WASHINGTON -- Disagreements have broken out within the Senate Democratic caucus over Majority Leader Harry Reid’s endorsement of a proposed change to last year's landmark health care law, which would impose greater financial burdens on low-income recipients of health insurance subsidies.
According to sources both on and off the Hill, complaints have been made from fellow senators to Reid (Nev.) over his rhetorical support for the House Republicans' approach to repealing the 1099 tax-compliance mandate in President Barack Obama's signature legislation.
Several leading Democratic senators, including Robert Menendez (N.J.) and John Kerry (Mass.), have raised concerns that the pay-for provision in the House bill would add an unfair burden to minority groups as well as low-income and middle-class Americans. Some senators, including Max Baucus (D-Mont.), have told colleagues that their party should remain committed to its own proposal, which took money from un-obligated earmarks to pay for the 1099 fix and already passed the chamber with more than 80 votes.
Referred to as a “true-up,” the House GOP provision would raise the amount of money that those individuals who receive subsidies to purchase health insurance would have to pay should they move up income brackets. The current penalty or payback is capped at $600. Under the House proposal, it would range anywhere from $600 to $2,500 or higher, depending on how much income was gained.
On Tuesday, Reid told reporters that he “personally” liked “the House pay-for better” than the Senate’s. Privately, efforts have since been made to get him to reconsider. Publicly, at least one senator has stood behind the upper chamber’s original approach.
“We all agree on repealing the 1099 provision,” Menendez said in a statement from his office. “The issue now is how to pay for it. House Republicans want to raise $25 billion dollars in taxes on middle class families – and create a quarter of a million uninsured Americans in the process… I believe that’s wrong, and I’ll fight to stop it. We should repeal the provision – as the Senate has already done twice – but not on the backs of middle class families who already have enough on their plate.”
A spokesman for Reid said that a vote on the 1099 fix would likely not happen this week and that the majority leader wanted to consult further with his caucus about the best way forward. Operatives who work with Senate offices, however, have grown convinced that the decision is more or less set. “They want to get this off the table and the caucus wants to get this off the table,” said one Democratic operative who is critical of the House GOP’s 1099 fix.
The White House has publicly stated its preference for the Senate’s original version, but the president has not issued an outright veto threat. Asked for a reaction to Reid’s warming to the House language, an administration official simply referred The Huffington Post to the “statement of administration policy.”