From Chelsea, which may be of interest to you:
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The New York Times
May 7, 2009
Rangel Bars Any Taxes on Workers? Health Care
By ROBERT PEAR
WASHINGTON ? The top tax-writer in the House of Representatives said
Wednesday that there was ?no way? he would support taxing
employer-provided health benefits, Americans? leading source of
coverage.
The comment came from Representative Charles B. Rangel, chairman of
the House Ways and Means Committee, after a committee hearing with the
new secretary of health and human services, Kathleen Sebelius.
Mr. Rangel?s remark was the clearest indication yet of the
difficulties Democrats may have in raising money to fulfill President
Obama?s campaign promise of offering health insurance to all Americans.
The chairman of the Senate Finance Committee, Max Baucus, Democrat of
Montana, has expressed interest in the idea of limiting the tax break
for employee health benefits. Some politicians of both parties, as
well as many economists, say the tax break is inequitable because its
benefits go disproportionately to people with higher incomes.
?It?s too regressive,? Mr. Baucus said in March. ?It just skews the
system.?
Mr. Rangel, a New York Democrat, did not suggest any specific way to
finance coverage for more than 45 million people now uninsured. In
response to a question, he said, ?I would not want to get involved in
cutting hospital payments.?
Hospitals are a mainstay of the economy in the New York metropolitan
area, and for years Mr. Rangel has been attentive to the needs of
teaching hospitals and those that care for large numbers of poor people.
Under current law, employers can take tax deductions for their
contributions to the cost of employee health insurance, and the
benefits are not counted as taxable income to workers.
Critics say that by subsidizing the purchase of insurance, the tax
break insulates people from the cost of care, increases the demand for
it and leads to more health spending.
In the presidential campaign, Barack Obama assailed the Republican
nominee, Senator John McCain of Arizona, for supporting the taxation
of employee health benefits. But in March, some of Mr. Obama?s
economic advisers indicated that he might be open to the idea.
Since then, labor unions have stepped up their criticism of it, saying
it would impose a tax increase on working families and undermine
employer-sponsored health coverage. Testifying on Wednesday before Mr.
Rangel?s committee, Ms. Sebelius affirmed the president?s opposition
to the idea but did not completely shut the door on it.
Eliminating the tax break ?has a huge potential of destabilizing the
private market and leaving more Americans uninsured,? Ms. Sebelius
said. Still, she said, Mr. Obama is open to ?all serious discussions?
of it and other ideas with members of Congress.
On another volatile issue concerning the health care overhaul, Ms.
Sebelius defended Mr. Obama?s proposal to create a
government-sponsored insurance program, which would compete with
private insurers. Republicans and insurance companies strenuously
oppose the concept.
Representative Wally Herger, Republican of California, asked if a
government-run health plan would force private insurers out of
business, causing people to lose coverage they already had.
Ms. Sebelius, former Kansas insurance commissioner, said it all
depended on how the government program was configured. She said Mr.
Obama did not support ?dismantling the private market? and relying
entirely on a public program. Indeed, she said, ?the president and I
want to stabilize the private insurance market.?
In more than two dozen states, she said, state employees have a choice
between traditional private health insurance products and a public
plan. Such competition does not destroy the marketplace but simply
gives people an additional choice, she said.
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