Key Democrat: Must Tax Benefits for Health Care Reform

By Kate Barrett

Jun 24, 2009 3:40pm

ABC News' Z. Byron Wolf Reports: Bipartisan Senate Finance Committee health care talks ended today without any real resolution. Most Republicans left through a back door. But there was an important divide on display among Democrats leaving the meeting. Sen. Kent Conrad, the deficit hawk Democrat and chairman of the Senate Budget Committee, said he cannot see a way to enact a sustainable health care reform bill that does not in some way tax health care benefits, which are currently tax exempt. "Tax subsidies for healthcare. They’re huge. Hundreds of billions of dollars a year," Conrad said of the potential revenue from taxing such benefits. "It is hard for me to see how you have a package that is paid for that doesn’t include reducing the tax subsidy for health care," he said. That's a very different point of view than President Obama gave Diane Sawyer this morning. He would rather pay for health care by limiting tax deductions for the wealthy. "I have identified the ways that I think we should finance this," Obama said. "I think Congress should adopt them. I'm going to wait and see what ideas ultimately they come up with. I suspect that once they start seeing what the options are they might end up concluding the options we're presenting are the best ones." "I don't want to prejudge what they're doing," he said. Conrad did say that limiting deductions was "still on the table" in the Finance Committee discussions. Conrad also differs from Obama on the need for a public health insurance option. Conrad wants to enact a series of co-ops that would be private, non-profits, and compete with private companies in the marketplace. The idea is that the co-ops would be less likely to squeeze out private insurers than a nakedly government plan. It has gained some interest from Republicans searching for common ground. Conrad said today he expects proposals from other Senators today on how to improve the co-op idea. Democrats on the Finance Committee will return to the table later today for more talks.

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