White House frames health care as economic problem
WASHINGTON — A Senate chairman who has a major role in writing health care legislation said Tuesday he hopes to convince President Barack Obama that taxing some employer-provided benefits will help control escalating costs.
Senate Finance Committee Chairman Max Baucus, D-Mont., may face a hard sell. During his campaign for president, Obama opposed taxing health benefits provided by employers.
“I know that’s an issue we have to work out with the president, but I think it’s an issue we will work out,” said Baucus, who is among several Senate Democrats scheduled to meet with Obama Tuesday afternoon to discuss health care costs.
Baucus said the tax-free benefit packages Americans now enjoy are a big factor in the high costs of the country’s health care system, because they provide workers free or low-cost access to too many health care services.
During the presidential campaign, Republican nominee John McCain’s health plan would have taxed health benefits. Obama made that a major issue in criticizing his rival.
But as Baucus and others have warmed to the idea because it could raise significant money to pay for health care, the White House has not ruled it out. By not treating health benefits as taxable wages, the forgone revenue to the federal government amounts to about $250 billion a year.
“It was not in our plan, it was not in our budget,” White House budget director Peter Orszag said Tuesday. “We are saying we want the legislative process to play out, and that’s all we have to say on that right now.”
Baucus and Orszag spoke at a White House event where Obama advisers released a new economic report that links fixing the economy with overhauling the costly U.S. health care system.
Obama is pushing Congress to enact sweeping health legislation this year to hold down costs and provide health coverage for 50 million uninsured Americans.
At the start of a White House meeting with senators, Obama warned that the window for overhaul legislation will close when Congress leaves for its August recess, part of his push to get lawmakers to move on a bill in the next two months. Majority Democrats in the House and the Senate want to bring the legislation to the floor by August.
White House officials argue that overhauling the health care system is key to turning around the economy.
The report by the White House Council of Economic Advisers says that health care costs — now about 18 percent of the gross domestic product — will rise to 34 percent in 30 years if left unchecked, wreaking havoc on the federal deficit, businesses and working Americans.
It says that for a typical family of four, income 10 years from now would be approximately $2,600 higher in 2009 dollars if a health care overhaul is enacted than it would be without it.
“The key contribution of the report is to show that if we do health reform well the benefits to the economy would be enormous,” said Christina Romer, chairwoman of the Council of Economic Advisers.
Critics dismissed the report.
“No report or headline can take the place of a comprehensive plan — and that is what we have yet to see from the White House,” said Rep. Roy Blunt, R-Mo.
Obama and his advisers have consistently sought to link health care and the economy, and they’ve begun turning up the volume as Congress returns from a weeklong recess.
Two Senate committees are crafting legislation: the Health, Education, Labor and Pensions Committee led by Sen. Edward M. Kennedy, D-Mass., and the Senate Finance Committee, chaired by Baucus.
The Democrats on Kennedy’s committee were meeting Tuesday for a first look at an outline of Kennedy’s plans, though Kennedy, who has been diagnosed with brain cancer, will not be there, his office said.
Majority Democrats in the House and the Senate want to bring the legislation to the floor by August.
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