Health care month is here. President Obama wants the House and the Senate to both pass health care reform bills before the August recess. It will be very difficult to get his done, but the House made progress as the Democrats released their proposal yesterday.
Liberal commentator Ezra Klein likes the proposal.
The Process Is the Message: Three separate committees — Energy and Commerce, Ways and Means, and Education and Labor — have come together on one bill. This is an incredible achievement. If you read histories of the 1994 health-care reform fight, all of them have a substantial section on the committee crack-up: One passed a version of single-payer, another a variant of Bill Clinton’s reform, another went further to the right. There was no unity.
There is unity now. And if it holds — if the House of Representatives manages to pass this plan with a substantial majority of enthusiastic Democrats — that significantly strengthens the House’s hand in its eventual negotiations with the more fractious Senate. That’s a big “if.” But so too would have been the idea that three separate committees could cooperate on a bill of this size.
The House proposal includes a tax surtax to help pay for the bill.
If I’m reading this correctly, about half is paid for through $500 billion or so in savings from Medicare and Medicaid. The rest comes from a surtax on the richest 1.5 percent. The surtax is 1 percent on income between $350,000 and $500,000; 1.5 percent on income between $500,000 and $1,000,000; and 5.4 percent in income above $1,000,000. The surtax can vary if the bill is less or more expensive than initially anticipated. There are also revenue expectations from the employer and individual mandates, though they’re relatively modest ($200 billion over 10 years is one estimate I’ve heard).
I’m not a big fan of this part of the proposal, though it’s important to get something on the table. Obama’s proposal to limit charity deductions for high-income taxpayers made more sense. A small surtax in the neighborhood 1% would be fine, but going up to 5% seems like a bad idea.
I would much rather see a tax on soft drinks. Liberals don’t like it because it’s regressive, but as we’ve seen with cigarette taxes an increase in price does affect consumption, and the American people are getting way too fat. That alone contributes to our soaring health care costs, so a tax on sugary drinks, just like taxes on alcohol and cigarettes, makes sense when we’re considering ways to fund health care reform.
Perhaps a compromise can be struck where we include a much more modest surtax along with a soda tax.