Earlier this week, President Obama released his budget for fiscal year 2017. This blueprint proposes changes to the “Cadillac” tax and sets the stage for additional cuts to the Federal Crop Insurance Program.
Earlier this week, President Obama released his budget for fiscal year 2017. This blueprint proposes changes to the “Cadillac” tax and sets the stage for additional cuts to the Federal Crop Insurance Program (FCIP).
While Congress is unlikely to act on this budget, these are two top priorities for the upcoming Big “I” Legislative Conference in April. The association will continue to advocate for a full repeal of the harmful “Cadillac” tax and oppose reopening the Farm Bill to cut crop insurance.
‘Cadillac’ Tax
In the recently released budget, President Obama calls for changes to the way the “Cadillac” tax threshold is calculated in states where health plans are costlier. In states where the average premium for “gold” coverage exceeds the “Cadillac” tax threshold established in the Affordable Care Act (ACA), the threshold would rise to the average cost of a “gold” plan, according to the White House.
While it is encouraging to see the Obama Administration acknowledge problems with the tax, this is just one of its many issues. The Big “I” believes it is not possible to fix the “Cadillac” tax with minor tweaks and will continue to push for full repeal.
At the end of last year, Congress and President Obama agreed to delay the tax in a year-end omnibus package that moved the effective date of the tax back two years until 2020. In addition to that delay, legislators have introduced four pieces of legislation to repeal the tax in the 114th Congress. In the U.S. House of Representatives, Rep. Frank Guinta (R-New Hampshire) introduced H.R. 879, the “Ax the Tax on Middle Class Americans' Health Plans Act,” and Rep. Joe Courtney (D-Connecticut) introduced H.R. 2050, the “Middle Class Health Benefits Tax Repeal Act.” In the U.S. Senate, Sens. Dean Heller (R-Nevada) and Martin Heinrich (D-New Mexico) introduced S. 2045, the “Middle Class Health Benefits Tax Repeal Act,” and Sen. Sherrod Brown (D-Ohio) introduced S. 2075, the “American Worker Health Care Tax Relief Act.”
FCIP
President Obama’s budget contains $18 billion in cuts to the FCIP over 10 years. Just two years ago, and after debate and evaluation, Congress carefully crafted a bipartisan farm bill that made crop insurance the centerpiece of today’s farm safety net. President Obama, who applauded the passage of the five-year Farm Bill, is now attempting to undermine its validity by reopening and cutting the most important risk management tool farmers have to protect their livelihood. The private-sector delivery system of the FCIP has already absorbed $12 billion in cuts over a 10-year window, including cuts in the 2008 Farm Bill and administrative actions in the 2011 Standard Reinsurance Agreement.
For crop insurance to be successful and operate as intended, it must be affordable and widely available, and the private sector must be able to ensure efficient delivery of services. The Big “I” will continue to strongly oppose additional attempts to reopen the Farm Bill and cut the program.
Jen McPhillips is Big “I” assistant vice president of federal government affairs. Wyatt Stewart is Big “I” senior director of federal government affairs.
