April 22,2010

Grassley: CBO Says 3.9 Million Low- to Middle-Income Taxpayers Will Pay Health Care Mandate Penalty

M E M O R A N D U M

To:       Reporters and Editors
Fr:        Jill Gerber for Sen. Grassley, 202/224-6522
Re:       Impact of individual mandate penalty
Da:       Thursday, April 22, 2010

Sen. Chuck Grassley, ranking member of the Committee on Finance, today made the following comment on a new analysis from the non-partisan Congressional Budget Office on the impact of penalties for not complying with the individual mandate to purchase health insurance.  The CBO document is posted with this news release at finance.senate.gov.

“The authors of health care reform downplay the penalty for not complying with the individual mandate on health insurance.  Many of the proponents of the law refuse to even recognize this penalty as a new tax, yet the legislation amends the tax laws.  The President opposed the individual mandate during the campaign for good reason. The numbers are beginning to come out, and the impact of this new tax penalty is real.  The latest from CBO shows that 76 percent of the 3.9 million people who will pay the penalty are at 500 percent of the federal poverty level or lower.  In 2016, the federal poverty level is projected to equal about $11,800 for a single person and about $24,000 for a family of four.  These individuals and families are middle-income and lower income.  They aren't wealthy.   The President and his supporters in Congress are celebrating the benefits of health reform, but they also have an obligation to acknowledge the other side of the coin.  There's a price for not participating, and people will pay it.  The mandate is a tax increase that hits middle-class America the hardest. And these people make less than $250,000 a year, which breaks the President’s pledge not to raise taxes on individuals earning less than $200,000 and families earning less than $250,000 a year.”