Obama Budget: Billions On Health Care For Reform This Year
President Barack Obama's first budget will call for tens of billions of dollars to be devoted to health care, in an effort to help ensure that major reform of the current system is considered within the year.
A senior administration official tells the Huffington Post that the president will provide "many billions of dollars" over a "ten-year period" to fund health care in the upcoming budget, to be introduced Thursday.
As confirmed by the official, the money will provide a pool of resources to help shore up the health care system on the benefits and coverage side. With that in place, the administration is hoping that Congress will push through a legislative overhaul for the health care system within a year.
"On the benefits side and the coverage side we are going to have principles, but part of what we are trying to do is set up a legislative process where we can actually get this done," said the official. "So don't expect full details on the benefits side, what we are trying to do instead is provide some funding that could then fund a variety of different ways that go about covering the coverage/benefits side. We are focused on getting health care done this year and the budget is going to facilitate that."
As for the source of the revenue stream, the Obama administration will use an "innovative" approach (see: cuts) to budgeting on items such as Medicare Advantage and Medicare and Medicaid spending. It may also tax large employers who have failed to provide coverage to their employees. The rest of the funds, as the New Republic's John Cohn writes, will have to be manufactured by Congress.
The trickier task will likely be reforming the system itself. The Obama administration is committed to not making the same mistakes as the Clinton task force in '93, which means allowing Congress to be a co-equal branch in the process. The president won't lay down a full plan alongside the budget, allowing members to craft something more amenable to the legislative branch. This could prove tricky for a variety of reasons. On the political side, some representatives, notably Rep. James Clyburn, have said a step-by-step approach to reform is preferable to a major overhaul. Others insist just the opposite. On the legislative side, as Ezra Klein points out in the American Prospect, the sticking point seems to be the employer tax exemption, which allows employers who buy health care for their employees to write off the cost while individuals who buy coverage for themselves are taxed.
Congress, indeed, has been slowly working its way towards exactly this conclusion. Ron Wyden's Healthy Americans Act replaced the employer tax exclusion with a health care standard deduction that phases out for families with higher incomes: Individuals making more than $125,000 receive no deduction at all. Max Baucus's white paper doesn't get into specifics, but simply states, "Most economists argue there are problems with the current set of tax incentives for heath care...One option for reform is to cap the amount of health care premiums that can be excluded from employee wages for income and payroll tax purposes."
With these legislative hurdles still in need of jumping, the Obama administration is hoping that the budget provides the launching pad needed for health care reform. Moreover, they're keen on getting the process finalized within a year.
"I think what will happen quickly is that there will be some summit on health care specifically and then we are working legislatively with the relevant committees to try and actually get this thing done, this year," said the administration official.
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First Posted: 02-23-09 09:47 AM | Updated: 03-26-09 05:12 AM