Senate Republicans Criticize Taxes in Health-Care Bill

By Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Friday, October 2, 2009

As it drew close Thursday to finishing work on a health-care overhaul, a key Senate panel engaged in a spirited debate about whether the measure is "riddled" with tax increases that would violate President Obama's campaign pledge not to raise taxes on middle-class Americans.

Republicans cited that vow in attempting to strip billions of dollars in fees and taxes from the package. "There are going to be a lot of people whose taxes are increased by this legislation," said Sen. Mike Crapo (Idaho), if it violates "the promise and the pledge the president has made to the American people."

Democrats on the Senate Finance Committee narrowly defeated Crapo's amendment and a similar proposal by Sen. John Ensign (R-Nev.), but they lost the votes of two moderates on the panel, Sens. Olympia J. Snowe (R-Maine) and Blanche Lincoln (D-Ark.), suggesting that the tax issue could prove problematic as the debate shifts to the full House and Senate in the coming weeks.

Democrats struggled to respond to the GOP charge, saying that the fees and taxes are necessary to pay for universal health coverage.

"The effect of your amendment is not what you're saying. The effect is no more health coverage," said Chairman Max Baucus (D-Mont.), who also told Crapo that the bill before the committee "provides for a $40 billion net tax cut."

"I don't believe when [Obama] said, 'We won't raise your taxes,' that that was a net deal," Crapo replied.

White House press secretary Robert Gibbs dismissed the GOP approach as "a silly argument that we can easily dispense with" and said that a fine for not buying insurance is more like a speeding ticket than a tax. But when pressed by a reporter about the excise taxes explicitly mentioned in the legislation, Gibbs replied: "It's pretty clear."

In August 2008, Obama said in a speech to the Urban League, "If you're a family making less than $250,000 a year, my plan won't raise your taxes one penny -- not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes.

The package the Finance Committee is considering would require people, beginning in 2013, to purchase insurance or face an excise tax ranging up to $1,900 a year. It also would make it harder for taxpayers younger than 65 to deduct catastrophic medical expenses from their income taxes. Both provisions would fall heavily on the very taxpayers whom Obama has vowed to protect, according to nonpartisan congressional analysts.

The health legislation "is riddled with tax increases that would affect Americans making far less than this amount," Sen. Orrin G. Hatch (R-Utah) said Thursday. "You can't do what you want to do without increasing taxes on everybody. But that isn't what the president said we're going to do."

By a vote of 12 to 11, the Finance Committee defeated Crapo's proposal to exempt middle-class taxpayers from fees and taxes in the bill. Baucus called it "a killer amendment," and said that it would have starved the legislation of needed revenue. Ensign's amendment, which targeted only the penalty for not buying insurance, failed with the same vote total.

The Finance Committee is the last of five congressional panels hoping to deliver a health-care reform package to Obama's desk by the end of the year, and its bill has been the most highly anticipated on Capitol Hill. After two grueling weeks of work, Baucus aimed to have the committee finish amending the legislation late Thursday. But he said he will delay a final vote on the measure until early next week to give congressional budget analysts time to confirm that it meets the twin goals of significantly expanding coverage to the uninsured and not increasing the federal budget deficit.

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