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Pelosi Pushing Against Excise Tax, Obama Commits to Affordability

January 7th, 2010, 04:01 am admin Leave a comment Go to comments

While Obama and Dem Congressional leaders might have agreed to “a fast-track alternative” on the non-conference conference, there are still critical issues to be worked out, and Pelosi doesn’t appear ready to roll over for the White House or Senate on a key issue.

[A]ides say she’s particularly steamed that the White House wants her to largely adopt the Senate bill in its entirety. And she’s particularly unhappy that the White House has thrown its weight behind the Senate bill’s chief funding mechanism: an excise tax on so-called “Cadillac” insurance policies, which she and many in her caucus have long believed violates President Obama’s pledge not to raise taxes on the middle class. According to one aide, that–not the public option–was likely the reason she ribbed Obama at her press conference yesterday, quipping, “there were a number of things he was for on the campaign trail.”

The House proposes paying for its bill by imposing a surtax on high-income Americans. And though there’s been speculation for months that the final reform package will include a combination of both sources of revenue, Pelosi, who’s already had to accept the demise of the public option, wants the excise tax gone.

Those “high-income” Americans that would be subject to the surtax are actually millionaires–couples making more than $1 million, a much, much fairer solution than the Chevy excise tax. Given everything progressives have had to swallow in this process, a fairer tax structure is little to ask for the price of their votes. Bloomberg reports that one option being considered for compromise is revisions to the Senate’s “0.9 percent Medicare tax on individuals earning more than $200,000 a year in salary and on joint filers who make more than $250,000.”

Another top priority for the House is affordability. From that same Bloomberg article:

Providing subsidies for low-income people to buy insurance will be “a critical part of this discussion” with the Senate, Van Hollen said. The House version “is much more generous” for people who earn more than the poverty level and don’t qualify for Medicaid, he said.

The Senate version would provide $426 billion for such subsidies while the House would offer $602 billion. “Since we are asking people to share in the responsibility for purchasing health care for the first time, we need to make sure that it’s affordable,” Van Hollen said.

HuffPo reports that “Obama agreed at Tuesday evening’s meeting to help strengthen affordability measures beyond what’s in the Senate bill.” That’s good news for the millions of Americans who should not be forced into buying insurance they can’t afford.

Of course, the excise tax and affordability issues come back to the same basic principle that all Democrats should be able to agree upon: “reform” on the backs of an already stretched thin middle class is no reform at all.


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