Reid's Refusal Leaves $320B Health Care Hole

Dems may look to income tax hike to cover cost of public option
By Jason Farago,  Newser Staff
Posted Jul 9, 2009 7:39 AM CDT
Senate Majority Leader Harry Reid of Nev. speaks in front of solar panels at Nellis Air Force Base in Las Vegas, Wednesday, May 27, 2009.   (AP Photo/Isaac Brekken)
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(Newser) – Harry Reid met with Republicans yesterday to diffuse some of his tough talk on health care reform, but as Politico reports, the Senate majority leader has forced a scramble for $320 billion over 10 years to pay for the plan. Reid said he would not support a bill that taxed federal health benefits, but the alternative may be just as unpopular: an income tax hike on Americans making $250,000 or more.

Reid's move to block taxes on health benefits is the largest headache yet for Max Baucus and the bipartisan group seeking to hammer out a compromise on health care. The Nevada senator insisted yesterday that he still wanted a bill with Republican support—a shift from earlier statements chiding Baucus for courting the GOP too much. Many senators are now anxious about the August deadline for the bill, but Reid's office says the Senate is sticking to it.