US Tax: Baucus moving forward with Finance Committee health care markup – with or without GOP support

Just one day after releasing a draft health care reform proposal for review by his bipartisan "Gang of Six" negotiating team, Senate Finance Committee Chairman Max Baucus, D-Mont., told reporters September 9 that he would unveil legislative text the week of September 14 and hold a committee markup the week of September 21. Baucus also reiterated that if a bipartisan agreement is not in place by September 15 – a deadline he set early this summer – the committee would move forward with or without support from GOP members.

Revenue provisions in Baucus's draft plan include an excise tax on high-end "Cadillac" plans offered by insurance companies, a corporate information reporting provision, a host of revenue provisions targeting health-related industries, and new requirements for nonprofit hospitals. (For additional details, see Tax News & Views, Vol. 10, No. 43, Sept. 8, 2009.) Baucus has indicated that the draft description he circulated was incomplete and that the provisions are subject to change.

Finance Committee ranking Republican Charles Grassley of Iowa, who has been a party to the Gang of Six talks, indicated September 9 that he has reservations with the latest proposal and may ultimately vote against it. He signaled that he has not given up on negotiations, but acknowledged that timing constraints may preclude a bipartisan compromise.


President signals support for 'Cadillac' plan excise tax

For his part, President Obama appeared to endorse elements of Baucus's draft plan in his September 9 health care address before to a joint session of Congress. Obama made the speech in an effort to jumpstart the health care debate after a series of heated "town hall" meetings on Democratic proposals during August.

Although the president did not use the speech to detail specific proposals, he did tell Congress that "this reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money – an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long run."

Obama also alluded to a provision in the Baucus proposal that would impose fees on health-services providers. The draft plan circulated by Baucus would impose annual fees on pharmaceutical manufacturers, medical device manufacturers, insurance providers, and clinical laboratories. Overall, however, the president shied away from endorsing any current House or Senate plan in its entirety, opting instead to provide a broad vision for the ideal reform legislation.


House waits on Finance action

Meanwhile, lawmakers in the House of Representatives have not revealed a timetable for action on their own bill, the America's Affordable Health Choices Act of 2009 (H.R. 3200). Speaker Nancy Pelosi, D-Calif., indicated September 10 that the House is waiting to see a Finance Committee product before moving forward.

Iterations of H.R. 3200 were approved by the three House committees with jurisdiction – Ways and Means, Energy and Commerce, and Education and Labor – before the summer recess and must be merged into a single package before floor action can occur. The chief revenue offset in the bill as approved by the Ways and Means Committee is a surtax on certain high-income taxpayers.


Harkin to chair HELP Committee

Senate leaders announced September 9 that Sen. Tom Harkin, D-Iowa, will chair the Health, Education, Labor and Pensions (HELP) Committee, succeeding the late Sen. Ted Kennedy, D-Mass. Along with the Finance Committee, the HELP Committee has jurisdiction over health care reform in the Senate. The HELP Committee approved its version of a health care bill in July. The Finance and HELP Committee bills will eventually be merged before going to the Senate floor.

Harkin was tapped for the position after Senate Banking Chairman Christopher Dodd, D-Conn., expressed his desire to retain his current gavel with the Banking Committee. Dodd served as acting chairman of the HELP Committee while Kennedy was absent from the Senate for medical treatment.