Health bill may combine millionare and 'Cadillac' taxes

Congressional Democrats may opt to use a combination of taxes proposed in the House and Senate's health bills, a top Democrat said Thursday.

Rep. Frank Pallone (D-N.J.), the chairman of the House Energy and Commerce subcommittee on Health, said leaders may use the different taxes in tandem to finance the final legislation, the cost of which will be hundreds of billions of dollars.

"Obviously I prefer to see the millionaire surcharge instead of the excise tax (from) the senate, but we may have to have both," Pallone said during a press availability on Capitol Hill.

The House bill uses a tax on income over $1 million per year to pay for its health reform package, while the Senate uses a combination of taxes and fees, most controversially the tax on high-value insurance plans, to which Pallone was referring.

That tax, also known as the "Cadillac tax," has been the subject of scorn from organized labor groups, one of which urged President Barack Obama to defer to the House's model on Thursday. Obama reportedly told lawmakers on Wednesday to include some form of the excise tax.

Pallone told reporters that if a combination of the two are used, one or both of the taxes may be scaled back or modified in the final legislation.

House and Senate Democrats are meeting to lay the groundwork of an informal deal to reconcile the differences in the two bills as they move toward an endgame on the landmark legislation.

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