Obama Suggests Taxing Health Benefits a Possibility

Posted June 24, 2009 at 9:25pm

President Barack Obama on Wednesday night opened the door further than he has in the past to taxing health benefits to pay for health care reform.Asked by host Charlie Gibson on a prime-time special — filmed in the East Room and broadcast Wednesday night exclusively by ABC — whether he would consider taxing health benefits to pay for reform, Obama drew a distinction between eliminating the tax exclusion altogether, which he said is “the wrong way to go,— and what he said is actually being talked about in Congress: putting a cap on the tax-free benefit.He said lawmakers are looking at taxing above a level like $13,000 or $17,000 in benefits, which he derisively called “Cadillac plans.— He said that even with this approach, “I continue to believe that’s the wrong way to do it,— noting that he still backs his own proposal to pay for expanded coverage by eliminating some deductions for higher-earning taxpayers.But, noting his view and that which is emerging in Congress, he said: “There’s going to have to be some compromise.—Obama also appeared to question a Congressional Budget Office cost estimate for a draft of the Senate Finance Committee’s plan at about $1.6 trillion over 10 years, saying it does not take into account cost savings that Obama wants to institute in the private sector.Most other arguments made during the show were retreads of what he has said many times. Obama vigorously defended the government insurance option, for example.