McCain Adviser: Obama Burdened By Campaign Pledge On Health Care

07/03/2009 05:12 am ET | Updated May 25, 2011

An ongoing lobby effort to get the White House to fund health care reform by ending the tax breaks for employers who provide coverage to their workers is not making any progress within the Obama administration.

The officials who have made the strongest case for this policy change say the reluctance is an unfortunate product of impossible-to-break campaign promises.

At a health care forum at the Brookings Institute on Tuesday, Chair of the Council of Economic Advisors Christina Romer said that Obama remains firmly opposed to ending the employer-based tax benefits despite pleas from Republicans and moderate Democrats.

"What the president has said -- and Doug is infinitely familiar with this -- during the campaign was that he was not in favor of getting rid of the exclusion," said Romer. "So he has certainly had very strong feelings about that. Given where Senator (Max) Baucus is, we are working with him, but certainly there has been no change in our position."

The "Doug," in this instance, was Douglas Holtz-Eakin, the chief economic adviser to John McCain's presidential campaign and a prominent proponent of ending the tax break for employer coverage. He too was at the Brookings forum, and when asked afterwards to assess the state of play on this contentious reform measure, he theorized that Obama's hands were politically tied.

"Look," he said, "governing is harder than campaigning, let's just stipulate. It would have been for anyone. But until they see a bill that makes it worth it to cross that campaign pledge they won't do it."

"When you talk about inefficiencies, part of the inefficiencies are at the consumer level where they have to choose how to spend their money," Holtz-Eakin said. "And if you subsidize something in an open-ended way to the richest Americans you get inefficiency. So it's a good policy to level the playing field. Our policy was not just taxing but also offering a tax credit. We thought of it as using a traditional subsidy to private insurance in a more efficient way. I still think it's a great idea."

So too does Sen. Baucus who, as chairman of the Senate Finance Committee, has great sway over the actual policy components of health care legislation. The Montana Democrat pressed Obama during a meeting on Tuesday to consider ending the tax break as a means of paying for the cost-heavy reform effort. But, as Romer noted, Baucus' pitch was met by opposition.

"We certainly have other ideas that we have put into the budget, as to how we will raise revenue," Romer said.

Suggest a correction