tv Ways and Means Committee Marks Up Health Care Bill as Congress Awaits Cost... CSPAN March 8, 2017 6:32pm-8:33pm EST
>> mr. renacci? >> aye. >> mr. meehan? >> aye. >> miz noem? >> aye. >> mr. holding? >> aye. >> mr. smith of missouri? >> aye. >> mr. rice? >> aye. >> mr. schweikert? >> aye. >> miss wolorski? >> aye. >> mr. carbelo? >> aye. >> will bishop? >> aye. >> mr. neal? >> no. >> mr. levin? >> no. >> mr. lewis? >> no. >> mr. doggett? >> no. >> mr. thompson? >> no. >> mr. larson? >> no. >> mr. blumenauer? >> no. >> mr. kind? >> no. >> mr. pascrell? >> no. >> mr. crowley? mr. davis? >> no.
the gentleman from new jersey is recognized for five minutes on his amendment. >> thank you, mr. chairman. i have an amendment which would strike the section of this bill that gives a tax break to insurance companies and executives. it is title 1, it is germane. specifically, this amendment would maintain the current $500,000 cap on the deductibility of insurance company executive pay. it would ask health insurance executives, a few of whom made $17.3 million in 2015, to limit the amount of income they write off and to contribute their fair
share. my amendment would save $400 million over the next ten years, direct those savings to the medicare improvement fund to ent st strengthen medicare for our seniors. in this bill we have a recurring theme. it paints a clear picture of where our priorities are, time and time again in this bill we see carve-outs, tax loopholes, give-aways, to the highest earners and the most fortunate, and cuts to working americans. it's not veiled. it's clear what is going on. this bill amounts to showering money on a remarkably small number of remarkably wealthy men and women in america while taking away the health care and increasing costs on millions of
working families. i urge my colleagues to support the amendment, direct these funds to the medicare program. the insurance industry and ultra-wealthy insurance executives don't need a special tax break. i urge you to support my amendment and i strike this provision from the bill. this is on the record, mr. chairman. thank you. >> thank you. does the gentleman from ohio wish to reserve the point of order? >> yes, i do want to continue to reserve a point of order. i make the point of order on the amendment right now because it's not germane to the amendment and the nature of substitute, the amendment violates house rule 16, clause 7 because it goes beyond the narrow subject matter of the chairman's amendment and nature of the substitute which is remuneration. this directs funds to the medicare improvement fund under a completely different section of the tax code. >> mr. chairman --
>> does the gentleman from new jersey wish to speak on the point of order? >> yes, i do. mr. chairman, the interpretation of this legislation does not make sense in view of the other interpretations that were made since 10:30 this morning. this is germane. it is title 1 which makes it applicable to what we are voting on tonight. i laid it out very clearly. you take from one group of people and you give to another group of people. if that's not germane, what in god's name are we doing here? and i am asking you to look at your dismissive attitude about this legislation -- >> will you yield? >> yes, sir. nch >> it's not dismissive, mr. pascrell. it's the fact this section
clearly violates the remuneration section. can you look at your amendment? >> i'm sorry? >> if you want me to give you a serious legitimate answer here -- >> i hope so. >> this is your amendment, under lines 11, 12, 13 and 14, it is the sense of congress that funds made available under subsection a shall be used to incentivize quality fee for service under medicaid, medicare and medicare advantage. that violates -- >> well -- >> you can take back your time. >> thank you. first of all, this is a sense of the congress. that's a very big difference, is it not? is it not -- >> mr. pascrell -- >> yes, sir. >> mr. chairman pascrell, medicare improvement fund is outside the subject matter.
i don't know how clearer i can be. that is completely outside the subject matter. >> would you agree -- >> are you filibustering? >> i'm sorry? >> are you filibustering? >> i would never do that. >> i'm starting to wonder. >> i would never do that. >> i yield back to you. >> it's the furthest thing from my mind. but, there is a big difference when we have a sense of the congress and we have a regular amendment, would you not agree? >> no. because this is outside the scope of the area in which we are debating right now which is the renumeration section. >> are you yielding back to me? >> he yields back. you control time. >> thank you. let me ask you a question, my friend from ohio. line 11, section b, the use of funds. what if i strike that out of there, that particular paragraph? >> mr. pascrell, you have to strike the whole daggone thing out of there to be quite frankly within the jurisdiction.
>> you know that's not true. >> no, it is true. i quoted you 11 through 14 on my own but as the crack staff has pointed out, you also are out of bounds on number 3 and 4 and 5. that makes most of the whole page out of bounds. i relinquish my time back to you, sir. >> well, it would seem to me, i laid out where the money would go. i don't think that's out of bounds. i think it is germane. you say it isn't. i respect your opinion even though i think it's wrong. >> i'm sure you do. >> but if i strike out that section b, paragraph b -- >> why don't we yield to the chairman? he can decide. >> fine. thank you. mr. chairman? >> that's not a very high standard. >> i agree. >> mr. chairman -- >> mr. levin, do you wish to speak?
>> if mr. pascrell simply moves to strike the repeal, isn't that germane? >> mr. levin, i would advise you to visit with your staff about making the amendments germane. we will be glad to consider them as presented. >> i'm asking you since you have been ruling on germane all day, if we simply move to strike that provision, would it not be germane? >> strike section 1? >> mr. chairman? >> yes. >> point earlier answer to that, i'm not going to rule hypothetically. if an amendment is made in order on a proper motion, we will certainly consider its germaneness. we do follow regular order as we move forward. >> mr. chairman. >> mr. pascrell? >> would it meadet your standar if i struck section 1? >> i don't want to rule on a hypothetical question. if you would like to, at this point, i'm going to rule on
germaneness of the current legislation. >> i'm proposing i strike section 1. >> thank you. >> now what? >> will the gentleman from new jersey yield? >> absolutely. >> my feeling is that we are going to be here for awhile. maybe work on the amendment, its germaneness and we can come back to it? just a thought. >> except would the gentleman yield? >> sure. >> you are suggesting your amendment start by -- just say strike section 1. >> yeah. >> okay. so just cut out everything else after it says strike section 1. >> mr. pascrell, why don't you just amend your, modify it to say strike section 1? >> mr. pascrell. >> yes, sir. >> let me give you some advice rather than attempt to modify this in a discussion on the
dais, i would recommend you withdraw the amendment, attempt to put it in germane order, follow regular order in the sense that modify it, 75 copies, we will continue to move forward with that and consider that bill hypothetically, but notas a dir amendment. >> all right, mr. chairman. >> what purpose, mr. pascrell? >> we will withdraw and then introduce. >> the amendment is withdrawn. are there other amendments in the nature of a substitute? >> where's the amendment? >> mr. chairman? i have an amendment. >> is it germane? >> and it's germane. >> mr. chairman, unfortunately, i'm going to reserve a point of
order. >> i'm trying to take your suggestion so we can get one amendment passed. >> i'm going to do more than offer a suggestion. by striking section 1 in effect, you wish to vote on the underlying subtitle? >> that is correct. >> when these amendments are concluded we will go to a vote on the -- in consideration of the underlying subtitle. your amendment in the next vote will be identical in policy and in action, and so moving forward without further amendments i think gets us to the argument you would like to have. >> you cannot do that now. >> excuse me? so by -- since you have withdrawn, if we consider, if this is the final amendment, move forward on the underlying subtitle, this will allow you to have the vote on the policy issue that i think you intend to have. >> yes. >> thank you. >> thank you. >> so are there any other amendments to the amendment in the nature of substitute?
if there are no further amendments, the question -- >> mr. chairman? would it be in order to move to strike the last word? >> great. miss sanchez, yes. you are recognized to strike the last word. >> thank you, mr. chairman. i want to thank my colleague, mr. pascrell, for valiantly trying to get some amendments made in order. i claim time to talk a little bit about the just hot mess that this bill is and the opposition that we have already seen coming from groups that are intimately connected with and critical to our health care system. we have now seen the association for the advancement of retired persons, aarp, come out against this bill. the american medical association
is opposed to this bill. the american hospital association is opposed to this bill. and now the american nurses association is also opposed to this bill. these are nonpartisan organizations that work day in and day out in the health care system and they have summarily said that the bill forces people to pay more for less health care coverage, for less health care benefits, and for less peace of mind. now, those groups that i just mentioned aren't the only ones who think that this bill is a hot mess. i would like to just let folks know about some of the republican members who are not enamored of this bill, either. representative brooks said right now the speaker of the house does not have the votes to pass this bill unless it's got substantial democrat support and i am not seeing that democrat support materialize.
senator rand paul said quote, it won't work, it will not pass, conservatives are not going to take it. senator mike lee said quote, this is not the obamacare repeal we have been waiting for. it's a missed opportunity and a step in the wrong direction. and governor john kasich said the right way to fix obamacare is by republicans and democrats working together. ruling amendments non-germane is not a way to work together with democrats, i would just remind the committee. in addition to those members of the senate, we have heard opposition from conservative influencers such as the republican study committee, freedom works, the tea party patriots, club for growth, americans for prosperity, the heritage foundation and freedom works. we have heard opposition from conservative commentators, michael cannon of cato said the house republican leadership bill
does not replace obamacare. it merely applies a new coat of paint to a building that republicans themselves have already condemned. megan mcartle much bloomberg views says if republicans manage to pass this they will richly deserve it when voters blame them for the resulting havoc it will wreak in the individual market. national review chimed in, all in all, though, the bill is a disappointment and it's not too late to get a second opinion. avic roy said little doubt the plan will price millions out of the health care insurance market. it's not clear why they are proceeding without a score but it means that members of the house energy and commerce and ways and means committees will not have the information they need to make informed decisions about how best to revise the bill. the cbo is likely to score the republican bill is covering 20
million fewer americans than the aca. expanding subsidies for high earners and cutting health coverage off from the working poor, it sounds like a left lik mustache twirling top hatted republican fat cats. and jennifer rubeen of the "the washington post" opined, arguably is the most irresponsibleably display of governance in my lifetime. robert less owski said it won't work. worse than obamacare itself and is a very attractive program better off gutting the program for the poor to be able to pay for it. so i would just like to point out to my colleagues on the other side of the aisle that have opposed actually working with democrats on good policy ideas that don't hurt middle class americans or working families or working families that are struggling, but instead
of that we have resistance at every turn and i would just like to say that if this bill makes it through committee and it seems like the republican majority is intent on doing that in a very short amount of time, you will own the results of this poorly crafted bill. you've had seven years to put together something that was workable and i have no other words other than to say it's a hot mess that we're talking about tonight. >> all time has expired. >> i yield back. >> strike the last word. >> thank you, ms. sanchez. i have the utmost respect for you, not as much as i have for mr. pascrell and i concur with ma mr. larson said earlier. here's the challenge on our side. when there are these amazing quotes coming from the other side with respect to defending the affordable care act it's hard to imagine the ability to work together.
in fact, here's a quote, republicans are going to have to do it alone. that was ms. sanchez in january. i won't go on to talk about -- >> will the gentleman yield? >> i'm not going to at this point in time. >> ten seconds. >> just a -- >> is that i understand everyone wants to work together but it's hard to take all of that in stride when some of the quotes that we've seen in local newspapers. i'll yield back. >> will the gentleman yield. >> the gentleman has yielded back. mr. rosscom -- mr. cowry you've struck the last word earlier so someone else will have to do that. mr. rascon is recognized. >> last fall when the insurance coops were collapsing there was an opportunity, a brightness a moment that i thought both sides could come together and it was a recognition that people who
through no-fault of their own were in a coop that had collapsed surely, i thought, on a bipartisan basis we could come together and say, they entered into the coop through no-fault of their own, the coop collapsed and yet they're going to be stuck with a penalty at the end of the year. surely we can come together on a bipartisan basis and say those people shouldn't be stuck. but here's what happened. every democrat on the committee even though there was an explicit assurance that the only purpose was to bring rescue to that constituency, every democrat on the committee said or they voted no. it's inconceivable. it's inconsistent with the spirit that's being articulated on the other side of the aisle or to quote the spirit of mr. larson, i think my constituents look at this debate and say, look, back in 2008 when president obama won the election there was a national consensus
around two core issues as it relates to health care. i haven't seen polling on this but it's pretty intuitive. number one, health care was too expensive and many of the cost drivers were not making us any healthyiers. the second thing that people agreed on a broad spectrum of the american public, they agreed that they were scandalized that the idea that somebody with a preexisting condition didn't have access to an insurance pool. the moment it was there, president obama could have been a trans formational figure in my view. he didn't go to those remedies that is dealing with costs and preexisting conditions. instead he went an entirely different route. now the route ironically is being criticized by our friends on the other side of the aisle that it relates to the cadillac tax. are basically playing legislative not it. they're the authors of. it's absurd. so here's the problem.
the problem is the false premises of the affordable care act. the affordable care act was purported and has had some success. i'll stipulate that. there's people that have been the beneficiaries of the affordable care act but here's the problem. the subtext of the argument for the affordable care act was that nobody was going to get hurt. do you remember this? president obama himself saying, if you like your doctor, you get to keep your doctor. turns out, not true. saying if you like your coverage you get to keep your coverage. turns out, not true. you're going to save $2,500 per family average american family. turns out, not true. in fact, all of those are absolute nonsense. so here's what we're trying to do, basically the democrats when they had control said to a whole group of americans, we're going
to come and get you on the next helicopter out of sigh gone. we're going to come back and pick you up. but you know what? nobody came back. now what we're saying is, we think we've got a better pathway. we think we've got something that is going to deal with preexisting conditions. we think that we've got something that's going to mitigate costs. we think that something is going to take off burdensome mandates that have created pressures on employers who are begging for mercy in my district. we think we've got something that is going to be reasonable in its approach as it relates to cost and there's an invitation to do the wide thing by a wide range of people. so we can continue to spar back and forth and we will undoubted undoubtedly. we'll have our anecdotes, our friends on the other side of the aisle will have their anecdotes. the constituents that i represent say enough already. let's get this done because the aca has underperformed. the aca has been a crushing
disappointment based on the expectations and based on the hype that it was all going to be great. and so we've got a choice to make, we can either continue to marinate in something that is just underperforming or we can be courage aj justice and we can move forward and we can be trans formational. so is any of these ideas, these concepts are they perfect, of course they're not. but are they good. yeah, they're good. and we're even acknowledging we're picking up some of the things that we came to appreciate about the aca. so this notion that revisiting the aca for our friends on the other side of the aisle is tampering with orthodoxy i think is disappointing. i'm in favor of this approach, mr. chairman. i appreciate the disposition and leadership that you've brought to this. >> thank you. do you wish to strike the last word? >> i do. thank you, mr. chair. mr. chair i'd like to yield time to mr. crawly of new york. >> i thank the gentle lady for
yielding at this time. the gentleman just spoke for five minutes and never once mentioned any support for the underlying bill that's ahead of this for five. in fact, not a single member of the republican party has mentioned -- maybe with the exception of the chairman, support of this particular provision. that will give some of the wealthiest people in our country, people who don't need a tax break, don't need any assistance, don't need help, we're going to give them a tax break. we've sat here for going on seven and a half hours and not once and i would like to give an opportunity to any of my colleagues on the other side of the aisle who have sat silent throughout these seven and a half hours an opportunity to express your support for the lifting of the caps of insurance
executives. here's your opportunity to do it. it's a critical portion of or part of your health care plan because it's the first section that you deal with. it's not the second. our the fourth or the fifth. or the third. i missed one, sorry. count can't. it's your first priority is to ensure that some of the wealthiest people in our country continue to be even wealthier which is fine. that's your belief but at least you should express it. not a single one has rebutted our argument. and i would just note for the record the continued silence. no one's asked me to yield to support this -- now you may demonstrate it in your vote. you may demonstrate it in your vote but not a single person on
the other sieftd aisle has taken the time to defend this. prefer to do it in the middle of night. no one even out there in the world knew that this little provision was going to be snuck in and it's there. president trump ran on a platform of helping the little guy, all the folks who analyze the election. we look back over the last few months, analyzing this election and president trump appealed to the average american. he appealed to people who were suffering in america who can't make ends meet. that's what we're told by the pun dents why president trump was elected. that the little guy was hurting and couldn't make ends meet. i didn't know that the little guy included insurance executives who are making over
$500,000 a year. let me clarify that, are making over a half a million dollars a year, they need a tax break? my heart goes out to them. to the expense at the expense of everyday hard working americans who are trying to make ends meet. your prioritizing those individuals at the expense of -- what would mr. trump think of that? i wonder what the president thinks of that. does he think about that at all? he said this is a tremendous bill. those are his words. president trump has said this is a tremendous bill and the first people who are helped by this bill are amongst the elite of our nation, some of the most wealthy people and not once and again, i continue my colleagues have not interrupted me once yet to ask me to yield in defense of
this first provision. and i'm waiting and the silence is deafenning because we know it's uncomfortable. we don't even know why you include this except it costs anywhere between $400,000,000,600,000,000,000. an enormous amount of money that could help enormous amount of people. working class hard working people. so mr. chairman, i'll continue to wait that in the hope someone will strike the last word on your side of the aisle in defense of this provision. i'm not holding my breath but i'm hope springs eternal that maybe some -- just one of you will defend this particular provision, this particular section of this 57 page bill. >> all time is expired, mr. chairman. >> do you wish to strike the last word? >> thank you, mr. chairman and forgive me for taking my own
five minutes. i see a sort of a math flow problem. let's see if we can walk through this. we've already had multiple mebds on our left side over here tell us that senior executives are already receiving these salaries. okay. and that we're taxing them so it is actually in the expense base of those providers. if the argument was coming from the left that's say because this is the magic cap no one's getting this money but they are already are. if the argument is we're trying to remove extra nalts, extra cost that have been hidden into everyone's premiums, this is a cost whether you like it or not that is ultimately in those premiums. because you've already testified on your side or stated upontive indicated that the salaries are already being paid.
i'm trying to work through the logic here. this is a cost that is within the insurance market. we're trying to find ways to remove costs so the insurance costs come down and become more competitive. i'm sorry. i understand the seasoned hatred of folks out there who have done well and these folks are obviously doing very well, but the logic of, hey, they're making the salary, but we want to add more cost to the cost of insurance is absurd and with that i yield back, mr. chairman. >> the gentleman has yield back. mr. lewis. you're recognized. strike the last word. >> i strike the last word. >> sir, you're recognized and yield to mr. logan. >> you know i think the key word that was used here was by mr.
rascon who said we come forth with anecdotes and i listened to that word and i thought that's really what this is all about. aca brought insurance to 20 million people. the uninsurance rate went down dramatically. the extended medicaid was part of that and that helped as well as exchange the insurance exchange it meant for people they no longer had to fear illness because they had no insurance. it brought certainty to medicaid. half of medicaid goes for long-term care and those people
who receive it and i know some of them personally, they're not anecdotes nor the others. it also brought preventive care to millions who never had it and so when it's said that aca is anecdotes, no, it isn't. it's the lives of millions and millions of people who have benefited from aca. many of whom went to bed every night never having any insurance coverage whatsoever. and so you can point to this or that problem within aca. it was never meant to be perfect. everybody knew that combining public and private coverage was going to be something that needed continuing work. but to simply say we're raising
anecdotes, if the millions of people who have benefited from aca could come here and line up, the line would stretch for hundreds of miles and if they told their story, nobody here would be able to look them in the eye and say, you are anecdote. this aca has been a major, major provision. there is nothing more sacred and important than one's health care. nothing. nothing. and to minimize it is to make, i think, a mortal mistake. thank you for yielding. >> mr. lewis, mr. hig begins do
you wish to strike the last word. >> yes. thank you, mr. chairman. we've been at this now for eight and a half hours today and the only thing we've really talked about is a plan to provide a massive tax cut for insurance executives. your bill kills a provision in the affordable care act that placed a $500,000 limit on deductions for each executives compensation. five major insurers paid their ceos a total of $73 million in 2015. 2.5 million of that was deductible currently under the action that you're taking today $70 million is deductible in executive pay giveway. so clearly this system is rigged
again to screw the american people. more insurance executive pay, less health care for the american people and higher premiums and all of this, all of this when last month the department of justice opened an investigation alleging fraud costing american taxpayers hundreds of millions of dollars from the medicare program. today house republicans gave united health care executives, including their chief executive officer who made $66 million last year a raise in the form of a tax cut compromising the best interests of the american people who i said very early today play by the rules, work hard every single day, pay health insurance premiums that are higher than
they should be and have one expectation, one expectation at the end of the day, and that is when they or their kids get sick there is fair, reasonable health care coverage available to them. we didn't take a step forward today. we took a major step back. as someone who tweets quite frequently these days, sad, very sad. i yield back the balance of my time. >> mr. rieker is recognized to strike the last word. >> thank you, mr. chairman. appreciate the opportunity to speak on this issue. my priority are my constituents at home and i know everyone on this panel feels the same passion for their constituents, the people that they represent in providing health care and that's what we want to do.
people talk about the promises that mr. trump made over his campaign efforts this past year. i want to talk about and i think most of us will remember and mr. rascon touched on a little of this, the promises made by president obama after he was elected. and let's just remind ourselves, these are broken promises. the claim on the other side there are promises broken during the campaign. this is a president who promised under the aca that you would be able to keep your doctor, you could choose your hospital, you could keep your health care plan. you would have quality health care. you would have access and it would be affordable. those things happened for some people. but they didn't happen for a lot of people and a lot of those people live in my district. so if we want to talk about, i
know in one meeting the president had with the members of the republican conference back when mr. baner invited him to our retreat, he was asked the question by one of our members, mr. president, is it true can people keep their doctor? is that true? yes or no. and i don't know if some of the republican members on the dais remember his answer or not but i remember it clearly. he hesitated and paused and said, you know, there might have been some language snuck into the bill that runs contrary to that promise. but yet, after that meeting the president continued to go out in the public eye and tell people that they would keep their doctor even after he recognized to us and admitted to us that that was not a promise that could be kept because of language snuck in to the bill. so my focus is on people who are
underinsured who are not insured and i think this bill addresses those issues and protects health care for those individuals but i also want to focus on those people who are paying exorbitant premiums monthly, some members -- some residents in my community have said my premiums have gone up from $500 to a month to $1,100 a month. one couple in maple valley in their late '50s, $1,100 a month in premiums, 5 to $6,000 a year it copays, 5 to $6,000 a year in deductibles. the male partner in this relationship has a serious health care issue. but he won't go to the doctor because he can't afford the five to $6,000 copay. yet he's paying that monthly premium and he doesn't use and can't use the health care quality accessible affordable
health care plan that was laid out in aca and, by the way, later on i might mention the history in a very clear logical way layout exactly how that bill was forced down the throats of american citizens without the help of republicans and this is why we find ourself here today. and i could go on with other examples of how this middle income families in my district and across the country are paying these higher copays, these higher premiums and they can't afford to use the health care system. so they have a health care plan but they don't have health care. they have a health care plan but they don't have health care. i yield the balance of my time to mr. rascon. >> thank you. just quickly a couple of examples. my contrasted anecdotes is anecdotal examples as opposed to studies. steve from illinois said my cost
for health care are increasing 41% on top of 75% last year. please stop this insanitity. jim from wheaton illinois said my premium is set to go up 75% for 2017 from $480 a month to $844 a month. lauren, as you can see, our new health premium will be almost the size of an additional mortgage. it's on and on and on. so like i said, i agree that there's people that will claim a benefit from the aca but let's recognize that there have been people who have been devastated by this. >> thank you. the gentleman's time has expired. >> i move to strike the last word. earlier today i said that this bill drives up the cost for middle class to pay for massive tax cuts for the wealthy. and that's exactly what the bill
does. this is a tax wind fall to insurance companies so they can pay their insurance executives. i don't think there's any dispute about that and my friends on the other side of the aisle can spin this any way they want, but it's just -- it's not plausible to think that it's anything other than that. i have a note here from sue ann who's a 12th grade teacher in my district. she said that many of her students simply didn't go to the doctor regardless of how sick or injured they were but under the aca my students are healthier. they've been vocal about their concerns as they age out of the programs for children. without obamacare, sick and injured kids cost schools funding. we all know what she means by that. if a kid is sick or injured and can't go to school, the school
loses the funding that they would get. and they struggle academically which impacts them far in to the future. tell sue ann that it's okay to give a $400 million tax cut to people who are making hundreds of thousands dollars a year. i mean it just doesn't make any sense at all. so spin till your hearts content but the fact of the matter does, you're spinning does not erase the fact that this is a massive tax cut giveway to the wealthy at the he expense for the middle class, hard working people that we all represent. i'd like to yield the balance of my time to mr. crowley. >> thank you. let me get this straight, premiums are so high and out of control that the first response and answer to that is to give a tax break to the wealthiest,
some of the wealthiest people in our country. i appreciate you're sticking around because you made some remarks before but your colleagues from the other side are 0-4 in terms of striking the last word and mentioning any support for this -- for this provision. i ask you, do you support this provision? >> the gentleman yield? >> i do. >> of course. as you and a couple of folks around you, this isn't a tax on the executives. this is a tax the insurance company is paying. if you can conflate this magical world of, well, it's a tax over here, we might pay someone here. they're already paying. >> you're taking my time. what it does, if you pay more to the executives, you can pay them more and the company gets to deduct more taxes from -- they have a lower bill so either way. >> well the gentleman yield
again? >> either way you want to spin it, the reality is it gives more money to people who don't need it and takes it from people who do. >> i yield to the gentleman. >> if you look at our bill we're stickily trying to remove those taxes that have been woven into people's insurance premiums. this is one of them. thank you. >> will you yield? >> yes, sir. >> the $400 million in this bill isn't paid for. it is not paid for. so you're not giving them anything except money from our treasury and money that would go to provide health care to the millions of people that we represent and i yield back to mr. crowley. >> thank you. listen to mr. rieker as well. i notice a lot of my colleagues i give you credit for sticking around, making statement you dropped tmic and walk out.
takes away funding for insurance coverage for 11 million newly covered working americans, raising their costs. allowing insurance companies to charge older americans up to five times more for the same insurance coverage. aarp notes, age rating plus premium increases equallies an unaffordable age tax. does the gentleman want me to yield? >> just a quick point on this. this provision that caps insurance compensation that employees played was something that was agreed to by the insurance companies. to help pay for the affordable care act because they knew that they were going to get more paying customers and they knew that the uninsured rate would go down under the bill so this was their contribution to making sure that everything was paid for, everything was and now you're about --
>> his time is expired. mr. rice. >> that you, mr. chairman. can i ask you a question questions? thank you, sir. are there any other limits on the deductability on the upside of compensation in the tax code? >> any other provisions on deductability? >> yeah limits on compensation. >> as we discussed a little bit earlier today, the general rule is that you can deduct all costs that are reasonable and necessary as part of running your business. there is a limitation enacted by congress in 1993 on compensation of the chief executive officer and the highest three paid executive limiting the deductible amount to $1 million in compensation -- >> really what we're talking about here if we remove this $500,000 limit they still won't be able to write off compensation over a million dollars is that correct?
>> let me be clear on that. that is correct but to be completely clear, it is also the case that there is an exception on that for performance based compensation. >> i got you. and are there any other industries where we have a special limit like we have on insurance companies for $500,000. every other industry is a million. we don't have any other special limits. >> it would be $1 million rule is the general rule for compensation. >> and with this bill, i mean, we're talking about eliminating all the taxes under obamacare not just this one tax, we're talking about eliminating the employer mandate in the individual mandate, every tax under obamacare, is that right? >> you have a number of different provisions that generally look at all the revenue provisions of the affordable care act. >> if we eliminate this, this limit on deductability by insurance companies, are the executives going to pay less tax on their compensation? >> this is not a tax on the
executives. it is on -- >> so when they say this helps these rich people, that's a lie, right? >> will the gentleman yield? >> mr. crowley, mr. rice. >> mr. chairman, with all due respect -- >> mr. crowley. >> reclaiming my time. >> i'm not going to make a mountain out of a mole hill. >> i guess where people can -- >> i'm reclaiming -- >> to accuse of us lying -- >> i'm sorry for the misrepresentation. so if you remove this limit on compensation with shurns companies these people that they say these rich people they're not going to pay any less taxes one dime less taxes, are they? no? >> the only way it would effect the tax liabilities of these individuals on their individual return is if they're
compensation changes. >> so who would pay less taxes if we remove this limit? >> it would -- if you removed it, it would increase the deductible cost of the business -- >> the insurance company would pay less taxes. now if the insurance company paid less taxes maybe they could charge less premiums is that right? >> the question of incidents of how the profits -- >> i know it's speculative. they would have more money and they would charge less premiums. this provision that these guys are so desperate to keep in their increases the expenses of insurance companies and drives up their cost is that not right? >> it makes the cost of compensation of certain individuals greater than it otherwise would be. >> and i just want to take the last minute of my time to tell you that, you know, this law that folks in south carolina have dealt with for the last
several years since it was implemented has been a disaster for many folks in south carolina. one thing people don't understand is there's only about 200,000 people in south carolina that are actually on obamacare. 4% of the population. 96% of the population in south carolina is not on obamacare and i have statement after statement after statement from folks in south carolina that are being horribly damaged by this law. this letter from mrs. poll lean said i'm writing to you because i'm so upset with the new obamacare premiums released this week. my husband and i are under 65 but not much. our premiums for the same plan will increase from 1,400 to $1,700 a month in 2017. our deductibles will increase from 3,000 to 7,000. who can afford that? this year after paying 20% of our income for health insurance
coverage alone the plan paid absolutely nothing. i submit to you that if you have an insurance policy that pays nothing that the deductibles are so high that you can't use it, regardless of the fact that statistics may say you're covered, you are not covered. i yield the balance of my time. >> thank you. you're recognized to strike the last word. >> thank you, mr. chairman. i read in the paper last maybe three, four months ago, are 62% of americans don't have a thousand dollars in the bank. i was just kind of shocked about that but then i was thinking back -- i got in business 40 years ago. and the first 15 years we paid everybody's health care and i think most industries did. and you look at the last -- it's not just the aca, the last seven, eight years, think back 20 years when i chaired our local chamber, the state
chamber, the number one issue 20 years ago was available and affordable health care. small companies couldn't get it. we had 137,000 businesses in the florida federation. 93% were probably 50 employees or less. their number one issue is trying to find affordable health care. so when you look at what's happened, this middle class, the cost is over the last 20 years, the cost keeps going up. it gets pushed, i'm guilty of that. a lot of business people are. it gets pushed to the middle class because the premiums keep going up for the small business person and let's say it's $1,400 a month, the small business is paying 700 and about 700 gets pushed out to the employee. the middle class is drowning. i had someone last week tell me that they're insurance premium per month, this is a couple,
they had their own business, they were paying for themselves a couple thousand a month. their premium for insurance was more than their house payment. so when i look at this, and we look at this experience -- experiment of obamacare, when that first came out, we talked about bending the curve on health care and maybe it did for some people. and if you look at just the nine -- the 11 to 20 million, maybe some definitely got support but if you look outside that, the 100 million people that are on various programs, that's why the middle class in america in my opinion, there's multiple reasons but the biggest reason in my opinion is that they're getting killed. they're going bankrupt a lot of them because of the cost that's been pushed. >> will the gentleman yield on that point? >> the last eight years we're supposed to bend a curve that's going like this someone said that what i'm looking at and how i look at this, i just look at
it, we've got to bring the cost down. not just for the select few but the 100 million people plus and the country trying to get health care. they're being buried. and that's just what i've seen over the last 40 years. i yield. >> i thank the gentleman for yielding. it was the exact point i was making earlier and i couldn't agree with you more there's a lot of overlap in interest on what we ought to be talking about together in fixing what's broken with the current health care system and if we can come together and stop using obamacare as just a political punching bag and focus on the real issue. how do we make it more affordable for all americans not just those in the individual plans or on the exchange or where have you, but all americans. that would be wide agreement here across the aisle. >> my point is, what we've got i don't care how you measure it, it works for some but most it doesn't work and that's why i think we've got to go down a
different track. i'd love to see us work closely together on some of these stuff but the bottom line is we got to go down a different track because it's bankrupting the middle class and i yield black. >> does anyone else wrish to strike the last word? >> move to strike the last word. just to follow-up on this conversation. we're on to something here that if we start putting our guard down a little bit, getting the same room and start talking to one another you'd be surprised how much common ground there might lie when it comes to trying to fix the health care system that is failing too much people. i think you were going to get wide bipartisan agreement with that. but there are also some key important things that are a part of the affordable care act that you all are very eager to repeal that could help bend the cost. medical homes, bundling payments. these alternative payment models
that are moving forward now because of the existence of the affordable care act to get us better outcomes at a better price. payment reform. that was a key feature of the affordable care act so that we're paying for the value of the quality of the outcome of care instead of the fee for service system which was bankrupting america because it was based on more test, more procedure more things leading to worse results and we can't afford that any more. that's a key feature to the affordable care act too that hasn't been discussed at all today. >> will the gentleman yield? >> one final point, too. what more can we do that that 93% of small business owners in florida because i haven't met a small business person in my district who wouldn't love to be able to provide affordable health care coverage to their employees. and yet we know that the tax credits under the affordable care act going to small businesses have been inadequate. they haven't been enough. and they've been too complicated for them to figure out in order
to pass that on to their employees so they can extend health care coverage in their small business. it's another i think area of potential bipartisan agreement that we should be focused on. but the fact is, per capita spending is at a 50 year low right now. something is gaining traction. by the end of this year 50% of medicare patients will be value based and no longer fee for service based and the cost of medicare is going down. in fact, again the congressional budget office showing a deficit reduction of $300 billion over the next ten years under the affordable care act but i'm not going to be sitting here defending the affordable care act as something that's the perfect answer to the complexity of the health care system. clearly it isn't but i think i'm hearing from you a lot of area potential overlap. i'm happy to yield to you. >> the aca 11 million people, some people have benefited in
that space. medicare, i think they have held to some extent to cost. but everybody else, is getting killed. my point is, is that it's not just about what's happening in the aca, it's also about health care in general. i can just tell you blue cross blue shield in our state, i've talked with the executive, the ceo there multiple times because they're not doing well in the aca space, it's costing them a lot more than they're thought they're having to jack everybody else's premium up. >> reclaiming my time and i'm going to yield in a second. let's also be honest with american people. a lot of what's gone for employees has resulted in a cost shift that businesses are making on their workers. they're sticking them in these high deductible health insurance plans which has nothing to do with the affordable care act and your response is to try to increase health savings account
which is great when people have disposal income but it doesn't work at all to lower income people who don't have that disposal income. that clearly is not going to be the answer moving forward in regards to the cost shift that employees are experiencing and y'all have been fond have trying to lay that at the doorstep of aca when that was a business decision. >> will the gentleman to yield? >> i thank the gentleman from wisconsin. this provision does nothing to bend the cost curve at all. nothing at all. this provision and we're going to tone it down a bit i guess. i'll do my best to do the same. this provision incentivize giving pay increases to corporate executives and gives the company the ability to deduct that cost.
that's why it cost anywhere between $400 billion-and $600 billion. it's going to be exploited. it will be exploited. it will give the opportunity for enormous pay jeess to people who don't need them at the expense of in some part helping to bent the cost curve. i appreciate the gentleman. i yield back to him. >> whatever time i yield to you if you want to make a last minute point. >> we just got finished blaming the cadillac tax for pushing costs on to hard working men and women and which i believe is right and agree with and then we just absolved the obamacare from that same action. the truth is affordable care act is driven up costs and out of pocket costs for all americans. we are as we look to complete
deliberation on the first of five subtitles, does anyone wish to strike the last word? >> mr. chairman, i don't believe i can strike the last word, can i? >> no, sir. >> i'll just point out you're two for seven for people speaking out for this amendment. >> the nature of the substitute, all though in favor aye. those opposed no. >> no. >> the ayes have it and it's agreed to. i'll now recognize mr. johnson for the purpose of offering a motion. >> mr. chairman, i move that the committee transmit the committee print related to remuneration from certain insurers as amended to the house committee on the budget in response to the reconciliation and structures. >> questions as amended.
house committee on the budget all those in favor signal by saying aye, those oppose by saying no. the ayes have it. a roll call is requested. the clerk will call the roll. >> mr. johnson. >> aye. >> mr. nunes mr. aye. >> mr. tea berry aye. mr. riek ker? mr. rascon. mr. rascon aye. mr. bu canon? mr. bu canon aye. mr. smith aye. mr. paulson aye. mr. merchant, aye.
>> mr. reed aye. mr. kelly, aye. mr. renee say aye. mr. meen aye. >> ms. nome aye. mr. smith of missouri, aye. mr. rice, aye. mr. shh wieker aye. mr. with a lorski aye. mr. occur develop lowe aye. mr. bishop aye. mr. neil, no. mr. leave vin, no. mr. lewis norks. mr. dog get, no. mr. thompson, no. mr. larson, no. mr. larson, no.
23 ayes, 16 nays. >> the motion's agreed to. committee print related to the remunation from certain insuresers. transmitted the house committee on the budget without objection asked the staff authorize to make technical and conforming changes. supplemental additional dece decenting or minority views. the committee print of budget reconciliation relating to repeal of the tanning tax. without objection the measure will be considered as read. at this time an offer of amendment which was distributed in advance. without objection amendment shall be considered as read. open for amendment at any point. i'll now turn to tom bartle the chief of staff of the joint committee on taxation to provide
the technical description of the amendment and a nature of the substitute. i ask members hold their questions until after his presentation. mr. bart hold. >> thank you. you have before you two joint committee documents which describe the underlying committee print and the chairman's amendment. under present law there's a 10% exisis tax leave individual on the valued paid for tanning services. it would repeal that tax effective for tanning services pfd after december 31 of 2017. effective next year. the joint committee staff has estimated that this proposal will reduce federal receipts by approximately $600 million over the fiscal years 2017 through 2026. that concludes my description. be happy to answer any detailed questions that the members might
have. >> thank you. are there any questions about the amendment? mr. thompson, you're recognized. >> thank you, mr. chairman. just so i understand this completely. this particular measure will repeal what's been referred to as the tanning tax, is that correct? >> that's correct, sir. >> and this is a tax on indoor tanning beds. >> on charges for the use of those beds, yes. not the for the acquisition of the equipment but showing up and udsing. >> so people who go in and use the tanning -- >> that's correct. >> that would be factored into the cost of getting a tan. >> yes. >> i would assume. and how much did you say this is going to cost. >> approximately $600 million over the ten year budget period. >> so if i understand, this, if this measure is passed and
signed into law, it will be a $600 million tax cut or a tax expenditure of $600 million? >> it would be a $600 reduction in tax receipts. >> not $600 million tax expenditure so a vote for this bill, is a vote to spend $600 million that we don't have is that correct? >> that prumz something about the whole budget. it would reduce the receipts to the treasury relative to baseline. >> i don't want to presume anything. i want to know and i guess -- >> if you're asking does this particular provision before the committee have a revenue offset with it, the answer is no. this is a repeal of the present law tanning tax. >> it's not paid for. >> that's correct. >> this is $600 million that will be shoulder by the
taxpayers of this country? >> $600 million reduction -- >> and it will show up where in our deficit, both? >> absent other congressional action it would be a -- increase in the deficit over that ten-year period. >> is there anything in any of these measures today that offsets the $600 million tax expenditure? >> as we noted in the prior discussion, don't have the full accounting for all of the measures that are before the committee. that's awaiting some of the analysis of my colleagues. for example, there is -- there is the modification and the repeal of the premium assistant credits. that would have the effect of increasing federal receipts. there are other provisions that the committee has before them that as you have noted already will reduce federal receipts. i do not at present have the
overall net for everything that the committee is looking at this evening. >> the way it would typically work, the congressional budget office would do an analysis and we would have that analysis in hand so we would know before voting on any of these measures how much this is going to cost the taxpayer, whether or not their health care services will be reduced, what sort of addition to the debt our national debt we could expect from this and that's not here today because the cbo has not completed their work, correct? >> i will not lay the entire blame on the congressional budget office -- >> i'm not -- >> it is joint -- >> i'm not trying to blame them -- i'm trying to fully -- >> it's joint work between my colleagues at joint tax and analysts at the congressional budget office and, yes, we have not been able to complete an
entire analysis of the proposals. >> so as many people who didn't already know, we learned in the last few days, that health care reform is complicated and i'm assuming that doing the math to figure out the cost is complicated as well. so i'm not trying to suggest that they're slow in doing their work, i would suggest that we're rushing this issue and bringing this issue before the committee before we have all of the data that will help us analysis the bill and vote on a bill that's going to effect all of our constituents. what i do know from your testimony is this one provision alone will be a tax expenditure of $600 million over the course of next ten years. it's not paid for. it's going to be increase our debt and if you add them all up
it's $593 billion over ten years give or take a little change, is that correct? >> if you add all the provisions before the committee today except those that await further analysis with the congressional budget office the ones for which i do have estimates, the ten year total is $593.7 billion. >> thank you. >> all time is expired. mr. levin you're recognized. >> let me ask you, it's a joint tax that did this estimate? >> excuse me. >> it's a joint tax that did this estimate. >> this is our estimate. >> it's your estimate. >> yes on the tanning tax, yes. >> do you know how many people are effected by this?
>> i could -- i believe the way we develop this was by looking at receipts, information in terms of sales of tanning services and so that could be one person who is there once a month and other people who are there multiple times a week, so i don't have a good estimate of the number of people. >> you don't know anything about who these people are? >> only anecdotally partly because i knew someone who had a business that offered these services. >> there's been a lot of talk about dynamic scoring. >> i'm familiar with it, sir. >> it's very clear that this procedure can lead to the increase of cancers. when you take into account the revenue loss, do you take into
account the impact on the health of people and the increased cost because of increased cancer? >> in some instances, yes. in this particular estimate, no. to tell you an instant where -- >> in this one you don't. >> in this one we do not. >> and even though it's clear that these procedures do increase the exposure to cancer, you don't take that into account. >> let me note that most effects from cancer would probably be outside the budget period but the short answer -- >> outside of what period? >> we do not take that into account in this estimate. >> outside the budget period. >> i know. but i asked -- outside -- so you
think that you're assumption is that the impact of this in terms of health is outside of the budget period? where did that come come from? >> i said the short answer is, no, we do not take account of any effects of cancer in this estimate. my knowledge of skin cancers, which is not as a professional but as a recipient, is it tends to be longer developing and so it would tend to have its effects outside the budget period. i should say no more because i said not an expert as skin practitioner or practition, only on the receiving end. >> mr. chairman, i'm just so astonished that we started with insurance executive enumeration
and now we're talking about a revenue loss because of the change in taxation and tanning. i would like to have entered into the record, miss sanchez referred to this, organizations that are very much opposed to this bill, and they deal with health issues. i think again, it is really d disquieting we start with these two provisions and then go on. so i would ask unanimous consent to add the arp letter in opposition to the record, letters from the american hospital association and the catholic health association from the american medical association and the national nurses united. i would ask all of these be entered into the record.
>> without objection. >> okay. by the way, i am surprised that, you know, the people who would benefit from this, it doesn't mean they started tanning the day we repealed. i really think if we're going to go into dynamic scoring, in te m terms of all of these impacts on health, it's up to joint tax to look into this. this is more serious than not looking to experts, mr. bartow, and i deeply respect you but i think tanning and skin cancer are really serious issues that need to be looked into not in terms of helping people in terms of their taxes. thank you. >> thank you. your time has expired.
miss sule, you're recognized. >> thank you, mr. chairman. i just want to understand. the loss of revenue associated with tanning beds annually is around 6$600 million? >> the 600, the 6$600 million figure is 10 year budgetary. >> amortized over 10 years? >> the total over 10 years. >> over 10 years. >> as you can see on our document, it's less than 1$100 million a year. the total is approximately 6$60. >> that's less money in the united states budget to do other things with, that we're giving a windfall -- is it -- how do you characterize this other than a windfall? >> it's less revenue to the u.s. treasury. >> it's less revenue to the u.s. treasury. really? preferential treatment, given to
people who tan because not everybody needs to tan. i'm living proof of that. i would love to have a tax on haggan daz coffee ice cream, nice to have that. we are making a judgment call by giving a windfall to people who tan, right? >> well, windfall is sort of a judgmental term. >> it's a tax break, though. >> under present law we tax this service. it's not the case we tax all services but under present law we tax this service. >> at 10%. >> this proposal would repeal that tax. >> you're basically giving a tax break to everyone who uses t tanning services, right. they would be probably better off, in temps rms of the price would have to pay than they are absent this repeal. >> how many americans would you say use this service? >> as i -- as i explained to mr.
thompson, i don't have an estimate of the number of people the way we developed the estimate was by looking at gross sales figures rather than the number of individuals. i'm not sure if there ae'sly suy evidence on the number of individu individuals. i can ask some of my colleagues. >> you don't know how many people benefit from this? >> i don't know or the distribution, as i was saying, some people may use a service once a month, some may use it multiple times, multiple times a month. >> mr. chairman, it's hard for me to wrap my brain around the fact we're going to give up a tax for people who fan and give up 6$600 million outside of the u.s. treasury to give these folks a tax break when i have hospitals in rural parts of my
district closing literally all the time. since 2011, eight alabama hospitals have closed and five of which are rural facilities. over the past 16 years, the state has had 17 hospital closu closures. that's just my state. we're making a judgment call to offer preferential treatment to people who tan when clearly, that is not a big portion of the american population who tans. when you come up with the number, do you offset that number by the losses of live that are -- life that are associated with tanning? is it offset? >> this is the point mr. levin was just raising. this is not an estimate we take account of change in medical expenses that could give rise from health problems associated
with -- >> we're not offsetting the revenue we receive from it from the cost of medical bills that may be derived from that. is that what you're saying? >> i'm saying, this is only looking at the tax receipt side, yes. >> mr. chairman, for the record, i just want to indicate this is the second title of this gop repeal bill that we're now deba debating. once again, it is a tax repeal, and i'm wondering when we're going to get to the actual healthcare underlying. the folks i represent, this is a matter -- their health insurance is a matter of life or death. it's very serious. i am appalled that we are, you know, giving a tax break to folks who -- we can't even
calculate, according to mr. b barte bartell, we don't know how many people we're giving that to, 6 0 $600 million is more money that we're not giving to our u.s. treasury executives that 4$400 million. >> thank you, mr. chairman. this tanning tax could be looked at as a completely discretionary tax by the user, can it not? if they choose not to tan, they don't have to pay this 10% surcharge on tanning services, is that correct? >> that's correct. it's a consumer expenditure, one of many they might choose to make. >> according to your estimate given the loss of 6$600 million over the next 10 years, apparently a lot of people are still going into the tanning d beds even with this 10% surcharge, is that a safe assumption? >> that's what our data and projection shows. >> when making your revenue and
calculati calculations, did you take into consideration at all the latest centers for disease control figures they released, which shows that thank ye indoor tanns used by 11% of high school students, 11% of high school girls, 16% of girls in the 12th grade and 15% of all white high school girls? did that go into your calculation at all? >> the distribution of users does not go into the calculation. what's important for the calculation for us is what are the -- what price is charged for the use regardless of who uses it. if there's discount pricing for high school students compared to someone my age, then that would be reflected in some of the receipts dated that we look at. it would account for that. >> if i heard you correctly, based on your previous testimony before us, you don't take into
consideration, again, figures for a the centers for disease control that shows that tanning beds used before the age of 30 has been found to increase your risk of developing melanoma by 75%? you don't take that into consideration at all? >> to the extent that use of n tanning beds is recognized by potential consumers as potentially harmful, and so they choose not use them at all, or as often as they were is part of our baseline projectioprojectio. our baseline projection is what is the projection of use? so, for example, in another area that we've done a lot of work for the committee, tobacco taxes, our projections are based off declining rates of smoking.
to to the extent that the information you're describing to the committee is known and affects people's decisions, we do account for that. in answer to mr. levin's question is there may be -- in fact there are costs of course associated with skin cancer, we do not, in this estimate is about the receipts from this tax, about tax receipts. it's not about outlays that may be the result of skin cancer used on tanning beds. >> based on your response from mr. levin, if i understood you correctly, it's because that cost would fall outside the 10 year budget window? >> i was suggesting on this particular proposal because we have this tax on tanning services now you might repeal it and, oh, people might choose to
tan more. they would choose to tan more after the beginning of 2018 and since skin cancer is long determining the incremental incidents of skin cancer. i admit i'm getting way from my knowledge base, not being a physician, longer term i would have intuitively thought those costs might fall outside. i'm not trying to say these were unimportant considerations. >> let me ask you a final question because my time is about to expire. is the 6$600 million revenue los called for under this subtitle, is it offset in any way with any increase in revenue we may get with the increase of businesses that dermatologists are going to realize throughout the country because of the policy implications of repealing this tanning tax? >> actually, in a very general
way, any analysis of excise taxes reflects the fact that excise taxes change prices that consumers pay. so that, as you increase them or decrease them, you decrease or increase the amount of funds that they may have to spend on -- elsewhere in the economy and that leads to increases or decreases in profits elsewhere in the economy. there is what economists jargon refer to as a general equilibrium analysis. >> thank you. >> thank you. mr. docket, you're recognized. >> thank you, mr. chairman. i want to limit my questions to this bill and the scope of your expertise, but understand that's made difficult by the fact that you're the only person in the whole world who has come forward to justify any aspects of this bill and no one came forward to
depleting 60$600 million to dea with their healthcare and i want to focus on who benefits and who gets hurt? on the who benefits side, mr. crowley asked you who would benefit from the 4$400 million. and the tax research i did, the quick remember research suggested there were 3500 companies with various subsidiaries and the like. i'm estimating there are 35 taxpayers who get the 4$400 million and who will get the 0 $600 million. do you have any idea which owners of tanning salons will benefit from this measure? >> thank you. our economic analysis is this tax is bourne by the consumers
of services in higher prices. as i responded, i do not right now know the number of tanners. >> i'm not asking about the number of customers. there is data about -- september a couple years ago, of the new england journal of -- new england journal of medicine, a leading medical journal an estimated million times a day someone exposes themselves to radiation from tanning. i'm asking about usually when you put a tax on something, it decreases consumption of that. if you remove that tax, as happens here, you will increase the consumption. isn't that your experience of
analysis of that? >> that was what we were just discussing. if you were the owner of tanning salons or a series of tanning salons from a taxpayer, you will gain from this 6$600 million ta cut. i'm just asking you, how many taxpayers fall in that category of the tanning salon business. >> i was not trying to avoid your question. i was explaining economically we see this reflected in the price of the service those people are charging and generally we would expect the price to fall and the real beneficiaries are the consum consumers. i can see if my colleagues who worked on our estimate for this have an estimate of the number of establishments that currently pay the tax and that would answer your question to the extend that it benefits -- >> i appreciate that
information. >> i don't think there were too many of these high school girls tanning advocating for this ta tanning tax. i believe there were many t tanning chain owners here b begging for tax relief. in the course of your work, did you or any consult within the tanning industry about trying to eliminate it? did you go to the tanning industry to get insight wh sigs tax works and what changing it is? >> we tried to work with the internal revenue service in terms of compliance. >> my time is expiring. you haven't had any interaction with the tanning industry? >> if you're asking if the industry has come in to speak to me the answer is no. >> they have not, or to your
staff? >> to the best of my knowledge. >> you're aware but cannot consider it in terms of who is harmed that the world health organization has categorized these tanning salons as a group one carcinogen? >> i have long been aware of dangers associated with tanning b beds. >> with this bill we're not only going to deplete the treasury but cause significant harm to many, particularly young women who increase their use of t tanning salons. i yield back. >> thank you. >> mr. chairman. >> i just have a follow-up to be a little bit more specific on response to that. our baseline projections do list use of tanning beds, some are regulations by different states
restricting use we tried to take into account the marketed or n tanning sprays opposed to t tanning beds and concern about the harm versus tanning beds. >> a quick question. >> the point made a minute ago to increase taxes and to raise taxes will lower consumption, it's dynamic scoring, isn't it? >> i consider it basic economics that goes into number we make. i know a lot of members like to call it dynamic scoring and macroeconomic effects and we look at microeconomic behavior the basic point you made is
microeconomic behavior and that's what the joint staff uses. >> thank you. >> thank you, mr. chair. i have a question related to one of my constituents, kevin from what kin county, a gi50-year-ol man self-employed and his wife is self-employed. they have two children. kevin's family currently purchases coverage from the washington state exchange and receives premium tax assistance. they get a bronze plan for 5$50 per month and say they cannot afford healthcare without the democratic reforms and current law. kevin wrote to me recently and said we are not poor, we're hard working small business owners and the emphasis is on small. we are struggling middle, we
just make ends meet, pay estimated tax, scrimp for school, pay down our debts and try to eat well and hope our kids will be able to have great opportunities. we need the affordable care act end quote. i've heard so many constituents who share kevin's concerns, they're middle class families just struggling to get by and are absolutely terrified by what the republican bill has been proposing. now, here we are talking about repealing a tanning tax. is there anything in this su subtitle that would help a family like kevin's and their access to healthcare? >> miss delbene, the providing before us is solely about the excised tax on tanning services. >> both this subtitle and the previous subtitle repeal taxes and don't directly have any impact on healthcare for any of my constituents or, frankly,
european in thany one in this country, is that correct? >> the tanning -- the tanning tax does not affect coverage. >> i also have a constituent named donna jo, donna jo is from lake stevens, washington, she contacted me to talk about her younger sister who didn't have historians before t historians -- have health insurance before the aca and thanks to the aca she has insurance now and as a result she didn't face financial ruin when she suffered three blood clots in the brain which put her in the hospital and various medications for over a year. she wrote to me and said without the aca she would have skipped medical care and died from her medical issues. again, we are talking about repealing a tax, a tanning tax that would cost us 6$600 millio,
is that correct? >> our revenue estimate is 6$60 million for the 10 year budget period. >> 6$600 million. we talked about the previous subtitle that would cost 40$400 million. so far we're talking about a billion dollars and nothing that we can say directly would impact someone like donna jo and her sister or kevin. the constituent i was talking about earlier, is that correct? >> i would say no effect one way or the other. these are not coverage provisions, they're not subsidy provisions. >> so we're not actually talking about healthcare at all when we really should be talking about healthcare for all americans and making sure all americans have access to affordable quality healthcare. all we've been talking about so far has been repealing a tax on insurance companies, repealing a tax on tanning beds, creating a
cost of a billion dollars to the treasury and not having any impact, we don't have a cbo score that talks about an impact. we don't know how coverage is impacted by any of this legislation. so i am very concerned, i think all we can do right now is highlight that we are -- we are repealing taxes on tanning, repealing taxes on insurance companies and doing nothing to address the healthcare of my constituents, and that's very conce concerning. i yield back. >> before we move on to striking the last bill? any last questions? >> thank you. i would like to yield to the gentleman from wisconsin, ron kind. >> thank you, mr. chairman. i want to thank my seatmate
here. back to the tanning tax idea. do we have any data, any evidence at all that repeal of this 10% surcharge on tanning b beds, the cost savings that the establishment realizes in that repeal will be passed onto the consumers of the tanning beds or are they just going to pocket it and laugh to the bank? >> as i mentioned to mr. doggett, our economic evidence and our basic working assumption is that the tax is reflected in the current price and that the markets have been fairly competitive for this service opposed to tanning sprays, opposed to the other tanning operator down the street. so we do think it will be reflected in price. i'm sure certain communities more so than other communities and less so. >> it's tough to quantify. i assume from your answer.
>> it will be born out through time in the data. the data does seem the price moved up exit services such as we mentioned the sprays have moderated price increases but that's other market forces at work. >> again, if the tanning bed has a pretty loyal group of customers and it appears as if 6$600 million in lost revenue over ten years indicates a lot of people still going in and using these tanning beds rega regardless of all the scientific evidence how harmful this can be with the incidents of melanoma and that, i would assume a lot of establishments will pocket those savings and not pass it onto the patients. the other point i wanted to ask is, i was just back home a couple weeks ago, i was in a tavern for a friday night fish and i bumped into an acquaintance, a farmer, not too far from our family farm. he said -- he walked up to me and said, ron, i've been a
life-long republican, you know that about me. i was one of the fiercest critics of obamacare. i thought it was the worst thing that ever happened in this country, but a couple of years ago, i was diagnosed with cancer. he said, but for the ability to get into that health insurance exchange coupled with premium tax credits and the fact i could not be excluded from coverage due to a pre-existing condition, obamacare saved my life. and also saved my farm. if i had not that coverage when i was diagnosed with cancer, it would have wiped him and his family out financially overnight, a farm that was in the family 130 years. he admitted that he has a different look on all this right now. i'm assuming that 10% surcharge on tanning beds is revenue that is used in part to help pay for those premium tax across that this farmer was able to qualify
so he could afford a quality plan that not only saved his life but also saved his farm, is that correct? >> mr. kind, the excise tax on tanning was enacted as part of the affordable care act. the revenues in the affordable care act are not dedicated to any -- with a couple exceptions are not dedicated to any specific purpose. >> clearly the revenue was raised to offset and pay for the bill so we wouldn't be dealing with budget deficits by passing that legislation in the past? >> that's correct. >> i yield back to my friend if he wants any more time. >> are there any other members seeking recognition to make an inquiry? >> dr. davis. >> as i listen to this discussion of having money that goes back into the treasury that
we're not using, i think of the experiences of the ross hinnings family of illinois. mrs. ross hinnings' son has lived with serious mental health issues since he was in high school. this year he turned 26, he worked for an employer with no health plan. without obamacare, his pre-ex t pre-existing mental illness would have made it impossible for him to find coverage. without a subsidy, he could not have afforded the help he desperately needed. with the care he received, he addressed his mental health and substance abuse issues, and is attending school. these skills should enable him to find a stable good paying job. if not for obamacare, his problems were severe enough that he would have had potentially
been home leless or very ill. instead, he is happy, in control of his life and preparing to become a productive member of society. if obamacare were repealed, the ross hen is family say they would live in fear for our wonderful son, and that's a quote, coverage has helped mrs. ross-hennings son to overcome his challenges and it would be catastrophic for their family if he were denied coverage based on a pre-existing condition. these are constituents of my state of illinois and could you tell me what the repeal repla replacement deal could do for this family?
>> mr. davis, the proposal before you repeals the excise tax on tanning, it reduces receipts to the treasury. it does not directly affect any payments for healthcare under any of our federal programs. or any outlay programs. >> thank you very much. i yield back. >> mr. chairman. >> mr. higgins. >> thank you, mr. chairman. in defense of attacks of this nature, it's a tax on negative ex sternalty, which is negative activity. it's like a tax on tobacco cigarettes. there's a huge societal cost to tobacco use and suntanning because it adds to healthcare cost with higher incidences of cancer, skin cancer, in the case
of tanning and lung cancer in the case of cigarettes. so the taxes on externalitities are intended to make consumers or producers pay the full social cost of the good and this reduces consumption and creates a more socially sufficient outcome. without the tax you have overconsumption because people ignore that consequence of undertaking the activity. i think it's legitimate in that regard because that activity has created a problem where there's higher incidences of cancer, that money has been helpful in creating a healthcare system to help cover those costs. i want to say that to the record. i'll yield back the balance of my time. >> mr. crowley. >> thank you, mr. chairman. i want to share a story from a constituent of mine named miriam. miriam was diagnosed with endometrial cancer and underwent
a hist ster rectomy because of that cancer. because of her illness she was not able to work full time and eventually lost her biggest client due to her absence and illness. she watched as her income decreased and became anxious. while she technically could afford her care she would spend her entire savings and everything she had on her cancer treatment leaving her with nothing. thanks to the affordable care act she was able to find and keep coverage and the subsidies offered saved her from extreme hardship. as her income decreased her subsidies increased simultaneo s simultaneously. she was able to keep her plan even as her income decreased and able to stay financially solvent. miriam wanted to share her story because so many people take their healthcare for granted and don't realize they could one day need access to the affordable coverage provided under the aca. for miriam and 35,000 people in
my district at risk of losing their health insurance, how am i supposed to know without a nonpartisan cbo analysis if this legislation will increase their cost or reduce their coverage leaving any of them at risk? >> mr. crowley, as i explained to the committee earlier today, my colleagues were working with their counterparts of the congressional budget office and the congressional budget office said they hope to have work complete by early next week, which will provide more detailed budget information than i'm able to provide you tonight, coverage information and premium information. >> information next week won't help me in my decision making today or tomorrow morning. further, another constituent of mine, briar winters, 32-year-old living in new york, obamacare gave her the coverage she needed
and she started a woman owned creative business in new york city. knowing that coverage was there would allow her to make the leap and confidence. now, miss winters' business is thri thriving, contributing to the neighborhood and the community. miss winters writes she could be devastated if obamacare were eliminated because the high cost of living within my hometown of new york is very high. it is crucial for miss winters to have coverage she can afford. miss winters writes many of her self-employed and 134small busis colleagues feel the exact same way. the aca allowed entrepreneurs like miss winters to pursue the dream of owning a small business while knowing they have the care they need to keep themselves and their families healthy during the start of transition and well beyond. knowing coverage will be available, affordable and comprehensive provided the peace
of mind to spur entrepreneurship i know democrats and republicans encourage. the question i have today is how would this bill help insure an individual seeking to start out on their own, start a small business, can afford healthcare coverage in the future? >> the legislation relating to the tanning tax, sir, would not really address the questions that you have. it's very narrow piece of legislation, repeal of an excise tax. >> i thank the gentleman. with that, i yield back the balance of my time. would the gentleman like my -- i would yield to the gentleman from new jersey. >> thank you, mr. chairman. we spent a lot of time analyzing the specifics of a couple of ridiculous giveaways in this legislation. let us step back and take stock of the whole bill again.
question one is will it increase the number of americans with health coverage? nope. despite the president's claim that it will take care of everyone, quote-unquote, experts have speculated that this could result in 15 million people. maybe even 20 million losing their insurance. will it improve medicaid? nope. cutting and capping medicaid is being proposed, which will ration care for those who need it the most. will it lower costs on the exchanges? nope. reduce subsidies in segregated risk pools and force more americans to leverage their life sa savings. >> mr. pascrell, mr. crowley's
time is expired. since you're directing your questions to me, i suggest if there's no other questions we transition to striking the last word and you'll be the first one we come to. if you have a question -- >> let's do that. >> are there others that seek recognition? questio questions? >> not questions. strike the last word. >> we're still on cress for mr. b barthold. >> my question goes past the affordable care act to these n tanning salons. i may be confused. is it the purpose of this, if we can raise taxes and raise regulations, we can actually affect somebody's business model to the fact it's low longer viable. in one article i read, there's 10,000 tanning salons that have been shut down. my question is, maybe you can answer this. these people running these t
tanning salons, are they subject to the same taxes any other business would be subject to? >> business income is generally subject to federal income tax, yes. >> what would that be for them? >> it would depend if they're organized as a c corporation or pass through entity forms, s corporation. i would assume it would generally be the latter case, a pass-through entity, perhaps lc corporation in which the maximum rate of taxes the highest rate under the individual income tax 39.36 marginal rate depending on the scale and success of their business they could be taxed at a lower rate. >> the 39.6%? >> the highest. >> that would be a tax on what? >> on the net income from their business. >> on their profits? >> yes. >> the tanning salon, the excise tax, what is that based on? >> based on the price they charge their customers.
>> the sale. it has nothing to do with profit but drives the cost of the sale up. you will add 10% to that. so if we're talking about the effects it has on the economy, if we're talking about trying to rebound and talking about trying to make sure we have viable businesses because coming from the private sector, there are years i paid zero taxes. that's the way the tax code works. it wasn't because i was smart, i didn't make any money that year. if we can get these people to the point where they can't make any money, would they probably just shut up and go away? >> if they were not making money in the business of offering t tanning services -- >> they would shut down. >> they would probably shut down and try some other business venture. >> if you're running a tanning salon you're also paying wage taxes, is that right? >> any employees you have would be subject to fica taxes. >> so i'm sure about this. the associate would pay 6.2% of
her or his income, right? >> yep. >> matched by the owner of she shop. >> and the 1.45% self-health insurance tax also, sir. >> that's a match. that actually comes out to 2.9. >> both, correct. >> i want to make sure we're talking the right way. all of a sudden we're up to 12.4% wage tax and another 3% for medicare. we're looking at this, saying, if we can just get these people to go out of business, if we can raise their taxes where they can no longer be solvent, wouldn't that be a wonderful thing to do? i am completely mystified by this whole conversation tonight where the hell it is we're going with this if the idea is we can put more people out of business and then pontificate, actually my doctor tells me i should go to a tanning salon because i don't get enough vitamin d but the problem is i can't find one i can actually get under and
close the lid on -- [ laughter ] >> but having said that -- having said that, we're closing these people down who are a source of revenue to run this wonderful government of ours that pay forcing every single one of these wonderful features, these entitlements. i'm trying to understand if you kill the goose that lays the golden egg does that make you feel better you no longer have the revenue. i get all the rest of this talk who we're helping and not he helping. where does this money come from? we forget it comes from hard working american workers and profitable businesses and wages and how can we allow more people in business to make more money to contribute more revenue and get more people in the workforce to pay more in wage tax so the people that employ them match those funds and have more money to run all these wonderful programs. i am completely confused. maybe it's the