This week, lawmakers in the House and Senate continued working on legislation that would comprehensively reform the tax code. In addition, The Senior Citizens League (TSCL) saw support grow for one key bill that would comprehensively reform the prescription drug industry.
Tax Reform Work Continues in House and Senate
This week, the House Ways and Means Committee held a four-day markup to work on comprehensive tax reform legislation called the Tax Cuts and Jobs Act (H.R. 1). The bill, which was released by Republican leaders in the House last Thursday, would consolidate the existing individual tax brackets from seven to four, double the standard deduction for taxpayers, permanently reduce the corporate tax rate, cap home mortgage interest deductions, and limit deductions for state and local taxes, among many other things.
The bill would also repeal the medical expense deduction, which is essential for older Americans who disproportionately experience high medical costs for prescription drugs, medical equipment, or services like nursing home care. Around 5 million taxpayers over the age of sixty-five rely upon the tax deduction when their out-of-pocket medical costs total more than 10 percent of their annual income. Its elimination would be a major loss for older Americans who are living on fixed incomes and are facing catastrophic medical costs.
In a statement released by TSCL on Thursday, Social Security and Medicare policy analyst Mary Johnson said: “Older middle-income Americans could shoulder a disproportionate share of taxes under these changes, and get pushed more quickly into higher tax brackets than they are today … The changes under consideration may provide some modestly lower federal income taxes at first, but the benefits for many people would be short-lived.”
If adopted, the Ways and Means Committee’s bill would increase the federal deficit by $1.5 trillion over ten years and according to budget experts, the projected economic growth due to its passage would not come close to offsetting the cost. TSCL is concerned that the Tax Cuts and Jobs Act – if signed into law – would open the door for major cuts to programs like Social Security, Medicare, and Medicaid.
The Tax Cuts and Jobs Act is expected to appear on the House floor for a vote by November 16th – the day before lawmakers adjourn for an eleven-day holiday recess. In the meantime, Republicans in the Senate are working on their own version that would likely keep the medical expense deduction intact. At the time of writing this week’s update, the text of the bill had not yet been released, but a conceptual draft from the Senate Finance Committee is expected before Friday, November 10th.
On Monday evening, Senator John Cornyn (TX) told reporters that the Senate’s bill would include major differences from the House version. He said: “We’re going to start from scratch, really. It’s helpful for us to have [House lawmakers] go first to see the kind of issues that come up and anticipate those in the Finance Committee markup. But I’m still pretty optimistic we’ll get this done before Thanksgiving.”
In the days and weeks ahead, TSCL will be keeping a close eye on the evolving tax reform discussions on Capitol Hill and we will continue to advocate for policy options that would ensure the financial security of older Americans, like the three mentioned in last week’s legislative update. For progress updates, visit the Legislative News section of our website or follow TSCL on Facebook or Twitter.
Key Prescription Drug Bill Gains Support
TSCL is happy to announce that one key piece of legislation gained support in the House of Representatives this week. The Improving Access to Affordable Prescription Drugs Act (H.R. 1776) gained a new cosponsor in Representative Pete Visclosky (IN-1), bringing the total up to twenty. If signed into law, H.R. 1776 would require the federal government to negotiate lower drug prices for Medicare beneficiaries, allow the importation of prescription drugs from Canada, accelerate the closing of the Part D “doughnut hole,” and cap monthly prescription drug expenses at $250, among other things.
TSCL enthusiastically supports H.R. 1776, and we were pleased to see support grow for it this week. For more information, visit the Bill Tracking section of our website.