Washington President Barack Obama is leaving the door open to taxing health care benefits, something he campaigned hard against while running for president, according to senators who met with him Tuesday.
Senate Finance Committee Chairman Max Baucus, D-Mont., raised the issue with Obama during a private meeting with the president and other Democratic senators and later reported the president’s position: “It’s on the table. It’s an option.”
The White House said later that Obama did not want to go that route. “The president made it clear during the campaign that he has serious concerns about taxing health care benefits,” Obama spokesman Reid Cherlin said in a statement.
The federal government would reap about $250 billion a year if it treated health care benefits given to employees like wages and taxed them.
Baucus and others are eyeing that money as they search for ways to pay for a costly health care overhaul that would extend coverage to 50 million Americans who are now uninsured. That could cost some $1.5 trillion over 10 years.
The president adamantly opposed health benefit taxes during the campaign, arguing they would undermine job-based coverage, and he criticized Republican presidential rival John McCain for proposing a sweeping version of the same basic idea. But since taking office, he and members of his administration have indicated openness to almost all suggestions from Congress on health care, including taxing benefits.
Obama has made some suggestions of his own for paying for a health care overhaul, including cuts to Medicare and limiting tax deductions wealthy people can take, but they’ve run into opposition from Congress. And they only add up to about $630 billion over 10 years.
Some experts think limiting the tax exclusion for health benefits is the only way to get the necessary money to pay for a sweeping health care overhaul. But there’s opposition from organized labor and from many Democrats, including House Ways and Means Chairman Charles Rangel, D-N.Y., who said recently there was “no way” he would support the approach.
Obama is leaving the details of crafting a health care bill to Congress and used Tuesday’s meeting to urge senators to swift action.