President Obama told House leaders Wednesday that they should incorporate the Senate’s proposal to impose an excise tax on expensive health insurance plans into their final health care system overhaul bill, the New York Times reported.
The move marks a departure for Obama, who has largely stayed out of disputes between the two chambers up to this point, but as they iron out the differences between the bills, he now may have no choice but to act as a mediator.
The Senate bill would issue a “40 percent excise tax on the cost of individual insurance policies above $8,500 and on family policies above $23,000, with higher thresholds for retirees and employees in high-risk fields like police officers.” Experts and administration officials like OMB Director Peter R. Orszag, agree an excise tax could go a long way in reigning in long-term health care spending for the federal government and taxpayers. The Congressional Budget Office (PDF) projected that the tax, which is included in the Senate bill but not the original House bill, would generate $149 billion in a 10-year span.
House Democrats did not warm to the idea earlier because of concerns that significant groups in the party base, namely unions, would be hit hardest by the tax. Liberals advocate paying for health care legislation by boosting income taxes on wealthy Americans.
House Speaker Nancy Pelosi says the two chambers leaders have been meeting to discuss the bill and are “very close to reconciliation.” Though according to Talking Points Memo, Pelosi is reportedly upset with the White House recommendation that she integrate an excise tax into the House bill, and considers it a transgression from Obama’s promise not to raise taxes on the middle class.
Also in today's taxation news:
Differences Between House and Senate Health Bills (Reuters)
