Senate Democrats working on bipartisan health care reform legislation say they may kill a plan to tax employee health care benefits, after multiple internal polls taken last week showed significant public opposition to the idea.
“When you go out and ask people across the country, they don’t like it,” said Kent Conrad, D-N.D.
Instead, the Senate Finance Committee is weighing other ways to raise revenue beyond the confines of health care, Conrad said, including reducing tax deductions for charitable deductions, an idea President Barack Obama favors.
Conrad and other members of the committee have been working for weeks to come up with a health care bill that might attract some Republican votes. One of the main sticking points has been how to pay for expanding health care coverage to 46 million who are uninsured. The Finance Committee’s working proposal was given a $1 trillion price tag by the Congressional Budget Office, and Democrats must produce a bill that does not increase the debt.
Conrad and other architects of the legislation had proposed taxing health care benefits that exceeded about $17,000 per individual to help pay for some of the cost.
But Conrad said three polls taken on the subject of taxing employee health care benefits showed strong opposition “in the 70 percent range.”
“When you get numbers like that it causes you to look at other alternatives,” Conrad said.
The benefits tax also has met with stiff resistance from Democrats, especially the unions. Despite the committee carving out a three-year delay on the tax for union members, the Laborers’ International Union of North America last week began television advertisements in North Dakota, targeting Conrad, as well as in Montana, targeting Finance Committee Chairman Max Baucus, D-Mont., denouncing the tax proposal. The union agreed to pull the ads only after Baucus agreed to a sit down with LIUNA head Terry O’Sullivan.
Obama is opposed to taxing health care benefits, but said in recent weeks he would at least consider such a proposal. But with the public and many Senate Democrats also oppose the health care tax, Conrad said, and the committee is ‘moving away” from it.
Conrad blamed the negative poll numbers on the notion that most people do not know the value of their health insurance plans, which makes them wary of any kind of tax.
“That makes it difficult in terms of the public reaction,” he said.
Finance Committee members have yet to settle on how to expand coverage. Baucus and Conrad back creating a health insurance cooperative owned by the people it would insure instead of a government-run system. But that idea seems to be fading now that Sen. Al Franken, of Minnesota, gives Democrats control of 60 votes in the Senate.
Obama on Tuesday sent a missive from Russia, urging senators to forgo the co-op in favor of creating the public plan, but Conrad warned “the co-op has the best chance” of attracting moderate Democrats and Republicans.
