Tax News

CCH (cch.taxgroup.com) reports:

  President Obama on June 10 met with key members of the Senate Finance Committee and the Health, Education, Labor and Pensions (HELP) Committee to discuss health care reform legislation with the goal of passing a final bill that has bipartisan support. Following the White House meeting, Sen. Christopher Dodd, D-Conn., a leading member of the HELP Committee, said both committees will work in the coming days to "develop a single product."

  Senate Finance Committee Chairman Max Baucus, D-Mont., stressed that "we are all flexible," including on an implementation date of any possible health care financing options. Baucus said the federal lawmakers are taking a "practical and pragmatic" approach to crafting legislation.

  According to Sen. Charles E. Grassley, R-Iowa, ranking member of the tax-writing panel, the president indicated he is flexible about the components in a health care measure. However, Grassley expressed misgivings about calling support for a final measure "bipartisan" if it only draws the approval of a handful of Republicans.

  Sen. Michael Enzi, R-Wyo., ranking member of the HELP committee, said he is concerned about the time line for finishing a bill and how it will be paid for. Baucus and Dodd hope to have a final bill sent to the president by October. White House Press Secretary Robert Gibbs said the president is "anxious to let the legislative process work" and pleased that the committees drafting legislation appear to be making progress.

  Taxing employer-provided health care benefits remains a viable option for both Obama and Congress, although Baucus has said he would cap the amount that would be subject to the tax. He also told reporters on June 9 that he is looking at possibly using either a 50-50 or 60-40 split between taxes and savings to pay for the bill. Baucus said he would mitigate the costs to beneficiaries through a grandfather clause that would take effect several years down the road and at an income level that would not impact a significant number of people. The senior tax writer plans to release draft legislation toward the end of the week beginning on June 15 and hold a markup the following week.

  In a related matter, HELP Committee Chairman Edward M. Kennedy, D-Mass., released that committee's draft version of health care reform legislation, the "Affordable Health Choices Act." The measure provides health care tax credits for low and moderate income individuals to purchase health insurance, credits for small businesses that make contributions to employee health insurance, and credits for long term care health insurance. The HELP Committee is slated to begin a markup on June 16.

  By Jeff Carlson and Paula Cruickshank, CCH News Staff

Tax-Related Title of Affordable Health Choices Act