Grassley: Health care mandate breaks Obama's tax pledge

Sen. Chuck Grassley (R-Iowa) on Thursday said findings by the nonpartisan Congressional Budget Office show that the new health care mandate is a tax that will hit people President Obama vowed to protect from tax increases. 

"The mandate is a tax increase that hits middle-class America the hardest," he said in prepared remarks. "And these people make less than $250,000, which breaks the president's pledge to not raise taxes on individuals earning less than $200,000 and families earning less than $250,000 a year." 

The new healthcare law obligates the IRS to penalize taxpayers who fail to purchase adequate health insurance, a rule known as the health care mandate. Grassley argues that since the mandate amends the Internal Revenue Code the penalty is actually a new tax.

The CBO predicts 3.9 million people will pay $4 billion to the IRS between 2017 and 2019 for not having adequate health coverage. It also projects that 76 percent of them will make no more than roughly $59,000, for individuals, and $120,000, for families. Grassley contends these are not wealthy taxpayers by Obama's definition and therefore should not have to face a tax increase. 

"These individuals and families are middle-income and lower income," Grassley said. "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."

The CBO estimates that 21 million non-elderly residents will be uninsured in 2016, but won't be penalized. Some will be exempt based upon income or because premium costs exceed a certain percentage of their income. Others will be waived from having to comply with the mandate because of hardship or religious beliefs.