A group of Republican members of the Senate Finance Committee on Friday submitted recommendations to the Joint Select Committee on Deficit Reduction for consideration, which include repealing the Alternative Minimum Tax and the health-care law, reforming Social Security and setting the income tax rate for individuals and corporations at no higher than 25%.
Under the Budget Control Act, congressional committees had until Oct. 14 to submit recommendations to the Joint Committee. The Finance Committee has jurisdiction over tax policy, Medicare, Medicaid, Social Security, pensions, welfare and international trade.
U.S. Treasury Secretary Tim Geithner (left) and Office of Management and Budget Director Jacob Lew released Friday details of the final fiscal year (FY) 2011 budget results. Although lower than expected last February, the release stated that the “FY 2011 deficit remained elevated at $1.299 trillion, which is essentially flat in nominal terms relative to last year’s deficit.”
In a letter to the Joint Committee co-chairmen, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Texas, which accompanied the recommendations, the senators wrote, “As members of the Senate’s Committee on Finance, we are submitting our recommendations on tax, entitlement programs, and trade policy that make meaningful contributions to deficit reduction.”
The deficit committee is charged with developing legislation that provides $1.5 trillion in deficit reduction by Thanksgiving. Senate Majority Leader Harry Reid, D-Nev., has said that the committee’s legislation will be given “expedited consideration, with a guaranteed up-or-down vote in the Senate before Christmas.”
The recommendations were submitted by Finance Committee Ranking Member Orrin Hatch, R-Utah, and Sens. Chuck Grassley, R-Iowa; Mike Crapo, R-Idaho; Pat Roberts, R-Kan.; Mike Enzi, R-Wyo.; John Cornyn, R-Texas; John Thune, R-S.D.; Tom Coburn, R-Okla. and Richard Burr, R-N.C.
The recommendations to the Joint Committee are as follows:
The Senators outline seven guiding principles and six specific proposals that comprehensive tax reform should achieve:
• The principles for reform include economic growth, fairness, simplicity, revenue neutrality, permanence, competitiveness, and savings and investment.
• The specific proposals include an income tax rate for individuals and corporations that is no higher than 25%; repeal of the Patient Protection and Affordable Care Act and its tax increases; repeal of the Alternative Minimum Tax; the adoption of a territorial tax system as an anchor for corporate tax reform; small business income should only be subject to a single level of tax; and the Joint Committee on Taxation should include macroeconomic feedback effects in its revenue estimates of any tax overhaul.
HEALTH CARE AND WELFARE:
MEDICARE: Designed for seniors, the Medicare program is split into Part A for in-patient hospital care, Part B for out-patient services, Part C for Medicare Advantage plans, and Part D for prescription drug coverage.
Medicare: The senators recommend: • Addressing the eligibility age; • Evaluating the impact of supplemental coverage; • Establishing a uniform deductible covering Medicare Part A and Medicare Part B services; and • Strengthening efforts against fraud, waste and abuse.
Medicare Part A: The senators recommend: • Reducing geographic variations in health spending; • Realigning provider payments; and • Evaluating existing cost-sharing structures for post-acute services.
Medicare Part B: The senators recommend the evaluation of the Medicare Part B cost-sharing threshold to ensure the long-term health of the Supplementary Medical Insurance (SMI) Trust Fund.
Medicare Part C: The senators recommend: • Examining approaches that competitively set reimbursement to plans and simultaneously preserve access in rural areas; and • Promoting reforms that encourage innovative plan designs to meet beneficiary needs.