Employer-based benefits tax on the table in Senate

President Obama is open to the idea of taxing employer-provided health care benefits to help fund overhauling the nation’s health care system - a concept he criticized during last year’s campaign, the Senate’s top tax writer and an architect of the evolving reform said Tuesday.

Following a White House meeting with top Democratic lawmakers, Sen. Max Baucus said Mr. Obama considers the option on the table. The chairman of the Senate Finance Committee is searching for ways to fund the plan, estimated to cost $1.5 trillion over 10 years.

Mr. Obama stressed to Senate Democrats that a viable reform plan has to control spending costs and pass by August.

“If we don’t initiate serious reform, one-fifth of our economy is projected to be tied up in our health care system in 10 years - one-fifth,” Mr. Obama said prior to the closed-door meeting. “Millions more Americans are expected to go without health insurance if we don’t initiate reform right now.”

Mr. Obama said he’s against expanding Medicare or Medicaid without reforms, but did not indicate whether he wants a new public program - a concept that has divided Congress.

Mr. Obama’s comments come as the Senate works to meet self-imposed deadlines to have bills marked up this month. But the president stressed urgency, too, telling senators that if they don’t pass a reform bill by August, it’s over.

“And this window between now and the August recess, I think, is going to be the make-or-break period. This is the time where we’ve got to get this done,” he said.

Senate Finance Committee ranking member Sen. Charles E. Grassley, Iowa Republican, said the meeting was a “fork in the road.”

“If Democrats come away from the White House [looking] for a partisan measure, then it can be done, but it’s going to be done under a very difficult set of circumstances,” he said. “Because even Democrats are not united on what should be done.”

Mr. Grassley said a bipartisan bill likely could pass the Senate by August.

Mr. Obama largely has taken a back seat on details, allowing Congress to sort out the specifics of a reform bill.

How to pay for a plan is one of the still-unresolved issues. Mr. Baucus said he’s against taxing all employer-provided health care plans, but favors taxing some of the most expensive ones. Other Senate Democrats are more open to the idea, a stance that riles both business and union leaders who fear that increased taxes will hurt the bottom lines of both workers and employers.

Taxing employee benefits would generate at least $250 billion annually, depending on how it is implemented, according to initial federal government estimates. During the campaign, Mr. Obama criticized Sen. John McCain for suggesting the tax.

Senate Republicans not at the meeting said they hoped the attendee list of 24 Democrats wasn’t a sign that Mr. Obama was flipping on his pledge to pass a bipartisan bill.

The Senate is waiting for the Finance Committee to release its reform plan. It will then be merged with a proposal put out by the Health, Education, Labor and Pensions Committee.

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