Sen. Alexander: GOP Open to Taxing Health Benefits

July 08, 2009 1:52 PM

ABC News’ Rick Klein reports:

Democrats are searching -- mostly in vain -- for areas where they can work with Republicans on health care reform.

But on the concept of taxing health benefits to expand coverage -- an idea floated by Sen. John McCain, R-Ariz., in the presidential campaign, and ridiculed by President Obama at the time -- they may find at least some GOP cooperation. 

Sen. Lamar Alexander, R-Tenn., a senior member of the Senate Health, Education, Labor and Pensions Committee, said today on ABCNews.com’s “Top Line” that the idea is appealing to Republicans because it finds a way to pay for coverage expansions. 

“Several of the Republican proposals -- which don’t add to the federal debt -- do involve the idea of saying that we’ll give you dollars if you’re low income so that you can buy health insurance more like the rest of us have. and we’ll take those dollars from people by not giving deductibility who have ‘Cadillac’ plans,” Alexander told me and ABC’s Jonathan Karl.

“I like that idea. I think that makes sense. That keeps everybody having a choice. Everybody with insurance. Pre-existing conditions covered. And it doesn’t add to the federal debt.”

Obama has indicated an openness to taxing some higher-end health plans, though he has made clear that he still wants Congress to pursue other ways of funding health reform. One of his main ideas -- capping the deductions available to high-income taxpayers -- is gaining currency among Democrats on Capitol Hill, after being widely panned when it was introduced. 

But the prospects for bipartisanship remain rather bleak. Asked whether including a “public option” -- as many Democrats are insisting -- is a Republican “line in the sand,” Alexander responded: 

“It’s one. And the reason it is [is] because we don’t want the government in between you and your doctor, which that would be. The other line in the sand is this trillion dollars more in debt. If we hear anything when we go home, it’s too much debt, too much Washington takeovers. And a public option is a lead to a government takeover health care system

Asked whether Democrats could use budget “reconciliation” rules to squeak a bill through with only 51 Senate votes, he said: “Technically they could. But it would be bad for the country, bad for the health care system. And I think bad for them. I mean, this is a big complex system. It involves every American. We need to have a bipartisan group and so far, the Democrats’ attitude is primarily been, ‘We won the election, we’ll write the bill.’ ”

Alexander also tells us that he’s given no thought to dusting off the plaid shirt and making another run for president: “That’s the only thing I know of that’s completely out of the question.”
 

Watch the full interview with Sen. Lamar Alexander HERE.

Also today, Ana Marie Cox of Air America dropped by to decode the latest maneuvering by Gov. Sarah Palin, R-Alaska, and assess President Obama’s foreign trip. (And she is so much smarter when her mic is attached.)

Click HERE to see the interview with Ana Marie Cox.