Extension of health tax credit generates bipartisan support
With the partisan divide in Con- gress getting wider by the day — the Republican-controlled House, the Democratic-controlled Senate and a Democratic president, Barack Obama, have made for a toxic political brew — any legislative initiative that has members of both parties signing on is a moment to savor. Thus it is with the push to extend the Health Coverage Tax Credit that expired Jan. 1. As the name suggests, the tax credit was available for eligible individuals and their families who received payment for a significant portion of qualified health insurance premiums from tax years 2002 through 2013.
But because the legislation that authorized the HCTC has expired, the credit is not available after tax year 2013.
Enter Ohio’s two U.S. senators, Democrat Sherrod Brown and Republican Rob Portman, and two of Ohio’s representatives, Democrat Tim Ryan and Republican Mike Turner, who along with more than 25 other members of Congress sent a letter Monday to Senate and House leaders seeking an extension to the tax-credit program.
The HCTC is of particular importance to retired steelworkers and Delphi salaried retirees, including 1,500 in the Mahoning Valley, who had their pensions slashed.
“Without the HCTC, which expired on January 1, 2014, these salaried retirees face financial hardship with up to 50 percent of their remaining pension going to fund their heath-care premiums,” the letter from Brown, Portman, Ryan, Turner et al said. “Given the importance of the HCTC to these American families who have already lost so much, we urge that an extension of this valuable program be included in any bill reported out of your respective committees.”
The program has been a godsend to Americans who have experienced the loss of their jobs and receive Trade Adjustment Assistance, or Delphi salaried retirees and United Steelworkers retirees whose defined benefit pension plans were taken over by the Pension Benefit Guaranty Corp.
In the case of the Delphi retirees, the termination of the pension plans meant a loss of up to 70 percent in benefits. More than 5,000 Ohioans — 1,500 in the Valley, 2,000 in the Dayton area and most of the rest in the Columbus and Sandusky areas — are suffering hardship due to the change in the pension plans.
The Delphi retirees have waged a five-year battle to be treated fairly, and they received a major boost last year when a report from the Office of the Special Inspector General for the Troubled Asset Relief Program confirmed what they had been saying all along: that they were sacrificial lambs in General Motors’ bankruptcy process.
We’ve argued in previous editorials that it’s simply a matter of fairness to ensure all retirees are treated equally. The PBGC, which took over the plans when GM and Delphi went bankrupt, restored full pensions and benefits to unionized General Motors and Delphi workers, but tossed out a few crumbs to the Delphi salaried retirees.
A study by Youngstown State University’s Center for Urban and Regional Studies has found that the economic impact of the pension cuts to the 1,500 Valley retirees is about $60 million.
Against this backdrop of financial hardship, the expiration of the Health Coverage Tax Credit is a devastating blow.
The restoration of the program is a no-brainer and must not fall victim to the partisan wrangling that has become Congress’ trademark.