Multi-Trillion Dollar Question: How Will Dems Pay for Government Takeover of Health Care?
Limiting Charitable Contributions? A Soda Tax? Democrats Scramble for Answers as Republicans Develop Better Solutions

Washington, May 12 - Health care reform is a bipartisan priority, and both parties are hard at work this month putting together their respective visions for a comprehensive health care overhaul.  While some areas of potential common ground appear to exist, Washington Democrats have made no secret of their desire to shift the nation to a multi-trillion dollar, government-run health care system.  Even if this was a good idea (for the record: it isn’t) how exactly would the Administration and Democrats in Congress pay for it?  Even after yesterday’s much-hyped announcement of some voluntary reforms from the health care industry – many of which Republicans support and have supported for years – there is still no clear answer to this question.  The Washington Post raises this critical point in an editorial this morning, noting that such a massive plan cannot be financed by presumed savings and promises:


“The White House has emphasized repeatedly that health-care reform is entitlement reform – that is, an answer to the nation’s long-term fiscal challenge. Yet, so far, it is backing a plan to expand coverage that would cost taxpayers between $1 trillion and $1.5 trillion over 10 years, while it has proposed health-care savings of only $309 billion.  There is a danger that the administration and Congress alike will be tempted to ‘pay for’ actual government expenditures with presumed but unspecified savings, like those promised yesterday.”

 

Indeed, there’s a massive gap between how much the plan costs and how much the Administration has offered to pay for it.  And one of the Administration’s key ways to pay for the plan – by limiting charitable deductions – doesn’t bring in as much money as the White House first predicted and, even so, has been roundly rejected in Congress because of the harm it would do to taxpayers and to charities.  So, as this morning’s New York Times reports, it’s back to the drawing board:

 

“Revised estimates show that his main idea for financing the initiative – a 28 percent limit on deductions for Americans in the top two tax brackets – would raise $266.7 billion over a decade, not $318 billion as he had projected in his overall budget blueprint last February.”

 

“Filling that gap actually understates Mr. Obama’s problems in paying for reforming health care.  The deductions limit has hit a wall of opposition in Congress, with the Democratic chairmen of the House and Senate tax-writing committees among others objecting that it could depress tax-deductible charitable contributions.  The proposal accounts for half of Mr. Obama’s proposed $635 billion, 10-year reserve fund to introduce cost-saving changes into health care and to expand coverage to the uninsured.”

 

The Wall Street Journal notes this morning that some in Congress are even proposing “new federal taxes on soda and other sugary drinks to help pay for an overhaul of the nation’s health-care system.”  In other words, it’s Washington’s quick fix to any problems: higher taxes.  But on soda?  That’s a new one.

 

As Democrats scramble to figure out how to fill this massive hole in their health care financing plan, House Republicans are hard at work on better solutions to make quality health care coverage affordable and accessible for every American – an alternative plan that Republicans hope to present to President Obama for his consideration.  Led by Rep. Roy Blunt (R-MO), the House GOP’s Health Care Solutions Group is crafting alternatives to the Democrats’ bureaucratic takeover of health care.  The Republican solutions will expand access to affordable health care for more Americans and ensure that health care choices are made by patients and doctors – not faceless bureaucrats in Washington.  And, unlike the Democrats’ plan, it won’t raise taxes on families and small businesses to make it happen.  As Democrats search for answers on how to fund their trillion-dollar plan, will they reach across the aisle and listen to Republican solutions as well?

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