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Republicans Seize On Retiree Subsidy Provision To Push For Repeal Of Health Reform

By Igor Volsky on March 31, 2010 at 10:52 am

"Republicans Seize On Retiree Subsidy Provision To Push For Repeal Of Health Reform"

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A growing number of corporations are complaining about a provision in the new health care law that preserves the subsidy employers receive for providing retirees with prescription drug coverage, but prevents companies from deducting it from their taxes. And now, Republicans are taking up their cause.

Framing the news as a harbinger of future tax increases and higher health care costs, Republicans will argue that if corporations aren’t allowed to write off the money they receive from taxpayers, thousands of Americans will lose their jobs. As the Daily Caller’s Jon Ward reports, the GOP is seizing on business opposition to the provision to move its health care message “away from trying to repealing the bill and toward focusing on the law’s impact on businesses and jobs.”

“House Energy and Commerce Committee Chairmen Henry Waxman, California Democrat, has expressed skepticism about the corporations announcements, summoning them to testify April 21 about their complaints. But Republicans have begun to pounce on the announcements, using them with increasing frequency to build a case that the health bill is bad for the economy“:

“The president’s new health care law is already hurting our economy,” read a release from the office of House Minority Leader John Boehner, Ohio Republican.

The release cited “a long list of employers including AT&T, AK Steel, 3M, Caterpillar, Deere and Valero Energy that have felt an immediate squeeze because of ObamaCare’s job-killing tax increases and health-care cost hikes.

Shocked by the passage of health reform, the party is now throwing its repeal rhetoric at anything that sticks. This provision is the worst kind of waste of taxpayer dollars and the most egregious form of corporate welfare, yet Republicans are seizing on it as an opportunity to paint health care reform as failure. “I think you’ll see Republicans probably get Democratic support to try to repeal this unless they remain immune to the idea that taxing companies into the tune of billions of additional dollars isn’t a job killer,” Rep. John Shadegg (R-AZ) predicted this morning on Fox News.

But this sounds unlikely. After all, lawmakers had ample opportunity to tweak the measure in the Senate Finance Committee and on the Senate floor. They chose not to. Moreover, is disingenuous for companies to suddenly complain about the charges, considering the change was a part of the draft bill that passed the Senate Finance Committee last year and several buisiness groups complained about it in September. Finance Committee aides “were in close talks with employer groups” and it ultimately won approval from many, with the chairman of Business Roundtable saying “it’s very closely aligned to [our] principles.” “They would come to us with a construct and explain how the constraints drove the policy, and we would try to suggest better ways to approach it,” said Neil Trautwein, vice president with the National Retail Federation.

All this is a roundabout way of saying that this provision is just a small example of responsible governance. Democrats chose to finance parts of health care reform by reducing wasteful government spending and eliminating the deductibility of the retiree drug subsidy presented an easy target. Now, the party of fiscal responsibility is outraged.

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The Retiree Drug Subsidy, Still A Form Of Corporate Welfare

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