July 16th, 2009
06:03 PM ET
13 years ago

Senate Dem criticizes Obama opposition to taxing health benefits


[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/07/16/art.baucus0716.gi.jpg caption=" Sen. Max Baucus said Thursday 'the president is not helping us.'"]WASHINGTON (CNN) - President Barack Obama's opposition to taxing employer-provided health benefits has slowed progress on passing a health care reform bill, the chairman of the Senate Finance Committee complained Thursday.

"Basically, the president is not helping us," said Sen. Max Baucus, D-Montana, after emerging from closed talks on the bill.

Baucus' criticism came on the same day the head of the non-partisan Congressional Budget Office said the health reform bills moving through Congress won't reduce long-term health care costs - in part because the bills don't include taxes on health benefits.

The comments by CBO Director Douglas Elmendorf provided ammunition for Republican opponents of the two Democratic-sponsored measures made public so far - one passed Wednesday by the Senate Health, Education, Labor and Pensions (HELP) Committee and one proposed this week by House Democrats.

"I don't see any Republicans that have any interest in voting to ration care for their constituents, raise costs to their constituents, and put the federal government in charge of the best health care system in the world," said House Minority Leader John Boehner of Ohio.

In the Senate, Baucus is one of seven bipartisan members of the Senate Finance Committee who have been meeting for weeks trying to negotiate health care reform. Taxing the employer-provided benefits - which are currently excluded from taxation - had been the principal way Baucus wanted to raise $320 billion to help pay for the trillion-dollar health overhaul.

It was also considered a key way to reduce costs because tax-free benefits encourage more spending on health care, many experts believe.

"With the tax exclusion off the table, it's difficult to come up with revenue measures and other savings measures," Baucus said. "We are clearly going to find ways to bend the cost curve in the right direction. That is, include provisions that actually vary the rate of increase in health care costs."

White House spokesman Bill Burton said Obama was committed to "getting stakeholders to the table, finding different ways to save money and produce the revenue that we need for comprehensive health care reform."

"Once we get something through the House and through the Senate, we'll be able to go to conference and really put the rubber to the road and get something done," Burton said, referring to a conference committee comprising members of both chambers that would create a compromise bill.

Testifying earlier on the long-term budget outlook, Elmendorf said trying to lower costs without taxing benefits was like "tying one of the two hands behind one's back."

Senate Majority Leader Harry Reid bluntly dismissed Elmendorf for appearing to take a position on a political issue.

"What he should do maybe is run for Congress," Reid said.

Rep. Mike Ross, D-Arkansas, a key leader of the conservative Democratic group known as Blue Dogs, told reporters he shares Elmendorf's concerns, saying: "That's what we've been trying to tell everyone for three months."

Ross said opposition to the initial Democratic plans for health care reform has extended beyond his group to other Democrats.

"No way they can pass this bill on the House floor now," he said. "No way. Not even close."

Boehner leveled particular criticism at proposed tax surcharges on the wealthy contained in the House bill. The surcharges intended to raise $550 billion over 10 years start at 1 percent for people reporting income of more than $350,000, go to 1.5 percent for those with income of more than $500,000 and climb to 5.4 percent for those with income of more than $1 million.

"This will kill jobs in America and make it more difficult for people to hire more people," Boehner said, adding that the measure would harm small business owners. "You just can't continue to tax employment and tax employers and think you're going to get more jobs. It doesn't work that way."

House Speaker Nancy Pelosi of California said Thursday she would willing to lower the amount of the surtaxes if more savings from proposed reforms can cover the cost of the bill.

"If we can get more savings, we can perhaps lower the percentage that the high end will pay," Pelosi said at her weekly press conference.

But Pelosi made it clear that Democrats still plan to tax the rich and said if the money isn't needed to pay for health care it would be directed at the nation's budget deficit.

"There is going to be a revenue change at the high end," she said. "It will be directly to reduce the deficit or to reduce the deficit by helping to cover the cost of this initiative."

Pelosi also said she is willing to make further cost-cutting changes to the bill to satisfy the Blue Dog Democrats such as Ross.

soundoff (60 Responses)
  1. Mitchell from MS

    You have a MD saying this will raise health care. What more do you need?

    If this passes the Gov. controls you from birth till death...hmmm not looking so good.

    July 16, 2009 06:27 pm at 6:27 pm |
  2. annie s

    Could someone tell Boehner his rhetoric is a tad old. He may have the best health care system in the world, but the rest of don't. We have a system based on profits, which means we have insurers denying and rationing care all the time. We spend more for our health care than many other countries yet have higher infant mortality rates and shorter life expectancies. I was a health care administrator for 20 years and I've seen things that would break the hearts of just about everyone except these cold hearted, mean spirited Republicans who refuse to put the American people first.

    July 16, 2009 06:28 pm at 6:28 pm |
  3. kishen c.rao

    Just tax health benefits to rich who make more than 250k....it is fair...but fix the health care...it is needed....don't cry....it is a must and ought...to fix health care now....don't bring lobbyists come into picture...they are menace....ok

    July 16, 2009 06:35 pm at 6:35 pm |
  4. johnnie

    Yea baucas, your helping yourself... (SHUT UP) The President is keeping you in (POWER) be Quiet and follow the leader...........

    July 16, 2009 06:38 pm at 6:38 pm |
  5. JS007

    Amazing, Boehner thinks that a health system that costs twice as much as that of France (recognized as having the best system in the world), leaves 50 million uninsured, and is the major cause of personal bankruptcies is the best in the world? I also don't see Boehner giving up the socialized health care he gets as a member of Congress.

    It's becoming apparent that Boehner, the GOP and the Blue Dogs are not working for the American people, but for the insurance industry. I did not hear nearly as much argument when $1 Trillion was being spent in Iraq (Halliburton had good lobbyists). Besides, the $1 Trillion banded about for health care is over 10 years – that is only $100B per year out of a $3.5 Trillion annual budget.

    July 16, 2009 06:39 pm at 6:39 pm |
  6. DC Insider

    Does this quote strike you as odd, "Baucus' criticism came on the same day the head of the non-partisan Congressional Budget Office said the health reform bills moving through Congress won't reduce long-term health care costs — in part because the bills don't include taxes on health benefits. " Ok so the CBO says that the health reform bills won't reduce long-term health care costs, UNLESS they tax health benefits? And granted this is taxing the rich, but again...Pelosi states that Democrats "still plan to tax the rich."

    That is a great way to get more and more wealthy Democrats to shy away from the party. I mean you don't hit people in their pocketbook...not to mention the bill annoys Blue Dog Democrats like me.

    Pelosi and Baucus, listen to Obama...you don't want to get the independents pissed, because the Democratic Party will need them in 2012.

    July 16, 2009 06:39 pm at 6:39 pm |
  7. Josh P

    In a time when unemployment is reaching the double digits and employers are seeing layoffs as an easy solution to cut costs, why is our government proposing a tax on health insurance benefits? This would hurt employers (especially those in small businesses that offer health insurance plans). We need answers that will actually encourage employers to hire American workers, not another reason to ship jobs overseas and cut more workers.

    July 16, 2009 06:41 pm at 6:41 pm |
  8. MatthewDetroit

    Good. There is at least one Honest Democrat.
    Barack is a liar.
    He said he would not tax benefits.
    Now he is going to.
    TAXES are GOING UP and we are all going to pay.
    It is WRONG to say "oh lets just tax the rich"
    THat is a bunch of crap.
    Get a job. You then can afford health insurance or you can save your money and pay YOUR medical bills. IT is NOT my problem or responsibility to pay anyones medical bills.

    July 16, 2009 06:43 pm at 6:43 pm |
  9. Michael

    "I don't see any Republicans that have any interest in voting to ration care for their constituents, raise costs to their constituents, and put the federal government in charge of the best health care system in the world," said House Minority Leader John Boehner of Ohio.

    That is why we have families filing for bankruptcy, companies moving jobs overseas, and people not getting the medical services they need, right Mr. Boehner?

    July 16, 2009 06:44 pm at 6:44 pm |
  10. Obama only creates TAXES



    July 16, 2009 06:45 pm at 6:45 pm |
  11. rachel

    Dont touch my healthcare benifits!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    July 16, 2009 06:46 pm at 6:46 pm |
  12. Enough

    Obama can't support taxing Health care benefits........he tore John McCain apart for suggesting that. It is insane to think they should tax that anyway. Isn't the object for people to be insured and not need the public option? Democrats need to reprogram their brains against Taxation. Public option should be paid for by those needing it, not those who don't.

    July 16, 2009 06:48 pm at 6:48 pm |
  13. Joe

    Using the fact that health care is broken to justify the new house health bill is like smashing your printer with a sledgehammer because it ran out of ink.

    July 16, 2009 06:50 pm at 6:50 pm |
  14. Fair is Fair

    You just can't make this stuff up.

    A sitting president taxing the daylights out of the citizenry, and a senator saying your not taxing the citizenry enough.

    Only in the democratic party.

    July 16, 2009 06:50 pm at 6:50 pm |
  15. FORMER republican, NEVER again!

    Republicans don't mind spending trillions on an illegal war or rebuilding a foreign country like they did Iraq yet hate to spend money on American citizens. BTW it is a fact GWB spend 950 billion dollars on Iraqi health care that the rethuglicans approved.

    July 16, 2009 06:51 pm at 6:51 pm |
  16. Henry Miller

    So Senator Baucus is annoyed that Obama is opposed to stealing money from working, productive, Americans in order to reward the shiftless parasites who elected him. Do I have that more or less right?

    July 16, 2009 06:54 pm at 6:54 pm |
  17. Steve, Columbia SC

    Hey senator, is it possible your president is doing a flip flop on his own party....................???? This may be an okay week after all.

    July 16, 2009 07:01 pm at 7:01 pm |
  18. bsmith171

    let's see the congress give up their "FREE" (paid by taxpayers) gold plated health care plans and free food, barber shops, security, servants and car + driver.

    July 16, 2009 07:02 pm at 7:02 pm |
  19. Bill

    No Universal Health care for Americans should equal the end of government sponsored health care for Congress. End of story.

    July 16, 2009 07:09 pm at 7:09 pm |
  20. IS IT 2012 YET ??

    How did Montanans ever put a left wing radical like Baucus in the Senate?

    July 16, 2009 07:15 pm at 7:15 pm |
  21. Lesley

    These guys are disgraceful. We already have a system that rations care and raises costs, in order to enlarge the profit margins of the insurance industry. This is not the best health care system in the world. Why can't they expand the federal employees insurance plan to include the rest of us, the same health care they get. It works fine for them. If government is run so poorly, Boehner can thank himself because he was one of many helping to pass legislation during the Republican hey day. He seems to be criticizing himself for doing a poor job of running the government. I agree with him.

    July 16, 2009 07:16 pm at 7:16 pm |
  22. Jim

    John, "The best health care system in the world" That may be true if you have health insurance. Get out of the country club and talk to the "real people in the country", then you will see how the average "Joe" struggles with the cost of health care each day. Not all of us have the luxury of government paid insurance. We that do often have to settle for cheaper treatment and generick drugs.

    July 16, 2009 07:16 pm at 7:16 pm |
  23. Boehner (R-Aetna)

    I would rather deal with a government bureaucrat than an for profit insurance company bureaucrat.

    Call your Senator and demand a Federal Health option.

    July 16, 2009 07:18 pm at 7:18 pm |
  24. AJ

    I am a life long Democrat who is no fan of Obama, but really, is there anything this Democratic Congress won't tax? Are they so insulated from reality that they don't realize we already pay an enormous amount for health care and taxing us on top of what we already pay will seriously damage our financial footing?

    July 16, 2009 07:19 pm at 7:19 pm |
  25. Kenneth

    If President Obama agreed to tax health benefits it would kill his chance at re-election, no matter what else he accomplishes. This is an insane idea. Tax the greedy rich, they can afford it.

    July 16, 2009 07:23 pm at 7:23 pm |
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