Weekly Column of U.S. Senator Lamar Alexander (R-Tenn.) - Health Care Votes Will Be for Big Medicare Cuts and Big New Taxes

Posted on November 8, 2009

There are a lot of unusual things happening in the Senate, the Congress, and the world today, but apparently Senators are about to be presented with a rare opportunity that very few have ever had a chance to vote on. The health care bill that will be considered will present Senators—it is still being written from behind closed doors, but from what we can tell from the other versions—with an opportunity to vote for $1/2 trillion in Medicare cuts and $900 billion-plus in new taxes at the same time. It is very rare that any Senator has a chance to vote for Medicare cuts that big and new taxes that big all at once. It is not an opportunity that many, if any, Republicans will take advantage of, but that is the proposal that is coming. The 2,000-page bill coming from the House soon is basically half-financed by Medicare cuts. Those cuts will not be used to make Medicare solvent—a program which has $37 trillion in unfunded liabilities over the next 75 years—but to spend it on a new government entitlement program. That is a fact. That is why it is important that the American people have an opportunity to read the bill and know what is in it, what it costs, and how it affects them. The taxes in this bill include a tax on individuals who don't buy government-approved health insurance. The Joint Committee on Taxation, our joint committee in Congress, and the non-partisan Congressional Budget Office (CBO) estimate that at least 71 percent of that penalty, that tax, will hit people earning less than $250,000. So these new tax hikes will not just raise taxes on rich people. When you impose $900 billion-plus in new taxes, as the Senate Finance Committee bill would when fully implemented, on a whole variety of businesses that provide health care, what will they do? According to the Director of the CBO, most of those taxes are passed on to the consumers. Who are the consumers? They are the people who are paying health care premiums—250 million Americans. That means that instead of reducing the cost of your health care premium, this bill is more likely to increase it. Republicans believe the American people do not want this 2,000-page bill that is headed our way. We want, instead, to start over in the right direction, which means re-earning the trust of the American people by reducing the cost of health care step by step. Specifically, we would start with small business health care plans. That would lower premiums, according to the CBO, cover up to 1 million new small business employees, and reduce spending on Medicaid. Then we could take a step to encourage competition by allowing people to buy health insurance across state lines, and we can take measures to stop junk lawsuits against doctors which also drive up the cost of health care. Encouraging the adoption of health information technology could be a bipartisan proposal. We can create health insurance exchanges. We should go after waste, fraud, and abuse in government health programs. Estimates are that $1 out of every $10 spent in Medicaid is wasted. These Republican proposals would offer a choice—a couple hundred pages, not 2,000—protecting Medicare instead of cutting it, with no tax increases instead of higher taxes, and reducing costs and premiums instead of increasing them. That is the kind of health care plan Republicans offer and the kind we believe Americans will want. We hope over time that will earn bipartisan support.