Obama Open to Health Care Tax

WASHINGTON (AP) - President Barack Obama is leaving the door
open to taxing health care benefits, something he campaigned hard
against while running for president.

Senate Finance Committee Chairman Max Baucus, D-Mont., raised
the issue with Obama during a private meeting Tuesday with the
president and other Democratic senators and later reported the
president's response: "It's on the table. It's an option."

The federal government would reap about $250 billion a year if
it treated health care benefits given to employees like wages and
taxed them.

Baucus and others are eyeing that money as they search for ways
to pay for a costly health care overhaul that would extend coverage
to 50 million Americans who are now uninsured. That could cost some
$1.5 trillion over 10 years.

The president adamantly opposed health benefit taxes during the
campaign, arguing they would undermine job-based coverage. But he's
now indicating openness to that suggestion from Congress, even if
he criticized Republican presidential rival John McCain for
proposing a sweeping version of the same basic idea.

Obama has made some suggestions of his own for paying for a
health care overhaul, including cuts to Medicare and limiting tax
deductions wealthy people can take, but they've run into opposition
from Congress. And, they only add up to about $630 billion over 10
years.

"The president made it clear during the campaign that he has
serious concerns about taxing health care benefits," White House
spokesman Reid Cherlin said in a statement about Tuesday's meeting.

"He stated again his belief that health reform can't wait
another year, and that while all options should be considered,
those options should include the revenue proposals that he included
in his budget," Cherlin said. "He made it very clear that he
prefers the approach he has already outlined."

Some experts think limiting the tax exclusion for health
benefits is the only way to get the necessary money to pay for a
sweeping health care overhaul. But there's opposition from
organized labor and from many Democrats, including House Ways and
Means Chairman Charles Rangel, D-N.Y., who said recently there was
"no way" he would support the approach.

Baucus wants to look at limiting - but not entirely eliminating
- the tax-free status of employer-provided health benefits. Obama
is leaving the details of crafting a health care bill to Congress
and used Tuesday's meeting to urge senators to swift action.

"This window between now and the August recess I think is going
to be the make-or-break period," Obama said before the meeting was
closed to reporters. "This is the time where we've got to get this
running."


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