Washington, DC – Democrats today offered a “jobs” bill in which 80 percent of the so-called tax relief went to state and local governments, while raising over $19 billion in new taxes. Today, Ways and Means Ranking Member Dave Camp (R-MI) offered an alternative on the House floor, that retained the underlying bill’s limited small business tax relief, while repealing billions of dollars in middle-class tax increases found in the Democrats’ recently-enacted health care bill.
Camp said, “We need to repeal the provisions in the Democrats’ health care bill which force millions of Americans to pay more in taxes and more for their health care. This motion is the first step in that fight. Today, Democrats had a clear choice: close a tax loophole to expand Medicaid or close that same tax loophole to prevent Americans from paying more for their health care and more in taxes.”
Specifically Camp’s motion to recommit repealed the cap on the maximum annual contribution to a Flexible Spending Account (FSA), which will be capped at $2,500 per year starting in 2011, under the Democrats’ health care overhaul. FSAs – which are currently used by 35 million Americans – encourage consumers to be more aware of both the cost and quality of health care goods and services. Approximately 7 million Americans put more than $2,500 into their FSAs and would be subject to this new tax increase. According to the Employers Council on Flexible Compensation, the median income of an FSA holder in 2008 was just $55,000. Repealing this provision would have provided Americans with $15.6 billion in tax relief.
The motion also repeals the Democrats’ new ban on using several forms of health savings, including FSAs and Health Savings Accounts, to purchase over-the-counter medicines. Not only does this ban discourage tax-free savings, it discourages Americans from choosing cheaper, non-prescription medicines when they are available. By repealing this provision of the Democrats’ health care overhaul, the Camp motion to recommit would have provided $5.5 billion in tax relief and helped American families lower their health care bills.
All Republicans and 10 Democrats voted to repeal harmful provisions within the recently-enacted health care bill.