For Immediate Release
July 11, 2013
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In Speech, Hatch Calls for Permanent Delay of ObamaCare

Utah Senator Says, “This law is too big, too cumbersome, too intrusive, too costly to work. I’ve never supported it and for good reason. What is most disconcerting is that it is the millions of Americans who work hard every day to pay their bills, put food on their tables and send their children to school who’ll bear this burden.”

WASHINGTON – In a speech on the Senate floor today, Finance Committee Ranking Member Orrin Hatch (R-Utah) said the President’s signature domestic policy achievement – ObamaCare – was not ready for primetime should be permanently delayed for all Americans.

“This law is too big, too cumbersome, too intrusive, too costly to work.  I’ve never supported it and for good reason.  What is most disconcerting is that it is the millions of Americans who work hard every day to pay their bills, put food on their tables and send their children to school who’ll bear this burden,” said Hatch. “For their sake, the best solution is a permanent delay of the whole law.”  

Hatch further highlighted the growing price tag of health care premium subsidies - complex tax credits designed to defray the cost of purchasing health insurance, based on household income - and questioned whether the Internal Revenue Service (IRS), already under investigation for targeting conservative groups, would be equipped to process the subsidies which are both advanceable and refundable – meaning pay out first and verify later.

“So, basically, the Obama Administration would have us believe that, while a four-year increase of 1,700 applications for tax-exempt status was enough to give the agency fits, it’s perfectly capable of handling seven million new filings for a brand new health care entitlement,” Hatch said. “On top of that, they want us to believe that they can continue processing these subsidies as they double in number over the first two years.  Needless to say, I’m more than a bit skeptical.”

Below are Hatch’s full remarks delivered on the Senate floor today:

Mr. President, I rise today to speak on what’s known as Obamacare and what the Obama Administration did last week, hoping the American people weren’t paying attention that impacts huge parts of the President’s signature domestic policy achievement as our nation was celebrating the fourth of July.  

I’m talking about the Administration’s decision to suspend for a year – conveniently past next year’s election - enforcing what’s known as the employer mandate, the requirement that businesses offer insurance to their employees or face a penalty.  

And then a rule issued by the Department of Health and Human Services last Friday stating that it would not verify people’s incomes before giving out premium subsidies.

While I’m certainly glad employers got some relief, it’s quite a message the Obama Administration is sending to struggling families and individuals who’ll get no relief from this monstrosity of a law and its burdensome individual mandate tax.

Republicans in Congress believe this is unfair – as such, Senator Thune spearheaded a letter to President Obama, which I enthusiastically signed - urging him to permanently delay the whole, entire law.  

If it’s good for the goose, it should be good for the gander – shouldn’t the Obama Administration give the same relief to everyone?

Furthermore, I might point out that we’ve always known this law was a budget buster. With the employer mandate delayed, I’ve joined with a group of Republican committee leaders in the House and Senate asking for the Congressional Budget Office to get us an updated cost estimate of the bill.  I can’t say what CBO will find, but I have a feeling that Obamacare’s price tag will continue to soar.  

Mr. President, what happened last week is just the latest in a series of confirmations that the President’s health care law is simply not ready for primetime.  

And unfortunately, it is the American people who’ll pay the price for the largest expansion of government in generations.  

They’ll pay the price through higher taxes.  They’ll pay the price through higher health care and insurance costs.  They’ll pay the price with more and more government regulations and debt.  They’ll pay the price when they are forced onto what are called “exchanges” that are simply not ready.

This law, that was jammed through Congress on a purely partisan vote, is simply too big to work.  The lesson is that asking government to do this much – what those of us who fought it tooth and nail said at the time would amount to a government takeover of one-sixth of the American economy – will not succeed and cannot succeed.

But that’s a lesson the Obama Administration doesn’t seem to get – doubling down on selling Obamacare that is less popular today than when the President signed it into law.  
In fact, the White House is rolling out a massive multi-billion dollar PR campaign – using taxpayer dollars – to try to convince the American people that it’s all the Administration promised – shaking down the health care industry, professional sports teams, and movie stars in the process.  

In fact, a cynic might argue that Obamacare was designed to fail – in order for the federal government to step in for a true European-style, single-payer system that many on the extreme left wanted all along.  

Now, it seems as though, every day, we learn about more and more problems with Obamacare.  So, what do we know about it less than four months out from open enrollment in the federal and state health insurance exchanges?

We’ve heard from countless experts who say that the exchanges will be rife with issues once they’re supposedly up and running.  Indeed, these experts have predicted everything from “glitches” to “consumer horror stories.”

Two GAO reports released in June confirm that the Obama Administration is ill-equipped for the implementation of both the federally facilitated health insurance exchange and the so-called Small Business Health Option Program exchange.  

Citing the programs’ delays and missed deadlines, the GAO concluded that there is potential for “implementation challenges going forward.”

But while we’ve been hearing about the problems with the exchanges for months now, we haven’t heard an explanation from the administration as to how, despite all these reports, all of this is supposed to be up and running by October 1st?

I hope I’m wrong, but I have a feeling that, come October, millions of Americans are going to find themselves unable to navigate these waters.  

Sadly, the problems with the exchanges aren’t the only difficulties with Obamacare.

Over the last several months, we’ve heard numerous reports about the problems at the Internal Revenue Service.

Let’s face it, the IRS has never been beloved.  Indeed, millions of Americans loathe and fear the IRS and the recent scandal surrounding the targeting of conservative groups hasn’t helped the agency’s reputation.  

At the heart of this recent scandal are claims by the IRS that they were simply unable to manage the increased workload that came with an influx of applications of groups applying for tax-exempt status under 501(c)(4).  According to IRS officials, the increase in applications was so massive that examiners had to find new ways to categorize and screen the documents submitted by these groups.  

That, they say, is the main cause of the targeting scandal.

Let’s assume these arguments are true for a moment.

When all is said and done, the number of applications of groups applying for 501(c)(4) status increased by 1,700 over a four-year period.  The IRS was apparently so flummoxed by an increase of less than 2,000 applications that it had to resort to inappropriate and potentially illegal measures.

Mr. President, if this is true, the country is in real trouble.  

If the IRS cannot manage an increase of 1,700 applications of groups applying for tax-exempt status, how will it handle its significant role in implementing Obamacare?  

Under the so-called Affordable Care Act, premium subsidies – complex tax credits designed to defray the cost of purchasing health insurance, based on household income – will go to an estimated seven million tax filers according to the Joint Committee on Taxation.  
Within two years, that number will nearly double.   

In other words, the number of premium subsidy applications will jump from zero to seven million in just one year.  That’s seven million applications for people across a wide income spectrum claiming subsidies that did not exist before.

So, basically, the Obama Administration would have us believe that, while a four-year increase of 1,700 applications for tax-exempt status was enough to give the agency fits, it’s perfectly capable of handling seven million new filings for a brand new health care entitlement.  On top of that, they want us to believe that they can continue processing these subsidies as they double in number over the first two years.  

Needless to say, I’m more than a bit skeptical.

Of course, it’s difficult to figure out exactly what the Obama Administration expects the American people to believe when it comes to the IRS implementing Obamacare.  That’s because, despite all the coming deadlines, it’s still not clear how the agency plans to fulfill this new responsibility.

Despite numerous congressional inquiries as well as those from GAO and the Treasury Inspector General for Tax Administration (TIGTA), no one really knows how the Affordable Care Act office at the IRS is going to work.  

One of the few things we know for sure is that the person who headed the IRS division that was responsible for targeting conservative organizations now heads the division responsible for implementing Obamacare.

That’s hardly a comforting thought.  

Make no mistake, processing these complex premium subsidies will not be a walk in the park.

These credits are both advanceable and refundable, meaning that they’ll be paid out first and verified later.  Some have referred to this process as “pay and chase.”

Many of my Democratic friends have referred to tax expenditures that they don’t like as “spending through the tax code.”  That label is usually not accurate.  But, when we’re talking about refundable credits, it’s precisely on target.  

The problem is that, over the years, the IRS has struggled to administer these types of tax credits.  

One needs to look no further than the Earned Income Tax Credit, or EITC, to see the inherent problems with refundable credits.  

In a report issued this past April, TIGTA found that 21 to 25 percent of total EITC payments were improperly given out.  

If you assume that same percentage of improper payments will apply to the trillion dollars we’ll spend on Obamacare premium subsidies – which is fair, due to the fact that the IRS has no way of verifying household income and now the Department of Health and Human Services says it will NOT even try to verify a person’s income – we could be looking at $210 billion to $250 billion in improper payments over the next ten years.   

Some of that will be the result of fraud.  Some of it will simply be due to filing errors.  

Either way, if the IRS’s track record with refundable credits is any indication, we’re looking at hundreds of billions in improper payments when it comes to the Obamacare premium subsidies.  

And now with the Obama Administration abandoning any income verification, we are left with a policy that’s little more than the honor system for hundreds of billions of dollars of premium subsidies.  

I’ll say it again – an honor system – at a time when the Finance Committee and the Administration is trying to crack down on improper government payments both within the tax system and our federal health programs.

Mr. President, if the definition of insanity is doing the same thing over and over again expecting different results, then this is the definition of insanity on steroids.

Couple that with the already soaring price tag of the subsidies and we’ve got a disaster on our hands.

In his Fiscal Year 2012 budget, President Obama put the cost of the first year of premium subsidies at nearly $16 billion.  

In his most recent budget, that number soared to nearly $22 billion without any additional explanation.

Why are these costs going up?  There are a number of possible explanations.  

For example, there is the fact that, due to the costs imposed by Obamacare, more and more employers are opting to drop coverage, pushing more people into the exchanges subsidized by these tax credits.  

At the same time, we know that, in order to avoid providing health care benefits, many employers are moving employees into part time work, which, once again, pushes more people into receiving premium subsidies in order to purchase health insurance.

And, of course, there is the looming fact that, despite the President’s claims that his health care law would reduce the cost of health insurance, the cost of insurance premiums has continued to skyrocket.  

All of these are potential explanations for why the estimated cost of the premium subsidies has gone up in the President’s budget.  

As such, yesterday a group of my Senate colleagues and I sent a letter to Secretaries Lew and Sebelius yesterday asking for an in-depth analysis as to how much of a burden the new health insurance exchanges will be on the federal budget given the skyrocketing price tag of these premium subsidies.  This is a reasonable question given the magnitude of America’s debt.  

Between the dramatically increasing costs, the daunting task of administering these credits through the tax code, and now the fact that the Administration is pulling back anti-fraud requirements, the chances for success are extraordinarily slim.

As I said earlier, this law is too big, too cumbersome, too intrusive, too costly to work.  I’ve never supported it and for good reason.  What is most disconcerting is that it is the millions of Americans who work hard every day to pay their bills, put food on their tables and send their children to school who’ll bear this burden.  

For their sake, Mr. President, the best solution is a permanent delay of the whole law.  

 

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