Tuesday, March 29, 2011

Dems “Try to Have It Both Ways” on 1099 Repeal

Politico reported last night that Senate Democrats were looking to “have it both ways” when it comes to repealing the health care law’s 1099 reporting requirements, with “an amendment that could kill the proposal down the road.”  Specifically, Politico reported that Sen. Menendez would offer an amendment “that would require an Obama Administration study to see how the Republicans’ amendment would affect small businesses’ premium increases and access to coverage…if the study finds that the Republican amendment increases costs or reduces access, the Johanns amendment won’t go into effect.”

For the record, the outcome for amendment votes on the small business bill remains unclear. (When final text and/or a schedule is available, we will of course get that information to you ASAP.)  But here are two simple examples of how such an amendment would show Democrats “having it both ways” when it comes to their positions on the health care law:

Democrats Voted AGAINST Keeping Premiums Low Last Year:  In March 2010, Democrats had an opportunity to vote on an amendment to the reconciliation bill containing similar provisions to the Menendez amendment being discussed.  That amendment, offered by Dr. Barrasso, conditioned implementation of the health care law “on the Secretary of Health and Human Services certifying to Congress that the implementation of such Act (and amendments) would not increase premiums more than the premium increases projected prior to the date of enactment of such Act.”  Every Senate Democrat now serving voted against this amendment to keep premiums low last year.  While it’s nice that the majority has finally decided to show concern about premium increases, it’s worth noting that Democrats voted to pass a law that will RAISE individual health premiums by an average of $2,100 per year – a direct violation of President Obama’s repeated statements that his bill would CUT costs by $2500 for the average American family.

Democrats Enacted a “Tax on Success” As Part of Obamacare:  During the House debate on a 1099 repeal measure (H.R. 4) earlier this month, Democrats complained that the repayment obligations in H.R. 4 (also in the pending Johanns amendment) represented a “tax on success” and a “tax trap” because it “would penalize people whose incomes had increased because of a raise, a bonus, or additional hours of work,” as individuals would have to repay insurance subsidies they received.  There’s only one problem with this allegation: It applies to the underlying bill Democrats passed.  As we previously noted, under the Democrat bill, in 2016 a family of four with income of $95,000 would lose nearly $5,000 in health insurance subsidies by receiving an extra $1,000 of income.  In fact, the Congressional Budget Office noted in August last year that Obamacare’s perverse incentives “will effectively increase marginal tax rates, which will also discourage work” – one of the main reasons CBO concluded the law will reduce the labor supply in the American economy by about 800,000 jobs.  While it’s nice that Democrats have finally objected to a “tax on success,” the majority should recognize that the legislation they enacted last year more accurately deserves that title. (Perhaps this is what Speaker Pelosi meant when she famously said we had to pass the bill to find out what’s in it, because Democrat Members of Congress apparently don’t understand the legislation they passed.)