Administration Officials Say Obama Is Open to Taxes on Some Benefits
President Obama is open to taxing employer-sponsored health benefits in order to fund health reform, but he would prefer to limit itemized tax deductions for the wealthiest households, two top aides said Sunday, CongressDaily reports.
The Senate Finance Committee has proposed paying for its $1 trillion overhaul bill by implementing taxes on some employer plans, all of which traditionally have been tax exempt (Edney, CongressDaily, 6/28).
During his presidential campaign, Obama said that U.S. families whose incomes were less than $250,000 annually would not experience "any form of tax increase, not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
However, when asked about the employer tax on ABC's "This Week" on Sunday, White House political adviser David Axelrod said, "One of the problems we've had in this town is that people draw lines in the sand and they stop talking to each other" and "you don't get anything done."
Axelrod said, "That's not the way the president approaches this," adding that Obama is "very cognizant of protecting people -- middle-class people, hardworking people, who are trying to get along in a very difficult economy" and will "continue to represent them" in negotiations with Congress (Shear, Washington Post, 6/29).
Axelrod also said, "There are a number of formulations, and we'll wait and see. The important thing at this point is to keep the process moving, to keep people at the table, to the keep the discussions going," adding, "We've gotten a long way down the road, and we want to finish that journey" (Elliott, AP/Washington Times, 6/28).
On "Fox News Sunday," HHS Secretary Kathleen Sebelius said that Obama is concerned that taxing employer benefits "is a way to encourage employers to stop offering" health benefits, which could deprive hundreds of millions of U.S. residents of their coverage (CongressDaily, 6/28).
She also said that Obama has "put forward his version" of how to fund an overhaul and cited "about $660 billion over 10 years in savings from the current system in redirecting money that's not currently going to make people healthier and make them more secure would be on the table, as well as about $330 billion over 10 years in capping the itemized deduction."
Several top Republicans also appeared on television shows over the weekend and expressed their opinions on taxing health benefits as a means of funding health reform.
Senate Finance Committee ranking member Chuck Grassley (R-Iowa) appeared on ABC's "This Week" and said, "Since the president denigrated [Sen.] John McCain's (R-Ariz.) effort to move [toward taxing employer benefits] during the campaign, it's going to take, in order to win over Republicans, presidential leadership in that direction."
Grassley added, "We want to bring money from within health care, reshuffle it," so "we're going to get money from the high-end health insurance and then we're going to save hundreds of millions of dollars within Medicare that's being wasted."
On "Fox News Sunday" when asked whether a bipartisan overhaul is possible, Senate Minority Leader Mitch McConnell (R-Ky.), said, "Yeah. Let's equalize tax treatment, target prevention and wellness, do something about medical malpractice junk lawsuits against doctors and hospitals that drive up the cost of health care" (CQ Today, 6/28).
Video, TranscriptsVideo of Grassley's appearance on "This Week" is available online. Transcripts for the Axelrod and Grassley appearances on "This Week" also are available online. Video of the McConnell and Sebelius appearances on "Fox News Sunday" also is available online. This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.