Monday, March 16, 2009

Almost too easy: the President inches toward taxing health-care benefits....

... despite the fact that he roasted Senator McCain for suggesting the same thing during the campaign.

From the NYT:

WASHINGTON — The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.

The proposal is politically problematic for President Obama, however, since it is similar to one he denounced in the presidential campaign as “the largest middle-class tax increase in history.” Most Americans with insurance get it from their employers, and taxing workers for the benefit is opposed by union leaders and some businesses.

In television advertisements last fall, Mr. Obama criticized his Republican rival for the presidency, Senator John McCain of Arizona, for proposing to tax all employer-provided health benefits. The benefits have long been tax-free, regardless of how generous they are or how much an employee earns. The advertisements did not point out that Mr. McCain, in exchange, wanted to give all families a tax credit to subsidize the purchase of coverage.

At the time, even some Obama supporters said privately that he might come to regret his position if he won the election; in effect, they said, he was potentially giving up an important option to help finance his ambitious health care agenda to reduce medical costs and to expand coverage to the 46 million uninsured Americans. Now that Mr. Obama has begun the health debate, several advisers say that while he will not propose changing the tax-free status of employee health benefits, neither will he oppose it if Congress does so.

At a recent Congressional hearing, Senator Ron Wyden, an Oregon Democrat whose own health plan would make benefits taxable, asked Peter R. Orszag, the president’s budget director, about the issue. Mr. Orszag replied that it “most firmly should remain on the table.”

No new taxes ("not a penny") on anybody but the top five percent of the wealthiest Americans, right?

Where have I heard that one before?

But here is how it will be spun:

1) Congress will have brought him this option, which he will reluctantly accept on behalf of the uninsured millions of Americans. He will tell us that it makes us all healthier.

2) Policy wonks will explain that this is only necessary as an interim measure while we separate health-care from the place of employment; once we have single-payer health care the necessity for this new tax will go away. It's a temporary, transition thing.

3) Then they will wryly observe that President Obama's critics want it both ways: they accuse him of dangerous, profligate deficit spending, but when he tries responsible strategies to pay for his programs, all they do is say, "No!" without contributing any better ideas to the conversation.

I'm thinking of copyrighting these responses.


Delaware Watch said...

I bet he doesn't do this. In fact, I think there is little chance that he will.

Steve Newton said...

You may well be right: all other issues aside I think it would be political suicide.

However: if it happens, I think he has to present himself as being "forced" or "persuaded" into it.