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House, Senate Dems Split on 'Cadillac Tax'

As finance committee votes, caucus divided on how to fund reform

By Jason Farago,  Newser Staff

Posted Oct 13, 2009 8:14 AM CDT

(Newser) – The Senate Finance Committee is poised to send its bill to the full legislature today, but its provision taxing "Cadillac" insurance plans is raising hackles in the House. Max Baucus and other senators say taxing high-cost plans will raise $200 billion, a quarter of the legislation's price tag, and keep costs down over time. But House members and union leaders say the tax burden will trickle down to workers and the middle class. Nancy Pelosi opposes the tax, as do two-thirds of House Democrats.

The Cadillac tax debate doesn't just highlight the stark divisions that remain within the Democratic caucus on health care reform. More than that, it challenges the commitment of President Obama, who embraced the tax in his September address to Congress, to keep spiraling costs down even if it means antagonizing his own party. And the proposal has created some strange bedfellows. Last week lobbyists from organized labor hit Capitol Hill to oppose the tax—hand in hand with the Chamber of Commerce.

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. enters an elevator on Capitol Hill in Washington, Thursday, Oct.  8,  2009.
Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. enters an elevator on Capitol Hill in Washington, Thursday, Oct. 8, 2009.   (AP Photo/Harry Hamburg)
President Barack Obama arrives in the Rose Garden of the White House in Washington, Monday, Oct. 5, 2009, to make remarks on health care reform.
President Barack Obama arrives in the Rose Garden of the White House in Washington, Monday, Oct. 5, 2009, to make remarks on health care reform.   (AP Photo/Gerald Herbert)
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COMMENTS
Showing 3 of 14 comments
my-name-here
Oct 13, 2009 3:55 AM CDT
I still say the AMA should lift limits on the number of doctors that are allowed to practice each year. http://www.bambooweb.com/artic...
hybrid
Oct 13, 2009 3:43 AM CDT
wow sorry about the typing and grammer, wasn't paying attention to the screen.
hybrid
Oct 13, 2009 3:34 AM CDT
well if they tax the caddy plans then the states plan would go up in xost and many stats couldnt afford that, nor would want to pass the cost on to the insured. My fav line from that article is the last one. i recomend all read that one line cause that is catch. PO insurance will still cost the average insured money with copays and pre drugs etc. It wont be worth what they have to pay in tax for the program. And to get good coverage you need a rider on your plan but then you would get tax on that ridrer having the audacety of purchasing something that not everyone can have.

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