This is frankly rather amazing in that totally-saw-it-coming way. We’ve been waiting for days to see the CBO score to see how much the final health care bill will cost, with the goals being to both reduce the deficit and to fit under the arbitrary $900 billion cap posed by Obama.
It seems they’ve been unable to do so, as Ben Smith now reports that AFL-CIO President Richard Trumka is on his way to the White House to discuss plans by Democrats to actually raise the tax on middle class health care plans in order to pay for the bill.
AFL-CIO President Richard Trumka is headed into a meeting with President Obama this afternoon after the White House and Congressional leaders have begun to discuss a higher-than-expected excise tax on some health care plans, in order to maintain their claim that health care legislation will reduce the deficit, a source involved in health care talks said.
Any unexpected change to the health care plan could endanger support for the bill from labor, which agreed to back it after reductions to the planned excise tax. Proposed new changes, I’m told, concern cuts to the rate at which increases to the tax exemption cap are indexed.
They already stole at least $10 billion in the student loan reform bill from community colleges to pay for this PhRMA bailout. Jon Walker notes that adding a public option would save at least $25 billion in the bill. The House paid for its bill by taxing the richest Americans.
And yet, faced will trying to contain the costs of this bill, Democrats’ first instinct is to raise taxes on the middle class even further. Brilliant!
Frankly, this is what unions get for accepting the excise tax in the first place. They agreed to the health care tax – a Reagan idea – and so of course they should expect it to be raised. I just don’t think they thought it’d be raised before they even pass the bill.
UPDATE: Sam Stein has some additional details on what kind of changes we’re looking at:
Under the president’s plan, those families with health care plans over $27,500 and individuals with plans over $10,200 would be taxed starting in 2018. That tax would be indexed to the Consumer Price Index plus one percent, which would provide some additional comfort to those with high-end policies — specifically for labor workers who had bargained for these plans.
The plan, however, got tripped up after congressional negotiators received poorer-than-expected feedback from the Congressional Budget Office, a senior Democratic hill aide confirmed. And as a compromise, on Wednesday, they began discussing indexing the tax simply to the Consumer Price Index.
“What the White House is putting out is not any big major changes to the deal,” said a source briefed on the matter. “What they are talking about is the way things are right now the tax was indexed to CPI+1 and they want to change it to CPI general inflation.”
Trumka is still at the White House, and according to Sam Stein, will meet with the AFL-CIO Executive Committee tomorrow to discuss the changes.