Eric Cantor Confident About GOP Wins During 2010 Midterm Elections

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Will Health Care Reform's Hidden Taxes Hurt America's Middle Class?

Reps. Cantor & Hoyer spar over the Health Care Reform Bill vote.

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Could health care reform lead to hidden taxes?


As a candidate and president, Barack Obama has had one core message for the middle class: I won't raise your taxes. The White House has pledged that only the wealthy — families earning more than $250,000 — would face a boost in income, capital gains, or other taxes. For the 97 percent of Americans below that level, no increases are in store.

But as Congress inches closer to forging a massive package of health-care reforms, it's increasingly clear how difficult it will be to keep that pledge. To pay for the near trillion-dollar health-care system overhaul — not to mention reining in the deficit and funding other ambitious plans Obama has laid out for the years ahead — many outside the White House believe the middle class will not be spared. Republican critics contend that the White House is misleading the public about who will ultimately shoulder much of the cost of extending coverage to tens of millions of uninsured Americans.

True, most won't see direct tax hikes, per se. Few believe Obama will go back on his vow to keep income tax rates the same for all but the top brackets when the Bush tax cuts expire at the end of 2010. And top White House economic adviser Lawrence H. Summers says Obama can keep his pledge while finding more than enough cost cuts and revenue elsewhere. "There is substantial scope for expenditure reductions in health care and for raising enough revenues from people with incomes over $250,000 and from companies," he says.

A key question, though, is whether over the next couple of years, middle-income families will face a host of surcharges, fees, reduced tax breaks, or other increased costs. Daniel Clifton, a Washington-based policy analyst for Strategas Research Partners, argues that Congress has purposely loaded onto the corporate sector the increased taxes needed to pay for the reforms to avoid politically unpopular individual tax hikes. But the added costs will eventually be shifted to customers. "It all depends on what your definition of 'tax' is. Everyone is mincing words here," says Clifton. "There isn't enough money available in just extracting more from corporate taxes or rich Americans."

Consider the Senate's proposal to impose a 40 percent excise tax on so-called Cadillac health insurance plans valued at more than $21,000. The idea, say backers, is to discourage the excessive health-care spending said to result from such generous plans. The proposed tax on the plans would raise $202 billion, more than half the new funds needed to help pay for extending insurance coverage. Rather than tax policyholders directly, the hit would be on insurers who offer those plans.

Worried unions

The insurers, though, likely will cut benefits or raise premiums as a result. That point hasn't escaped union leaders, who oppose the proposal because it would target many of their members, who have negotiated generous health benefits. Richard L. Trumka, the head of the AFL-CIO, argues that roughly 15 percent of insured families and 19 percent of individuals—most solidly middle-class—have plans that would fall under the new tax. For many members, he says, the result would be higher medical costs. "What [they are] actually saying is that cost of covering the uninsured should be borne by the middle class," Trumka says.

Summers counters that the tax is intended to curb wasteful health-care spending; the goal, he says, is to get employers to offer less pricey insurance policies and raise wages instead. But labor leaders remain unconvinced, and they're lobbying to kill the measure.

GOP opponents of the reforms have also intensified their attacks. Senator Chuck Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee, argues the pending bills would leave many worse off. "The vast majority of middle-class Americans would pay higher taxes and premiums," he says. He, too, cites the Cadillac tax increase, along with other changes such as a rise in the threshold on deductions for medical expenses from 7.5 percent of adjusted gross income to 10 percent. Quoting figures compiled by the bipartisan Joint Committee on Taxation, he says that by 2019, when the bill would be fully in effect, families earning over $75,000 would see a net hike in taxes.

On another front, the Senate is counting on hefty excise taxes assessed on the different players in the medical industry for a big chunk of funding. Altogether, insurers, drug companies, and device makers could be on tap for roughly $120 billion in fees over the next decade. Problem is, a big portion of those taxes are likely to be recouped in the form of higher prices or increased premiums. "It's a fiction," says Roberton Williams, a former Congressional Budget Office official now with the nonpartisan Urban Institute's Tax Policy Center. "The excise taxes won't be paid by the companies; they'll be passed right back to their customers."

Summers disputes that notion and argues that the excise taxes "are designed so they will likely be difficult to pass on." And he points out that the estimates Grassley cites do not take into account expected cost savings and other benefits of reform. "Many of those same firms will no longer have the burdens associated with paying for uncompensated care," he argues.

However the numbers are sliced, they add up. All told, by imposing new taxes on health-care providers, the Senate Finance Committee is counting on raising some $340 billion to help pay for reforms. An additional $42 billion would come from trimming tax breaks for such things as health savings accounts and medical expenses, according to fiscal watchdog US Budget Watch. It remains to be seen how much of that tab average Americans will end up shouldering.


Sources: MSNBC, Business Week, Flickr

GOP Promotes Their Health Care Reform Plan...New Web Video

GOP promotes health reform plan. House Minority Whip Rep. Eric Cantor, R-Va., unleashed a fresh attack against House Speaker Nancy Pelosi’s health reform plan in a new Web video.

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Final health reform vote awaits U.S. House this Saturday

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Sources: MSNBC

Jobs! Tax Credits Or Another WPA Program? WPA...No More Corporate Welfare!

(WPA Part I: We Work Again is a US government civic-minded film aimed specifically at the unemployed African American population in the wake of the Great Depression. )



(A clip from a short government film about the the Works Progress Administration, one of the New Deal programs started during the Great Depression. This clip shows road, bridge, and airport construction, as well as water and sewer projects. Posted by David Burns for the Fasttrack American History Project. Part II)







Support Builds for Tax Credit to Help Hiring


The idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and Washington officials grappling with the highest unemployment in a generation.

The proposal has some bipartisan appeal among politicians eager both to help their unemployed constituents and to encourage small-business development. Legislators on Capitol Hill and President Obama’s economic team have been quietly researching the policy for several weeks.

“There is a lot of traction for this kind of idea,” said Representative Eric Cantor of Virginia, the Republican whip. “If the White House will take the lead on this, I’m fairly positive it would be welcomed in a bipartisan fashion.”

In addition to the economists working on the proposal, some heavyweights support the concept, including the Nobel laureate Edmund S. Phelps, Dani Rodrik of Harvard and former Labor Secretary Robert B. Reich.

One version of the approach, to be unveiled next week by the Economic Policy Institute, a labor-oriented research organization, would give employers a two-year tax credit if they increased the size of their work force or added significant hours of work (for example, making a part-time worker full time). Employers would receive a credit worth twice the first-year payroll tax for each new hire, amounting to several thousand dollars, depending on the new worker’s salary.

“It’s beautiful if it can be timed at a dire moment like this, when unemployment is way too high and appears to be going somewhat higher,” said Mr. Phelps, an economics professor at Columbia, lamenting that the president dropped it from the $787 billion stimulus plan approved in February. “But it’s a pity that this wasn’t done a year ago.”

One of a number of ideas being discussed, the policy is intended to encourage companies to start hiring again by making it cheaper to add new workers. It has raised concerns, though, that employers might try to exploit the system.

States have dabbled with similar tax credits in recent years, with mixed results. The federal government last tried this measure in 1977-78. During that period, employment — which had been soft from the 1973-75 recession — climbed at a record pace. The creation of one out of three jobs that was awarded the credit then was attributed directly to the policy. But the permanence of those jobs was less clear, and some dispute how many of those positions would have been created eventually anyway.

Supporters say that improvements upon the 1970s policy would increase its potency. These include better publicizing the credit; making it available even to concerns that are not making money, in the form of a direct payout to nonprofits and companies in the red; and distributing the credit quarterly so that companies see it sooner.

Timothy J. Bartik, a senior economist at the Upjohn Institute for Employment Research who is working on the draft with John H. Bishop of Cornell, estimates that it would cost about $20,000 for each job created.

But some dismiss the idea as corporate welfare.

“Some bad ideas never go away,” said Howard Gleckman, a senior research associate at the Urban Institute. “It’s just providing incentives to lots of companies that probably aren’t going to make it in the end anyway.”

Under the proposal from Mr. Bartik and Mr. Bishop, the credit in the first year would equal 15.3 percent of the cost of adding an employee. In the second year, it would fall to about 10.2 percent.

For example, hiring a worker might cost a small business $50,000 annually. But with the tax credit, the cost would fall to $42,350 in the first year, and then be $44,900 the next year. After that, the cost would return to $50,000.

The credit would apply only to the portion of an employee’s salary under $106,800. Lowering the cap further, however, could provide an even greater benefit to low-wage, unskilled workers.

The authors estimate their proposal could create more than two million jobs in the first year.

“Businesses like those provisions that reduce the hurdle rate that you have to surmount in order to make an investment — like an employee — a profitable investment,” said Robert Willens, president of a tax and accounting advisory firm in New York.

Of course, even in recessionary times, some companies are hiring without tax breaks. So a subsidy could merely benefit those businesses that already would have added new workers.

An American Economic Review study has suggested that the 1970s policy was responsible for adding about 700,000 of the 2.1 million jobs that were awarded the credit. This may sound modest, but if accurate, economists say it would make this proposal a successful and relatively cheap way of creating jobs.

Advocates argue that such incentives would be more effective this time around not only because of design, but also because of timing. In 1977, hiring was already on the upswing, whereas economists expect today’s job market to decline a bit more and then stagnate for months.

“Now is a better time than ’77 was because we’re closer to the bottom of a recession,” said Daniel S. Hamermesh, an economics professor at the University of Texas, Austin, who helped create the 1970s plan. “This could help an uptick proceed more rapidly.”

But critics of the idea argue that businesses hire based on actual demand for their products, and a minor subsidy for adding an employee will not make up for the collapse in demand across the broader economy.

“Why would a business hire a new worker?” Bill Rys, tax counsel to the National Federation of Independent Business, a small-business industry group, said. “They’re hiring because they need to do work. Unless you have work to do, it’s still an expense.”

Pres. Barack Obama — like Senator John Kerry before him — proposed a job creation tax credit during his presidential campaign, and then in discussions for the stimulus package. The proposal was eventually killed because of concerns that employers would exploit the tax credit. For example, companies might close and reopen, claiming credit for all their “new” employees.

Even advocates acknowledge that, as with any tax incentive, employers and their accountants will take advantage of loopholes. But they argue that with strong rules — possibly by reducing the credit for “new” companies, or by requiring a company’s overall wage bill to rise along with its work force — the proposal could minimize such abuse.

Deficit hawks still worry about the cost of the proposal, and whether it would be politically feasible for Congress to phase it out once businesses have grown used to it.

The biggest fear among some, though, is that the proposal might unintentionally reduce job opportunities if it sits in Washington too long without passing.

“Particularly for big employers, if they think a job creation tax credit is in the offing, it could certainly be an incentive to delay hiring,” said Lee E. Ohanian, an economics professor at the University of California, Los Angeles. “That means it could have the perverse effect of actually prolonging the recession.”



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Ed Schultz Calls Out Eric Cantor To A Health Care Debate...Truth Or Dare

(Ed Schultz calls out Eric Cantor to a Health Care debate appearance on his show. Listen)




(While speaking before an audience at a Town Hall meeting in Richmond, VA Rep. Eric Cantor responds to a woman's questions about Health Care. Watch)





Ed Schultz Challenges Eric Cantor To Exciting Debate


On last night's The Ed Show, MSNBC's Ed Schultz didn't take too kindly to Virginia Representative Eric Cantor's suggestion to a constituent, whose relative was diagnosed with cancer and who could not get health care, that she should seek out an "existing government program" or a "charitable organization" to, you know... save her life and whatnot. I can understand why Schultz was so angry! Here's Eric Cantor, knowing full well that America has the "best health care in the world," suggesting that health care was somehow rationed or something!

Well, if Schultz didn't care for Cantor sloughing off the concerns of a constituent in that manner, the straw that seems to have broken the camel's back was a call from a Cantor spokeperson, "chiding him for going after the congressman," reports ThinkProgress. This would not stand!

SCHULTZ: I want you to email or call Cantor's office and ask him why he won't go head to head with me on this issue. Why he doesn't have an answer for that woman that would give her coverage, and why he is against the public option that would give her coverage. She obviously now has a pre-existing condition and can't get helped. She is left behind and the Republicans don't have a plan for her, and they're just comfortable with the fact that she...you know...she's either got financial ruin, or she's going to die.

Schultz then played the original exchange between Cantor and fulminated a bit more before reiterating his call-slash-invitation to have Cantor come on The Ed Show for the entire hour to debate the matter and elucidate the Republican health care plan in full:

SCHULTZ: Call Cantor's office or e-mail him and ask him if he'll go head-to-head with me for a full hour on the Ed show. A full hour. I'll give him a full hour! To explain what the Republican plan is to help that woman out, or is she just left to die?

Then there was some stuff about roulette tables and ass-kickings. Schultz was pretty het up! He concluded by saying, "Come on, Cantor. Don't hide behind your press secretary. Let's get it ooooooonnn."

Anyway, get excited, America, at the prospect of Ed Schultz and Eric Cantor yelling at each other for an hour, which will solve everything except for the part where it's actually Blue Dog Democrats killing meaningful health care reform because lobbyists paid them to do so.

Related:

After being chastized by Cantor's "PR flack", Ed Schultz challenges the congressman to a one-hour debate.



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GOP Lawmakers Acting The Fool, Still Trying To Stop HC Reform...Party Of No

Politico----


Rep. Wilson's rallying cry

(TODAY’s Meredith Vieira talks to Vice President Joe Biden about President Obama’s speech on health care reform and Rep. Joe Wilson’s outburst during the address.)

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(Rep. Congressman Eric Cantor states "Pres. Obama's recent Health Care Reform speech didn't assauge fear.)

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(Another GOP lawmaker decides to express his negative, divisive perspective about HC Insurance Reform and slam Pres. Obama's speech. He claims Pres. Obama's Health Care plan isn't the "right plan".)

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(Pres. Obama is heckled by SC Rep. Joe Wilson during his recent HC Reform speech to Congress last night.)



(Congressman Joe Wilson (SC) apologizes for foolishly heckling Pres. Obama last night.)

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All eyes were on Pres. Barack Obama entering Wednesday night's address to Congress, but a little-known South Carolina Republican may have done more than the president’s combative speech to unify besieged Democrats around health care reform.

The night's defining moment — which Democrats hope to transform into a turning point – came when Rep. Joe Wilson (R-S.C.) shouted "You lie!" as Obama claimed his plan wouldn't offer free care to illegal immigrants.

Wilson's boorishness — for which he quickly apologized — enraged audience members on both sides of the aisle.

It also overshadowed a speech that included some of Obama's harshest attacks on his GOP critics to date, including a denunciation of "death panel" alarmists as liars — a veiled swipe at Sarah Palin — and a warning to Republicans who want to "kill" reform.

"What we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government," Obama said. "Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned.

"Well, the time for bickering is over. The time for games has passed," he added, to Democratic cheers.

The president's combativeness, coupled with Wilson's behavior, clearly energized Democrats — to the point where few were in a mood to criticize Obama's lack of specifics or the fact that he offered no ironclad commitment to inserting a robust public option in the final legislation.

Ben Nelson (D-Neb.), one of the upper-chamber Democrats most skeptical of the White House reform efforts, was impressed by Obama’s speech.

"I think it was a bit of a game changer," he said.

"The speech galvanized support along the Democratic caucus across the political spectrum, from the progressive caucus to the Blue Dogs, and everybody left determined to get something done this year," Rep. Chris Van Hollen (D-Md.), head of the Democratic Congressional Campaign Committee, told POLITICO Wednesday night.

Republicans — some of whom expressed open contempt for Obama by scanning their BlackBerrys or holding up copies of GOP bills during the speech — saw the president’s remarks as a Democratic call to arms that belied the president’s oft-repeated calls for bipartisanship.

"I was incredibly disappointed in the tone of his speech,” said Lindsey Graham (R-S.C.).”At times, I found his tone to be overly combative and believe he behaved in a manner beneath the dignity of the office. I fear his speech tonight has made it more difficult — not less — to find common ground.

"He appeared to be angry at his critics and disappointed the American people were not buying the proposals he has been selling... If the Obama administration and congressional Democrats go down this path and push a bill on the American people they do not want, it could be the beginning of the end of the Obama presidency."

Rep. Mark Kirk (R-Ill.), who is running for Obama's old Senate seat, said, "He talked at us. He didn't listen to us... It was a missed opportunity."

Added Sen. Bob Corker (R-Tenn.): "I sat there tonight wondering what the purpose of this evening was. I was hoping to hear the president flesh out a middle ground, but instead we heard platitudes and campaign rhetoric."

But Sen. Tom Coburn (R-Okla.), one of Obama's most consistent critics, saw some room for compromise. "It was a good speech, the problem is that what he wants and what they've written are two totally different things," said Coburn, an OB-GYN. “I'm willing to compromise to get things fixed. But I'm not willing to put the government in charge because we don't have a good track record."

Despite the energized tone, Obama offered cold comforts to liberals, no detailed road map for reform and an endorsement of the public option that fell far short of a guarantee.

"It is only one part of my plan," he said of the option. "To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end — and we should remain open to other ideas that accomplish our ultimate goal."

But the fight over the public plan was eclipsed by Wilson's outburst halfway through Obama's address.

Wilson was quickly shouted down by Democrats, and House Speaker Nancy Pelosi shot a withering glance at the GOP side of the room. White House chief of staff Rahm Emanuel demanded an apology from Wilson — as did Sen. John McCain (R-Ariz.).

A chastened Wilson quickly obliged, issuing a public apology and calling Emanuel personally after the speech, according to a White House source.

"This evening, I let my emotions get the best of me when listening to the president's remarks regarding the coverage of illegal immigrants in the health care bill," he wrote in an e-mail to reporters. "While I disagree with the president's statement, my comments were inappropriate and regrettable. I extend sincere apologies to the President for this lack of civility."

House Majority Whip James Clyburn, a South Carolina Democrat, said the remark was the latest in a long line of political attacks by Wilson.

“Joe Wilson took our state's reputation to a new low. I thought [Gov.] Mark Sanford had taken it as low as it could go, but this is beyond the pale," Clyburn said.

"Joe is very confrontational," he added. "He held his first town hall meeting three blocks from my house at my kid's high school. Now why would he have this town hall meeting in my congressional district, three blocks from my house in my kid's high school? It's not in his district.

That's the kind of guy Joe Wilson is. He loves confronting people. So he was confronting the president, just as he was confronting me."

Illinois Sen. Dick Durbin, the second-ranking Democrat in the Senate, predicted that Wilson’s outburst would have consequences.

"The person who said it will pay a price,” Durbin said. “I think the average American thinks that the president and the office deserve respect, and that was a disrespectful comment. They'll pay a price in the court of public opinion."




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