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. Katrina

    Why don't we tax the real source of our health care woes; sugar, soda, candy, junk food, etc.? The tax should be significant, comparable to the taxes on alcohol and tobacco.
    Here's a question? Is nationalized agriculture the same as nationalized health care?

    July 16, 2009 07:35 pm at 7:35 pm |
  2. Capt. SNarKy

    Baucus must be an idiot, if he thinks his political career would survive pushing this tax on his constituents. Montana is still a relatively conservative state. I'd really like to know who the Deceptacons are buying their crack from these days. This type of wealth redistribution won't fly with mainstream America.

    July 16, 2009 07:36 pm at 7:36 pm |
  3. Sam SixPack

    How's that for no tax increase? This amounts to the biggest tax increase on the working class in our life-time. The tax brackets will stay the same, so your "leaders" will say it isn't really an increase. What a bunch of liars. The Republicans destroyed Iraq. The Democrats are destroying America.

    July 16, 2009 07:37 pm at 7:37 pm |
  4. CBO is Non-Partisan?

    I don't think so! Folks need to STOP reporting the CBO is non-partisan or substantiate this claim with actual data. It appears nearly everybody AND organization/institution in this country is partisan - too include the corporate Mainstream Media (yes you CNN)!

    July 16, 2009 07:43 pm at 7:43 pm |
  5. Taxing Health Care Benefits?

    Exactly how will taxing health care benefits lower costs? CNN, that is one glaring factor that is MISSING in this article. The CBO Director makes this claim based on what data/facts exactly? Why does your network continuously allow individuals to make claims without also including the background data, research, calculations, etc., that substantiates their claim? Pathetic reporting as usual - "he said this, he said that." What about the facts INDEPENDENT of what each side claims - you know, actual INFORMATION!

    July 16, 2009 07:51 pm at 7:51 pm |
  6. Republican from Alerbami

    This blue dog should get his mouth washed out with soap.Where is Montana?

    July 16, 2009 07:51 pm at 7:51 pm |
  7. Matt

    Actually, the WHO ranks our healthcare system as the 37th "best in the world". Right ahead of Slovenia. Socialist France is number 1.

    July 16, 2009 07:57 pm at 7:57 pm |
  8. Chris

    Quit enslaving working class people to pay the way for those who refuse to work........use stimulus money to invest in companies that will employ people from the welfare ranks, teaching them to work, teaching them to have pride in themselves.

    July 16, 2009 07:57 pm at 7:57 pm |
  9. listen dummy

    then come up with your own plan, do just criticize

    July 16, 2009 07:57 pm at 7:57 pm |
  10. Annie, Atlanta

    I think it's time we figure out a way to remove health care benefits for our representatives, as well as cut their salaries in half, since they only work about half the year, and remove pension funds. They should be treated as well as we are, don't you think? Then maybe they will remove themselves from the bubble, and begin to relate.

    July 16, 2009 08:00 pm at 8:00 pm |
  11. the rector

    So now we cant speak the truth on CNN, big surprise.

    July 16, 2009 08:02 pm at 8:02 pm |
  12. annie for Palin

    Let's try out this government rationed (no) health care on the members of congress and obama and his family for about 3 to 4 years and then if it works, we can all go for it.

    July 16, 2009 08:05 pm at 8:05 pm |
  13. RealityKing

    "I will not raise your taxes.., not one penny" -Obama 2008 campaign promise.

    July 16, 2009 08:19 pm at 8:19 pm |
  14. Reinstate Darwinism

    I don't need or want, YOUR healthcare.

    I don't need or want, YOUR self serving taxes. I plea the Fourth.

    I don't need or want, YOUR social programs.

    I need and want, you to do YOUR job, protect us from our enemies.

    I need and want, a simple tax code. (nothing like a legal document that is larger than the bible)

    I need and want, justice on Wall St. Enforce the laws we currently have. Issue some actual penalties to those who do wrong. (anyone go to jail for the financial meltdown... no.. record bonuses paid governemnt money handed to private corporations)

    July 16, 2009 08:30 pm at 8:30 pm |
  15. Rafael

    I have no idea what the minority leader is talking about. We clearly do not have the best health care system in the world...far from it.

    July 16, 2009 08:35 pm at 8:35 pm |
  16. tlobe

    Pres Obama's position on this issue is one of the few things he has gotten right so far. Taxing employer-provided health care will achieve the opposite of what Sen Baccus wants. Instead of raising revenues to pay for government-subsidized healthcare, it will actually reduce revenues and increases costs of the plan. Businesses will eliminate group health insurance plans, which in turn will leave more people without health insurance–just the opposite of what Obama wants.

    July 16, 2009 08:47 pm at 8:47 pm |
  17. bco

    I don't remember the Max Baucus for President campaign last year. I do remember the Obama and Clinton campaigns, which had similar health care plans, including a publicly-financed option, and not including taxes on heath benefits.

    As I recall, that is the position that won the primaries and won the election, by a handy margin.

    I'd like to see President Obama and his Democratic congress deliver on those campaign promises.

    I'd like to see Senator Baucus recognize that no one outside of his sparsely populated state voted for his vision of health care reform, and I'd like to see him support the leaders that we did vote for.

    July 16, 2009 08:48 pm at 8:48 pm |
  18. RR

    so a NON-PARTISAN CBO says the dems plan won't reduce long term costs?

    How will the dems and moveon spin this one? Accuse the CBO of being the "office of 'no!'"?

    July 16, 2009 08:50 pm at 8:50 pm |
  19. Willy Brown

    You dumb democrats will lose because of Obummer. I can't wait.

    July 16, 2009 09:03 pm at 9:03 pm |
  20. AlysonRNMPH

    I hope that before anything more moves forward with respect to healthcare reform that the key political players, including President Barack Obama carfeully chooses to use the phrase "Universal HealthCare Coverage" versus "Socialized Medicine;" the two terms mean different things, but to many are the same and therefore may divide our country even more on this issue, which we can not afford to happen. Please help the public to be better educated on this issue as it is not an easy solution. My comments are driven by the fact that whomever wrote this article should have have been more clear in writing the following statement, particularly for an audience that is not well versed in the demand for LTC and what drives the demand for it.

    "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."


    July 16, 2009 09:16 pm at 9:16 pm |
  21. Gator

    Go get em Blue dogs, you are theonly dems with any sense. I don't want my healthcare (which I pay for) taxed to provide care for some person who sits back and expects a government check every month to buy crack with.

    July 16, 2009 09:33 pm at 9:33 pm |
  22. marcus (seattle)

    as an individual who makes substantially less than the $250,000 cutoff line of wealth in the US, the dems will be playing with fire should they choose to tax my health benefits.. obama ran on a platform of NOT raising our taxes.. there's plenty of money in the US, and most of it rests in the hands of the absolute wealthiest.. democratic control of the house, senate and presidency, is NOT a lifetime appointment.. watch how quickly you're back in the minority in each house, and OUT of the white house, should you decide to tax those of us significantly DOWN the wealth ladder in the US...

    July 16, 2009 09:35 pm at 9:35 pm |
  23. Party of HELL NO!

    This president has rushed us to an elective war on prosperity with no exit strategy.

    Where's the "exit strategy" regarding belligerant out-of-control government takeovers of nearly every industry?

    This economic collapse and subsequent socialism is Obama's Vietnam.

    July 16, 2009 09:37 pm at 9:37 pm |
  24. Amy from MN

    I appreciate Obama opposing taxing my health insurance that I pay for through my employer. I work hard to pay for it, and taxing it would add insult to injury. Find another alternative, Sen Baucus!

    July 16, 2009 09:40 pm at 9:40 pm |
  25. ender

    I really and truly wish the republicans would stop claiming we have "the best healthcare system in the world". We do not anymore. And if they would just stop posturing and acctually look intop it they would see it for what it is. A system that is quickly falling behind the rest of the world.

    July 16, 2009 09:55 pm at 9:55 pm |
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