House Dems Want to Tax the Rich for Health Care

Vice President Joe Biden listens to small business leaders discuss the rising costs of health care...

Vice President Joe Biden listens to small business leaders discuss the rising costs of health care for people who work in small businesses and small business employers, Friday, July 10,2009, in the Eisenhower Executive Office Building in Washington. (AP Photo/Ron Edmonds)

(AP)

Key House Democrats decided Friday to raise taxes on the wealthy to help pay for health care legislation, capping an up-and-down week for President Barack Obama's top domestic priority. At the same time, Democratic leaders tried to quell concerns among moderate and conservative lawmakers about other elements of the bill.

"We're closer to that significant reform than at any time in recent history. That doesn't make it easy. It's hard," Obama said while traveling overseas.

Democrats on the tax-writing Ways and Means Committee agreed to a new surtax that would start with households making $350,000 a year and begin in 2011, said the committee's chairman, Rep. Charles Rangel, D-N.Y.

It would raise some $540 billion over 10 years, about half the cost of Obama's ambitious plan to reshape the nation's health care system and provide care to the 50 million uninsured. However, lawmakers could not provide an exact price tag of the overall bill.

The proposal faces an uncertain reception in the Senate and from moderate and conservative Democrats in the House, who rebelled Thursday over various aspects — including costs — of the plan.

Democratic leaders spent hours Friday trying to soothe those concerns without reaching resolution, even as Rangel's panel met to come up with the payment proposal.

Obama acknowledged obstacles to the legislative timetable but said failure to meet a self-imposed August deadline for moving bills through the House and Senate didn't doom the endeavor.

"I never believe anything is do-or-die," the president said at a news conference in Italy. "But I really want to get it done by the August recess."

Rangel said the new surtax would be graduated, starting with households at $350,000 and then rising at $500,000 and again at $1 million. Cuts to Medicare and Medicaid would raise about $500 billion, according to the Congressional Budget Office. Fees paid by companies who don't provide insurance to their employees would push the amount of the bill even higher.