Senate Dems: No tax hikes for healthcare

Senate Democrats have identified a healthcare reform talking point they believe is a winner: No tax increases.

After a two-hour meeting Wednesday, Democrats made a special point to emphasize they will not raise taxes on any individuals, unlike House Democrats.
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“There’s been a lot of talk about the House plan; it has tax increases as pay-fors. We really don’t,” said Sen. Kent Conrad (D-N.D.).

Senate Finance Committee Chairman Max BaucusMax Sieben BaucusBottom line Overnight Defense: McCain honored in Capitol ceremony | Mattis extends border deployment | Trump to embark on four-country trip after midterms Congress gives McCain the highest honor MORE (D-Mont.) went so far as to describe health insurance subsidies for low-income individuals as tax cuts.

With President Barack ObamaBarack Hussein ObamaKrystal Ball tears into 'Never Trump' Republicans Sanders campaign announces it contacted over 1 million Iowa voters Iowa Steak Fry to draw record crowds for Democrats MORE and the White House going into campaign mode for healthcare and opponents intensifying their efforts to discredit the Democrats’ plans, August will be a pivotal time for lawmakers to do their part.

To prepare, Senate Democrats are staging gatherings all week. On Tuesday, Obama hosted the entire caucus at the White House for lunch. David Axelrod, Obama’s communications guru, will talk messaging with Senate Democrats Thursday.

Also on Thursday, the six senators trying to devise a bipartisan bill in the Finance Committee – Baucus, Conrad, committee ranking member Chuck GrassleyCharles (Chuck) Ernest GrassleyOvernight Health Care — Presented by Partnership for America's Health Care Future — Pelosi unveils signature plan to lower drug prices | Trump says it's 'great to see' plan | Progressives pushing for changes Trump: 'Great to see' Pelosi plan to lower drug prices Pelosi unveils signature plan to lower drug prices MORE (R-Iowa), Democratic Sen. Jeff Bingaman (N.M.) and Republican Sens. Mike EnziMichael (Mike) Bradley EnziHere are the lawmakers who aren't seeking reelection in 2020 Liz Cheney and Rand Paul extend war of words The Hill's Morning Report - 2020 Democrats set for Lone Star showdown MORE (Wyo.) and Olympia Snowe (Maine) -- will visit the White House to meet with Obama.

Democrats met for two hours Wednesday to hear a presentations on healthcare from Majority Leader Harry ReidHarry Mason ReidBarr fails to persuade Cruz on expanded background checks Harry Reid warns Trump 'can be reelected' Homeland Security Republican accuses Navy of withholding UFO info MORE (D-Nev.), Baucus, Sen. Chris Dodd (D-Conn.), who presided over the Health, Education, Labor and Pensions (HELP) Committee’s passage of its portion of the healthcare reform bill, and White House Office of Health Reform Director Nancy-Ann DeParle.

Although the final Senate bill will include new taxes– worth as much as hundreds of billions of dollars – those taxes will not target individuals.

“What we’re working on the in Finance Committee, we don’t have tax increases,” said Conrad, one of the bipartisan negotiators.

“We’re not going to be talking about any broad tax increase,” Dodd said. Dodd also said the Senate has completely abandoned a proposal to cap the currently unlimited tax exclusion on workplace health benefits, which Obama and labor unions strongly opposed. “What’s not going to happen is a tax increase on benefits,” he said.

The House bill as it currently stands would levy a “surtax” on people earning more than $350,000 a year and raise about $540 billion over 10 years.

Senate Democrats highlighting the lack of individual income tax hikes in their bill will come as a relief to nervous House Democrats who pressured their leadership to at least scale back the new tax in their bill to only affect people earning more than $1 million a year.

But by making an unfavorable comparison of the House bill to theirs, Senate Democrats also are taking aim at the House leaders and liberals who support taxing the wealthy to pay for healthcare.

Instead, the six Finance Committee members negotiating in search of a bipartisan deal are looking at deeper spending cuts and a smaller tax increase – and refusing to look outside the healthcare system to find ways to pay for their bill.

Though no agreement has been reached, the bipartisan working group is eyeing a tax on insurance companies that sell health plans worth more than $25,000 a year. Many economists believe such “Cadillac” plans with rich benefits encourage people to consume unnecessary and costly medical services, driving up national healthcare spending in the process.

That tax would raise about $90 billion over 10 years but Conrad said health insurers would not be hit with the cost. Conrad said the tax’s purpose is to discourage insurers from selling the plans in the first place.