After a marathon negotiation session yesterday between Obama, administration officials, and Congressional leaders, there seems to be some narrowing of differences, enough that one of those leaders, Charlie Rangel, thinks they can have the bill to CBO on Saturday.
The key issues seem to be narrowed down to the House insistence on a national exchange framework and changes to the financing structure--the excise tax in particular.
The Senate and the White House have proposed to pay for the legislation by taxing expensive insurance plans--a policy that generates considerable savings, but draws the ire of progressives and organized labor because it would ensnare the benefits of middle class workers. Yesterday, one of the architects of the House bill, who opposes the so-called "Cadillac insurance tax," says it can be modified to lessen the impact on workers and the middle class--and that could seal the deal.
"It would be a way to lessen impact of the so-called excise tax," Rep. Robert Andrews (D-NJ) said yesterday. "I think we could build a consensus around that idea--a majority around that idea."
Separately, Democrats have to figure out whether new insurance exchanges will be organized and regulated at the federal or state level. House Democrats want insurance markets to meet strict federal standards, while the Senate leaves it up to the states. Obama has reportedly signaled in private that he prefers the House method, but according to House members and aides, the compromise language on the table isn't good enough--yet.
"I've seen language," Andrews said. But it's not where he wants it to be, and House aides agree that leadership wants to see more deference given to the House on this issues.
That's key movement on the excise tax--hitting truly gold-plated plans should have been the object from the beginning, not this blunt tool that will effect not only union members but older people or people who are "geographically disadvantaged" and live where healthcare costs, and thus premiums, are just much higher. That tax should be offset by modifying the Medicare payroll tax that was already in the Senate bill, and it looks like that's what negotiators are considering.
Rangel said Tuesday night that among the measures lawmakers are considering is the tax on unearned income. Rangel, whose panel writes tax law, said the idea of expanding the Medicare payroll tax to unearned income was preferable to the Obama- backed proposal to tax health benefits.
He said applying the Medicare tax to unearned income would be “comparable to the surtax” that House Democrats want to impose on the highest-income people and which has drawn opposition in the Senate. The House bill, approved on Nov. 7, calls for a 5.4 percent income surtax on singles who earn more than $500,000 and couples who make more than $1 million. An expanded Medicare tax “covers the same people,” Rangel said.
The tax is currently 2.9 percent on salaries, split evenly between employers and workers. The Senate proposal would add 0.9 percentage points to the individual portion of the tax for those who earn more than $200,000 and married couples who earn more than $250,000.
On the regulation front, the national as opposed to state-based plans is key for House and apparently for Obama as well, as is the ending the anti-trust exemption.
A Democratic leadership aide said this week Obama also favors a House plan to set up a nationwide exchange on which people could buy low-cost insurance. And the president backs the repeal of the insurance industry’s antitrust exemption, said the House aide, who spoke on condition of anonymity.
Dan Pfeiffer, Obama’s communications director, said those were “at best educated guesses.” Pfeiffer said in a statement that work on merging the House and Senate bills is continuing and “there simply isn’t anything final to discuss yet.”
Notice anything missing here? The big ol' elephant in the room that no one seems to want to talk about? That's right, abortion, and the efforts of Stupak and Nelson to make sure that insurance companies just don't cover it anymore. This feels eerily like a repeat of the "strategy" that we've seen all year--pretend like it's not there and maybe it will go away. Senior House aides say that those negotiations are continuing parallel to others, but the cone of silence on the issue is troubling.
