax refurn will begin, that debate with 600 billion for tax cuts for corporations and pharmaceutical companies, and health insurance industry, and wealthy individuals. >> well, with that budget point, mr. crowley, we don't have the full numbers in what i am reporting to you, and those were the -- if those were the only changes enacted, yes. >> debating this with a lot of
the information absent quite frankly, but what we know of this, it is a $600 billion hit overall, correct? >> that is correct, sir, approximately. >> i hope that you will be able to analyze the benefits of the 2017 tax cutts, and the american people want to know what they have done to the overall deficit when that time comes about. five committee friends coming before us would get a $600 billion with a "b", and thank you for clarifying that, but how much of the tax benefit accrues for individuals with less than $100,000 in income? >> mr. crowley, as i explained to mr. levin, i don't have a complete distributeionalal analysis, in part, because we don't have a complete analysis of the effects of the entire
legislation. i have distribution analysis on the individual parts which we will provide to the committee later, and the question is no, i cannot provide that information. >> do you have that information? >> we, and it is part of the jointly work with the congressional budget office? >> and monday we may have that before it goes to the budget committee. >> i don't believe they said monday, but next week. >> so if the committee marks up early next week, they may, too, not have that information? >> i don't want to speak for where my colleagues are right now. >> it is quite possible that the information may not be available before the committee. >> it is possible. and they want to complete the work, and do a good thorough job for the members. >> i don't diminish your attempt to do a complete and thorough job for the members, but i wish that the members and the
majority would slow down to allow you to provide that information before we have to continue like we are today. can you tell us what the analysis? >> since i don't have an analysis of the entire bill, i cannot give that answer, but we have some of the pieces that will be made available later as i promised mr. levin. >> and are the same four people make over $5 million or $10 million? >> as a routine matter, we do the are distributional analysis similar to the tax simulation model, mr. crowley, and we don't think that we can make good s statistical inferences for the relatively smaller sample of the individuals above $5 million, and so we report to the committee at levels above a mil y million and not tranches of 5 or 10 above that. i would not be reporting that. >> i appreciate your candor, and the honesty with the committee,
but it is clear that you don't have the information there to give to us, and yet, we are taking action on a bill without incredibly pertinent information that our constituents want to know, and our american people e deserve to know who benefits, and how well they benefit from the tax cuts. it is not impugning to you, but suggest to the committee overall, before we take it up, we should heed the words of mr. doggett, and slow down and get that information before we move forward and do incredible damage to the system at hand. as much as you may not like it, what you are intend ing ing to going to have incredibly serious health and life risks, mr. chairman. >> thank you. time has expired. mr. larson, you are recognized. >> thank you, mr. chairman and mr. barthol. i think that it has been
explained, this dealing with health care in america is a very complex and it can be a complicate complicated issue for people to grasp and fully understand, so i appreciate the time that you and your staff do put into this. i was wondering if you might be able to, and i know that you talked about it in addressing mr. levin, you said that you would provide a distributional analysis, but to a lot of the listeners out there, and people viewing this right now, and the people at augie and rays for example in my hometown or the se seniors looking in fearful of what is going to happy to them, they hear all of the numbers thrown around, and they say, well, you are going to be talking about js 6 and js 7 and
they have no idea what that means, but you said a distributional analysis, and could you exniplain to the publ what that is >> yes. a distributional analysis that is trying the look at the effective tax benefit or the tax increase across the tax paying population providing the tax paying population by income. >> and so in other words, a person listening at home making 20,000 or say $35,000 a year, they would know from your analysis what they are going to receive and what let's say individuals earning over $1 million would receive? >> not specifically, because it is averaging, and within any swath -- >> what is the band on those
average averages? >> significant differences. i'm sorry? >> what traditionally are the bands? >> they report to categories of less than 10,000, 10,000 to 20,000, and 20,000 to 30,000 -- >> and up the scale, the individuals would have a clearer understanding, but you can't give it to us today, because you don't the information. >> i will be giving you some information today. >> and you can't give it to us all, because you don't have what we don't have and what the constituents don't have which is the information and so that begs the question, why are we rushing to this. we have had seven years to come up with what should be, you know, after you would hear from to a acrimony from the other side which is simple and straight forward and yet people
at home that are scared to death can't even get from the congress and the government that they rely on, and staff's competent staffs like yours that would very much like to provide them with the information they need, they can't get one scintilla of information in order to know what is going to happy to their health care. even in a very narrow area that we are discussing here, i wonder if even the insurance executives know this. is that something that they asked for? is this something that 245i were looking for in the bill? is this something that they suggested would be part of the drivinging the cost down and making health care more after aed forable, and making sure that all americans have health care? geez, i know a a lot of them in
my district, and i don't believe that is the case. and yet, we see this incredible windfall that is before us, and that is why a distributional analysis is important, because people are going to actually see what they are going to get versus what people at the top end are going to receive. so i thank your committee, and ufrp unfortunately, you are not able to give us a small portion, but not a complete portion. that is not your fault. that is as mr. neal has pointed out this rush to go to the public vote on this to dday whe we have a mark-up that is
incredibly important for the public. >> you are recognized. >> thank you. community health centers have been for over 50 years or more some of the most effective ways to deliver health care to low and moderate income people, and would the passage of this appeal in any way impact the centers of excellence? and if so, how? >> mr. davis, the provision before us relates to health insurance providers and so as a general matter, community health center s would not be affected
by limiting compensation, but there may be circumstances but i am not aware of it where an insurance company may sponsor a certain health center, and where there could be some case of where there is some related effect, but the provision before us right now is about measured and it is about the deductibility of compensation paid to employees of health insurance companies and health insurance providers. >> well, let me ask you about hospitals, because all of us can concerned about hoscos and what the disproportionate share of hoscos who care for low, moderate income patients as a part of the base. would there be impact on
provision provisions for the continuing services of those institutions. >> from this provision, no, sir. this is about what affects health insurance providers, and so it not people that manage care facilities, hospitals, clinics or the like. it is about people that offer it, insurance in the individual market or the group market, and nose those businesses that offer insurance -- and not those businesses that have offered insuran insurance. >> and have some decided that in the affordable care act to expand medicaid. what impact would this have on the medicaid in those states? >> mr. johnson, i'm afraid that i am not knowledgeable enough about medicaid and what other
proposed legislation may do in terms of funding for medicaid. so i can't answer the question. >> so we don't see any great disruption of the health care delivery systems? >> i can't speak to the question about medicaid, and saying that this particular provision is much narrower e relative to your questions that you were asking questions about clinics and hospitals, and the service providers. this provision is about the taxable income, allowable deductible expenses of those businesses that are in the business of offering individuals or grouple health insurance coverage. >> well, are we then in any way excusing a robinhood in reverse plan where we diminish services
for the middle and low income and provide breaks for the wealth wealthy? >> umm -- >> mr. davis, mr. barthol is here to answer technical questions of the bill, but that is beyond the scope of the section. >> thank you, mr. chairman. i yield back. >> thank you. representative dellbiney, you are recognized. >> i have a question based on a letter, a heartbreaking letter from one of my constituents diane from washington, and before the democratic reforms were enacted, diane's 25-year-old daughter, sarah, delayed seeking doctor-recommended care because she did not have health insuranc insurance, and we all know that one of the greatest challenges
in health reform has been to bring young americans into the system, but tragically for diane, her daughter's lack of health care ended up fatal the, and she died at the tender age of 25. diane wrote to me, and she said, quote, we didn't know that the headaches were a symptom of a life-threatening condition, and she was recommend ad ed a mri, she was after raid of the costs without health care coverage, so she dealt with them daily. and now we have to live with guilt and anger in this wealthy company that people could not get a life-saving cost because of the costs. there is not any parent in the room that is not moved by that store ri. it is awful, but it also highlights the distinction between access and coverage and it does not matter if the working families like diane's have access to health insurance, but it matters that they have coverage for the do
doctor-recommended care that they need. because it can literally be the difference of life and death. and so we are looking at this subtitle that you have said would estimate is a revenue loss of $400 million over ten years, is that correct? >> that is correct. >> so, given the loss of revenue there, and what impact would that have to give revenue used for health care, and what impact does that loss of revenue have for coverage of families like diane' diane's? >> the coverage questions go to the broader scope of u.s. health care system. this provision is really just about deductible expenses of health insurance providers and what happens in terms of the federal budget, and how the members choose to spend those
are up to this committee and other members of congress. >> but given that this is less revenue, and we are supposed to only be looking at this particular subtitle by itself, because we are not talking about the entire bill, is there anything that this subtitle would do to improve coverage for a family like diane's? >> i really could not comment on the overall coverage effects of how this weaves into the entire package, and again, that is part of the analysis that is still forth coming. >> so we have a piece of legislation that we are talking about that just reduces, and creates a tax break for insurance company, and reduces the revenues by $400 million, your number, and does nothing to help the families across the country and probably undermines
it, because they have revenues that are to support the families. that is disappoint ing thing th are only talking about a tax break and not talking about the coverage at all. unless we have somebody else that doesn't have the information this you discussed the cbo score or the distribution, there is no other information to help us to understand at all, once again, how legislation like this the really helps families and in providing the quality coverage for americans throughout the country. >> well, as i did report earlier, my colleagues working with the cbo and they are, the cbo has said that they will release the estimate as soon as it is ready, and they hope it is early next week, and they lin collude the effects on the federal budget, and the health insurance coverage and the effects on the premium. >> but we are supposed to be
voting on this today, so we are voting on this in the absence of any of that information. thank you for your time, and i yield back. >> ms. chu, you are recognized. >> i want to make sure they understand the underlying legislative text and its treatment of maternity care and abortion services, and i'm concerned because unbelievably this bill takes away the requirement that health plans offer maternity care and the objective result is that it would incentivize women to have abortions. now, there are many women -- >> ms. chu, if i may, we will have in ra latin a later sectio bill, and great and unlimited opportunity to explore the issue issu issues, the situation in front of us, and mr. barthol's exp
expertise is to the remunation area and i ask you the focus your question on this scope of the bill. >> okay. so, getting to the tax credit issue, mr. barthol on the page 5 of the committee print, there are no tax credits for plans that cover abortions if that is correct? >> if i may again, ms. chu, we will have plenty of opportunities to support these questions in this section of the mark-up. mr. barhol is available to talk about this in regard to remuneration in this area. >> how about the tax credits to require ma teternity care, and t is -- >> i believe that is beyond and mr. barthole is here to answer questions of this section of the bill related to insurance coverage. >> and i would say that the republicans are takinging away access to maternity care and --
>> that is beyond the scope of the gentleman's expertise, and we will have plenty of opportunity to explore these issues and all members of the committee when that section of the bill comes before us. >> i would like to yield to that have such a far reaching effect. but i want to be sure on this particular bill that i understand its affect. currently an insurance company can deduct $500,000 to it's chief executive. >> chief executive and any other employee. >> right. and if this bill is passed and that compensation is in the form of performance pay it will be able to deduct in aetna and cigna's case in 2015 their chief executives earned $17.3 million. they'll be able to deduct the
full if it is performance pay instead of a mere $500,000. >> i think you're referring to the allowance of compensation for performance pay under 162-m which has some requirements by the shareholders. >> i understand. >> the answer is yes. >> yes, so basically what this bill will do, what this title will do from a tax standpoint is that taxpayers are just now subsidizing the first $500,000 of an insurance executives compensation but once this bill passes american taxpayers will be asked to subs diidize, 17.3 million for aetna,
14.5 milli 14.5 million for united health and anthem and so on, millions of taxpayers will now have to subsidize instead of limiting it to a half a million dollars. it's not that they can't pay out the enormous sums i guess if you're vice president you just get 10 or $12 million, but currently their shareholders have to be responsible for covering the costs and now we'll inject the american taxpayers and permit their 100% deduction, isn't that the way it works? >> it would permit a deduction as an ordinary business expense. >> it could be 100 million, it would still be possible, right? no limit at all. >> it could be possible though
there are -- >> $17 million for a year's good work starting payment from the insurance rate payer is not unreasonable, but what is the limit or how do you determine what is reasonable? >> time has expired. >> miss sanchez you're recognized. >> mr. chairman, i'll yield back and save questions for another section of the bill. i yield to mr. kind my time. >> i appreciate it. i'm a little confused because my previous question to you indicated there's current law that limits the ceo in the top three earners of an insurance company to a million dollars of expensing. and now according to mr. dog ge is it's structured in performance pay the sky is the limit. >> did not mean to mislead you.
in 1993 the congress enacted limits in $1 million deductibility but provided that compensation in excess of $1 million may be deductible if it is performance based and essentially put to a vote of the shareholders so if the shareholders have reviewed this as essentially you know appropriate compensation for their chief executive officer and top three. >> so what mr. dog gget was representing was accurate? >> yes. >> they can dueduct it all on their business expense? >> right. >> i appreciate the fact that jct is still working and acts as a none-partisan referee and that information isn't available, but
also understanding that this huge tax giveaway now to insurance ceos with the dedu deductibility the going to be going to middle class working families, serious reduction in medicaid funding back to our states, is that correct? >> i shouldn't characterize what pays for anything else in the bill. there's many moving parts. >> i appreciate that and we'll get into that a little bit later. it's linda's time. do you want to yield to mike thompson? >> yes. >> thank you jengentle woman fo yielding. >> i think mr. kind explained quite clearly how this incredib incredible windfall that we're going to vote on this this bill rips away health coverage for
every day working americans. there's another part that i don't think has been mentioned. is job loss. it's my understanding that this bill, this combination of bills that we're going to pass today are going to cost the american public some 3 million lost jobs. and in california it's about 350,000 jobs that we're going to lose. so not only do people lose their health care and insurance executives get millions and millions and millions of dollars, but americans are going to lose their jobs to feather the nest of these millionaires in this kind of back doorway to compensate them. i think it's real important that members in this committee
understand what it is we're voting on. had cbo done the report and we had that before us, i'm assuming that we wouldn't have had to find out by good luck that this was the case. we would have had this information. i think there's probably more in the bill that we're going to find out that hurt it is american people that we were sent here to represent. i can't understand why it is we're instint on having this hearing today without the information before us to make sure that we can cast the best votes for the people that we represent. >> i'll yield back the balance of my time. >> thank you. >> mr. pass crcropasscrow. >> it's miss --'s time. >> i yield what to whatever remains of mr. pass crowcrow's . >> this is a stahistoric time,
chairman, historic moment and we're all trying to capture it and i go back to the president's great speech last week when he said time for small thinking is over. he's never been so right. we're thinking big now. we're thinking big. when i go back to the campaign, which is not germane to this issue, but let me go back any way. >> all time has expired on miss sanchez's time, but mr. pass crow, go ahead. >> when i listen to how we're going to connect with the working people of this country, and how we're going to be synthetic to their needs and this is what we find out that decision historic moment.
it's mind boggling because the big thinking is now for the big boys. so much of the money we're saving when we're cutting these taxes and everybody is for cutting taxes but never look at the consequences many times. in the president's cabinet it's estimated to have a net worth of $13 billion. good for them. would anyone in this cabinet benefit from this tax provision we're talking about today? members of the president's cabinet, sir, are not employees of health insurance companies, so no. >> okay. >> from the provision that's before us right now. >> would anyone in this cabinet benefit from the other tax cuts
which are nearly 600 billion in cuts. $600 billion. >> thank you, mr. pass cecellpa. >> it is related to the insurance and renumeration section of the bill. >> no it's directly connected to what we're talking about, i believe. >> a gentle reminder. please direct your questions to mr. bar totold who has technica experience and expertise on this. >> mr. chairman. time for more mr. chairman, point of information. >> inquiry? >> yes. >> at least 15 to 20 seconds transpired in your gentle reminder to the gentleman to new jersey, can you please restore that time on the clock. >> on your time we will restore
them both. >> okay thank you. >> we're talking about nearly 600 billion in tax cuts are we not and is this not germane to this legislation we're talking about today? >> excuse me, mr. passpasscrell >> i'm talk to go the gentleman. >> would you repeat the question please. >> sure, we're talking about $600 billion and i'll go over where the money is coming from if you wish, that's not my purpose but i think that's germane to what we're talking about. the bill we're marking up today. and i want to know would anyone in the cabinet benefit from the other tax cuts, these other tax cuts of $600 billion. >> again, i appreciate the question -- >> and even members of the cabinet would benefit from that. >> he has experience related to
this section to have bill. there will be hours for us to move through this bill. >> isn't it strange, mr. chairman we come here to mark up the alternative that we've been talk about for six and seven years, doesn't it strike you as peculiar that the first thing we're doing is not only cutting all the revenue out of the bill, most of the revenue out of the bill and that that revenue the first thing we do is take care of insurance executives? and people who are of a certain income level. >> mr. pascrell if i may, in moments, there will be a chance for those who wish to strike the last word and then i'll give you the opportunity to explore that
section to have bill. >> i yield back. >> thank you. >> mr.bartold, again it's a $600 billion tax cut, correct? >> again, if i may remind members, mr. bar toldtold's expe is related to this section of the bill and would ask not to go beyond the scope of the section. >> how much are we talking about? >> this particular provision will reduce federal receipts by $400 million over the ten-year budget period. >> we know through the medicaid expansion cuts anticipated on other parts of this bill. the state of new york will see a reduction of 5$5.7 billion. in a state where local governments contribute to medicaid, a matching local
government component to that, it's quite possible that localities will be facing prompt tax increases because of those cuts and i want the constituents back in new york to understand that pharmaceutical executives will benefit tremendously between 400 and $600 billion where -- will have to consider increasi increasing property taxes, because of this tax cut, i want to state that for the record. i appreciate your time and the time for the gentleman of new jersey to yield back! claiming my time i yield the rest of my time to -- >> stay with me for a second, but is it safe to assume that if insurance companies are able to enhance their expense on employee compensation that one of the beneficiaries of doing so could be any individual that holds private stock in those insurance companies whether it's
a member of congress or a member of the administration due to enhanced capital gains? >> at its simplist level, the present law affect it is computation of the net taxable income of the business. >> i would assume that insurance company is able to -- >> compensation of the business. >> -- able to reduce their tax responsibilities that could enhance the value of the stock and therefore the shareholders would benefit -- >> thank you mr. kind, time has expired. >> miss sul. >> thank you mr. chair. i want to make sure i can find myself to the renumeration for insurance executives. so this title will give a net benefit to insurance executives and have less money coming into the federal government to the
tune of $400 million, is that right? >> tax receipts largely from these businesses will be reduced. >> it's a wind fall basically for them and not for the taxpayers, but my question is do we know how many insurance executives actually benefit from this provision currently. >> i believe that's the same question that mr. thompson asked earlier and i don't have that information. i'm checking with my colleagues to see if we know the number of companies maybe limited under pren present law. >> do we know what the average reduction is with respect to this provision? >> i will check -- >> what is the average compensation of these executives and what is average deduction? >> i'm checking with my colleagues and if i get supplemental information that i've asked about i will make it
available to all the members of the committee. >> can you also add to that if there are any regional or geographical differences in compensation and the deductions related to insurance executives? i assume you don't know that answer either. can you add that to the list of things to explore. >> regionals -- well, we usually don't model things at the joint committee because the committee is making national policy. there are as a general matter general differences in some compensation. i don't have information as to whether this particular limitation would be expected to have any -- >> i guess you can imagine that it does matter to me especially since the district i represent has .6% of the people makeover $200,000. so you can imagine that the constituency that i represent looks in awe of the fact that we
are giving a $400 million wind fall to insurance executives when they can barely be able to afford food on the table the average income for my district is $34,000. so it seems a little bit out of balance if you will and i understand that you may not focus on geographical differences but it is paramount to the folks i represent especially since this bill will result in 357,000 alabamans being kicked off health care and the job loss mr. thompson talked about in my district alone will be 28,000 jobs related to this bill so you can imagine that does stir up a lot of real concern frankly by the american people over having a title, the first title out of the gate be a wind fall for insurance executives. my last question mr. chairman is
with respect to the insurance executives prior to the implementation of the affordable care act when with we capped it at 500,000, do you know how much the average deductible was for insurance executives? >> i do not know what expenses were claimed in 2010 or were k effected. >> i want to state that it is woefully inadequate for us to -- even when our expert can't give concrete information like how many insurance executives will benefit. these are basic questions that we need in order to vote on a bill such as this so i want to state for the record that it really is unacceptable and
woeflly inadequate for us to take up a bill like this without having knowledge of how much it's going to cost to the american people. thank you i yield back my time. >> mr. chairman, i want to yield to mr. kind. >> i would like to thank any friend from georgia to yield for my time. >> just so we're clear on the subtitle. by repealing the cap on employee compensation deductibility and allowing it to rise and apparently to unlimited heights if it's based on performance pay, this directly aneuros to the benefit of the insurance company's bottom line because they reduce their tax liability then with this provision? >> yes, sir. >> and that could be used as an excuse to enhance executive pay with the insurance company. do we have any data that would show a liflting of this
provision before us could lead to enhanced executive compensation packages for these insurance companies? >> the economic affect of present law is if you were to give a covered individual additional compensation beyond the $500,000 limit, it costs the business owners more because it's not a deductible expense. so this would make it cheaper to provide compensation. i'm nod aware of any evidence of sensitivity of employment or business compensation offers to such a change. >> i understand that, but i would suspect that those of us on this side would have less to complain about with this provision if there was any
evidence or data to show if insurance companies can increase their bottom line by being able to expense this to a greater extent if that then could be used for the reduction of premiums or deductibles from the customers of those insurance plans that wouldn't necessarily be a bad thing. is there any evidence to support that type of cause and affect? >> i'm not aware of any insurance company profitability and short term affect on market prices >> on premiums and deductibilities that customers would have to pay? i would also presume if you are able to reduce your tax liabilities the market would react favorably because they would be able to show a healthier profit statement and share prices i think would go up. is that a logical consequence to
wa we're doing here today? >> the check incentives that you laid out if it increases the net income it would be seen as more valuable it would be a question of how much magnitude. >> so it's also safe to assume, share prices go up that those who are shareholders of that company would certainly realize a benefit through enhanced distribution, whether it's capital gains or dividends. is that true? >> that would be a possibility. it would be a matter of magnitude. how important is this to the overall market evaluation of the enterprise? >> the sitting member of congress a private shareholder or a member of the administration that they would be in line to profit from this type of provision that's before us today? >> any shareholder, sir. >> yeah. mr. chairman, i'm just wondering
whether or not stock act implications might-ply. the stock act is new ethical rules and guidelines dealing with self-dealing legislation pending before us and one where you're a private shareholder with a insurance company could as you werely enure to the shareholders. i though that for yours and ours consideration, and i yield back to the gentleman of georgia. >> i yield back. >> before we move to strike the last word are any other members wish to question. >> i just want to quickly summarize why there is such deep feelings on our side and maybe silence on the other side.
we're starting off this markup with essentially a giveaway to insurance executives. it's part and parcel of $600 billion in lost revenue. and i just want to mention because it's going to come later that everybody should understand why our focus. the two largest provisions the .9 medicare tax and net income tax those two come to about 275 billion. about half to have $600 billion in lost revenue. those two provisions according to the distribution tables that we have and i want everybody to understand this, over one half of each of those goes to someone
making over $1 million a year. and another quarter will go to those making over $500 million. so 500,000. so essentially what we have here to kick off this discussion in this markup is a beginning of a huge giveaway to the very, very wealthy. a huge give way, and the silence from the other side i would think would indicate deep embarrassment if possible that we're going to what is called by the speaker what they have been
interruptions to narrow discussion and to cut off questions, this is a deliberate part of the presentation of this bill in this fashion. it did not need to be done this way, but it is done that way so as to constrict not only our ability to have reviewed the bill and to have reviewed what it cost and how much it covered but to try to limit even within that what amendments we can offer and what we can discuss and what questions we can raise and despite those limitations imposed unfairly upon us there's striking evidence of what is occurring here and what has not occurred here. this first measure dawned under the guys of repealing obamacare is to give a $400 million windfall to the insurance industry. now, which member of the insurance industry had the courage to come an sit at that
desk and tell us they needed the $400 million? none. because like the rest of this sorry bill they did not have the courage to have a single public hearing on it. in all the seven years of why it is that taxpayers ought to have to subsidize a $17 million annual salary for some insurance executive. and what is amazing this morning is that in this discussion that that silence has continued. you would think we were asking someone to comment on whether or not president obama was a criminal who wiretapped president trump at trump tower because they have been silent on that. you would think we were asking for president trump's tax returns because they have been si silent on that. indeed every outrageous
statement every crazy tweet, they are silent on that and again in this hearing on this title they are silent again. we have not heard one member of our committee who is a republican speak up to explain why insurance companies deserve a $400 million windfall as part of a $600 billion giveaway in this tax measure. they're quiet, silent as they are silent and acquiesce in the wrong doing of this administration and i think it's very important to point out not only the wrong that is being committed here. a wrong on american families. a wrong that as my colleague from new york said will lead to property tax increases. a wrong that will lead in texas who got their first family physician to no longer have that. we won't know how many millions
are affected chwhen this vote i cast. we do know $600 million is being drained out of a treasury with this first step of 400 million for a totally unjustified windfall that no one felt it was necessary to explain or justify in public hearing or public comment a single word about it. i yield back. >> thank you, mr. dog get. does anyone else wish to strike the last word? >> dr. davis, do you wish to strike the last word? >> you're recognized. >> thank you, mr. chairman. >> this bill is the first tax bill for the republican congress and president trump. rather than helping hard-working americans who make too little to feel comfortable, the tax
provisions shower billion dollars of millionaires and billionaires on insurance executives and wealthy pharmaceutical companies. to add insult to injury these republican bills pay for the windfall by cutting health care and increasing costs for tens of millions of working families and retirees. the two tax benefits in this section cost $156 billion with a "b." about 400 families will get 7 million apiece every year. this is a billionaire's bonus. these 400 wealthy families will receive a benefit for about 800,000 people in 20 states.
these cuts will most certainly go to president trump and high percentage of his cabinet. no wonder mr. trump so enthusiastically supports this bill. my colleagues must think the president and his cabinet are doing a grand job to reward them so generously so quickly. given the small number of people affected, this provision looks very much like a congressionally directed earmark. like a 157.7 billion earmark. the american people hoped they had elected republican leaders who would create jobs and give them a handup. instead of using this 157.6 billion to make the credits more generous to protect retirees this bill harm it is vast majority of americans to
give $157.6 billion to the most secure advantaged among us. i urge my colleagues to oppose this congressional earmark that would give millions of dollars in raises to president trump and much of his cabinet. i yield back. >> thank you. anyone else wish to strike the last word? >> are there any amendments to amendments in nature to a substitute? >> gentleman seek recognition? >> gentleman from oregon is recognized for the purposes of offering his amendment. >> mr. chairman. >> mr. t barry is recognized. >> i would like to recognize a point of order. >> has been recognized. i would ask the clerk to spend -- while the clerk
last week our president discovered that health care was complicated with meeting with the governors. in fact he said famously who knew? ever member of this committee knew health care is complicated. we got some great little buttons that say we knew. the claim by the president that we're going to have health insurance for everybody. quote, it's going to be people can expect to have great health care. it will be in a much simplified form, less expensive, much better. he's gone on the airwaves with
this pledge to the american people. we're in somewhat of an awkward situation here. we haven't scratched the surface of dealing with this and the on going thoughtful fast we did when we had the affordable care act with hundreds of hours of work, dozens of witnesses, committee hearings, we're force today rely on articles frankly being published in the last 48 hours. mr. chairman, i have a very simple amendment. it would state that nothing this this bill would take place unless the congressional office certifies that everybody gets
health insurance as a result of this bill. that it keeps president trump's promise that it will be at least as good. we're rushing s into this blind. we have never had at the witness table. i feel sorry for mr. bart hold. but he's sort of on the receiving end. the questions that should have been asked should have been asked to experts in health care, economics, insurance companies, the medical profession, hospitals people who care for the disabled. people who manage programs on the state level. there ought to be a full and complete hearing of the implications. the fact that we're going to
have 64-year-olds with a 60% increase in their premium insurance rates that ought to be a concern of everybody on this committee. it ought to be available to the american public to decide whether or not the increase on financial burden on citizens approaching medicare but not quite there yet. that should have been part of this debate. it should have been part of the effort here listening to the experts about the impact of taking $170 billion out of the trust fund for medicare. the president has famously promised that it wouldn't be touched. and this proposal ends the guarantee that we rely on with medicaid and its expansion. this bill if enacted would begin the retreat of medicaid.
capping, lowering, shifting burden to the states, putting the people who deal with the elderly and disabled in chaos. my state will lose almost a billion dollars in 2019 as we are struggling with two-year budgets. so mr. chairman, because we haven't followed regular order, because we don't have a cbo score because we haven't heard from experts who could give dimension though these challenges, i think the least we should do is approve my amendment so make sure it doesn't go into fek unless we can certify the president's claims about a health care program that's going to be great, less expensive, going to cover more people unless we can prove it and i respectfully suggest we all ought to approve
this amendment to give the american people the trump guarantee. >> bus the gentleman from ohio wish to -- >> yes, mr. chairman, it is not germane to the amendment in the nature of a substitute t. amendment viemt -- violates house rule 16 clause 7, it is broader than the narrow chairman's -- >> mr. chairman, i respectfully disagree. i think what we're talking about here with legislation we're still trying to figure out what you have got in here and what its impacts are. that's why it would be great to have a cbo score, that's why it would be great to have a hearing to bring in people to flush this out. and i think being able to make sure that we can give the
american public assurances that they're going to get what the president and the republicans have pledged they're going to give i think is entirely germane, i think it is something you actually august to give the benefit of the doubt for giving peace of mind to the american public. part of what is going on is the failure to follow regular order. we have no cbo scores, no public hearings, it's trying to get jammed through on something we all worked on for weeks and weeks and months and you had six solid years not to chip away at but to reform, flush out, deal with.