Obama Administration Appears Open To Taxing Some Health Benefits

The Obama administration is "signaling to Congress" that President Obama "could support taxing some employee health benefits" to help offset the cost of health care reform, a move supported by "several influential lawmakers and many economists" but "opposed by union leaders and some businesses," the New York Times reports (Calmes/Pear, New York Times, 3/15).

During separate appearances on the Sunday talk shows, Lawrence Summers, chair of the National Economic Council, and Christina Romer, chair of the White House Council of Economic Advisers, said that Obama opposes the proposal but did not say that he would not consider the move (Washington Times, 3/16).

According to White House Office of Management and Budget Director Peter Orszag, Obama has said that the proposal "most firmly should remain on the table."

The Times reports that the issue could pose problems for Obama because he criticized Sen. John McCain's (R-Ariz.) proposal to tax some health benefits.

Opposition

House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) said that many Democrats oppose a proposal to tax some employee health benefits. He said, "It's a dumb idea," adding, "We have to maintain as much as we can of the employer payments."

Alan Reuther, legislative director of the United Auto Workers, said, "These proposals would represent a tax increase on working families. They would undermine good health care coverage."

Dennis Rivera, chair of SEIU Healthcare, said that the union is "predisposed not to agree to the taxing of health benefits" but might support the proposal as part of a broader health care reform plan (New York Times, 3/15).