Dems on Collision Course on How to Pay for Heath Care

By Jason Farago,  Newser Staff
Posted Jul 10, 2009 5:47 AM CDT
Sen. Charles Schumer, D-N.Y. address a health care reform rally near Capitol Hill in Washington, Thursday, June 25, 2009.   (AP Photo/Jacquelyn Martin)
camera-icon View 2 more images

(Newser) – Democrats in Congress are heading for an intra-party showdown over how to fund health care reform, reports the New York Times. The powerful House Ways and Means Committee is reportedly near agreement on an income tax surcharge of 2% or more on Americans earning above $250,000, which moderate Democrats in the Senate called unworkable. The committee ruled out sin taxes on sugary drinks and a new payroll tax.

The White House has not expressed any opposition to the proposed income tax surcharge, which would not violate Barack Obama's campaign pledge not to hike taxes on the middle class. But Charles Grassley, the leading Republican in the bipartisan Senate group negotiating the bill, said a surtax was "non-negotiable," and the group is now exploring a proposal to tax only the most generous employer-provided health plans—those worth $25,000 or more a year.