Tax Increase Prevention And Reconciliation Act of 2005--Conference Report
TAX INCREASE PREVENTION AND RECONCILIATION ACT OF 2005--CONFERENCE REPORT -- (Senate - May 11, 2006)
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Mr. AKAKA. Mr. President, the chairman of the Finance Committee is a very good friend, and I know him as a good friend and a very passionate person who takes his work very seriously and is a hard worker in this body. I want him and the body to know that I do appreciate his good work. In this body we know that many of the bills offered are not perfect. We know there are many bills that are of concern to Members of this body and for those they represent.
Mr. President, once again, we are faced with a tax package that represents misplaced priorities, and that is not in line with the views of a majority of Americans, including taxpayers in my State of Hawaii. My constituents are calling for fairness in tax treatment, and they are not getting it in this tax package.
The $70 billion tax reconciliation conference report before us puts tax cuts for the richest in this country above tax relief for the middle class. It leaves out real solutions for real pocketbook issues for middle America, like the gas price crunch that has many families in a bind. It is outright fiscally irresponsible in an era when annual federal deficits exceed $300 billion, and uses budget gimmicks and timing shifts to mask its true costs. There are other choices that my colleagues and I would have made, and did make when we passed the Senate version of this bill, such as extending the Research and Development and Work Opportunity Tax Credit, but, once again, we were simply shut out of meaningful input into the conference committee process.
My constituents will not appreciate the inequities in this conference report. The measure provides an estimated annual tax cut of $42,000 for those making more than $1 million. For the top one-tenth of one percent of households in this country whose incomes exceed $1.6 million, tax cuts will average more than $82,000. Roth IRA changes would benefit those taxpayers who make $100,000 or more, meaning that more than 99 percent of the benefit would go to the top 20 percent income group. In contrast, Mr. President, the average tax reduction for middle-income families would be $20. Only five percent of benefits would go to those earning annual incomes of $75,000 or less.
What does this mean for those who are left out of this package? Not a single taxpayer can deduct state or local sales taxes from their 2006 federal taxes. School teachers who purchase classroom supplies out of their own funds--and I remember doing this when I was a teacher, and my teachers doing this often when I was a principal--will pay higher taxes this year. Families paying college tuition will be unable to deduct that tuition from their taxes this year. Employers will not receive a tax credit for people hired from welfare to work, so fewer will be hired. The research and development tax credit will not be available this year to businesses working hard on innovations to allow America to remain competitive in global markets. And, as the Ranking Member for the Homeland Security and Governmental Affairs subcommittee with jurisdiction over D.C., I must protest the non-inclusion of certain tax incentives for the District of Columbia.
Large oil corporations are taken care of in this package, while people in Hawaii and many others across the country continue to see their household budgets squeezed by high gas prices. This week, according to the AAA Daily Fuel Gauge, the average price for the nation is $2.88 a gallon for regular unleaded. The average price in my state of Hawaii where most supplies are imported is a whopping $3.40 per gallon for regular unleaded, and this number is steeper on the neighbor islands. I really feel for my constituents who have long commutes, such as those going from Wahiawa or Nanakuli to downtown Honolulu, Kona to Hilo on the Big Island, or Lahaina to Kihei on Maui, whose household budgets leave little room for excess costs. Hawaii's average price a year ago was almost a dollar lower per gallon, at $2.51 for regular unleaded. You can see what this has done to household expenses in my state and across the country. This tax package presented an opportunity to send a message to big oil. Instead, it fails to adequately curtail existing tax benefits for big oil--benefits that business leaders in the industry say they do not need--and includes pared back provisions such as a measure that eliminates exploration expensing. In the meantime, protections for those buying hybrid vehicles were weakened. The conference report does not respond to the current crisis at the gas pumps in a meaningful way.
For all of these reasons, Mr. President, I oppose this tax reconciliation conference report. We are once again burning the candle at both ends--shrinking revenues while absorbing tremendous ongoing costs for our military operations, efforts to combat terrorism, and relief for hurricane victims. This package comes at the wrong time and fails to deliver on promises of fairness to the American people.
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Mr. AKAKA. Mr. President, too many in our country are uninsured or unable to afford health care. For those with coverage, costs continue to rise as insurance premiums and copayment increases make it more difficult to continue to access health care. We must take steps to increase health insurance coverage and expand access to affordable health care, but we must not do so in a manner which will undermine existing coverage and leave consumers without adequate protections and benefit mandates.
I appreciate the efforts of my colleague from Wyoming, Senator Enzi, to expand access to employees through his bill, S. 1955, the Health Insurance Marketplace Modernization and Affordability Act. However, the preemption of State laws will have negative impacts on consumers. Existing State benefit requirements ensure consumers are protected against the cost of illness and provided coverage to preventive services at earlier stages for the better likelihood of favorable treatment. AARP, the American Diabetes Association, and the American Cancer Society, a sample of the many health care related organizations opposed to the legislation, believe that the bill ``could remove critical consumer protections pertaining to rating and benefits as well as reduce broad access to the services necessary to continue producing better outcomes for those with cancer, diabetes, and other chronic illnesses.''
Health care organizations are not alone in their opposition to this legislation. Attorney generals across the country, including Attorney General Mark Bennett in Hawaii, are opposed to S. 1955 because it would cause health insurance consumers to lose important state protections.
We must act to make health care more affordable. An alternative to S. 1955 is S. 2510, the Small Employers Health Benefits Program Act. This legislation would help improve access to insurance without bypassing State consumer protections. The legislation would also provide a tax credit to make health coverage more affordable.
In addition, we need to enact reforms to ensure generic competition for name brand prescription drugs. The legitimate patent protection period needs to be respected, but we need to make sure that generic prescription drugs get to market in a timely manner and that name brand drug companies cannot simply pay generic drug companies to not make a drug. Greater use of generic drugs will help slow the increase in health care costs without reducing access.
Unfortunately, the majority in the current Congress have made it more difficult to access health care. For example, the Deficit Reduction Act contained a provision which will require individuals applying or reapplying for Medicaid to verify their citizenship through additional documentation requirements. For most native-born citizens, these new requirements will most likely mean that they will have to show a U.S. passport or birth certificate. These requirements will create barriers to health care, are unnecessary, and will be an administrative nightmare to implement.
One in 12 U.S. born adults, who earn incomes of less than $25,000, report they do not have a U.S. passport or birth certificate in their possession. Also, more than 10 percent of U.S.-born parents, with incomes below $25,000, do not have a birth certificate or passport for at least one of their children. An estimated 3.2 to 4.6 million U.S.-born citizens may have their Medicaid coverage threatened simply because they do not have a passport or birth certificate readily available. Many others will also have difficulty in securing these documents, such as Native Americans born in home settings, Hurricane Katrina survivors, and homeless individuals.
Having to acquire a birth certificate or a passport before seeking treatment will create an additional barrier to care. Some beneficiaries may not be able to afford the financial cost or time investment associated with obtaining a birth certificate or passport. The costs vary by State and can be as much as $23 to get a birth certificate or $97 for a passport. Taking the time and obtaining the necessary transportation to acquire the birth certificate or a passport, particularly in rural areas where public transportation may not exist, creates a hardship for Medicaid beneficiaries.
Further compounding the hardship is the failure to provide an exemption from the new requirements for individuals suffering from mental or physical disabilities. Those suffering from diseases such as Alzheimer's may lose their Medicaid coverage because they may not have or be able to easily obtain a passport or birth certificate.
It is likely these documentation requirements will prevent beneficiaries who are otherwise eligible for Medicaid to enroll in the program. This will result in more uninsured Americans, an increased burden on our health care providers, and the delay of treatment for needed health care.
I have introduced legislation, S. 2305, to repeal the additional documentation requirements to ensure that Medicaid beneficiaries are not unfairly denied access to care by these burdensome and unneeded requirements. I had hoped that I would be able to offer my bill as an amendment to the pending legislation. However, the majority has taken action that will prevent this from occurring on S. 1955.
We also need to improve and simplify the Medicare prescription drug benefit so that all seniors are able to obtain all of the medications that they need. We must correct the mistakes of the Medicare Prescription Drug, Improvement, and Modernization Act and fulfill the promise to seniors that the Federal Government will help beneficiaries get the drugs they need. We also need to extend the deadline so that seniors are not unfairly penalized if they need more time to figure out which plan is right for them.
Another important Medicare issue are provider reimbursements. Rising costs, difficulty in recruiting and retaining staff members, and declining reimbursement rates make it necessary to make improvements in Medicare reimbursements to ensure that Medicare beneficiaries have access to health care services. We must increase Medicare reimbursements for service providers so that they can continue to afford to treat Medicare beneficiaries.
Another issue that should be addressed during Health Care Week is stem cell legislation. I am a proud cosponsor of S. 471, introduced by Senators SPECTER and HARKIN, which would authorize Federal funding for research on stem cells derived from embryos donated from in vitro fertilization. Unless this legislation is enacted, these embryos will likely be destroyed if they are not donated for research. This bill also would institute strong ethical guidelines for this research. The House companion measure is pending consideration in the Senate. We must pass this bill so that researchers may move forward on ethical, federally funded research projects that develop better treatments for those suffering from diseases such as diabetes and Parkinson's.
Mr. President, I am afraid that this will be a Health Week only in terms of rhetoric because we are not able to offer amendments to address the pressing health needs of this country. Instead of working together to find common solutions to better meet the health care needs of our country, the majority party has simply offered up legislation that is flawed and refuses to work with us in a meaningful way on this issue.
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