Toomey for Senate

Contact: Nachama Soloveichik or Tim Kelly - 484.809.7994

Allentown, PA – Pennsylvania Rep. Joe Sestak (PA-07) aligned himself with the most extreme left-wing portion of the Democratic Party when he voted for the House Democratic government-run health care plan in the Education and Labor Committee on July 17, 2009.

Totaling 1,018 pages, the bill is expected to cost $1.042 trillion over ten years and increase the deficit.  It creates a new government-run health care system that will strip individuals of choice.  It contains, not one, not two—but three tax increases.  And it will hurt America’s small businesses and cost American jobs.

The legislation is so extreme that even some Democrats are shying away from the legislation and urging the President to move more cautiously, including Democratic Senators Ben Nelson (D-NE), Ron Wydan (D-OR), and Mary Landrieu (D-LA).  Many moderate House Democrats, known as Blue Dog Democrats, are also opposing the bill’s explosive cost.  “We cannot fix these problems by simply throwing more money into a broken system,” Democratic Rep. Bart Gordon (TN-06) said.  And governors across the country—both Republicans and Democrats—are balking at the expensive mandates the legislation would impose on states.

Even liberal leaning Washington insiders like the Washington Post’s David Broder—a strong Obama supporter—are raising questions about the bill’s staggering costs and the haste with which it is being pushed through Congress.

So why is Joe Sestak supporting Washington extremism over America’s hardworking taxpayers?

New Spending:
At a time when the deficit for 2009 is climbing towards $2 trillion, the last thing the country needs is a bill that promises to increase the deficit.  And yet, that is exactly the Democrats health care plan promises to do.  President Obama requested a deficit neutral bill, but the Congressional Budget Office projects that the legislation will result in a net increase in the budget deficit by $239 billion.

To make matters worse, the plan ignores long-term costs past the 10-year mark. In fact, the plan attempts to obscure the true costs of the bill by postponing most of the real expenses to later years. The chart below shows how drastically the cost of the bill will increase after the first five years.

And the CBO projections don’t even begin to deal with what will happen after 2019. According to the Heritage Foundation, the federal budget deficit may total as high as $800 billion the legislation’s second decade, and even more in subsequent years.

Government-Run Health Care:

President Obama and the Democrats claim that Americans who like their health insurance will be able to keep their plans exactly as they are today.  But independent analysis shows that this is not the case at all.  In fact, the plan will shift 88 million people from employee based private insurance to the newly created government-run plan.  Total enrollment in the newly created public plan is estimated to be 103.9 million.  In other words, 84.79% of people covered by the newly established public plan would be dropped from private insurance to enter the world of government-run health care.

To make matters worse, those who chose to remain on private insurance because of the greater choice and flexibility inherent in those plans will end up shouldering a greater portion of health care costs in this country.  Like Medicare, the new government program will only pay hospitals and doctors a portion of what private insurance pays.  The gap in costs and payments will be paid by those individuals with private insurance, causing an increase in costs for those individuals left with private health insurance.

Finally, a government-run, socialized style health care will allow a government bureaucracy to set prices and determine appropriate treatment.  In the UK, for example, the government has decided that 6 months of life is worth $22,750.  If a medicine costs more than that, it is not available to the majority of the British under their socialized health care system (New York Times, 12/02/08).  Consider a provision in the House Democratic bill that would require every senior to have a mandatory counseling session with a government bureaucrat every five years to discuss ways to “die with dignity.”

Three New Taxes:

The plan imposes a mandate on individuals and employers, hitting both with a new health care tax if either fails to comply.  For individuals, this tax amounts to 2.5% of one’s gross adjusted income above a certain level; for businesses, this tax ranges from 2% to 8% of total payroll.  Small businesses with too many employees to be exempted from the tax will be especially hard hit.

The plan also calls for a new, massive surtax on personal income, including many small business owners, to pay for the $1.3 trillion in new government spending.  Ranging from 1.5% to 5.4%, the surtax will push the highest federal marginal income tax rate to 46%--the highest rate since 1986.  And with states raising their own income taxes, thirty-nine states will see a combined income tax above 50%.

In Pennsylvania, for example, state and federal taxes combined will push the top rate to 51%.  That means the top rate income tax rate in Pennsylvania and many other states across the country will actually be higher than that of our biggest economic competitors, including Germany, Japan, and France (see chart below).

To be sure, there are many problems with the country’s health care system.  The cost of health care is exploding at a much faster pace than general inflation.  Individuals who buy their own health insurance don’t receive the same favorable tax treatment as individuals who receive their insurance from employers.  And small businesses are denied the ability to band together with other companies to provide health insurance for their employees at an affordable rate.  But instead of dealing with these problems directly, one-party rule in Washington has produced legislation that will only make the problems worse.

“The country and the economy face serious problems,” U.S. Senate candidate Pat Toomey said, “but we need balanced, thoughtful solutions, not expensive policies that cater to the far left-wing of the Democratic Party.  One-party rule in Washington has quickly given way to extremism, at the expense of America’s hardworking taxpayers.  As the economy struggles to recover, the last thing the country needs is higher taxes, a larger deficit, and government-run health care that deprives individuals of the freedom to make choices based on what is best for them and their families.”