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Daschle Sees Movement on Taxing Health Benefits

June 29, 2009 10:17 AM

Klein ABC News’ Rick Klein reports:

Former Sen. Tom Daschle indicated today that he believes a sweeping health reform measure is likely to include a new tax on at least some health care benefits, adding to a sense of momentum around a politically controversial financing option.

Daschle -- President Obama’s one-time choice for Health and Human Services secretary and still a key player on health care reform efforts -- told reporters at a briefing in Washington that Democrats have to be “willing to show some flexibility” in finding ways to pay for a reform effort that could cost as much as $1.5 trillion or more over 10 years.

“Obviously we want to do as much as we can to keep the commitments we’ve made to working Americans,” Daschle said. But, he added, “There’s a limit to how much we can provide that assurance.”

“At some point, if you really want to get this done, you’ve got to be willing to show some flexibility, but hold as true as possible to the principles you outlined at the beginning,” he added.

On the campaign trail last year, Obama blasted Sen. John McCain’s proposal to subject all health care benefits provided by employers to taxation. Such benefits are not taxed under current federal law.

Major labor organizations are adamantly opposed to taxing health benefits, arguing that such a change would negatively impact workers. 

Obama also pledged repeatedly not to raise any taxes on those making less than $250,000 a year -- a promise that’s far more difficult to keep if he pays for health reform in part by taxing health care benefits.

On ABC’s “This Week” Sunday, senior White House adviser David Axelrod refused to rule out imposing taxes on health benefits, while making clear that’s not the president’s preferred option. 

“The president had said in the past that he doesn't believe taxing health care benefits at any level is necessarily the best way to go here. He still believes that," Axelrod told George Stephanopoulos. “But 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. We've gotten a long way down the road and we want to finish that journey." 

Daschle today said Democrats’ plans are far different than McCain’s in that they would only impact so-called “gold-plated,” high-end health plans, which are typically offered only to well-compensated employees.

“We’ve said you can’t eliminate the exclusion -- nobody’s saying that, at least on our side,” said Daschle, D-S.D.  “At what level does it become gold-plated? That’s part of the debate.”

Daschle comments came as the liberal Center for American Progress -- where he serves as a senior fellow -- released a report today outlining ways to pay for a health care reform package it estimated would cost between $1 trillion and $1.5 trillion over 10 years.

The group is proposing that a third of the money come from new revenues -- such as a new tax on health benefits -- with a third coming from savings inside government health care programs, and the final third via “modernization” efforts that would make the health delivery system more efficient.

The center’s president and CEO, John Podesta, said that he’s growing more optimistic that Congress will be able to complete work on a health care overhaul this year.

“Better than 50-50 chance is maybe even a little bit understated,” Podesta said. “This period of time [before the August recess] is critical.”

Daschle is also backing a proposal -- developed by the Bipartisan Policy Center -- that would delay a federal “public option” for health coverage for at least five years. That window of time would allow states to step in and develop their own plans -- and would duck a politically explosive debate over whether private insurers should be forced to compete with a health insurance plan run by the federal government. 

Daschle, a former Senate majority leader, said he still believes that a public option is the best way to go, but recognizes that most Republicans view that as a non-starter. He said, however, that Senate leaders retain the option of using obscure budget rules to press ahead with health reform; in that case, they’d need only 51 votes, a threshold they could reach with only Democrats on board.

“I don’t think public option is dead at all. I think it’s very much alive. There’s strong support in the Democratic caucus. I think it’s very doable,” Daschle said.

UPDATE: With Daschle giving more ground publicly than Obama or his top advisers, Richard Wolffe poses an intriguing question: “Has Daschle Gone Rogue?”
 
Writing at The Daily Beast, Wolffe -- who recently published a book on Obama and his presidential campaign -- quotes a “senior Obama aide”: “Everyone loves Daschle. . . . But he’s making compromises we don’t want to. We just take a different view right now.”

 

June 29, 2009 | Permalink | Share | User Comments (24)

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No taxes for anyone making under 250,000 well except for this and that and of course this.

Posted by: greg | Jun 29, 2009 11:11:07 AM

How do you spell obama?=L_I_A_R

Posted by: Obamas brownnosing media network | Jun 29, 2009 11:15:34 AM

I have no employer provided health care (or retirement) for me and 4 kids. I say tax health care and retirement contributions. If Obama is about fairness (though he really is not), that is fair. My neighbor retired from the county at 49 and gets family health coverage courtesy of the taxpayers!

Posted by: Tax 'Em | Jun 29, 2009 11:27:02 AM

Tax 'Em -
so it's ok to tax someone out of spite? you're upset about your neighbor's benefits, so you believe we should tax everyone. no one is forcing you into your current line of work. If it is not beneficial financially for you, you should look elsewhere. Don't tax me because you are unwilling to find a job with better benefits.

Posted by: stdntdrvr | Jun 29, 2009 11:43:11 AM

THE LAST thing any American taxpayer needs is more taxes !

Posted by: Ron | Jun 29, 2009 11:51:28 AM

There is a much better fix for health care for taxpayers, patients, businesses, and our national economy unfortunately the health care lobby sees it as a threat to their profits as I am sure you are well aware.

If you like private care, keep it.

For all others.

Without government owned and operated hospitals and clinics substantial cost reductions are not possible.

Government needs to become the basic necessities no frills provider of health care.

The cheapest way to collect money to pay for health care is through a national sales tax, and not by forcing people and companies to purchase questionable insurance to pay excessive costs for services in a failed system.

50 million uninsured people along with every individual and business, who wanted to drop private care and receive free public care and medications, including seniors on Medicare, could do so and the annual costs would still be hundreds of billions of dollars less than the $2.5 trillion spent last year for health care.

Posted by: Bill Watson | Jun 29, 2009 11:59:43 AM

KaKa: Name one president who didn't turn on everything they said as a candidate?

Posted by: xmarks | Jun 29, 2009 1:02:06 PM

Tax'em: How is it fair to tax me because I've worked hard, invested in myself, had fewer kids and have been able to get insurance? Pay your own way.

Posted by: xmarks | Jun 29, 2009 1:04:41 PM

I remember the Obamabots ridiculing John McCain when he suggested taxing health care benefits. Now that Obama wants the same thing, they're fine with it. It's tough to admit your Messiah is a liar and a typical politician, isn't it?

Posted by: Sarah | Jun 29, 2009 1:09:54 PM

Obama was elected for one basic reason: he promised to soak the rich and leave the middle class alone. That sounded great to me (I make about $48,000/year). I didn't vote for him, though, because I DIDN'T BELIEVE HIM.


Posted by: Janet Bradley | Jun 29, 2009 1:14:11 PM

More reason WHY the idea of the government controlling healthcare is an incredibly BAD idea.

We keep hearing how this is going to control costs, and how its going cost us less than current plans that available.

We also heard that if pass the great "Stimulator" unemployment would not go above 9%.

So lets just pass this insane idea, then wait until after to find out just how badly this administration missed the mark this time.

I mean its "change" isn't it?

Posted by: Mike_C | Jun 29, 2009 2:21:18 PM

Some of these comments are disgusting. Soak the Rich, tax my neighbor. Wow has Obama succeeded. His overriding goal in all of this garbage is to pit rich vs poor so he can redistribute wealth. There used to be a time in this country when everyone wanted to be more successful and wanted to be rich. Now people are too lazy and too stupid to work for it so they want the government to steal from those that did. How dare you say soak the rich because I don't have as much as them. Get off your lazy ass and work for it. If you don't want to, fine. But those that do are ENTITLED to it. I am so glad that Democrats are sealing up the homeless, welfare, lazy, uneducated, bitter, jealous voting bloc. That is who I want making decisions in this country. American exceptionalism is all but dead, hail Obama.

Posted by: trb | Jun 29, 2009 2:59:29 PM

We're already paying taxes on the out of pocket premiums we pay for health insurance (those of us who have private, non payroll deducted premiums which can be paid with pre-tax income)so why tax again on the so called "benefit"..The way I look at it , if you are paying out of pocket, it is something you purchase.. not a benefit!

Posted by: linda | Jun 29, 2009 3:01:30 PM

Tax 'Em wrote:"My neighbor retired from the county at 49 and gets family health coverage courtesy of the taxpayers!"

Sometimes the retirement plans are promised to supplement lower pay conditions during the working years.

In the 1990's, I could have jumped to a different county's school system and earned $10,000 per year more. But, to keep from having to compete for salaries, many counties in my state require that you spend at least your last 15 working years with them or you get NO retirement health benefits. So if I went back into teaching, and taught in a different county for 1 day, I'd lose my retirement health benefits. Likewise, veteran teachers can't jump to higher paying count0ies. But it's a win-win situation. The counties keep the salaries down and the teachers get retirement health benefits.

So you can't really say it's "courtesy of the taxpayers" unless you also say the taxpayers paid for reduced teacher salaries "courtesy of the teachers".

Posted by: The_Mick | Jun 29, 2009 3:27:09 PM

Is Daschle still even relevant?

Posted by: LongT | Jun 29, 2009 3:30:28 PM

"Obama also pledged repeatedly not to raise any taxes on those making less than $250,000 a year -- a promise that’s far more difficult to keep if he pays for health reform in part by taxing health care benefits." The old bait and switcheroo! Except for payback for the union vote.

Posted by: LongT | Jun 29, 2009 3:32:22 PM

So, people that belong to union do not have to pay taxes on their benefits and we must provide health care for the ILLEGALS because the RAZA wants that.Is this how the law of United States works? See you guys at voting time...

Posted by: Anna N. | Jun 29, 2009 3:39:22 PM

Never say never! Execpt when saying over 2/3 of a new government program will be paid by "modernization" and "new savings". IT NEVER HAPPPENS!!!

Posted by: lee | Jun 29, 2009 6:25:39 PM

Don't Blame Me! I Didn't Vote For Obama...Ring..Ring...it's 3 AM !!!!

Posted by: toldyaso | Jun 30, 2009 1:14:47 AM

Most military retired personnel don't make enough to be above the poverty line, so after serving their country and putting their lives on the line, they still have to find work in the private sector.

Posted by: Lizzie | Jun 30, 2009 12:25:57 PM

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