A bill intended to repeal key parts of the Affordable Care Act and defund Planned Parenthood would now decrease the deficit by about $553 billion, should it become law.
The legislation would save about $318 billion without macroeconomic benefits between 2016 and 2025, according to an updated score of the bill by the Congressional Budget Office and the Joint Committee on Taxation.
If it’s December, it must be time for a massive, one-time, all-or-nothing annual spending bill. That’s just what has become of Congress’s core function over the past decade. This year’s version includes a 2,009 page omnibus appropriations bill and a 233 page tax bill mostly extending various “temporary” tax preferences and other provisions.
Republicans have majorities in both houses, so this bill reflects their priorities on the whole. But on health care, it’s actually most interesting for what it suggests about the Democrats—some meaningful number of whose votes are after all necessary for passage.
The Senate voted overwhelmingly today 65-33 in favor a $1.8 trillion package of spending bills and tax breaks, sending the legislation to President Obama’s desk for his signature. Included in the two bills are provisions trimming some of the levies that help finance ObamaCare. A tax on medical devices would be suspended for two years, a levy on health insurers would stop for a year and a tax on higher-cost insurance policies would be postponed two years until 2020.
The House voted 318-109 to send a $680 billion tax-extenders bill to the Senate, which is expected to approve the legislation alongside the omnibus spending measure. The tax legislation, which would make permanent some tax credits and extend several others, is the product of a deal reached by Democratic and Republican leaders earlier this week.
“With this tax bill, families and businesses are going to have the long-term certainty that they need, instead of scrambling year after year to find out what’s next,” House Speaker Paul Ryan (R-Wis.) told reporters on Thursday before the vote.
A federal budget proposal brought good news Wednesday for Minnesota’s medical device companies by freezing for two years a tax on products like pacemakers and ventilators that they have long opposed. The package of tax cuts and spending cued up for final votes in Congress this week would suspend the 2.3% excise tax on those devices, ultrasound machines and more that took effect in 2013 as part of the funding mechanism for President Barack Obama’s health care law.
In a big package of tax and spending legislation that Congress is likely to approve this week, Republicans have forced President Obama to swallow three changes that undermine his signature health care law, including a two-year delay of a tax on high-cost insurance plans provided by employers to workers.
In an interview on Wednesday, Mr. Obama’s first budget director, Peter R. Orszag, a leading supporter of the Cadillac tax, said, “The two-year delay is likely to be equivalent to repeal of the tax because people will expect it to be deferred again and again.”
The Cadillac tax contained in the Affordable Care Act represented an attempt to remedy a major problem with health care and tax policy – the exclusion of the cost of employer-sponsored insurance from both income and payroll taxes. Regardless of political leanings, economists generally agree that the exclusion causes employers to offer overly expansive insurance. This depresses wages and increases overall health care spending. Moreover, the exclusion provides a disproportionate benefit to the wealthy.
It goes without saying that delaying a scheduled tax increase is a tax cut. According to the Joint Committee on Taxation, a two year delay of the Cadillac tax combined with deductibility will save taxpayers $20 billion over the next decade. Conservatives are for tax relief.
Conservatives are for repealing ObamaCare, in whole or in part. The Cadillac Plan excise tax is a part of how ObamaCare’s latticework of subsidies and regulations is supported. Delaying on the road to repealing parts of the ObamaCare law is good public policy. Eventually, we want to repeal and replace all of ObamaCare.
Some of my colleagues are blasting the Republican leadership for delaying three of ObamaCare’s taxes as part of the $1.14 trillion end-of-the-year tax extender and spending package scheduled for a House vote on Friday.
The legislation provides a two-year delay in the “Cadillac” tax on high-cost health insurance policies that labor unions were pleading to repeal; a two-year delay in the medical device tax that is drying up research budgets in this critical industry; and a one-year delay in the Health Insurance Tax (HIT).
Health insurers nabbed a victory in the $1 trillion spending bill unveiled late Tuesday night, earning a one-year freeze on the so-called premium tax. The tax has been strongly opposed by insurance companies and business groups, who argue that the cost of the tax is passed on to workers in the form of higher premiums.