Flashback: Former White House Economic Adviser Denied Health Care Mandate Was a Tax

By Patrick Burke | July 2, 2012 | 5:59pm EDT

(CNSNews.com) -- Austan Goolsbee, former chairman of the White House Council of Economic Advisers, testified before the House Ways and Means Committee on Jan. 26, 2011 and said the individual mandate in the Affordable Care Act (aka Obamacare) was not a tax. In his majority opinion last week on the mandate, Supreme Court Chief Justice John Roberts argued that the mandate is constitutional because it is “a tax.”

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During an exchange between Goolsbee and Rep. Patrick Tiberi (R-Ohio), Goolsbee rejected the idea that those who do not purchase health insurance under Obamacare will be subject to a tax.

Rep. Tiberi: “Thank you Mr. Chairman. Dr. Goolsbee, the president repeatedly mentioned throughout the debate and afterwards, that Americans making less than $200,000 or families earning less than $250,000 would not see their taxes increased with respect to the Democrats’ health care bill.

“I’d like you to tell me whether each of the following -- and a yes or no answer would suffice -- that were included in the health care law constitutes an increase in taxes for individuals or families making less than 200 or 250,000:

“A new tax on individuals who did not purchase who did not purchase government approved health insurance?”

Goolsbee: “I don’t think that’s an accurate way to describe it, no.”

Tiberi: “Not a new tax?”

Goolsbee: “I don’t think that’s an accurate way.”

Tiberi: “A new ban on the use of flexible savings accounts, HSAs, HRAs, on using pre-tax income to purchase over the counter drugs?”

Goolsbee: “I don’t, that’s not a tax increase of a normal form and that’s part of a broader reform effort, obviously.”

Tiberi: “An increase from 7 ½ % percent to 10 percent of income the threshold after which individuals can deduct out of pocket medical expenses?”

Goolsbee: (Shakes his head.)

Tiberi: “Not a tax increase?”

Goolsbee: “As I’m saying, I do not consider the Affordable Care Act as a whole to be a tax increase on people less than $200,000.”

Tiberi: “[I’ve] got two more. Imposing a $2,500 cap on a family’s ability to use pre-tax dollars to and fund an FSA?  A $2,500 cap.”

Goolsbee: “I don’t consider that a tax increase.”

Tiberi: “A new 10 percent tax on indoor tanning bed services? Not a tax increase?”

Goolsbee: “That seems like a strictly voluntary that one could choose.”

Tiberi: “But not a tax increase?”

Goolsbee: (Smiles and shrugs.)

Later in the exchange, Tiberi asked why the Department of Justice was defending the constitutionality of the individual mandate on the basis that it is a tax, despite the rest of the Obama administration contending that it is not a tax.

“ …[T]he President was very, very firm in that nobody making less than $200,000, or families less than $200,000 would see income taxes go up, any taxes go up,” said Tiberi.

“And now,” he continued, “we see a Department of Justice defense that this bill is constitutional because it’s a tax. The individual mandate is a tax. So on one side, we say it’s not a tax, or you say it’s not a tax, the administration. On the other side, you say it is a tax, so which is it?”

However, Goolsbee did not respond to this part of Tiberi’s question. Instead, he discussed the part of the question that addressed whether a cap on flexible savings accounts (FSAs) could be considered a tax increase.  Goolsbee said: “If it changes the FSA rule but simultaneously gives her a significant deduction in the cost of her health care, that should not be viewed as a tax increase, even though just looking at this one component I had a disallowed expense on an FSA. But the point is taken in totality, it’s not a tax increase.”

In his majority opinion of the Supreme Court decision to uphold the Affordable Care Act, Chief Justice John Roberts ruled that the individual mandate is constitutional under the taxing power of Congress.

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