To amend the Internal Revenue Code of 1986 to allow amounts elected for reimbursement of medical care expenses under a health flexible spending arrangement that are unused during a plan year to be carried over for such use for subsequent plan years.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I just heard the ranking member say this is not a health bill, that this is a tax shelter. I beg to differ. Number one, what we are talking about here is really novel and revolutionary. We are saying that employers and employees can together contribute to their own savings account with pre-tax dollars, with tax- deductible dollars to purchase health care spending and to have a catastrophic plan.

The gentleman from New York said, what about the people who do not have $4,000 to put in their health security savings account? Well, their employer can put $4,000 into their account. The purpose of this reform, Mr. Speaker, is to get at some of the big issues that are really hurting this country, and that is the cost of health insurance, the affordability, and the accessibility of health insurance.

So what this reform does is it equips the individual in the family with the ability to go out into the health care marketplace with tax- deductible dollars to act like good consumers and buy their health insurance. It gives incentives. It actually requires, on health savings accounts, that employers provide catastrophic health insurance, or individuals who have their own health savings accounts have catastrophic health insurance. So it makes sure that people have health insurance if they really run into problems. But it allows people to manage their health care expenditures themselves.

You know, it is often said that we spend more time shopping for cars or

computers than we do for our own health insurance. Well, the reforms in this bipartisan Thomas-Lipinski bill give us those incentives to act like good consumers so we can watch our health care dollars. Health care inflation is out of control. Health care spending is out of control. Premium increases facing small businesses and individuals are out of control. We need to give consumers the ability to get it under control. That is what this legislation does.

I am also interested in the argument that this is somehow fiscally irresponsible. I find that kind of a unique argument, given the fact that the gentleman from New York is about to bring a prescription drug substitute amendment to the floor that spends $600 billion more than the Republican plan does; a trillion dollar bill that spends a trillion dollars on his prescription drug bill versus the $400 billion that was paid for in the House budget resolution, as is this health savings account legislation.

Mr. Speaker, I reserve the balance of my time so that the other side can yield time.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Washington (Ms. Dunn), a member of the Committee on Ways and Means.

Mr. Speaker, I yield myself 30 seconds.

Mr. Speaker, to respond to a couple of comments from the last speaker, I would say, number one, we are going to keep hearing this rhetoric, that this undermines or destroys employer-sponsored health care. Actually, it is far from that. It is the opposite of that. This makes it easier for employers to offer health care to their employees. What this does is it makes it easier because employers can offer less- costly catastrophic coverage and give their employees money, pretax money in their accounts, to purchase health care. This will lower the cost of health insurance and make it cheaper for employers to offer health care.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Arizona (Mr. Hayworth), an esteemed member of the Committee on Ways and Means.

Mr. Speaker, I yield myself 15 seconds to respond just briefly only to say that health care is voluntary by businesses. Mr. Speaker, Boeing could drop their health care right now, today, to their employees. And, Mr. Speaker, that is what is happening today. Millions of businesses are making those kinds of decisions to drop health care. We are trying to make it more affordable. We are trying to keep it so that businesses can still offer health insurance at an affordable price to their employees.

Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Royce).

Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. English) to talk about this legislation that we are debating, health savings accounts.

Mr. Speaker, I yield 2 minutes to the gentleman from Nebraska (Mr. Terry).

(Mr. TERRY asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 30 seconds to the gentleman from Louisiana (Mr. McCrery), from the committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Burgess).

Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. Harris).

(Ms. HARRIS asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield myself the remaining time.

I would like to begin my closing by saying that the gentleman from California is a person who has worked in health care for many, many years; and I know that he is sincere in trying to do what he thinks is best to give access to people who need health care. I believe everyone who came to the floor and into the well who spoke on this bill today cares about health care.

Mr. Speaker, I am relatively new to this body; but one thing I have learned is that if you are running out of arguments, the oldest trick in the book is to impugn the other person's motives. Tell them that all we want to do is help the rich and hurt the poor, that what we are trying to do is destroy employer-sponsored health care.

Well, Mr. Speaker, two of the Nation's leading organizations who represent small employers, the people who are really facing these high premium hikes, the National Association of Manufacturers, the National Federation of Independent Businesses, this is one of their key priorities. They endorse this bill.

What this does, Mr. Speaker, is it makes it easier for employers to offer health care to their employees. It helps us continue employer- sponsored health care.

Another thing that we have been hearing, that this is fiscally irresponsible and adds to the deficit.

Mr. Speaker, what is fiscally irresponsible is the substitute prescription drug bill that the minority is bringing to the floor which costs $600 billion more than the budget resolution allows. The budget resolution that passed this House balances the budget within the term of the budget resolution, within 10 years. And this is paid for and budgeted for in the budget resolution.

Mr. Speaker, at the end of the day, after we have heard all of these arguments, it kind of comes down to two things, two different philosophies: socialism versus consumerism. They want socialized medicine. They want power to go to Washington where Washington can allocate the benefits, where Washington can ration the health care. We want power to go to the people. We want power to go to the consumers. We want people to have more choices. They want to restrict those choices.

This does not take anything away from anybody, Mr. Speaker. This gives people more choices. This says to people, if you are having a hard time saving for your health care, we are going to make it easier for you to do that. If you are a small business and you cannot afford health care for your employees right now, we are giving you a new option to do just that.

We are going to give employers the ability to say, look, you can put money in an account that you can deduct it from in your employee's name. Your employees contribute to this account. If you do it, you have to buy catastrophic health care coverage for them. So we are making sure with health care savings accounts that there is health insurance. And the beautiful part of this proposal, Mr. Speaker, is that this is the employee's money; it is their money that is at stake when they go out and buy health care. They are going to act like real consumers. They can take this money with them when they leave their job and go to another job. They can take this money with them into retirement throughout the rest of their life; and when they die, this money can go to their spouse. This money becomes the individual's money.

One of the big problems we have in health care today is we do not act like consumers. We have third-party payers paying the bills, and so when we go and pay for health care, someone else is paying the bills, so we really do not care how much it costs. That is one of the reasons why the costs of health care are going up through the roof.

This puts in place 280 million brains on behalf of bringing down health care costs and 280 million sets of eye balls watching this industry to make sure that doctors are charging the right kinds of prices, that hospitals are not overcharging, and that they are getting the best quality for their dollar.

Mr. Speaker, it is about giving power to consumers versus giving power to bureaucrats in Washington. Let us give Americans more freedom, let us give consumers more power, and let us help bring down health care costs.

Mr. Speaker, I urge passage of this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself 3 minutes.

(Mr. STARK asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I will start with an apology to all my Republican colleagues. For, oh, at least the 30 years or so I have been here, I have been accusing the Republicans of not being inclusive, just dealing with the rich and forgetting about the minorities and the working people in this country. With this bill they have become broadly inclusive. Later on tonight, they are going to take the first step in destroying health care for seniors, and then, because they are being so inclusive with this bill, they are going to screw everybody. They are going to destroy health care for the employees who get their health insurance from employers.

As the distinguished ranking member of our committee pointed out, $100 billion was added to this in the middle of the night, and the bill will be funded by borrowing, by increasing the national debt and worsening deficits. And all it really does, if you cut through all the Mickey Mouse that they have talked about, high-deductible insurance, is that it creates some new tax-exempt savings accounts. Tax shelters for the wealthy and the healthy. And it advances the objective of undercutting employer-provided health coverage.

It is no secret that the distinguished chairman of the Committee on Ways and Means has expressed his desire to dismantle the employment- linked health insurance system, and he has noted that he believes it encourages overutilization of health care because individuals are shielded from knowing the true cost.

Now, the argument that the bill will assist the uninsured is not true. Most of the uninsured have incomes too low to be eligible for any tax benefits contained in H.R. 2596. And as was stated earlier, few, if any, have the $4,000 a year in additional savings required to utilize the benefits contained. There is nothing in this bill that requires the employers to give the employees any money to make up for that gap that will be created by the higher deductibles. It merely gives them the opportunity, if they have any money, to add to savings accounts.

Not surprisingly, the same 6 million families who were deliberately excluded by the Republicans from the recent tax bill for child tax credit are the same families that they are excluding from benefiting in this bill. So for families with insurance, it provides tax benefits only if the insurance requires them to pay the first thousand dollars; and employers will be encouraged by this nonsense to increase health insurance deductibles, which lowers their costs and lowers the benefits for most of their employees' health insurance.

Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr. Levin), a member of the Committee on Ways and Means who understands that with this $174 billion that we are wasting in this bill, we could help States maintain Medicaid coverage as they weather their fiscal crisis.

Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. McDermott) who realizes that with this $176 billion we could insure every one of the 9 million uninsured children in this country.

(Mr. McDERMOT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself 30 seconds. I have a couple of letters, one from the AFL-CIO which suggests that this legislation would establish an enormous tax shelter for wealthy individuals and at the same time undermine employer-based health coverage and shift costs onto workers. I have a letter from Families USA which, among other things, says that this bill also threatens the employer-provided health insurance system particularly among smaller employers who will be able to take deductions in the top brackets and who will then no longer be interested in providing coverage for their employees.

Mr. Speaker, I include both letters for the Record.

American Federation of Labor and Congress of Industrial

Organizations,

Washington, DC, June 26, 2003.

Dear Representative: The AFL-CIO opposes H.R. 2351, the

Health Savings Account Availability Act. This legislation

would establish an enormous tax shelter for wealthy

individuals and at the same time undermine employer-based

health coverage and shift more cost onto workers. Despite

proponents' claims, this bill would fail to expand coverage

to the uninsured and would be especially harmful to those

low-income, older and sicker workers who now have

comprehensive coverage.

Under H.R. 2351, employers could offer Health Savings

Accounts as long as they are provided in conjunction with

high-deductible health insurance policies, defined as at

least $500 for an individual policy and $1,000 for a family

plan. This will encourage employers to abandon more generous

coverage and offer instead less comprehensive policies that

shift significant costs onto workers. The Joint Committee on

Taxation has estimated that 30 million such accounts would be

established by 2013 and the majority of employers would

modify their health plans to meet the high-deductible

guidelines of the legislation.

In addition, this shift in coverage would harm most those

workers who need health care. Low-income workers who are the

intended beneficiaries of these plans' preferred tax

treatment are not likely to get back enough in taxes to

offset the greater out-of-pocket costs they are likely to

incur with these high-deductible plans.

Furthermore, those workers and other insured individuals

who have traditional, more comprehensive coverage will see

their premiums rise. Younger, healthier workers will likely

choose the less-comprehensive coverage, leaving older and

sicker workers and those who earn too little to pay taxes in

traditional coverage. As a result, costs for this coverage

will rise, leaving workers with no choice but to enroll in

the high-deductible coverage this bill seeks to promote.

This legislation was slipped through the Ways and Means

committee last week, and made worst late last night in the

Rules Committee. Among the changes made in Rules, the income

threshold has been raised to $175,000 for joint filers. The

cost of the revised bill is estimated to be $174 over ten

years--more than twice the estimated cost of the bill that

passed Ways and Means last week--and makes clear that this

legislation is first and foremost another tax shelter, not a

bill to cover the uninsured.

H.R. 2351 was raised just last week with little notice and

certainly without any hearings, despite the bill's far-

reaching implications and significant cost. And now the House

leadership has called for it to be joined with the Medicare

prescription drug legislation before the House. I urge you to

vote against H.R. 2351.

Sincerely,

William Samuel,

Director, Department of Legislation.

Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Wisconsin (Mr. Kleczka).

Mr. Speaker, I yield 4 minutes to the distinguished gentleman from Texas (Mr. Doggett), a

member of the Committee on Ways and Means.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from New Jersey (Mr. Pallone), who understands that we could cover the parents of low-income children who are eligible for Medicaid and CHIP with the same amount of money.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. Inslee).

(Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I am delighted to yield the balance of our time to the distinguished gentleman from California (Mr. George Miller), the ranking member of the Committee on Education and the Workforce.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, pursuant to House Resolution 299, I call up the bill (H.R. 2596) to amend the Internal Revenue Code of 1986 to allow a deduction to individuals for amounts contributed to health savings security accounts and health savings accounts, to provide for the disposition of unused health benefits in cafeteria plans and flexible spending arrangements, and for other purposes, and ask for its immediate consideration.

Mr. Speaker, I yield myself such time as I may consume.

This is an important day regarding all Americans' health care needs. Most people are focused on our seniors and the Medicare legislation, which will be before us shortly. We have before us now the Health Savings and Affordability Act, and I first want to thank my colleague, the gentleman from Illinois (Mr. Lipinski), for working with us in producing a bipartisan piece of legislation, which is extremely important to seniors accompanying the Medicare legislation, but really to all Americans, and especially those Americans who, through no fault of their own, today have no health insurance available to them.

This legislation creates two new savings accounts, a health savings account and a health savings security account. The basic idea is that people ought to be able to put their own money away, individuals, relatives, or otherwise who wish to help them put money away, and in particular instances, employers who adopt particular kinds of health care plans for their employees assist in putting money away for health care needs. These accounts will accumulate tax free and can be expended for any health needs.

Here is the really exciting and important new twist. There is no age limit at

which you have to make all of the contributions paid out of the health savings account. It is literally lifetime assistance. Why is that important? Because today, as we pass the new Medicare modernization with prescription drug program, we will add tremendous new benefits, but there are other costs associated with the bill, both in acquiring prescription drugs and in making sure that seniors can pay for those additional costs.

It is not right to say that every additional benefit provided to seniors should be paid for by taxpayers. We are already in the midst of the greatest intergenerational transfer of wealth in the history of the world. But it is also not fair to say to hardworking Americans that when they retire they should pay out of their own pockets if we have not provided an easily affordable method to accumulate those dollars.

That is exactly what we have in front of us today: A health savings account that has a multiple number of ways in which money can be placed in to be paid for health needs not only while you are working but when you retire. There is no absolute payout. And if there is money in it when the senior passes, then it becomes part of an estate and that money, in its transfer, is taxable. There is no possibility of gimmicking the system.

The real concern is that we have told Americans oftentimes that they have to pay for particular costs, and yet we do not provide an easy and affordable way for them to do so. One of the big concerns we have today is chronic or long-term care costs for seniors. Time value of money is the best way to address a problem that is going to face most Americans. That is exactly what health savings accounts allow you to do. It is clearly an affordable health care cost if you have planned for it.

Unfortunately, too often today's seniors did not plan. There was not a program convenient and easy for them to plan. This allows them, in a prudent way, to put money away. Oftentimes we may want to help our parents, senior children. This is a way, through a health savings account, that they can place money available for seniors to be readily used for health savings accounts that provide a positive, tax-free environment for accumulating those dollars.

In so many ways, Mr. Speaker, this particular program will blend not only with the Medicare changes that we are going to be making but in terms of meeting the needs of today's workers as well. It is completely portable, it is a fund that accumulates tax free, and it belongs to the individual. They can take it with them wherever they may want to work.

Mr. Speaker, I ask unanimous consent that the control of the balance of my time be by the gentleman from Wisconsin (Mr. Ryan).

Mr. Speaker, once again Republicans insist on a fiscally irresponsible bill that will benefit the wealthiest and in this case the healthiest at the cost of at least $174 billion added to our already soaring national debt.

Mr. Speaker, despite the bright sunshine outside, it really is a dark day for so many Americans who are working hard just to make ends meet. This bill is the natural companion to a measure written by the same folks that are presenting this bill, which previously denied a child tax credit to poor working folks. Tax cuts, no matter what the economic conditions, no matter how pressing are the other priorities we have in our country, such as protecting our families from terrorism, tax cuts, we are always told, can cure any ill in our society, unless of course you are poor and working, in which case your kids are not worthy of a child tax credit.

Thanks to the intransigence of the House Republican leadership, there are now 6 million working American families, they are folks like cafeteria workers and teachers' aides, nursing home employees, those working at our hospitals doing the tough work, they will receive no check for their children this year like other Americans. Their bid to gain a little economic independence, to share in the economic benefits of the American Dream, it will come and go on July 4 unfulfilled because of the refusal of this House Republican leadership and their desire to go on recess not only for July 4 but to continue their recess from reality.

For these same families that were deliberately excluded from the recent tax cut as well as for many other working families, House Republicans add more insult to injury by encouraging employers to terminate or to weaken any group health insurance coverage through which some of these employees may be covered. This bill is also the natural companion to the next bill that we are about to take up, the bill to repeal Medicare as we have known it, since President Lyndon B. Johnson signed it into law. We know this is not new. They have opposed Medicare since before President Johnson wrote his signature to make it a reality. Newt Gingrich wanted it to wither on the vine. Earlier this month, Mr. Gingrich declared, much as our colleagues are here today, using the very same words that they got from Newt Gingrich, that it was an ``obsolete government monopoly.''

Only yesterday we heard the same language from the sponsor of this measure: ``To those who say that the bill would end Medicare as we know it, our answer is, `We certainly hope so.' ''

``Old-fashioned Medicare isn't very good,'' said Bill Thomas, the sponsor of this legislation and the companion measure to repeal Medicare tonight.

Some of us think old-fashioned Medicare has worked pretty well for the millions of Americans that it has served since 1965, and we want to strengthen it, not see it undermined through into privatization.

The bill before us this afternoon does something very similar to what the later bill proposes to do to Medicare and, that is, to weaken, at great cost to our Treasury, our employer-based health care system. By totally excluding employees unless they are in plans that deny any assistance on at least the first $1,000 or $2,000 in medical bill coverage, this bill will encourage even higher deductibles. And it will be a struggle for a cafeteria worker to pay their first $1,000 or their first $2,000 or more-thousand under these new high-deductible plans.

The same plans will encourage more small employers to stop providing coverage at all and to protect themselves individually through these MSAs and to terminate costly health insurance for their other employees. It will encourage group health plans to reduce covered services, increase copayments.

In short, through these three bills, we see Republican indifference from cradle to grave for children, for workers, for seniors.

Mr. Speaker, I thank the gentleman for yielding me this time.

Mr. Speaker, in the next few hours, the Republicans in the Congress will engage in the greatest raid and diminishment on middle-class health care benefits in the history of this country. Benefits that have been built up over the last 50 or 60 years in this country that have enabled middle-class individuals to have some health security, to have some access to prescription drugs, to have access to the health care that they and their families need, will come under assault. It begins with this legislation, medical savings accounts, where millions of Americans who now have good health care plans, where they share the payment of those plans with their employers, between employers and employees, will find out that those plans are going to be substituted by high-threshold, high-cost, high-deductible plans, and the theory is that they can pay for that out of their medical savings accounts.

Millions of Americans are going to wake up and find out that the health care plans that they have available to them today will not be available to them tomorrow.

Just as with the passage of the Medicare bill, the prescription drug bill that we will do later tonight, some 30 percent of the people who have prescription drug benefits will wake up and find out that they will get a lesser benefit under the Medicare prescription drug benefit than they are currently getting today. Millions of senior citizens will discover that they have lost their prescription drug benefit as they know it, and they will have to accept something much less than that.

When we come back from the Fourth of July break, we will complete this trifecta assault on middle-class health care plans when the Committee on Education and the Workforce reports out the Association Health Care Plan proposal. Because the CBO, the Congressional Budget Office tells us that over 8 million Americans will lose the health care they have today, and what will be substituted will be a health care plan that is much less comprehensive than they have today. Mr. Speaker, 8 million Americans, 8 million middle-class Americans. And the answer that the Republicans suggest to us is we can all just save and pay for that ourselves.

Well, if we look who is paying into 401(k)s, we know that most Americans do not have that disposable income. That is why they have employer-based health care systems.

But starting tonight, that employer-based health care system, that system that has done so much to keep people healthy, to keep people out of poverty, to keep them from losing their homes, is about to be shredded; and the assault is complete and its comprehensive, and it runs from the seniors to new and young families trying to raise children. All of these people will find out. If my colleagues do not think it is going to happen, just look at the employers who are announcing that these cutbacks are going to come who are supporting the association health care plans, who are supporting medical savings accounts, these health savings accounts tonight, and who are supporting prescription drugs. Because they are lining up to get rid of their obligations for prescription drugs, for health care for young

families, health care for older families, all in the name of their cost savings. But that will dramatically change the middle class in this country and what they have come to know as health care security.

But for the elderly it is going to be even more dramatic. When we look at the prescription drug benefit, it is interesting that the largest elderly group in the country, AARP, everything that they say is essential to protect senior citizens, and a prescription drug benefit is not in this bill. Read their letter. It is not in this bill. They wish it was, they hope it will be, but it is not here tonight.