Tax News

CCH (cch.taxgroup.com) reports:

  Lawmakers on the House Ways and Means Committee traded barbs on June 24 about the nature and effect of comprehensive health care reform legislation now under consideration by Congress. At a committee hearing on the health care draft legislation proposed by Democratic leaders, GOP lawmakers attempted to characterize the public insurance option included in the health care reform plan as a wholesale move toward socialized medicine.

  Ways and Means ranking member Dave Camp, R-Mich., said an independent analysis of the Democratic plan shows that a public option would cost $3.5 trillion. Committee Chairman Charles B. Rangel, D-N.Y., remarked that Congress would use estimates from the Congressional Budget Office (CBO) when determining the cost and method of paying for health care reform. Democrats maintained that offering Americans a public option for health care would provide competition for private insurers and lower prices for patients. The health care discussion draft legislation was written by Democrats on the House Ways and Means, Energy and Commerce and Education and Labor Committees, which held a third day of hearings on the proposal on June 24.

  Randel K. Johnson, senior vice president of Labor, Immigration, & Employee Benefits for the U.S. Chamber of Commerce, told lawmakers that the only way health care reform can appear to be budget-neutral is for Congress to impose massive new taxes. He said creating a European-style value-added tax would harm the economy and hurt those with the lowest incomes. Other regressive ideas under consideration by Congress include taxing sugary drinks and alcohol, and modifying flexible spending accounts and health savings accounts.

HELP Committee Seeks Budget Score

  The Senate Health, Education, Labor, and Pensions (HELP) Committee on June 24 asked the CBO to score the budget impact of two competing proposals requiring employers to help pay for employee private health insurance coverage if they are not offered coverage in the workplace. The so-called "pay or play "mandate would exempt small businesses, according to Sen. Christopher Dodd, D-Conn., but the committee has yet to determine who would qualify as a small business. The CBO has also been asked to determine the cost of a proposal requiring businesses with large numbers of employees covered under Medicaid to pay additional taxes.

  The committee plans to wrap up work on the less-controversial portions of its health care reform bill by the end of the week of June 22 and resume consideration of more difficult sections, including public-backed insurance programs and how to pay for the overhaul, when Congress returns from its Fourth of July recess during the week beginning July 6.

  By Jeff Carlson and Stephen K. Cooper, CCH News Staff

Ways and Means Press Release: Ways and Means Focuses on Health Reform Proposals to Reduce Costs, Protect Current Coverage and Preserve Choice for Patients to Ensure Affordable Care