And youre turning around and cutting 185 billion from the same people then youre cutting i believe 179 billion from medicaid. Now, im pretty sure those people dont make 50 now dollars a year. So youre cutting 364 billion. There are no cuts to medicaid in this bill. I beg your pardon . Im reading off of the cbos form. 179 billion in medicaid subsidies. Thats where the money is coming from. Where do you think the 300 billion is coming from . Is there a fairy dropping it on the senate . The money youre spending is coming out of medicaid to people that make less than 50,000. Youre trying to shop this like youre giving a 43 billion savings . Just so you know cbo, thats people who are leaving medicaid. Mr. Chairman and what they estimate is going to happen. You have spending 318 billion to make tax cuts for corporations permanent. That money is coming from the very people you say youre saving by eliminating 43 billion in tax penalties. All these people and you know whats going to happen . They are going to get sick. When they dont have insurance anymore who will pay the bill . Ill tell you, the middle class families will pay with a higher insurance premium. The hospitals cant absorb all of this uninsured care. We wont turn them away when they show up with cancer and no insurance. Its not like these people will not get sick anymore. This is such a scam. The people who have Health Insurance will pay more and youre taking it out of the medicare program. Senator, your time is up. Thank you mr. Chairman, was that applause for me . I dont think so. Well, let me just say that, you know, im kind of surprised that we are going through this drill again. If i remember correctly i think it was 1 30 in the morning in a completely hushed Senate Chamber back in early august or late july that john mccain came in and walked up to the reading clerk and said no. As a result the repeal and replace of the Affordable Care act was over. I thought it was done and we had saved health care for over 30 Million People. Low and behold it came up again in september again in an attempt to repeal and replace a different version. Finally instead of three republican senators voting no they found it was going to be more like 10, 10 republican senators that wouldnt vote for the package of repeal and replace and therefore they didnt even bring up the bill for a vote. And here we are again. And its the same thing. We are going to take the economic out of it that is going to cause 13 Million People as stated premiums are going to go up. 10 a year. So lets see. The first year premiums go up 2 . Now it comes around to the next year. Premiums go up another 10 . Im just a country boy but i understand if you add that up over ten years its something in addition to 10 up to 100 and premiums are going to go up depending on the base. We want to go through this drill again on what has been stated over and over that the American People want to have health care for those people that in the past have not been able to Purchase Health care or have health care provided . This is going to take place when everybody wants to reform the tax code and yet this is the avenue to get additional revenue in order to cut out the Affordable Care act. Im really surprised. Instead of working in a bipartisan fashion we are taking more of the same old same old. I thought that once the Affordable Care act was saved in early august i thought we were going to see the sprouting of blossoms of bipartisanship and indeed we have. We saw those early efforts with patty murray and they were in september and low and behold lamar and patty are meeting as we speak with about 20 bipartisan senators sponsoring the Affordable Care act and sponsoring legislation and here we go again. I thought that issue was behind us. Here we have it coming back and so in my remaining 17 seconds, mr. Chairman, i think that your provision to generate 338 billion to help pay for Corporate Tax cuts when the light of day is shined on this and people recognize whats happening they are not going to like it one bit. Thank you, mr. Chairman. So i will get back to this issue. Lets get some clarification. We have heard some extraordinary comments. It was really tax provision. There is no provision that disqualities people for medicaid . Does it disqualify anybody for medicaid . How about medicare . No changes in terms no medicare . Nobody is disqualified what so ever . Thats correct. How about the text in the bill that denies People Protection for preexisting condition . Where is that text . The chairmans mark is a tax mark. It doesnt change requirements on insurance industry. It doesnt change that one bit does it . Completely silent on that. How about how much does the bill text specify that reimbursements to Health Care Providers have to go down . Where is that text . It is about the Internal Revenue code. There is nothing right. So the point im obviously trying to make here is there are no cuts to medicaid or medicare. Nobody is disqualified from insurance. What does happen . We have a mandate. People are forced to buy a product whether they want it or not. It is whether people think its a good idea. Theres a category who cant afford our product. What we do is if youre in that category of people who cant afford this product that doesnt suit your family well then we are going to punish you with this tax. What we do in this bill this is all we do in this bill is bezero out the punishment that we inflict on people who decide they cant afford to comply with this mandate. Thats what we do. Thats it. It turns out 82 of the people who are currently absorbing this punishment, forced to pay this tax, their Family Income is less than 50,000. It is the people who cant afford these unaffordable plans who will no longer be punished with this tax. There are no cuts to medicaid, no disqualifications, none of that. We are simply saying if you cant afford these ill designed plans with respect to your family youre not going to have to pay this bounty. Let me move onto the issue broadly. My understanding is we dont yet have the distribution tables. Thats correct, sir. So when i look at the previous it ration i see a reduction in federal taxes paid in every single income. On average thats correct, sir. In total thats correct . Thats correct, sir. And i also see this average tax rate goes down. Is that correct . Thats correct also, sir. There have been changes. Is it your impression that the result of the chaks will be to further reduce some of the low and middle income . In years before the sunset so you would return basically to present law in the very last year but as noted when senator asked earlier the expansion of the Child Tax Credit increased the value and also actually made a further modification that no taxpayer in excess of a half Million Dollars could claim Child Tax Credit. That means all of that increase in value is for taxpayers to dependent children and the tax rate brackets has effects for everyone in the new 22 bracket and above. Right. So mr. Chairman, im running out of time. I would just observe it lowers taxes on the vast majority of middle income and working class families and individuals. The earlier it ration did and the final it ration does so even more. I think it should be clearly stated for the record. Im glad you pointed that out. Let me just say there was a question about the refund blt of the Child Tax Credit. It is my belief that we increase the refundable thats correct mr. Chairman. Your underlying mark provided indexing of the 1,000 refundable portion of the Child Tax Credit. Throughout the budget throughout the budget period that indexing would apply up through the sunset. Yeah. Im glad you pointed out we indexed the refundable part of the Child Tax Credit which will increase it. Thats correct. It would increase from 1,000 to 1,100 in the first year. So basically its untrue . Thats correct. So my Democrat Friends may not support tax relief lets not mistake the facts. Mr. Chairman if we can be a little more careful. Just yield far moment. Thats not factually accurate that we dont provide tax relief for the middle class. What we object to is permanent relief and temporary relief for the middle class. Thats a double standard. Will the gentleman yield . I have the time from the chairman. Ill yield for you. I was simply going to observe would it be in order for the Ranking Member to offer an amendment to make the tax reductions for individuals permanent . Second. If we do it dwoilt on the fl. It wunderstood that there is no refund blt in the Child Tax Credit. Thats not true. The Child Tax Credit has expanded. It is an expansion from current law. Not only is the tax credit richer than it was before it is a doubling of the Child Tax Credit. It is also the refund blt of it is expanded. I think if we can stick to the facts. You might want to go on jtc point gov. I would encourage people to see the fact that if you want to tax middle class more then you should vote no on this bill. Mr. Chairman, i appreciate the other provisions. I think they make the bill better including a bunch of bipartisan ideas including middle class tax cut at a 20 rate. It is a system that enables us to bring trillions back to this country for more investments, higher wages thats already in the bill. You added some other revisions that i think can be put in three categories. I want to thank the chairman for tax reform act. Senator widen has been a champion on this approach and growing Craft Beverage industry. It gives the Smaller Companies much needed relief that allows them to invest more in their businesses and into our kpl communities. The industry supports about 15,000 jobs. And this legislation is only going promote the expansion and jobs that come with these Small Businesses. In the savings space i would like to thank for accepting the amendment to the original chairmans mark that accepts the nonqualified and also the 401 k contributions. It protects in the broad case stock option plans which are actually growing in this country. It is among smallstartup businesses. We protect the Stock Options that would have been on phantom income we never would have received. These types of savings vehicles are critical at helping attract new talent and for giving an ownership take for the company they work for every day. It restores the ability to use a cashup contribution. We got into the law several years ago. We want to encouragement. I appreciate you doing the changes. Finally, common sense, i have a bill called stop taxing death and disability act. If someone has a child then their Student Loans ought to be forgiven. Maybe mr. Barthold maybe you can touch on what happens when a and what would happen under this legislation. We have had tragic circumstances in my state of ohio. Tragically they had a child and a big opportunity loenl debt and this legislation would help them. Certainly. Under general tax prince prals the rm any debt is dred an increase in income and what your uchb they die by having so signed or guaranteed the debt. If the loan the forgiven the death of the student becomes forgiveness of indebtedness to the parent and they would otherwise have taxable income and your legislation would make an exception from the general rule in that situation. And again, i think this is just common sense and an example that are bipartisan, broadly supported. Thank you. Thank you next we have warren. Some of them might have been good changes. If you want to know how the worst of sausage making is, he just enumerated a whole series of items, some of which may be pretty good. They got secretly crammed in late last night with no input from any of us. Why do people think this is a swamp . That was swamp 101. No one was willing to answer this but i got the cbo letter right here. It violates statutorys pay. 25 billion cut next year to medicare. Anyone who denies that i would ask them and the senator from pennsylvania and to the point that no cuts to medicaid. No cuts here or there. Technically there is not, but senator has already pointed out what is so absurd is to save 43 billion in a so called tax cut going to cost the government this 4 4 billion because more people are going to be uninsured and are going to go to the hospital without any coverage. That means well have to pay 44 million more. I strongly find it offensive when somebody says theres no cuts to medicaid where in the heck did you get the 300 billion cuts . The effect of getting rid aft man did and their Health Insurance. Dont clachl your not of 179,000,000,185 billion in decreased aca subsidies. At rooes dont claim youre not doing this than when youre then spending these dollars. I think theres a lot of comments from both sides. They want us to slow down the movement of american businesses abroad. I act which youly do clam to have background in paks maybe they waned to do the right a per spers spers incentive to buld are testimony. The aublt to mac capital unvestment m and still move their ent lek chuck frankly this bill does nothing to remove the biases towards tax havens. My understanding is that you can take those what is called normal return deduction amounts and then if they exceed it is the ability to average these across the series of countries means that rather than decreasing the incentive we may have increased the incentive for companies to move offshore. I particularly add as well you layer that on top with pass through records you may have many wayingst including. If. Taxpayers and in sort of simple terms it cannot be used to shelter but there is the averaging. It is done on a global outside the u. S. Basis. So it will mean you can keep your ent lek chul fr intellec. It would depend on the kpe s specifics. One of the reason it needs for review and more time. I will clarify one point for you. You have to apportion the tax attributed. So for your kpafrp for foum and there was next no to there i can welcome across low tack abdomenen tan. Lets be clear, there hasnt been a single sequester. Congress routinely exemptions spending and revenue measures from the score cards. Mr. Chairman wait, wait, wait. Mr. Chairman, if i could comment briefly. Since youre commenting on something i raised can i get 10 seconds to respond . I will be happy to do that. Because of congresss unwillingness i think it would be appropriate that we dont continue to use these gimmicks and put it out to the American Public and resume all of these things will give way so we know the true cost rather than trying to fit this backseat in the 1. 8 trillion debt you agreed to incur. I appreciate you making the point you just did. A lot of concerns are being made here about what possible things might happen outside of the tax code because of the legislation we are considering. The reality that the chairman has raised is that congress has a perfect record of fixing those things. So far never has Congress Allowed that she quest ration. And we dont expect it to. One of my colleagues made the point that senator murray are working to address some of the concerns they raise outside of the irs code that can help to adjust some of the issue that is are being raised. I think its disingenuous in terms of attacking policies. What are the policies that are being attacked . It is the elimination of the individual mandate. One of the most regressive taxes in the Internal Revenue code. I have information in front of me here that of all of the taxes paid under the individual mandate 58 of that burden is carried by individuals who make less than 50,000. Is that correct . Senator, i dont have your particular figure. I can tell you in 2015 okay. Okay. Thats consistent with what im reading here in the cbo document that says 58 of those make less than 50,000 and another 28 of them make make between 50,999 which makes like 86 of the burden fall on individuals making less than 100,000. It is for those for not being able to buy a product which they dont want to buy. And the attack has been made that we are some how using the revenue that comes from eliminating this tax to feather the nest of the wealthy. Common sense would tell you if we take this money from this tax increase and turn it into a tax cut that it would help across the board. We allow more to claim the credit. Individual income tax rates from middle income are reduced from 22. 5 to 22 from 25 to 24 and from 32. 5 to 32 which will help taxpayers keep more of their hard earned money. It updates the pass through provisions to better assist maybe street. So is this a bill that reduces tax. You answered questions about under the previous analysis that you have done. I know you havent run those numbers for this new park but do you expect that those numbers will simply go down down further. Further. So in the last year youll actually see changes back in the other direction. I think the only sis will be lower. Arent they larger in the lower income categories . Well, i believe thats what we discussed yesterday. It is. There is the point this has to expire because of reconciliation tools. The Ranking Member hell support to make it permanent. I think youll find great support from that on our side of the aisle. Thank you. Youre next. Thank you for holding this hearing. I want to thank all of those on the panel for your patience through yesterday and today. We are here today and discussing the individual mandate because the individual Supreme Court said that the individual mandate was a tax. Thats whats on a tax bill today. Frankly it is the most regressive tax in the irs code. It is a tax on poor people. Mr. Chairman, i have heard from different states that they have on their particular states i would certainly like to share the interest that it has on the state of nevada. They paid 33. 5 million. 33. 5 million in fines to the irs because they couldnt afford a protect the government told them they had to buy. It means 56,000 people in nevada 56,000 people in nevada paid a tax, a fine on a product they couldnt afford because their government told them they had to buy it. My state had 17 counties. This is the impact of the ava. Only three have more than one insurance carrier. Only three. 14 of them will only have one carrier. Im listen sthom if this mandate will reverse. We can this government has failed these individuals. I want to read a letter from a woman that wrote me we cently. She said i drive a 1999 chevy suburban thats falling apart but it runs. Our house is small for five people, but we make it work. My husband works construction and gets laid off. We are the family that falls in the middle. We make too much for midkad ed. Not able to afford the affordable insurance out there today. When my kids get shots, when they get their checkups or anything else i pay cash for them. For an additional hit on our finances i have to pay a fine for not having insurance for the past three years. Mr. Chairman, thats what this bill is all about. This is to give relief to these individuals that fall in the middle. Through this bill and through your efforts, through this committee to give tax relief to these individuals to make sure they have better quality work and this i want you to thank you for work on the chiel tax credit. This mr. Chairman, i wanted to thank a chance to thank you. They worked hard and pushed hard so that we can give families tax relief here in this country. Thank you. Thank you so much. Youre next. Thank you mr. Chairman. Thank you for all of the work you have done on this. As i traveled around wyoming. Im in wyoming every weekend. This isnt going to solve a lot of health care problems. Its a twoyear shortterm solution. There are longer Term Solutions being worked on like invisible high risk pools, automatic opt in and then Small Business health plans. There are a bunch of things needs to be donement we have a system thats not work withing. The biggest thing i here in wyoming is that the people cant afford the insurance. They are i. When it kms to house payment and insurance they go with house payment and then they have to pay a penalty. How much of a penalty . In 2014 in 2015 its not as complete. In 2014 i had 19,600 residents of wyoming, the least populated state in the nation pay penalties of 5. 3 million. Of those they had annual income from below 25,000. The next year was 9 million that they paid instead of buying insurance kwle, the preem i think that the Insurance Companies will adjust. I thought the decision was we would work together. There hasnt been anything on longer term thats worked together. So my question i have been hearing this word that its going to kick 13 Million People off Health Insurance. Is there anything in there that says we are going to kick anybody off . I direct that to mr. Barthold. The result in terms of changes im sure is a result of decisions made. Theres nothing that mandates that people give up insurance. Its an economic decision. Thats the way that i read it and the way that i hear it from people at home they say they choose not to buy it. They pay a penalty which is a tax. They will be getting a bigger tax rebate than they would have gotten. Well recess until 2 30. Thanks i will respond to a question asked by our colleague from pennsylvania. He said he could describe it as a punished word to come from. I want to remind us that some of my colleagues are getting tired of hearing this. It created the individual mandate. When mitt romney in 2006 decided to extend coverage to as many as he possibly could he listed cosponsored by senator grassly. It became the romney plan. When we did the affordable plan we said it ought to be part of the Affordable Care act. Its a good approach. Republicans have good ideas. That was one of them. They have been trying to kill that idea for seven or eight years. We have to have a chance to work. The idea of continuing the exchanges, i think its so counter productive. In this room they held two weeks of hearings and invited Insurance Companies, Health Economists and said what do we need to do . They said three things, number one we have to make sure that they are not going to go away. Number two they said we need to have some kind of reinsurance back up, really expensive cases. Number three, retain the individual mandate. If you dont retain it replace it with something at least as effective. Always here we havent made it. We never had pm in seven years we have nod hat ot had on hearing. Why not . Based on the work of your colleagues and staff at cbo how would the help health hurn. Thank you, senator are premiums ub 10 higher each year. Flchlt mr. Frfrm. There seemed to be confusion earlier. Its not 10 kpom pounded. Its the level across the budget h her. Would it reduce Insurance Market composition in the states individual Health Insurance markets . I dont think cbo has gotten into that much detail since it sort of came out last night. Im not sure it there st no and tis. Zbl zblou. I dont think cbo has gotten into the premium impact but i think think toy p if 34z sl. The latest revised chairmans mark, is there anything in the latest revised bill tax that would guarantee and revised pie rals. No. I created risk pool and raises premium. No tax provisions related to Health Insurance beyond the pif we would do three things and three things i mentioned mandat at least as effective will be retained to make sure we have a good mix of people. We do those three things it was suggested to us we could see stabilization in the marketplaces and reduce premiums by as much as 30 , 35 . Who benefits the most by that . Some of the families we are talking about here today. You know who else benefits . Uncle sam. To the extent we reduce premiums, uncle sam has to pay billions of dollars less in premiums on behalf of those millions of people who otherwise will lose coverage. Thank you. Thank you. I hope the committee will continue to work like they have. With that well recess until 2 30 and well resume again for our second round. The Senate FinanceCommittee Review of the Senate Version of the republican tax bill resumes at 11 00 a. M. Eastern. Right now, more from the Senate Finance committee yesterday