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Democrats and Republicans Make 'Final' Offers
on Health Insurance Reform

Friday, June 28, 1996

Deloitte & Touche OnLine

Senate Majority Leader Trent Lott, R-Miss., and Senate Minority Leader Tom Daschle, D-S.D., warned they both have made their final offers on the health insurance reform bill (S. 1028), CongressDaily news service reported Friday.

The two sides have been struggling over a provision in the bill that creates tax-favored Medical Savings Accounts. Republicans argue that the accounts give individuals greater control over their health care needs, but Democrats contend that the accounts will draw the healthiest and wealthiest Americans out of the existing health care system. In addition to the MSA provision, the bill contains foreign trust compliance provisions.

Lott said the latest Democratic offer "didn’t seem like forward movement," and Daschle said the latest GOP proposal contains "very small movement" in the Republican position.

Exempt Financing For Stadiums Stopped Under Bill: Ranking Senate Finance Committee Democrat Sen. Daniel Patrick Moynihan, D-N.Y., introduced a bill (S. 1880) that would eliminate immediately tax-subsidized financing of professional sports facilities.

The proposed Stop Tax-Exempt Arena Debt Issuance Act "is important in its own right, and would close a loophole that ultimately injures state and local governments and other issuers of tax-exempt bonds," Moynihan said on the Senate floor. "The existing system contributes to the enrichment of persons who need no federal assistance whatsoever," the senator said.

Moynihan also noted that appropriate transition relief would be afforded to localities that had been planning to finance professional sports facilities with tax-exempt bonds.

IRS Funding Cut by House Spending Panel: The House Appropriations Committee approved legislation June 27 cutting fiscal 1997 funding for the IRS by $774 million, snuffing out hopes of reviving the tax systems modernization program.

Under the committee’s bill, the IRS would receive $6.6 billion. The beleaguered modernization program would receive $424.5 million in FY 1997, a drop of $270.5 million from 1996.

A committee report accompanying the bill said lawmakers are not "willing to put any more money into TSM until dramatic measurable actions are taken by IRS."

IRS Reform Panel Chooses Leader: The National Commission on Restructuring the Internal Revenue Service met for the first time June 27 and chose Sen. Bob Kerrey, D-Neb., and Rep. Rob Portman, R-Ohio, as cochairmen. The commission will next meet July 15.

Ways and Means To Hold Tax Reform Hearing: The House Ways and Means Committee’s hearings on tax reform will resume in July with a hearing on the impact a new tax system would have on international competitiveness.

The hearing is scheduled for July 18 and will focus on the impact that a flat tax, a national sales tax, a value-added tax, and an income tax with an unlimited savings deduction will have on the U.S.’s ability to compete in a global marketplace.