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As Republican lawmakers move to repeal the Affordable Care Act and scrap its tax provisions, they may look to past years as a guide, House Ways and Means Committee ranking member Richard E. Neal (D-Mass.) said.
Lawmakers may handle the law’s nearly two dozen tax provisions—including those on medical device manufacturers and investment income—“piece by piece,” instead of killing them all in one fell swoop, Neal told reporters after a speech at the National Press Club Jan. 12. That approach was also used during the tax overhaul in 2001.
Because Republican lawmakers are dismantling the law through budget reconciliation, which comes with strict monetary parameters, any tax changes may need to be phased in or out at different times to fit within the limits.
Lawmakers have grappled with reconciliation requirements before. The “Cadillac tax,” an excise tax on the part of high-cost health plans that exceed the limits, was delayed but not repealed to avoid budget loss outside the reconciliation period in 2015 repeal legislation ( H.R. 3762) that President Barack Obama eventually vetoed. The estate tax was reduced between 2002 and 2009, and fully repealed in 2010 under the Economic Growth and Tax Relief Reconciliation Act of 2001.
Similar decisions this go-round could help bring in revenue and avoid the budget consequences of repealing all the tax elements at once.
“They had problems selling a tax cut, and then they decided to break it out and all of a sudden we started hearing about the ‘death tax,’ we started hearing about the marriage penalty, and so I think that that might be the road they’re going to go down on this,” Neal said of the 2001 tax changes.
The House is expected to vote Jan. 13 on the budget resolution (S. Con. Res. 3) being used to kill the law. The Senate passed the resolution in the early hours of Jan. 12 after a voting marathon on health-related amendments. Repealing the ACA is a top priority for Republican lawmakers, and President-elect Donald Trump has urged swift action.
The reconciliation process begins with the passage of a budget resolution in both chambers, a step that is nearing completion. Instructions in the resolution set the dollar figures for budget changes that must be achieved over a 10-year time frame.
“They can make the tax cuts expire in some way, shape or form so it fits in reconciliation language, and then 10 years from now, have this discussion,” Jason J. Fichtner, a senior research fellow at the Mercatus Center at George Mason University, told Bloomberg BNA Jan. 12. He was a senior economist on the U.S. Joint Economic Committee in 2001.
Still, some lawmakers, like House Ways and Means Committee Chairman Kevin Brady (R-Texas), have called for all the tax provisions to be repealed, and the 2015 legislation may be a guidepost for current efforts.
Neal, along with Frank Pallone (D-N.J.), Energy and Commerce Committee ranking member, and Bobby Scott (D-Va.), Education and the Workforce Committee ranking member, sent a letter Jan. 12 to the chairmen of their committees requesting a public hearing on the ACA as part of regular order.
Brady has said he plans to hold a hearing on the topic, and told reporters Jan. 12 it will likely cover the current “state of play” in terms of how the law is affecting Americans and insurance companies.
Lawmakers are also “looking at beginning action” on a replacement plan now, Brady said. A markup on the committee’s reconciliation portion will likely occur the last week of January, after Republicans return from a joint retreat, he said.
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