Dems urge higher taxes for health bill

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By Jennifer Haberkorn

House Democrats on Friday called for boosting taxes on incomes beginning at $350,000 to help pay for health care reform but are still trying to find a compromise with moderate Democrats on other aspects of their reform plan.

Rep. Charles B. Rangel, New York Democrat and chairman of the Ways and Means Committee, said the taxes, which would escalate at $500,000 and $1 million income levels, will be somewhere between 1 and 3 percent. The starting rate is higher than the $250,000 figure previously discussed.

He said it would raise about $540 billion over 10 years, beginning in 2011, and would be combined with Medicare and Medicaid cuts to pay for the reform bill, which is expected to cost about $1 trillion.

The House bill, if passed, is going to have to be merged with a Senate plan that does not yet have a clear payment method. Sen. Max Baucus, Montana Democrat and Finance Committee chairman, has been reluctant to eliminate any payment plan from discussions.

While the payment method is one of the most contentious aspects of health care reform, the House Democratic leadership was still trying Friday to negotiate with the fiscally conservative Blue Dog coalition on the latter's demands to the reform bill.

Members of the coalition said the meetings were productive but yielded no deals and expected talks to continue Monday and Tuesday. Mr. Rangel said the bill would still be released Monday.

The Blue Dogs, a group of more than 50 members, said it has "strong reservations" about the current proposal, adding it wants the bill to be deficit-neutral and include stronger cost controls and protections for small businesses and rural areas. The group also said it wants to include bipartisan measures.

President Obama and House Democrats downplayed the differences within the caucus.

"There are going to be some tough negotiations in the day and weeks to come, but I'm confident that we're going to get it done," Mr. Obama told reporters in L'Aquila, Italy.

He stepped back from his earlier remarks that a reform bill must pass the Congress before lawmakers leave on their summer break.

"I never believe anything is do-or-die," he said. "But I really want to get it done by the August recess."

"This is huge; this is enormous," said Rep. John B. Larson, Connecticut Democrat and chairman of the Democratic caucus. "We've been trying to do this since Harry S. Truman ... so it's normal and completely understandable."

Rep. Mike Ross, Alabama Democrat and chairman of the Blue Dogs' health care task force, said morning meetings between the coalition and Democratic leaders were productive.

The group's letter outlined five broad objections to the bill, but Mr. Ross said that comes out to one or two dozen specific items that need to be addressed before the group would support the bill.

"We want to make sure we're containing costs ... not basing any public option on Medicare rates ... and larger exemptions for small businesses," he said.