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Lawmakers Refuse To Allow Time to Read Health Care Bill
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Health Insurance Mandate Includes ‘Tax’ Despite Obama Denial
FOX News
September 21, 2009
A proposed requirement that all Americans buy health insurance does in fact include a “tax” increase, according to the Senate — even though President Obama insisted Sunday that it “absolutely” does not.
Obama gave ABC News’ George Stephanopoulos a stern talking-to Sunday for suggesting that the mandate to buy health insurance would amount to a tax. He even taunted the host for citing the dictionary definition of “tax” to make his point.
“The fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now,” Obama said.
But the language of the health care reform plan proposed by Sen. Max Baucus, D-Mont., explicitly labels the penalty attached to the mandate as an “excise tax.”
Penalties for failing to obtain coverage would range from $750 to $3,800 under the plan. This is addressed in a section labeled: “Excise Tax.”
“The excise tax would apply for any period for which the individual is not covered by a health insurance plan with the minimum required benefit,” the Baucus plan says.
Republican strategist Brad Blakeman said Obama just got busted.
“The president cannot orate himself out of this one. If it feels like a tax, it says it’s a tax — Mr. President, it’s a tax,” Blakeman said.
House Minority Whip Eric Cantor, R-Va., said Monday at a forum in Richmond that the House treats the penalty the same way.
“The president was on TV last night or yesterday morning saying ‘no no no, it’s not new taxes,’ whereas in this bill and in the Senate bill both, it calls what they are charging employers and individuals a tax. It’s an IRS section of our bill,” he said.
The Baucus plan does not describe the requirement itself as a tax — just the penalty.
But Julian Epstein, former Democratic counsel to the House Judiciary Committee, said the requirement is no different from requirements to obtain auto insurance.
“It’s called personally responsibility,” he said.
Obama and Stephanopoulos got in a testy exchange over the matter Sunday on “This Week.”
“Under this mandate, the government is forcing people to spend money, fining you if you don’t. How is that not a tax?” the host asked.
Obama argued that the government would be providing tax credits for those who have trouble affording coverage, and that Americans who have insurance are already paying hundreds extra in premiums to cover uncompensated care.
“That may be, but it’s still a tax increase,” Stephanopoulos said.
“No. That’s not true,” Obama said. “I absolutely reject that notion.”
FACT CHECK: Coverage requirement enforced with tax
AP
September 21, 2009
Memo to President Barack Obama: It’s a tax. Obama insisted this weekend on national television that requiring people to carry health insurance — and fining them if they don’t — isn’t the same thing as a tax increase. But the language of Democratic bills to revamp the nation’s health care system doesn’t quibble. Both the House bill and the Senate Finance Committee proposal clearly state that the fines would be a tax.
And the reason the fines are in the legislation is to enforce the coverage requirement.
“If you put something in the Internal Revenue Code, and you tell the IRS to collect it, I think that’s a tax,” said Clint Stretch, head of the tax policy group for Deloitte, a major accounting firm. “If you don’t pay, the person who’s going to come and get it is going to be from the IRS.”
Democrats aren’t the first to propose that individuals be required to carry health insurance and fined if they refuse. The conservative Heritage Foundation called for such a mandate in the 1990s’ health care debate, although its proposal differed from the ones pending in Congress. Heritage has since dropped the idea and now favors using tax credits to encourage people to buy coverage — carrots and not sticks.
During the 2008 political campaign, Obama opposed making coverage mandatory because of the costs. His position has shifted now that it’s becoming clear such a requirement will be part of any legislation that Congress sends him. Conservative activists are calling it a violation of his pledge not to raise taxes on the middle class.
“This is exactly what George Bush Sr. did when he said he wouldn’t raise taxes, and it cost him the next election,” said Grover Norquist, president of Americans for Tax Reform. “Obama is doing the same thing, but he’s insulting people by telling them that if you don’t call it a big purple banana, somehow it wouldn’t be a tax.”
Some liberals acknowledge that Obama might be vulnerable on the insurance requirement. But they say most people will understand as long as the legislation provides enough of a subsidy to make the coverage affordable. That’s a central issue this week as the Senate Finance Committee starts voting on legislation.
“I think it’s a metaphysical question as to whether it’s a tax or not,” said Roger Hickey, co-director of the Campaign for America’s Future. “The real question that will determine whether people are upset is whether the insurance is affordable.”
In an interview that aired Sunday on ABC’s “This Week,” Obama insisted that the insurance requirement is not a tax.
“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said. “What it’s saying is…that we’re not going to have other people carrying your burdens for you anymore.
“Right now everybody in America, just about, has to get auto insurance,” Obama added. “Nobody considers that a tax increase.
“You just can’t make up that language and decide that that’s called a tax increase,” he added.
But a Democratic staff description of Sen. Max Baucus’ bill calls the proposed fines an “excise tax.” Penalties of up to $950 for individuals and $3,800 for families would be imposed on those who don’t get coverage.
The House bill uses a complex formula to calculate the penalties, calling them a “tax on individuals without acceptable health care coverage.”
The coverage mandate is part of a political bargain under which the insurance industry would agree to take all applicants, regardless of prior medical history.
“If we’re going to have coverage without regard to pre-existing conditions, it makes sense,” said economist Roberton Williams of the Tax Policy Center. “Otherwise people will come in the door the day they get sick.” He sees no distinction between the requirement to get coverage and the fines themselves.
“The fact that it is imposed on people and they have no choice in paying it, and the fact that it’s administered through the tax system all make it look like a tax,” Williams said. The center is a joint venture of the Urban Institute and the Brookings Institution.
It wouldn’t be the first asterisk added to Obama’s campaign pledge on taxes. Earlier this year, he signed a tobacco tax increase to pay for children’s health insurance. Even that can be read as a violation of his expansive campaign promise.
“I can make a firm pledge,” he said in Dover, N.H., on Sept. 12, 2008. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
He repeatedly promised “you will not see any of your taxes increase one single dime.”