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Edited on Fri Oct-23-09 06:33 AM by BzaDem
The Senate (and most healthcare economists) say you have to fund healthcare reform by reducing the employer healthcare tax excemption for the upper part of high-cost healthplans, because those costs are the only costs that grow as quickly as healthcare spending. They will also discourage employers from getting extremely lavish health benefits, and therefore incentivize insurers to lower their prices. The problem with this is that unions believe that their members will be more affected due to years of great negotiated health benefits.
The House instead wants to raise the income tax on people making more than 350,000/year. This is more politically popular. But the problem with this is that the increase in taxes doesn't grow nearly as quickly as the cost of the bill. In the second decade and beyond, it would blow a large hole in the deficit.
According to O'Donnell, there are essentially no votes in the Senate for the House tax and there are over 150 Democratic no-votes in the House for the Senate's tax.
(As far as I can tell, something like the Senate's plan will need to carry the day if this is going to pass. The CBO won't score a bill as deficit neutral if the spending grows 3 times as quickly as the taxes to pay for it, which is the case in the House. Whereas in the Senate, the spending grows equally as fast as the taxes to pay for it. I just don't know if the House would vote for it.)
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