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Time Running Out on Health Insurance Reform, Lott Says

Monday, June 17, 1996

Deloitte & Touche OnLine

Time is running out on congressional leaders’ efforts to reach a compromise on the health insurance reform bill, Senate Majority Leader Trent Lott, R-Miss., said.

"If we get it done next week, it’ll happen. If we don’t, it may never happen," Lott said on CBS’ Face The Nation June 16. "I think we are very close."

The health insurance reform bill (HR 3103) is intended to improve access to health insurance for millions of Americans, especially people who might lose or have trouble getting health insurance if they change jobs, lose their jobs, or if they (or someone in their family) have preexisting conditions.

Congressional leaders and the White House disagree over the language in the bill calling for the creation of medical savings accounts, which allow individuals to make tax-free deposits to bank accounts that they can use to pay for medical expenses.

Lott also is optimistic that the proposed minimum wage increase, which is linked with the small business tax incentives bill (HR 3448), could be enacted soon.

The majority leader presented to Senate Minority Leader Tom Daschle, D-S.D., a proposal that backs away from the GOP’s earlier demand that the wage hike legislation must include a provision changing certain work rules. The so-called TEAM Act provisions were vigorously opposed by the White House and congressional Democrats.

No Aviation Taxes In Commerce’s Bill: The Senate Commerce Committee decided not to include an extension of aviation excise taxes, including the 10% airline ticket tax, in the Federal Aviation Administration reauthorization bill approved last week.

Instead of approving a bill reinstating the tax, the committee approved a non-binding resolution calling for an 18-month extension of the taxes, and urged the FAA to study replacing the ticket tax with a set of user fees.

The Senate Commerce Committee, like the House Transportation Committee, backed away from reinstating the tax because all revenue-raising matters fall under the jurisdiction of the tax-writing committees. The House Transportation Committee recommended a three-year extension of the tax and the Senate Finance Committee approved a six-month extension.

Aviation user taxes include a freight tax, an international departure tax, and two different aviation fuel taxes, in addition to the 10% ticket tax.

Unless action is taken to reinstate the taxes, the aviation trust fund, which finances the operations of the Federal Aviation Administration, will run out of money as early as the end of 1996.

Large airlines have been pressuring Congress to replace the ticket tax structure with a system of user fees, but discount airlines oppose that plan, congressional sources told Deloitte & Touche, LLP.

Small Business Bill Not Quite Done: Senate Finance Committee members and their staffs continue to negotiate over the fine points of the small business tax incentive bill (HR 3448), approved last week.

The final piece in the puzzle that has not yet fallen into place is the provision reforming portions of the law dealing with independent contractors, congressional sources told Deloitte & Touche.

The legislative language and the committee report on the bill (HR 3448), which extended certain expired tax provisions, provided tax incentives for small businesses, and phased out the possessions tax credit, will not be available until Tuesday or even later in the week.