Tax News

CCH (cch.taxgroup.com) reports:

  House Democratic leaders huddled on July 24 to discuss the possibility of bypassing the House Energy and Commerce Committee and taking its massive health reform bill directly to the floor for a vote. The Committee has delayed a markup of its portion of the bill as conservative Democrats known as Blue Dogs have threatened to withhold approval of the measure until they are satisfied that the costs are realistic and manageable. House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., showing frustration with the inability to move the bill, made the threat after a contentious meeting with members of his panel.

  House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., told CCH that he was meeting with House Speaker Nancy Pelosi, D-Calif., to discuss holding the direct floor vote. Rangel also affirmed that the bill would be changed before the vote, but declined to give any details. There had been earlier discussions of raising the threshold for applying a surtax on wealthier Americans as a means to pay for health reform changes, but at the time Rangel dismissed the idea.

  The pressure for the House to act before leaving for its summer recess on July 31 is growing, and the impasse in the House Energy and Commerce Committee may be providing the incentive to move forward. Pelosi on July 23 played down the possibility of bypassing the Committee. "I don't want to do that, "she told reporters following a meeting with House Democratic leaders, but by the next day she was holding meetings to discuss the option.

White House

  President Obama met with Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., at the White House on July 24. Both Reid and Baucus have said they believe the Finance Committee will be able to complete its mark up of a health care bill before the August recess. White House Press Secretary Robert Gibbs said the White House meeting addressed process and substantive issues but he did not know if they included proposals to tax health care benefits.

  The president at a health care town hall meeting in Shaker Heights, Ohio, on July 23 (TAXDAY, 2009/07/24, W.1) expressed interest in a few of the health care financing options under consideration by the tax-writing panel. Obama said he is willing to consider changes in the tax exclusion on employer-provided benefits and penalizing health insurers that offer high-end health insurance plans, but he does not support eliminating the tax break entirely. He noted that he had not signed off on any particular proposal to change the exclusion.

  By Jeff Carlson and Paula Cruickshank, CCH News Staff

White House Press Release: CEA Releases Report on the Economic Effects of Health Care Reform on Small Businesses and Their Employees

Executive Office of the President Council of Economic Advisers Report: The Economic Effects of Health Care Reform on Small Businesses and Their Employees