Tag Archives: John Cornyn

What You Need to Know about the Senate’s Obamacare “Vote-A-Rama”

It’s not a carnival ride—although it might prove even more adventurous. The Senate’s consideration of health-care legislation will soon result in a grueling series of votes dubbed “vote-a-rama.”

After 20 hours of debate on the budget reconciliation measure, equally divided between the majority and minority parties, the Senate will complete consideration of all pending amendments, with the process’ conclusion typically determined when senators exhaust all the amendments they wish to offer—not to mention themselves.

Here’s what you need to know about “vote-a-rama.”

1. It’s Physically Demanding

The “vote-a-rama” process during consideration of the 2010 reconciliation bill that “fixed” Obamacare provides an example. On Wednesday, March 24, senators began voting on amendments at 5:32 PM. Nearly nine hours later, at 2:17 on the morning of Thursday, March 25, senators had completed votes on 29 amendments. The Senate then took a brief break, re-convened at 9:45 the same morning, and disposed of a further 12 amendments over an additional four-plus hours, with a vote on final passage at 2 PM on March 25.

For 20-something or 30-something staffers—let alone senators several times their age—this lengthy process can prove grueling, with long hours, late nights, lack of sleep, and little food (or bad food) the norm.

2. It’s Mentally Confusing

Between votes on amendments, senators usually allow for brief one-minute speeches by the amendment’s proponent and an opponent (generally the majority or minority floor manager of the bill). However, as Senate procedural expert James Wallner notes, that habit has derived from custom and unanimous consent, not any formal rule. If any senator objects to the brief “well speeches” as part of “vote-a-rama,” then the Senate will vote on amendments without any debate or a summary of what the amendment does.

Even with the brief summaries by amendment sponsors, it’s often difficult for senators—and particularly Senate staff—to understand exactly what’s going on down on the Senate floor. Amendment text can occasionally change at the last minute, as can the sequence of amendments offered. On occasion, senators may have to “fly blind” without clear guidance or recommendations from their staff on how to vote. Coupled with the long hours and lack of sleep (for members and staff alike), it’s a recipe for mistaken votes and confusion.

3. It’s Hard to Pass Amendments with a Simple Majority…

As Wallner noted in an article earlier this week, the Senate’s rules essentially give preferential treatment to the underlying reconciliation bill, making it difficult to craft amendments that can pass with a simple (i.e., 50-vote) majority. The amendment must be germane (i.e., relevant) to the underlying bill, and cannot increase the deficit.

Moreover, to pass with a simple majority, an amendment must also comply with the six-part “Byrd rule” test. For instance, an amendment may not have only an incidental fiscal impact, make programmatic changes to Title II of the Social Security Act, or exceed the jurisdiction of the committees who received the reconciliation instructions (in this case, the Senate Finance and Health, Education, Labor, and Pensions committees). Other than simple motions striking particular provisions, amendments will face a difficult time running the procedural gauntlet necessary to pass on a 50-vote threshold.

4. …But It’s Easy to Get Amendment Votes

Even if an amendment does not comply with the budget reconciliation rules, senators can still offer a motion to waive those rules. The motion to waive requires the approval of three-fifths of senators sworn (i.e., 60 votes), which often does not materialize, but the motion to waive provides a way to get senators on the record on a specific issue. Many votes in a “vote-a-rama” series consist of a “motion to waive all applicable budgetary discipline”—i.e., the “Byrd rule” and other restrictions that make passing an amendment with a simple majority difficult.

5. It Will Result in Messaging Amendments

Perhaps the classic example comes from the Obamacare “vote-a-rama” in March 2010, when then-Sen. Tom Coburn (R-OK) offered an amendment that included the following language:

(b) Prohibiting Coverage of Certain Prescription Drugs—

(1) In general.–Health programs administered by the Federal Government and American Health Benefit Exchanges (as described in section 1311 of the Patient Protection and Affordable Care Act) shall not provide coverage or reimbursement for—

(A) prescription drugs to treat erectile dysfunction for individuals convicted of child molestation, rape, or other forms of sexual assault;

The “No Viagra for Sex Offenders” amendment drew no small amount of attention at the time, and led to political ads being run against the Democrats who voted against it (as some predicted prior to the amendment vote).

Democrats will almost certainly offer similar messaging amendments this year, including amendments unrelated to the bill, or even health care. They may offer amendments regarding the Russia investigation—those would likely be subject to a 60-vote threshold, as foreign policy is not germane to a budget reconciliation bill, but if Democrats wish to get Republicans on record, any vote will do.

Doubtless Democrats will offer amendments related to Donald Trump’s taxes—the reconciliation bill is in the jurisdiction of the Finance Committee, so these amendments could theoretically prove germane, but amendments specifically targeting the president (i.e., making policy, with only an incidental fiscal impact) could violate the “Byrd rule,” making them subject to a 60-vote threshold. For Democratic political consultants, the possibilities are virtually endless.

6. It May Lead to Chicanery—and ‘Strategery’

Senate Republican Leader Mitch McConnell (R-KY) has generally opposed allowing reimportation of prescription drugs from Canada or other countries, with one noteworthy exception. In December 2009, McConnell, along with several other Republicans, supported one of two reimportation amendments offered on the Senate floor.

While opposing reimportation on the merits, some Republicans supported these particular amendments because they wanted to break up the “rock-solid deal” between Democrats and Big Pharma—whereby pharma agreed to support Obamacare in exchange for a promise from Democrats not to support reimportation of prescription drugs.

As it happened, Democrats spent an entire week—from December 8 through December 15, 2009—without floor votes on amendments to Obamacare. The delay—effectively, Democrats filibustering their own bill—came in part because party leaders could not persuade fellow Democrats to vote against the reimportation amendment—and could not afford to allow the amendment to pass.

One can expect similar gamesmanship by the Democratic minority this time around, as evidenced by their tactical decision to abstain from voting on Tuesday’s motion to proceed to the bill until Republican senators mustered a majority solely from within their own ranks. If only three Republicans defect on an amendment, Democrats could have the power to play a decisive role in that amendment’s outcome. It’s an open question how they will do so.

For instance, will some or all of the 12 Democrats who voted against reimportation earlier this year—during January’s “vote-a-rama,” when the Senate passed the budget enabling the current reconciliation process—switch their votes so the amendment will pass, causing Republicans heartburn with the pharmaceutical lobby? When and how will Democrats use other tactical voting to gum up the process for Republicans? The answers range from possible to likely, but it remains to be seen exactly how the process will play out.

7. It Will Inflict Political Pain

Consider for instance a flashpoint in the reconciliation bill: Whether to defund Planned Parenthood. Two Republican senators, Susan Collins and Lisa Murkowski, have already stated they oppose defunding the organization. If one more Republican defects, Democrats would likely have the votes to strip the defunding provision. (While Democratic Sen. Joe Manchin previously supported defunding Planned Parenthood two years ago, in the immediate aftermath of sting videos featuring organization leaders, he has since reversed his position, and will presumably vote with all Democrats to strip the provision.)

To put it another way: Sen. Dean Heller (R-NV) may not just have to be the 50th vote supporting the underlying bill, he may also have to provide the 50th vote to keep the Planned Parenthood defunding provision in the legislation. Will Heller vote to defund the nation’s largest abortion provider—and what will happen to the bill if he, and the Senate as a whole, votes to strip the provision out? Senate leaders will face several of these white-knuckle amendment dramas during “vote-a-rama,” any one of which could jeopardize the entire legislation.

8. It Could Unravel the Entire Bill

Ultimately, with no agreement among Republicans to preserve the underlying bill text, and no clear roadmap on how to proceed, “vote-a-rama” could resemble pulling on the proverbial thread—one good tug and the whole thing unravels. What if Heller ends up helping to strip out Planned Parenthood defunding—and conservatives respond by blocking more funding for Medicaid expansion states? What if moderates vote to strip the “consumer freedom” amendment offered by Sen. Ted Cruz (T-TX), and conservatives retaliate by taking out the “side deals” included to assuage moderates’ concerns?

At the end of “vote-a-rama,” senators could be left with an incoherent policy mess, legislation that no one would readily support. It’s the big potential downside of the freewheeling amendment strategy—but a chance that McConnell apparently feels he has no other choice but to take.

9. It’s Why Senate Leadership Is Talking about a Conference with the House

In recent days, Senate Majority Whip John Cornyn (R-TX) and others have floated the idea that, rather than having the House pass the Senate’s bill whole, sending it straight to the White House, members may instead want to have a House-Senate conference to resolve differences between the two chambers. Some have gone so far as to propose the Senate passing a “skinny” bill—repeal of the individual and employer mandates, along with the medical device tax—as a placeholder to get the reconciliation measure to a conference committee.

This strategy would have one beneficial outcome for the Senate’s Republican leadership: By allowing congressional leaders to re-write the bill in conference, it would save them from having to abide by the results of “vote-a-rama.” If, for instance, senators vote to strip out Planned Parenthood defunding, or to add in reimportation language, congressional leaders could re-write the bill in conference to negate the effects of those votes—presenting a new measure to both chambers with a binary choice to approve the bill or not. (In other words, rather than a “wrap-around bait-and-switch” on the Senate floor, senators could instead face a bait-and-switch in conference.)

That leadership has mooted a conference committee speaks to the nature of the “vote-a-rama” ahead. Despite the complaints on both ends of Pennsylvania Avenue about the lengthy nature of the health-care process, Senate leaders are now looking to extend the process further via a House-Senate conference—because they may need to regain control of the legislation after a wild and unpredictable debate on the Senate floor.

This post was originally published at The Federalist.

Why the Motion to Proceed Is a Sucker’s Bet

In trying to win support for their Obamacare “repeal-and-replace” bill, Republican Senate leaders are making a process argument to their fellow senators: We know you don’t like the bill, but work to mend it, rather than ending the process. As Sen. John Thune (R-SD), the chairman of the Senate Republican Conference, argued, “We gotta get on the bill.…If we don’t at least get on the bill, we’re never going to know.”

It’s a typical leadership argument: The promised land is only one bad vote away, not two bad votes, not ten bad votes, only one bad vote away. (Until the next bad vote crops up.) But to skeptics of the bill—whether moderate or conservative—that argument should sound like a sucker’s bet.

Without a clear vision of the final legislation and an agreement from 50 Republican senators to preserve that vision on the Senate floor regardless of the amendments offered—both things that Senate Majority Whip John Cornyn (R-TX) last week admitted Republicans do not have—proceeding to the bill will result in a policy morass that could make the confusing events of the past week look tame by comparison.

As things stand now, a successful motion to proceed will result in an amendment process under which various provisions of the bill get struck—due to guidance from the parliamentarian, dissension within the Republican conference, or both. Then, a last-minute substitute amendment from Majority Leader McConnell (R-KY) will attempt to win over or buy off votes (or both), with the hope that he can dare enough Republicans not to kill the legislation just before the finish line. Here are the likely ways the bill could change—and not for the better.

The ‘Byrd Bath Bloodbath’

As I have previously written, the prior versions of the Senate bill had not gone through the “Byrd bath” testing which provisions comply with the Senate’s “Byrd rule” for budget reconciliation. Late last Friday, the Budget Committee minority staff released a list of provisions that could get stricken from the bill for not complying with the “Byrd rule,” including pro-life protections ensuring no taxpayer funding of abortion, or plans that cover abortion; funding for cost-sharing subsidies; a prohibition on Medicaid funding to certain entities, including Planned Parenthood; and a provision imposing waiting periods on individuals lacking continuous health coverage.

Multiple sources indicate that the list produced by Budget Committee Democrats comprised preliminary guidance on a prior version of the legislation. Therefore, that list should not be considered definitive—that all the enumerated provisions will get stricken.

Conversely, provisions not on the list released Friday could fail to pass Byrd muster, not least because the parliamentarian’s guidance can change. In 2015, a provision repealing Obamacare’s risk corridor program was stricken from that year’s reconciliation bill on the Senate floor, because the parliamentarian was persuaded by Democrats’ last-minute arguments.

Regardless of the specifics, the “Byrd bath” will doubtless make it more difficult for Republicans to present a coherent policy vision through budget reconciliation legislation, meaning the bill could change significantly from its introduced version on procedural grounds alone.

Death by Amendments

In calling for Republicans to vote to begin debate on the bill, Sen. Lamar Alexander (R-TN), a close McConnell ally, has argued that senators will “have a virtually unlimited opportunity…on the floor to make amendments to the bill and try to improve it.”

Alexander’s key phrase is “try to,” because the numbers are strongly stacked against Republicans wishing to offer amendments. If three of 52 Senate Republicans—only 5.8 percent of the Republican conference—defect on an amendment vote, the amendment sponsor will have to rely on Democrats to approve the amendment. And why would Democrats vote for any amendment that might help Republicans pass an Obamacare “repeal” bill?

The most likely answer: They won’t. As a result, it appears more likely that the amendment process could see Republicans stripping out other Republicans’ amendments—from Cruz’ “consumer freedom” provision to the various “side deals” included in the bill—than inserting provisions into the bill to win support. After all, if a provision is so popular that it could attract the votes of 50 Senate Republicans, why didn’t McConnell include it in the base bill to begin with?

The ‘Wraparound Bait-and-Switch’

As Politico notes, the myriad amendment votes don’t represent the end of the process—they’re merely the beginning: “At some point, [Senator] McConnell will introduce a substitute that will represent the Senate’s draft bill. It may be different than what is introduced…and could be subject to amendment on the Senate floor next week. The bill, in other words, will be a work in progress until the final vote.”

That’s exactly what happened the first time the Senate considered Obamacare legislation under reconciliation, in 2015. At the end of the process, McConnell laid down a “wrap-around” amendment—essentially, a whole new version of the bill replacing the prior substitute. Reports suggest McConnell could well do the same thing this time round: introduce a new bill just prior to the vote on final passage, then dare recalcitrant Republicans to vote against it.

Conservatives in particular should fear the “wrap-around,” for the new “goodies” potentially lurking in it. With McConnell having roughly $200 billion in taxpayer funds to distribute in the form of “candy” to members, and staff brazenly telling reporters they plan on “making it rain” on moderates by including additional cash for home-state projects, the “wrap-around” could well include all sorts of new last-minute spending intended to buy votes, and not enough time to scrutinize its contents. (Will we have to pass the bill to find out what’s in it?)

If this process works as outlined above, Alexander’s argument about amendments seems less an invitation to offer suggestions in an open process than a call for senators to go to McConnell’s office and work out a special deal behind closed doors in exchange for their vote.

Willing Disbelief

If the Senate votes to proceed to the bill and McConnell’s office turns into a trading floor, with staff “making it rain” taxpayer funds just like they promised, senators will claim themselves “Shocked—shocked!” that the process took an ugly turn.

They shouldn’t be. The signs are as plain as day. If senators have objections to the bill now, they should vote down the motion to proceed, for the bill—likely on substance, and certainly on process—isn’t going to get much better, and almost assuredly will get worse.

This post was originally published at The Federalist.

A Status Update on the Senate Health Care Bill

The past week’s debate on health care has seen more twists and turns than a dime-store movie novel. “Repeal-and-replace” is dead—then alive again. President Trump calls for outright repeal, then letting the law fail, then “repeal-and-replace” again.

As Vince Lombardi might ask, “What the h— is going on out here???”

Never fear. Three simple facts will put the debate in context.

Leadership Is Buying Moderates for ‘Repeal-and-Replace’

Whether in the form of “candy,” “making it rain,” or old-fashioned carve-outs that help states with reluctant senators, Senate leaders are trying to figure out the amount and type of money and incentives that will win enough moderate votes to pass a “repeal-and-replace” bill. Details remain sketchy, but the broader outline is clear: senators don’t want to vote for provisions they approved 18 months ago—when they knew President Obama would veto a repeal measure. And Senate leadership hopes to “solve” this problem essentially by throwing money at it—through new funding for Medicaid expansion states, opioid funding, bailout funds for insurers, programmatic carve-outs for some states, or all of the above (likely all of the above).

Leadership Isn’t Serious about Repeal-Only

Some observers (not to mention some senators) are confused about whether the Senate will vote on a repeal-only measure, or a “repeal-and-replace” bill. But Senate Majority Whip John Cornyn (R-TX) explained leadership’s strategy to Bloomberg Wednesday: “There’s more optimism that we could vote on a repeal-and-replace bill, rather than just a repeal bill….But if there’s no agreement then we’ll still vote on the motion to proceed” to a repeal-only measure” (emphasis mine).

Translation: Senate leadership will only move to a vote on the 2015 repeal bill—which some conservative groups have argued for—if it knows it will fail. In fact, some observers have gone so far as to suggest Majority Leader Mitch McConnell’s Monday announcement that the Senate would vote on a repeal-only bill amounted to an attempt to bait-and-switch conservatives—convincing them to support starting debate on the bill by dangling repeal-only in front of them, only to pivot back to “repeal-and-replace” once the debate began.

Regardless of McConnell’s intentions earlier in the week, Cornyn’s comments make clear the extent to which Senate leaders take a repeal-only bill seriously: They don’t.

McCain May Make It Moot

It may sound impolitic or callous to translate a war hero’s struggle against cancer into crass political terms, but if the recent cancer diagnosis of Sen. John McCain (R-AZ) means the senator will be unable to travel to Washington, Republican leaders’ desperate attempts to cobble together a legislative compromise may ultimately prove moot. At least two conservative senators oppose the current bill from the Right; adding more money to appease moderates won’t reduce those numbers, and may increase them. And at least two moderate senators oppose the current bill from the Left, hence the effort to increase funding.

If McCain is unable to vote on the legislation, Republican leaders will be able to withstand only one defection before putting the bill’s passage in jeopardy—yet at least two senators on either side of the Republican Conference oppose the current bill. That math just doesn’t add up, which means that barring some unforeseen development, the hue and cry of the past several days may ultimately amount to very little.

This post was originally published in The Federalist.

John Cornyn Illustrates Republicans’ Obamacare Problem in One Tweet

As the Senate’s second-ranking Republican, John Cornyn holds significant sway in policy-making circles. In his third term, and serving on both the judiciary and finance committees—the latter of which has jurisdiction over Medicare and Medicaid—Cornyn should have a good working knowledge of health policy.

All of that makes this tweet, sent Friday from his account, so surprising:

How can advocates tout Obamacare a success when, among many other flaws, it leaves 30 million people uninsured?

The tweet essentially complains that Obamacare wreaked massive havoc on the health care system, while leaving 30 million uninsured. It’s similar to the Catskills joke cited by Woody Allen in “Annie Hall”: “The food at this place is really terrible—and such small portions!”

Observers on Twitter noted the irony. Some asked Cornyn to support more government spending on subsidies; some asked him to have his home state of Texas expand Medicaid; some asked for a single-payer system that would “end” the problem of uninsurance entirely.

For that matter, increasing the mandate tax to thousands of dollars, or putting people in jail if they do not purchase coverage, would also reduce the number of uninsured. Does that mean Cornyn would support those efforts?

It’s the Costs, Stupid!

There are many reasons conservatives should not remain fixated on the number of people with health insurance when designing an Obamacare alternative.

Insurance Does Not Equal Access: The narrow networks and high deductibles plaguing Obamacare exchange plans—imposed because federally mandated benefits force insurers to find other ways to cut costs—impede access to care, making finding an in-network physician both more difficult and more costly.

Similarly for Medicaid—the prime source of Obamacare’s coverage expansions—beneficiaries themselves don’t even consider a Medicaid card “real insurance,” because they cannot find a physician who will treat them: “You feel so helpless thinking, something’s wrong with this child and I can’t even get her into a doctor….When we had real insurance, we would call and come in at the drop of a hat.”

Insurance Does Not Equal Better Health: The Oregon Health Insurance Experiment compared a group of individuals selected from a random lottery to enroll in Medicaid with similarly situated individuals who did not win the lottery and did not enroll in coverage. It found that Medicaid coverage brought no measurable improvement in physical health outcomes. Likewise, prior studies have suggested that, for health outcomes Medicaid coverage may be worse than having no health insurance at all.

Beneficiaries Do Not Value Health Insurance: Another study from the Oregon Health Insurance Experiment released last year found that most Medicaid beneficiaries valued their health insurance at between 20 and 40 cents on the dollar. In other words, if given a hypothetical choice between a Medicaid insurance policy valued at $3,000, and cash in the amount of $1,500, most beneficiaries would choose the cash.

Obama Promised to Lower Costs—And Failed to Deliver: During his 2008 campaign, Barack Obama didn’t promise to reduce the number of uninsured by a certain amount. He did, however, promise to cut the average family’s health insurance costs and premiums by an average of $2,500 per year. On that count, his health law failed miserably. Since the law passed, employer-sponsored coverage has risen by more than $4,300 per family. Exchange policies spiked dramatically in 2014, when the law’s mandated benefits took effect, and are set to rise again this coming year.

Voters Care Most About Costs: Prior polling data indicates that, by a more than two-to-one margin, voters prioritize the cost of health care (45 percent) over the lack of universal coverage (19 percent). Likewise, voters prefer a health plan that would lower costs without guaranteeing universal coverage to a plan that would create universal coverage while increasing costs by a 13-point margin.

Buying into a Liberal Shibboleth

The responses from liberals to Cornyn’s tweet indicate the extent to which health coverage has become a shibboleth on the Left. There are few things liberals will not do—from spending more money on subsidies, to creating a single-payer system, to expanding coverage to illegal immigrants—to ensure everyone has a health insurance card. (Some liberals might object to putting people in jail for not buying health coverage. Might.)

The liberal fixation—some would call it an obsession—over the number of people with health insurance comes despite evidence suggesting insurance coverage does not necessarily equate with access or improved health outcomes. Over the past 40 years, 90 percent of the growth in safety net spending has come in the form of higher spending on health programs. That spending could have been more effective in alleviating poverty by improving the education system, changing transportation patterns, or enhancing nutritional options in poor communities, all of which also could foster better health outcomes. But because liberals remain singularly focused on the number of Americans with insurance cards, that’s where they want to focus all the federal government’s time and energy.

So, apparently, does John Cornyn. Rather than pledging to lower health costs—Americans’ top health care goal—or questioning the effectiveness of Democrats’ focus on health insurance above all else, his tweet looks like pure kvetching about a problem he has no interest in solving. If one wants to understand Republicans’ problems on health care—both their poor messaging, and their single-minded policy focus on replicating liberal solutions in a slightly-less-costly manner—they need look no further than this one tweet.

This post was originally published at The Federalist.

An Individual Mandate — To Eat Your Vegetables???

During their questioning of Elena Kagan yesterday afternoon, Sens. Cornyn and Coburn both touched on the Commerce Clause issues surrounding the individual health insurance mandate and the limits (or lack thereof) on federal power.  In response to Sen. Cornyn’s questioning about the scope of the Commerce Clause, Ms. Kagan said that “the current state of the law is to grant broad deference to Congress in this area, to assume that Congress knows what’s necessary in terms of the regulation of the country’s economy, but to have some limits.”  However, the limits she went on to describe were centered around “activity…not itself economic in nature.”  Left unstated in this exchange was whether NOT buying health insurance constitutes economic activity, as the health care law, and the Justice Department’s defense of it, assert.

Dr. Coburn followed up on this point, asking whether Congress could pass a law forcing individuals to eat three fruits and three vegetables every day.  Ms. Kagan replied that such a measure would be a “dumb law,” but did not answer as to whether or not the Constitution gives Congress power to create and enforce such a mandate.  In fact, she implied that Congress MAY have such a power, noting that “We can come up with, sort of, you know, just ridiculous sounding laws, and the – and the – and the principal protector against bad laws is the political branches themselves.”

Dr. Coburn went on, pointing out Ms. Kagan that a finding that “eating three fruits and three vegetables a day would cut health care costs 20 percent, now – now we’re into commerce.  And since the government pays 65 percent of all the health care costs, why – why isn’t that constitutional?”  Once again, Ms. Kagan declined to say a law would be unconstitutional, and instead asserted that “deference should be provided to Congress with respect to matters affecting interstate commerce.”

It’s worth asking: If Ms. Kagan is unwilling to admit that Congress cannot regulate the diet of all Americans, is there any area where she believes the federal government CANNOT invoke the Commerce Clause to intrude upon every facet of Americans’ daily lives?

Cornyn Amendment 3712 to H.R. 4872 — Medicaid Fraud

Senator Cornyn has offered an amendment (#3712) regarding Medicaid fraud.

Summary:

  • The amendment reduces the federal Medicaid match by 1 percentage point for any state for which the payment error rate measurement (PERM) is over 10 percent, beginning in 2014.
  • CBO has opined that the amendment would have the effect of reducing federal deficits.

Arguments in Favor:

  • Medicaid faces numerous incidents of fraud.  Reports by The New York Times in 2005 found that the state Medicaid program had reimbursed a Brooklyn dentist who billed Medicaid for 991 procedures in one day—even as the same newspaper found a poor teenager turned away three times without being asked to fill out a Medicaid application.
  • A former New York state investigator estimated that up to 40% of all state Medicaid claims paid—representing nearly $18 billion for New York alone—are questionable.
  • The Government Accountability Office (GAO) has frequently criticized the lack of accountability within the Medicaid program, including a May 2008 study where GAO could not provide a total amount of supplemental payments by state Medicaid programs—because state reporting on the billions of dollars spent was incomplete.
  • The amendment would give states an incentive to strengthen their efforts to fight fraudulent and questionable payments.

Cornyn Amendment 3698 to H.R. 4872 — National Health Expenditures

Senator Cornyn offered an amendment (#3698) regarding national health expenditures.

Summary:

  • The amendment conditions the implementation of the health care law on a certification by the CMS actuaries that the legislation “will reduce national health expenditures relative to the level of such expenditures under current law.”

Arguments in Favor:

  • In 2009, American health expenditures consumed 17.3% of the American economy – an all-time record, the highest level among industrialized countries, and the largest jump in health spending as a share of the economy in decades.
  • The Administration’s own actuaries have concluded that the law will RAISE health costs, and the Congressional Budget Office found that the law, in conjunction with the reconciliation bill, would raise the federal budgetary commitment to health care by $390 billion in their first ten years.
  • The Congressional Budget Office also found that the law would raise premiums in the individual market by an average $2,100 per family.
  • Tom Daschle – the man President Obama wanted to nominate as his HHS Secretary – recently admitted to the New York Times that the health legislation has cost containment provisions that “would be of ‘minimal value’ at the beginning.”
  • During his presidential campaign, Senator Obama made as one of the focal points of his plan the promise that it would “save $2,500 annually for [the average] family” – a pledge the President has not reiterated recently.
  • This amendment holds President Obama to his campaign promise that health reform actually will hold down costs by requiring the non-partisan CMS actuaries to certify the legislation would REDUCE overall health expenses rather than raising costs still further.

Cornyn Motion to Commit H.R. 4872 — Strike Investment Tax

Senator Cornyn has called up a motion to commit the health care bill to the Senate Finance Committee with instructions to strip out the 3.8 percent investment tax.

Summary

  • The reconciliation bill includes a brand new investment tax of 3.8 percent on investments for Americans whose AGI is above $200,000 if single and $250,000 if married.
    • Investment income is defined as interest income, dividends, annuities, royalties, or rents, business income derived from a passive activity, and net capital gain unless derived from disposition of property held in the ordinary course of business.
    • This tax is not indexed for inflation, so more and more Americans will become subject to the tax on their investment income over time, just like the Alternative Minimum Tax.
    • This tax raises $123 billion over ten years, and was included to fill the revenue hole left when Democrats scaled back the high-cost plans tax at the behest of unions.

Considerations

  • A tax on investment is a tax on savings that will discourage long-term economic growth.
  • Investment and savings are two of the key determinants of long-term prosperity.  The Institute for Research on the Economics of Taxation estimates that a 2.9 percent investment tax would depress economic growth by 1.3 percent and reduce capital formation, a key contributor to long-run economic growth, by 3.4 percent.
  • Lower economic growth and less capital formation in the long run means fewer jobs, lower wages, slower growth, and fewer opportunities for future generations of Americans.
  • This tax will break two of the President’s tax pledge – first, as the tax is not indexed for inflation, it will ensnare millions of Americans who earn less than $200,000 or $250,000, which President Obama delivered a “solemn pledge” not to do; second, President Obama pledged that “everyone in America – everyone – will pay lower taxes than they would under the rates Bill Clinton had in the 1990s.”  This additional 3.8 percent tax combined with the proposal in President Obama’s budget to raise capital gains rates back to 20 percent will raise the top capital gains rate to 23.8 percent, above the level they were at in the 1990s.
  • The Wall Street Journal accurately called this “Obamacare’s Worst Tax Hike.”  With the replacement of the high-cost plans tax, which would have slightly encouraged more responsible shopping for affordable health plans, for this investment tax, Democrats have dropped all pretense that their bill is designed to “bend the cost curve” and instead are just turning to the old model of pure income redistribution to fund a new entitlement that will bankrupt future generations.