Health-Care Ideas Had Few Allies in Congress

By Christopher Lee
Washington Post Staff Writer
Monday, January 28, 2008

The most favorable reception that President Bush's proposed tax deduction for health insurance got on Capitol Hill last year was the GOP applause that followed the line about it in the State of the Union speech.

It was all downhill from there, with administration officials falling short in their efforts to sell the idea to key lawmakers, failing even to get a committee hearing.

The idea -- replacing a tax break for employer-provided health coverage with a new $15,000 tax deduction for families and $7,500 for individuals, regardless of where they buy insurance -- would have been a major change in both the tax code and the health-care system, difficult to achieve under the best of political circumstances. And last year was hardly that.

Congressional Democrats, newly in control and encouraged by the prospect of a Democrat in the White House in 2009, were not eager to compromise with a Republican president on a signature Democratic issue.

Rep. Pete Stark (D-Calif.), chairman of the House Ways and Means subcommittee on health, and Rep. Charles B. Rangel (D-N.Y.), the committee chairman, met with Treasury Secretary Henry M. Paulson Jr. and White House National Economic Council Director Al Hubbard about the proposal on the day of the State of the Union address.

"We never heard from them again," Stark said. "I just don't think it ever got any serious consideration on either side of the aisle."

The White House suffered from a lack of working relationships with Democrats, especially in the House, congressional aides said. Even when Bush officials found a willing partner, as they did in Sen. Ron Wyden (D-Ore.), they showed little flexibility.

"They weren't willing to accept a 'meet halfway' kind of approach," Wyden said.

Bush even alienated natural Republican allies such as Sen. Charles E. Grassley (Iowa) by linking the tax proposal to an extension of the State Children's Health Insurance Program.

Sources familiar with the White House thinking say officials never expected the proposal to make much progress. Rather, the president was hoping to lay down a "marker" of what a GOP approach to the uninsured would look like.

A senior Senate GOP aide said Bush's idea never had a chance. "If there was any kind of failure here, it was really a failure to recognize that while it was a great contribution to the debate . . . an idea of that magnitude was going to need a lot of work," the aide said. "It couldn't be put together in a few weeks, and it wasn't going to be politically viable last year in any sort of meaningful way."

Staff writer Michael Abramowitz contributed to this report.

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