Here's a very important article in the New York Times that needs to be read to understand why the excise tax is a hugely unpopular element of the Senate health care bill from the perspective of lawmakers in the House.
"I do not believe there will be an excise tax enacted," said Larry Cohen, president of the Communications Workers of America. "It appears that the administration and Congress will be taking a much more modest approach to health care reform. The cost and value of such reform would not justify using an excise tax."
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Moreover, House Democrats said, the tax is bad politics because it would set the middle class against the poor — people struggling to keep health insurance against people struggling to get it.
The excise tax was hugely unpopular in the election in Massachusetts, as you can read from the New York Times article.
About 49% of union workers voted for Brown in comparison to the 46% of votes Coakley received from union households. The usually reliable blue-collar union votes weren't there because they felt that the Democratic leadership had abandoned them by taxing their health insurance plans. We may take issue with how union households perceived the excise tax, but it wasn't just them that viewed it in that way--it was across a whole spectrum of voters.
Lawmakers like Rep. Markey and Rep. Neal heard directly from their voters about the excise tax:
At meetings of the House Democratic Caucus, lawmakers from Massachusetts, including Representatives Edward J. Markey and Richard E. Neal, said they were struck by the vehemence of opposition to the tax in their districts.
Mr. Markey recalled that a constituent had poked him in the chest and said: "Eddie, I’ve voted for you my whole life. But if you think you will tax my benefits and give the money to Ben Nelson in Nebraska, you’re crazy." Senator Nelson, Democrat of Nebraska, voted for the bill after it was rewritten to provide extra Medicaid money to his state.
Speaker Pelosi, in that same article, mentions that there is very little support for the excise tax in her Democratic caucus. She's gotten an earful from her caucus on this issue, and Senator Conrad doesn't know if the excise tax will remain unchanged.
Hopefully the excise tax will be addressed in the reconciliation package, either modified or even better, completely excised. This will help improve the public perception of the Senate health bill. Now, if the Nebraska kickback issue is also removed along with the excise tax, it'll definitely improve the Senate bill and make it easier to pass in the House.
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Speaker Pelosi has a very difficult vote margin to navigate, which is why she can't afford to have the excise tax or the kickback deal remain in the final bill. Here's the article from Philip Klein outlining why Senator Bayh's retirement affects the votes in the House:
In the broader sense, news of a strong moderate Democrat feeling the need to step aside could make other red state Democrats even more nervous than they already are about reelection and thus uneasy about casting a tough vote. But more specifically, the most obvious Democrats to seek Bayh's seat are Indiana's Democratic congressmen: Reps. Brad Ellsworth, Baron Hill and Joe Donnelly. All of them have already voted for the original version of the House health care bill, and it's unlikely that any of them would want to cast another vote for the bill during a difficult race for the Senate.
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Keep in mind that the House health care bill passed by a slim 220 to 215 margin the first time around, with 39 Democrats voting against it. Since then, the one Republican who voted for it -- Joseph Cao -- has indicated that he would not support the bill a second time around given the weaker language on abortion. Florida Rep. Robert Wexler already retired prematurely. Factor in Jack Murtha's death, and Pelosi is down to 217 votes. If Hill, Ellsworth or Donnelly defect while running for Senate, she's down to 216 and the route to passage is even further in doubt.
That's why Speaker Pelosi has a very difficult margin to navigate in the House, which means that in order for the Senate bill to pass, the excise tax and the Nebraska kickback deal have to be done away with in order to get the votes of those in the House. The Senate bill won't pass otherwise with these two provisions intact. Help us CALL on February 24th and February 25th to tell Congress to finish the job on health reform!
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