CQ TODAY ONLINE NEWS
July 13, 2009 – 12:21 a.m.
How To Pay For Health Plan? Tax the Rich Or Not?
By Alex Wayne, CQ Staff
Work on a health care overhaul will intensify this week, as the cost of the legislation — along with the methods to pay for it — becomes a paramount issue.
House Democratic leaders plan to release a finished version of their bill Monday, and three committees — Ways and Means, Energy and Commerce, and Education and Labor — are expected to start marking up the bill this week.
Members of Ways and Means said July 10 that the measure would cost less than $1 trillion over 10 years, paid for chiefly by a combination of spending reductions in the health care system and a surtax on wealthy taxpayers.
Over 10 years, committee members said, the health care spending cuts would total $500 billion to $600 billion and the surtax would produce about $540 billion.
The surtax would be levied beginning in 2011, said Ways and Means Chairman Charles B. Rangel , D-N.Y., and the rate would be graduated. He said there would be three income brackets — $350,000, $500,000 and $1 million for couples filing jointly, and $280,000, $400,000 and $800,000 for individuals — with a different rate at each level: “One, two, three [percent] — something like that.”
The surtax rate would increase in 2013 if expected savings from health care spending cuts were not realized.
The committee rejected a number of other proposals to pay for the measure, including taxing sugared beverages and applying Medicare’s payroll tax to capital gains — an idea under consideration in the Senate. Proposals other than the surtax lacked sufficient political support among Democrats, lawmakers said.
“I think that may be the only way we can do it,” said Lynn Woolsey , D-Calif., co-chairwoman of the Progressive Caucus.
The Ways and Means Committee is under strong pressure from the White House, House Democratic leaders and the moderate Blue Dog Coalition to wring as much savings from Medicare as possible. Earlier last week, the committee settled on changes to Medicare that would save a net $152 billion over 10 years, according to a Congressional Budget Office analysis. Panel members July 10 declined to say how they would nearly quadruple that figure.
“We’re still working on the savings side,” said Chris Van Hollen , D-Md.
House Republicans, who have not been invited to help develop the bill, roundly oppose the measure and say it is misguided.
“This is the problem when you spend $1 trillion to give taxpayer-funded insurance to illegal aliens and people who already have private health insurance,” said Sage Eastman, spokesman for Dave Camp of Michigan, the senior Republican on Ways and Means. “You have to raise massive new taxes that . . . hit hard small businesses and their employees.”
All About Cost
Cost has become the foremost issue in the health care debate, eclipsing even the ongoing arguments over a proposed government-run plan that Democrats want to create to cover some of the estimated 47 million people with no insurance. While a surtax on the wealthy may be the most politically palatable way to pay for the overhaul, it is sure to cost House Democratic leaders some votes among their caucus.
“I have a concern with going outside the health care system” to pay for the bill, said Jason Altmire , D-Pa., a Blue Dog.
The Blue Dogs met with Democratic leaders for more than two hours July 9 after releasing a letter saying they would oppose the House bill unless it included significant changes. The moderates have warned for weeks that the bill was leaning too far left politically, and they said they felt party leaders had ignored their entreaties to modify the measure.
Rangel said his committee had spent time July 10 discussing the Blue Dogs’ concerns, but he did not detail any changes that might satisfy them.
“I feel like the House has moved this issue so far to the left, we’ve taken ourselves out of the discussion entirely,” Altmire said.
A bill under development by the Senate Finance Committee, he said, seems to be perceived as more likely to become law.
In the Senate
But efforts by Finance Chairman Max Baucus , D-Mont., to draft a bill with at least a smattering of GOP support have not been successful, and no formal Finance Committee markup has been scheduled. Confirmation hearings for Supreme Court nominee Sonia Sotomayor will distract some Finance members from the health care debate this week, but a committee spokesman said July 10 that members would continue to meet ad hoc to try to reach a compromise.
The Senate Health, Education, Labor and Pensions (HELP) Committee plans to begin its fourth week of formal debate on its proposal at 2 p.m. on Monday. The panel’s Democrats unanimously support the bill, by committee Chairman Edward M. Kennedy of Massachusetts, and its Republicans unanimously oppose it.
HELP Democrats hope to finish the markup this week, a spokesman said, but they are still debating the most controversial title: a section that would create a government-run plan and require large employers to contribute to their workers’ coverage.
After that, the panel will likely try to resolve policy on authorizing the Food and Drug Administration to approve generic versions of complex biotech drugs known as “biologics.”
Lawmakers have been wrangling over how long the creators of biotech drugs should be protected from development of generics. The drug industry is seeking 14 years of “data exclusivity,” while generics makers, consumer advocates, insurers and some lawmakers want a far shorter period.
Christopher J. Dodd , D-Conn., HELP’s acting chairman, has introduced an amendment to give biotech drug makers an initial nine years of exclusivity, then a second three-year period, followed by a third period of one year for reformulated versions that represent “significant innovation.”
But a senior Democratic aide to the HELP Committee said Dodd’s language was “expected to change, maybe even be replaced entirely.”
Drew Armstrong and Joseph J. Schatz contributed to this story.
Comments
If you, as opponents to the much-needed, long overdue health care reform, get lost in the deep, steep mountains, or if you are drowning in the water by all your fault, the rescue team run by government will lift you out of such critical status at the huge cost of tax-payer's money as a human life and health can never be exchanged with anything else on earth. And it may be a major roll of government to protect people from any dangers and that's why every modernized state has public 'shared responsibility' policy in place, I guess. Those who have a different view over this reform, Please keep what you like and respect the others' choice and diversity that the U.S. is proud of on the basis of democracy. Thank You !
In 1980 the top 1% of the population of the US controlled about 9% of the wealth of the country. By 2007 that 1% controlled 21% and growing. Given the rapidly disappearing nature of the middle class, I am in favor of taxing the rich for any reason at all to get things back in a better balance.
AMERICA'S NATIONAL HEALTHCARE EMERGENCY! It's official. America and the World are now in a GLOBAL PANDEMIC. A World EPIDEMIC with potential catastrophic consequences for ALL of the American people. The first PANDEMIC in 41 years. And WE THE PEOPLE OF THE UNITED STATES will have to face this PANDEMIC with the 37th worst quality of healthcare in the developed World. STAND READY AMERICA TO SEIZE CONTROL OF YOUR NATIONAL HEALTHCARE SYSTEM. We spend over twice as much of our GDP on healthcare as any other country in the World. And Individual American spend about ten times as much out of pocket on healthcare as any other people in the World. All because of GREED! And the PRIVATE FOR PROFIT healthcare system in America. And while all this is going on, some members of congress seem mostly concern about how to protect the corporate PROFITS! of our GREED DRIVEN, PRIVATE FOR PROFIT NATIONAL DISGRACE. A PRIVATE FOR PROFIT DISGRACE that is in fact, totally valueless to the public health. And a detriment to national security, public safety, and the public health. Progressive democrats the Tri-Caucus and others should stand firm in their demand for a robust government-run public option for all Americans, with all of the minimum requirements progressive democrats demanded. If congress can not pass a robust public option with at least 51 votes and all robust minimum requirements, congress should immediately move to scrap healthcare reform and request that President Obama declare a state of NATIONAL HEALTHCARE EMERGENCY! Seizing and replacing all PRIVATE FOR PROFIT health insurance plans with the immediate implementation of National Healthcare for all Americans under the provisions of HR676 (A Single-payer National Healthcare Plan For All). Coverage can begin immediately through our current medicare system. With immediate expansion through recruitment of displaced workers from the canceled private sector insurance industry. Funding can also begin immediately by substitution of payroll deductions for private insurance plans with payroll deductions for the national healthcare plan. This is what the vast majority of the American people want. And this is what all objective experts unanimously agree would be the best, and most cost effective for the American people and our economy. In Mexico on average people who received medical care for A-H1N1 (Swine Flu) with in 3 days survived. People who did not receive medical care until 7 days or more died. This has been the same results in the US. But 50 million Americans don't even have any healthcare coverage. And at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES! If President Obama has to declare a NATIONAL STATE OF EMERGENCY to rescue the American people from our healthcare crisis, he will need all the sustained support you can give him. STICK WITH HIM! He's doing a brilliant job. THIS IS THE BIG ONE! THE BATTLE OF GOOD Vs EVIL! Join the fight. Contact congress and your representatives NOW! AND SPREAD THE WORD! (http://action.firedoglake.com/page/s/publicoption) (http://www.actblue.com/page/healthcareheroes) God Bless You Jacksmith – WORKING CLASS
The middle class is shrinking because more have been moving into higher income brackets, not lower. Also, the top 1% pay over 33% of all federal income taxes. Check the census and IRS data.
When will people start checking the info stated as "fact" by BO. In reality, there are only a few million not covered by insurance. Start by taking out all the illegals, then all the people who DO NOT WANT to have insurance. The Constitution I read does not say that having health insurance is right. Is he going to re-write the Constitution also. And what about Federal employees-including Congress members. Ever look at their insurance that we are already paying for? The Cadillac of all plans - covers everything. Are they going to switch to the government mandated plan? Look at Senator Kennedy-he lives in Massachusetts-want to venture a guess as to what his care cost? You can bet he didn't use the Massachusetts state mandated coverage. Massachusetts is now being sued because of the high cost of their program which is being hailed by BO as a "good plan". We are all going to die. If we have government managed healthcare, many of you will die a whole lot sooner. Leave our healthcare alone.
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