First up is the financing issue,
Funding: This may be the stickiest difference between the two bills. The House version raises a substantial chunk of the needed revenue by imposing a 5.4 percent surtax on incomes over $500,000, or $1 million for couples. Meanwhile, the Senate bill raises revenue through an excise tax on "Cadillac plans." Many wonks believe the tax will put downward pressure on spending by making these expensive plans less appealing, but there's still concern that the tax could hit many middle-class people. The conference could just split the difference, implementing versions of both taxes.
As I've said for some time when folks like Ezra Klein and Matt Yglesias have been upset with union opposition to the Senate funding scheme, if you spread the pain around you probably lessen the rhetoric emanating from labor. Funding healthcare reform solely on the backs of middle-class Americans is bad policy and bad politics. Spreading the funding around is certainly more palatable.
1 comment:
Funding is one area where a split the difference compromise between the House and the Senate, as opposed to a my way or the highway approach that favors the Senate bill, seems possible and even likely.
While the cost of the bill has been a political hot potato, rheotric in opposition to the bills has not focused much on the sources of those revenues, and the positions of the key players on revenue sources are not deeply entrenched.
For example, the House high income taxpayer rate increases could be cut in half, in return for a big cut in the Senate revenue raisers (such as the excise tax on expensive health insurance plans, perhaps by make it a revenue raising as opposed to a punitive tax by reducing the tax rate).
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