This week, lawmakers in the House and Senate continued working on legislation to comprehensively reform the tax code. In addition, President Donald Trump nominated Mr. Alex Azar – a former pharmaceutical executive – to serve as the next secretary of the Department of Health and Human Services (HHS).
Work Continues on Tax Reform Legislation
On Thursday, lawmakers in the House advanced legislation called the Tax Cuts and Jobs Act (H.R. 1) with a vote that cut mostly down party lines of 227-205. Meanwhile, those on the Senate Finance Committee began debating a 247-page tax proposal of its own.
The two bills include some key differences that will need to be worked out in the weeks ahead. The House bill would consolidate the existing seven individual tax brackets down to four, while the Senate’s proposal would keep the seven brackets, but lower the rates slightly. The House version would eliminate the estate tax on the wealthiest Americans in 2025, while the Senate version would double the exclusion but keep it in place. And both would lower the corporate tax rate from 35 percent to 20 percent, but the House bill would do so one year earlier than the Senate bill.
The Senior Citizens League (TSCL) was pleased to see that the Senate’s proposal would not eliminate the deduction for medical expenses like the House bill would. This deduction is crucial for around 5 million taxpayers over the age of sixty-five who have out-of-pocket medical costs that total more than 10 percent of their annual income.
One TSCL member – William P. of California – contacted TSCL this week to share his concerns about the House bill’s elimination of the medical expense deduction. William is home-bound due to several medical conditions, and he relies on home health aides to provide him with lifesaving care on a daily basis. At the age of 61, William is not yet eligible for Medicare and he expects the out-of-pocket cost of his care to total $48,000 by the end of this year. The elimination of the medical expense deduction would be a major financial loss for him.
William told TSCL: “The potential loss of this deduction is enormous … Senior citizens have the most to lose because they are by far the largest population of people who find themselves in need of costly in-home or nursing home care. For Congress not to be concerned with the potential catastrophic effect this could cause is cruel and unusual indifference to elderly and disabled Americans.”
TSCL shares the concerns of William and we were pleased to see that one Member of Congress – Congressman John Larson (CT-1) – offered an amendment to the House bill that would have kept the medical expense deduction in place while lowering the income threshold for all ages from 10 percent of annual income to 7.5 percent. Unfortunately, lawmakers on the House Rules Committee did not advance the amendment, but TSCL will continue to advocate for its inclusion in the Tax Cuts and Jobs Act the days ahead.
As tax reform legislation continues to evolve, TSCL will post updates here in the Legislative News section of our website and on Twitter. In addition, our legislative team will continue to advocate for policies that would protect and improve the financial security of older Americans.
President Trump Announces HHS Nominee
In a tweet on Monday, President Trump announced the nomination of Alex Azar to serve as the next HHS Secretary. Mr. Azar served as the HHS Deputy Secretary under President George W. Bush, and more recently, he was an executive at the pharmaceutical company Eli Lilly, where he worked for ten years. President Trump tweeted on Monday, “[Mr. Azar] will be a star for better healthcare and lower drug prices!”
If Mr. Azar is confirmed by the Senate, he will lead the department with that runs major health programs like Medicare and Medicaid, and he will be tasked with monitoring the pharmaceutical industry, which he once helped lead.
Congressman Peter Welch (VT), who was sponsored several bills that would reduce drug costs for Medicare Part D beneficiaries, expressed his concerns about the nomination this week, saying: “When given the chance to put his money where his mouth is [on drug prices], [President Trump] brazenly nominated a former pharmaceutical executive … Instead of draining the swamp, he has set the fox to guard the henhouse.”
On the other hand, former HHS Secretary Mike Leavitt said of Mr. Azar this week: “We worked side-by-side on the implementation of Medicare Part D, pandemic preparedness, and Hurricane Katrina recovery … He is an expert on health policy and HHS operations, as well as a skilled manager. Because he knows the department so well, there may never be a HHS secretary better able to hit the ground running than Alex Azar.”
TSCL is hopeful that Mr. Azar will act as a champion for Medicare and Medicaid beneficiaries at HHS if confirmed by the Senate, and our legislative team will urge him to take steps that would reduce prescription drug costs for consumers. For updates on the confirmation process, follow TSCL on Facebook and Twitter.