Tax and Health Care Policy

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Mr. HATCH. Mr. President, we are currently in the middle of an election year. Like most Americans, I look forward to the end of the political campaign season and the end of the rhetoric, spin, and constant battle to win the latest news cycle.

Don't get me wrong, I am not saying this election is meaningless. In fact, there is quite a bit at stake this coming November. And the American people have some clear choices to make.

Unfortunately, some of the more complex and consequential policy matters are the ones that most frequently end up in the middle of the political echo chamber, surrounded by hyperbolic rhetoric, empty promises, and overly simplistic answers to some very difficult questions.

This includes, among many other areas, tax and health care policy, both of which fall largely under the jurisdiction of the Senate Finance Committee, which I chair.

Let me be clear: I understand why both tax and health care policy are fertile grounds for political gamesmanship.

When we are talking about the Tax Code or our health care system, we are taking about issues that impact the lives and livelihoods of individuals, families, and businesses throughout our country. As a result, people are particularly sensitive to the notion that one party or candidate might raise their taxes or enact policies that will increase--or decrease--their health care costs.

Politicians are usually more than willing to promise that, if elected, they will make sure that the people in category X will ``finally pay their fair share in taxes,'' while simultaneously promising that the intended audience will not see their taxes go up.

Similarly, politicians are quite fond of telling people that their policies will bring down their health care costs--or even eliminate them altogether--while promising that the people in category X will be the ones to pay for it.
I suppose the factor that most often separates these politicians from one another is whom they include in category X, whom they choose to slap with an unfavorable label so that their audience has no problem raising their taxes or making them foot the cost of an expanded health care system.

This type of rhetoric--defining enemies and promising to make them pay--may make for good politics, but it almost never results in favorable conditions for meaningful reforms.

That is a big reason why, despite almost universal dissatisfaction with the Tax Code, Members of Congress have for years now been unable to enact meaningful reforms.

It is also a major reason why, even though the vast majority of Americans do not believe our current health care system works for them, many politicians refuse to even acknowledge that there is even a problem.
Put simply, we need to do better. While I understand the importance of elections to our system, we should not let election-year rhetoric paint us into a corner when it is time to draft and enact policy.

Case in point, for years now, the Obama administration has been ramping up its political rhetoric on corporate inversions, fully aware that the American people were rightly concerned about U.S. businesses moving their headquarters offshore.

After years of attacking American businesses--and Republican politicians--for a supposed lack of ``economic patriotism,'' they finally had to translate their rhetoric into policy, which resulted in the recently proposed debt-equity regulations that have drawn criticism from observers and businesses throughout our economy and Members of Congress on both sides of the aisle for being too broad and too blind to ways in which businesses legitimately manage their finances.

By all means, we should try to prevent inversions and go after earnings stripping, which is a closely related problem. I think most reasonable people want to do that. But the Obama administration's proposed regulations go after many legitimate business transactions-- transactions that are not at all motivated by tax avoidance.

Put simply, these regulations will impose substantial burdens on businesses throughout the country and will likely hamper our still fragile economic recovery.

Despite the backlash that we have seen to the Treasury Department's proposed regulations under section 385, they show no signs of backing down--and how could they? After years of demonizing American companies and Republicans over inversions, how politically advantageous would it have been to sit down with Members of Congress to craft more narrowly focused, reasonable solutions that would not grab as many headlines? Ultimately, the Obama administration has determined that it is better--politically speaking--to, as the saying goes, go big or go home on its anti-inversion policies and hope that anyone from the opposing party who speaks out against them will be seen as soft on corporate inversions.

And, when it comes to tax policy, it appears that the pattern will not be changing if we are faced with another Democratic administration after November.

The Democrats' nominee for President has been relatively short on details when she talks about her tax proposals. For the most part, her campaign sticks to the tried and true Democratic tactic of promising everything from tax cuts to ``free'' college tuition, to child care for middle and lower-income workers, while simultaneously claiming that all of it and more can be paid for simply by raising taxes on the rich and closing corporate tax ``loopholes.''

Just last month, a top advisor to the Democratic nominee said that she opposes any reduction of the U.S. corporate tax rate, even though there is a broad consensus among both parties that our corporate tax rate is too high and needs to come down.

I suspect that Secretary Clinton's advisors share this belief behind closed doors, as it is, for the most part, conventional wisdom among tax policy experts; yet, as they have in countless other situations, they have made a political calculation that supporting a reduction in corporate tax rates doesn't play well with the Democratic base.

Let's set aside the fact that increasing the tax burden on American businesses results in costs that are largely passed along to consumers, including lower and middle income earners.

Let's also set aside that their nominee has expressed support for ideas like a carbon tax that would also result in higher costs of living for Americans across the board, particularly on the middle class and lower-income workers.

And let's also set aside the fact that she has endorsed taxes on goods like guns and soda, many of which would be predominantly imposed, not on the super wealthy, but the middle class and lower-income earners.
If you ignore those statements on her part and focus on her plan, her tax and spending proposals have little basis in reality. Modest increases in the individual tax rates for the highest earners wouldn't cover our current and projected deficits, let alone pay for the massive spending increases she has proposed. Similarly, there aren't enough corporate tax ``loopholes'' that could reasonably be eliminated to cover the costs of her campaign promises.

We know this because we have gone through it with the current occupant of the White House. In every major budget dispute and many of the conflicts surrounding the statutory debt limit, President Obama has repeatedly clamored for increased taxes on the so-called rich, often claiming that doing so would solve our budgetary problems.

This is, of course, a facade that only serves a political agenda and it has permeated beyond the election season and into discussions that are supposed to be about actually creating policy.

As I mentioned earlier, this problem persists outside of the tax space. We also see it in our debate over health care policy.

Here is the reality we are living in when it comes to health care: Costs are going up across the board as insurance premiums continue to skyrocket while the implementation of the President's health law continues to be a disaster. Enrollment numbers in the Obamacare exchanges continue to fall well below the projections made by both the administration and the Congressional Budget Office, and the result is a steady decrease in options for patients and consumers and increased burdens on businesses and hardworking taxpayers.
Even without the inherent systemic problems causing the downward spiral of the entire Obamacare system, the implementation of the law has been remarkably inept and unaccountable.

For example, nearly two-thirds of the Obamacare CO-Ops have failed, costing taxpayers billions of dollars.
In addition, the Government Accountability Office repeatedly reports that criminals and fraudsters are likely able to navigate the Obamacare exchanges and even obtain tax subsidies due to the lack of proper safeguards in the system.

Despite all of these failures, which highlight both the shortcomings of the law and the innate inability of government to regulate such a vast and complex marketplace, the Democrats still argue that more government is the answer.

President Obama has repeatedly refused to acknowledge that the health law isn't working, writing off unfavorable data points as being anecdotal or irrelevant to the bigger picture.
The Democrats' nominee for President takes it one step further, doubling down on the Obama administration's position while promising even more government control of the health care system.
She has outlined a number of ``reforms'' she would like to add to the ``progress we've made'' under Obamacare. And, each of her proposals amounts to an expanded role for the Federal Government.

Most notably, of course, she has resurrected the so-called public option, by promising voters access to a government-run health care plan.

She is not alone. An expanded role for the government in health care is what most Democrats openly say that they want.

I am not making that up or casting unfounded aspersions. This isn't paranoia on my part. My colleagues have purposefully chosen to make the creation of a government-run health care plan a central tenet of their 2016 campaigns. Just a few weeks ago, the vast majority of the Senate Democratic caucus signed onto a resolution calling for a government-run health insurance option.

It is almost as if the last 7 years didn't happen.

It is almost as if my colleagues haven't seen the failures of the existing system and the overwhelming evidence of government ineptitude when it comes to health care.

In their resolution, my colleagues are telling the American people that expanding the government's role in health care will ``lead to increased competition and reduced premiums,'' and ``ensure that consumers have the affordable choices they deserve,'' even though virtually everything about the Obamacare experience contradicts that conclusion.

The inevitable result of the course my colleagues want to follow is a single-payer health care system, even if many of them won't admit that is their long-term goal. I have noted several times that, in a world where the government dictates both the products on the health insurance market and the prices at which they are sold, the eventual result will be a market where the government is the only available provider.

From the time Obamacare was drafted, I have argued that Democrats intended to keep expanding the role of the government in the health care sector until they could argue that, after a series of failures, the only option left is a nationalized, single-payer health care system.

And my arguments have been called paranoid and inflammatory by pundits and politicians on the other side; yet, looking at this current campaign season, it is not remotely a stretch to say that my colleagues support and eventually intend to impose a health care system run entirely by the government.

Whether we are talking about taxes or health care or anything else, the problem with this type of rhetoric and all of these campaign promises isn't that my colleagues are simply wrong on the facts. The problem is that, when the rubber meets the proverbial road, these kinds of promises don't lead to good results for the American people.

And, here is why: While some unfortunately seem to live in a perpetual election cycle, once the votes are all counted, we have an obligation to actually govern the country.

I know that fact is sometimes lost on a number of people in this town, but it is the cold, honest truth. The purpose of elections is to eventually enact policies that are preferred by the voters.

Yet, in every election, candidates and Members of Congress spend months taking unreasonable positions and making outlandish promises because they play well with the voters. But, once the election is over, all of that rhetoric--the promises as well as the attacks--have to be translated into actual policy. And, far too often, that process of translation leads either to gridlock when elected officials refuse to move off of their unreasonable campaign positions or to results that, in the eyes of many voters, appear watered down in comparison to the promises they heard in the middle of campaign.

Is it any wonder, then, that the American people are, by and large, growing more distrustful of the government?

Is it any wonder why the vast majority of Americans across the ideological spectrum have a negative view of Congress? As chairman of the Finance Committee, I am well aware that I am going to be tasked with translating election-year rhetoric into workable policies. I am also aware that the policies that fall within the Finance Committee's jurisdiction are often those where we hear some the most contentious rhetoric and unrealistic promises during each and every election cycle, which makes the job of crafting policy that much harder.

Don't get me wrong, I don't doubt my own ability to reach policy solutions that can satisfy members of both parties, and, as chairman and previously as ranking member, I have worked very hard to do so.

And, prior to that time, I had a great deal of success working through difficult policy matters with members in both parties to find the right answers to complex problems.

I believe strongly that we can be successful in coming up with tax policies, health care policies, or any other policies that serve the best interests of the American people. I simply do not believe that election-year rhetoric and hyperbolic campaign promises are the right starting points for these efforts.
Allow me to boil it down a little further and get more specific.

I believe wholeheartedly that we can reform our broken Tax Code on a bipartisan basis, I just don't think we can do it by starting with the notion that tax reform should be about raising revenue for increased spending and punishing disfavored income groups, unpopular industries, or savvy investors.

I also believe we can find a bipartisan way to fix our ailing health care system. But I simply don't believe that it can be done if we are focusing on expanding government in order to keep campaign promises to create a government-run health plan.

I look forward to tackling these issues with my colleagues and to reaching across the aisle to find the right answers. In my view, that will be much easier to accomplish if my friends on the other side of the aisle will eventually be willing to set aside the rhetoric they have employed during the campaign to appease their base.
I am willing to work with anyone to address these and other issues.

We're just going to have to find a way to cut to through the politics and partisanship that all too often slows us down.

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