The Treatment

Spoiling For A Fight On Taxes

By

Jonathan Oberlander, one of the nation's leading experts on health care policy, is a professor at the University of North Carolina at Chapel
Hill and author of The Political Life of Medicare. This is the first of what we hope will be many posts at The Treatment.

The Obama administration's just released budget blueprint marks the beginning of a new health reform battle. The largest source of money for financing health reform comes from a proposal to reduce itemized tax deductions for families making over $250,000. By paying for expanding insurance coverage partly through tax increases on wealthier Americans, the Obama administration is making health reform a redistributive issue. In 1993, the Clinton administration tried hard to avoid the stigma of "tax and spend" Democrats. The Obama administration is, in contrast, explicitly committing to taxing the wealthy to spend on health reform.  In short, the health reform debate is now a debate about taxes. That is a politically risky strategy for the Obama administration, though it deserves much credit for spelling out real financing measures. Yet none of the major options for financing health reform are risk-free. Indeed, the administration and Congressional reformers will need much more than the $634 billion outlined in the budget  to pay for universal coverage (or even a pathway to universal coverage). Other, more controversial financing proposals (such as limiting the tax-exempt status of workers' health insurance benefits) lie ahead.  It's not hard to anticipate Republican opposition to Obama's health reform financing plan. But can the Obama administration persuade conservative Democrats in the House and Senate (and a few G.O.P moderates in the Senate) to go along?  And can the administration mobilize and sustain public support for tax increases to pay for health reform in the face of the attacks that are sure to follow? Stay tuned. --Jonathan Oberlander  

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