December 20th, 2009
09:02 AM ET
6 months ago

Aide: Obama believes tax on costly policies 'has some merit'

Washington (CNN) - President Barack Obama thinks a Senate proposal to tax insurance companies that provide high-cost "Cadillac" health care coverage has merit, his senior adviser said Sunday.

In an interview on CNN's "State of the Union," Obama aide David Axelrod provided few details but offered some insight into how the president views aspects of emerging health care reform legislation.

“I think there’s a will to get this done,” Axelrod said of the end game of a national debate that has roiled for months. “People understand we’re on the doorstep of doing something really historic.

The House has passed its version of the bill, and Senate Democrats prepared to brave the aftermath of a blizzard Sunday in their push to pass their health care measure before Christmas. If the Senate passes a bill, the two versions would be merged into a final measure requiring approval from both chambers before going to Obama to be signed into law.

While the House and Senate bills agree on most issues, there are significant differences over how to pay for them and how they will expand health coverage to more than 30 million Americans currently uninsured.

The House bill calls for an income tax surcharge on the wealthy, while the Senate version would increase the Medicare payroll tax for those earning more than $200,000 and levy a tax on insurance companies that provide expensive health plans.

Axelrod avoided discussing details, but said that taxing the expensive insurance plans would lower their long-term costs because insurers would seek to bring down the price to avoid the tax.

Obama "thinks that has some merit," Axelrod said.

Organized labor opposes taxing expensive health plans, arguing such benefits have been negotiated for workers in lieu of pay raises in a changing economy.

Axelrod noted the plan would tax insurance companies, forcing them to become more efficient. Eventually, he said, reducing the cost of employer-provided health care should mean more money to raise wages.

Some liberal Democrats criticize the Senate bill as being too weak, but Axelrod said a final health care measure passed by Congress will mean historic and far-reaching benefits for the nation.

"It is so wrong to suggest that this is somehow some kind of middling improvement for the American people," he said.


Filed under: David Axelrod • Health care • State of the Union
soundoff (71 Responses)
  1. Fed Up

    Why should people who have the money be prevented from buying the type of insurance they want????? Obama is the one that is dictating that everyone has to have insurance. Oh, is that another one of his "fairness doctrines"? Does it also say that you can only have the insurance he wants you to have? Sounds like that's where the "public option" comes in. Hmmmmm.

    December 20, 2009 11:19 am at 11:19 am |
  2. Party Purity will never bring Political Power!

    "Tax and spend"?

    We are now up to our knees in economic woes, caused by 8 years of "tax cuts and new wars" of course, then the impact of the deficit on our grandkids was secondary. This was the result of a President that was either passed out in class or too hung over to attend that class on Econ 101.

    How can you start wars AND give tax cuts without running up a 5 trillion dollar deficit, plus almost another "off the books" trillion like the shrub did and yet not one republiklan was trying to stop the chump in chief.

    But today the republiklans are fiscal hawks???.

    The new con mantra, "deficits to kill people good, deficits to save people bad".

    December 20, 2009 11:39 am at 11:39 am |
  3. JT the Show Me State College Freshman

    I am seeing a lot of people from both sides of the political spectrum calling eachother names and finger pointing at one another about who's fault it is for this recession. Well, I got an answer for all of you: It is all of our faults; humans are naturally a flawed multi-celled organism mammal. We are not a perfect race, and we are bound to mess up badly once in a while, but we also can improve on our own mistakes, and become a better, improved human race after learning from our mistakes. We have the potential to be the greatest species that ever existed on the Earth's 4.6 billion year history. If we all pull together as one America aka the "United" States of America, and come together around the world to help eachother, we can make history in becoming the finest generation America and the world has ever seen and ever will see. If we choose not to, well the consequences will be very severe to say the least. What is your choice? Choose wisely folks.

    December 20, 2009 11:40 am at 11:40 am |
  4. Claudia, Houston, Tx

    The debate is about healthcare people and not race or hate. Get a grip and use your insurance, if you have any, and see a doctor to fix your head so you can use it for it's intended purpose, intellect.

    December 20, 2009 11:43 am at 11:43 am |
  5. Brian

    does this mean taxing members of congress too?
    I doubt it

    December 20, 2009 11:44 am at 11:44 am |
  6. Scott, Tucson

    Just look what democrats did to Social Security and Medicare and you think this program is going to run in the black? Fat chance of that ever happening.

    December 20, 2009 11:48 am at 11:48 am |
  7. America Shrugged

    Good grief..Is there anything these big bad republicans aren't afraid of?

    December 20, 2009 11:54 am at 11:54 am |
  8. Black Viper

    I will take the bill as it's now even if it stinks but I WILL CAMPAIGN SO HARD IN NEBRASKA and urge every democrats in Connecticut and in the States of so called self interest senators called "blue Dogs" to vote to fire them all.

    December 20, 2009 12:14 pm at 12:14 pm |
  9. Woonsocket

    I agree with the Obamists here. Better to turn our lives and fortunes over to Pelosi, Reid and Castro than to try to manage our own lives and fortunes. We Americans are no longer of capable of making our own decisions about medical care, food consumption, and the heating of our own homes. Obama is now enforcing many of the methods Castro used in creating his own wonderful paradise in Cuba. All heil the Obama !!

    December 20, 2009 12:16 pm at 12:16 pm |
  10. Marion/Birmingham,Al

    Obama promised not to raise taxes on the Middle Class,Not to raise taxes on the middle class,Does Obama keep any promises,any that are of consequence...Nothing more than a PONZI Scheme. What Change did you vote for?

    December 20, 2009 12:23 pm at 12:23 pm |
  11. Hammerer

    A group of 60 old men has decided to take your healthcare and dictate to you your needs. They decided that you did not need a government option, much less a single payer plan, and that you would pay rates that they deemed fair. You will buy insurance policy or go to jail.You will buy the insurance from a private company and that will also be regulated.
    In order to pass this bill these 60 men rewarded themselves with payments from the government to cast their votes.
    The insurance companies have an unlimited source of customers , that are mandated to purchase a policy, so they will make millions. The drug companies covered their products , the bill does not allow drugs to be imported, so they also have a captive customer base.
    The media convinced the mass that they wanted healthcare so congratulations you are about to get what you wished for.
    Suckers!

    December 20, 2009 12:31 pm at 12:31 pm |
  12. Ted

    There's no such thing as a "Tax and Spend" liberal; its "Spend and Tax" and we're seeing it play out right in front of our eyes. Democrats run and get elected promising everything thing for free then try to figure out how they're going to pay for it. Unfortunately time and again its a set of convoluted tax laws that hurt more than they help and more national debt.

    December 20, 2009 12:47 pm at 12:47 pm |
  13. J.C. - Independent 4 Public Option

    If you think you have good insurance, you haven't really have to use it yet.
    Just wait and see. Status quo doesn't exist in any profit-seeking world.

    December 20, 2009 01:03 pm at 1:03 pm |
  14. Chad

    When will the left ever learn that when you tax businesses the cost is passed down to the consumer? What is so difficult about that fact to comprehend?

    December 20, 2009 01:14 pm at 1:14 pm |
  15. Ted........

    But I must admit....Republicans don't tax and always spend through bankrupting middle class schemes.............which leaves our economy in far worse shape every time......I'd rather see a thriving economy for all instead a contrived scheme for a few........

    December 20, 2009 01:24 pm at 1:24 pm |
  16. RobertJ

    The President would have us believe that 99% of Americans will not be affected by all these new taxes. That is total nonsense. Yes, we can tax insurance companies and everyone else we believe has deep pockets. But the reality is that all of these taxes get passed along to consumers in the form of higher prices.

    He might have made us believe it, except the fat cats in this case turn out to be his friends running the labor unions, so he doesn't dare to blow them off as whiners.

    December 20, 2009 01:27 pm at 1:27 pm |
  17. Bpin

    Yep. This Robin Hood approach is about the only promise BHO has kept. Because I am educated, have worked my butt off to build a successful business over 25 years, have paid millions and millions in taxes over that 25 years, have given millions and millions in charitable gifts to folks less fortunate than I in that 25 years, I am going to be further taxed because I choose to have a superior benefit plan I also pay dearly for. Yep. Who do you think is going to suffer here? Me? Nope. When BHO gets through taxing me, the less fortunate will just get less. By the way, all businesses will do the same. So BHO thinks he is helping the poor? Nope. He is taking shirts right off their backs. How sad.

    December 20, 2009 01:32 pm at 1:32 pm |
  18. JT the Show Me State College Freshman

    “One man may hit the mark, another blunder; but heed not these distinctions. Only from the alliance of the one, working with and through the other, are great things born.”
    caballtaz Antoine de Saint-Exupery quotes (French Pilot, Writer and Author of 'The Little Prince', 1900-1944)
    This quote has great significance in this situation the world is currently in at this point. This quote is saying that humanity is a flawed race but has potential to achieve something great if, and only if, we team up as one American people and as one human race. This is saying that we must put our own unique talents together and use them to help eachother out. If we did that, so much would be solved, even somethings that seem impossible right now. Call me a naive person, but I think that the human race can come together as one; we just have to realize first that all of us are not perfect people, but working together, we can balance out those flaws and fix the mistakes of our own making from the past. I may be naive, but I think it is possible to achieve; we just have to put our minds to it.

    December 20, 2009 01:37 pm at 1:37 pm |
  19. Tom in Delaware

    So much for not taxing families that make less than $250,000 a year....yet another lie from Obama and friends.

    You people startin' to smell the coffee now?

    December 20, 2009 01:42 pm at 1:42 pm |
  20. Pelosi's a see-you-en-tea

    Obama beleives in any tax that he thinks only affects the wealthy. He can't comprehend the fact that they just pass that tax on down to the consumers.
    Would it be alright with you, Sniffit, if CNN decides to post my comment? I realize that you think being on this site day and night entitles you to make the decisions.

    December 20, 2009 01:59 pm at 1:59 pm |
  21. The Constitutionalist

    Wouldn't taxes on the wealthy and on those purchasing "cadillac" insurance plans constitute a bill of attainder?

    December 20, 2009 08:59 pm at 8:59 pm |
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