This week, 157 House Democrats (which for math junkies like me, who want to know the actual percentage of House Dems who signed, it’s 62%) signed a letter which put House Speaker Nancy Pelosi (D-CA) on notice that an excise tax on high-cost health care insurance plans is not acceptable. Those who signed the letter believe the tax will hurt many middle class families.
So what exactly is the excise tax? Here’s the scoop: Max Baucus (D-MT) has proposed a 40% tax on so-called “Cadillac” employment-based health insurance plans. Currently, the proposal would define those high-cost plans as plans which exceed $8,000 for a single person or $21,000 for a family per year. The tax would apply to the amount over the cap. So, for example, a $10,000 plan for a single person would be subject to an excise tax of $800 (40% of the overage).
All taxes involve some kind of “and, if or but” and this one is no exception. The cap is raised for plans for workers in high-risk jobs and retirees over the age of 55. Those caps would be $9,850 for a single person and $26,000 for a family per year.
I was astonished to see those kinds of numbers. Those caps for health care benefits are equal to roughly twice the annual salary for minimum wage employees. Surely, those would be reserved for the top 1 or 2% of employees. Not so. The Joint Committee on Taxation has estimated that those caps would still affect 15% of employment-based health insurance plans in the first year alone. That’s a lot of taxpayers.
My gut is that if the excise tax does go forward, we’re going to see those caps go up significantly. But I also believe that if the cap goes away completely, everyone goes back to the table to start from (nearly) scratch. Paying for health care reform is a huge part of the bill and without that piece, it’s not going to move forward. In fact, President Obama has indicated that he will not sign a version of the bill which increases the deficit.
So all eyes on Pelosi to see what the response will be… I’ll keep you posted!
This week, it was announced that the total job losses for 2008 were more than 2.6 million, the highest since 1945. It was no surprise, then, that Congress is rushing to approve a much touted economic stimulus package.
Speaker Nancy Pelosi has said that she expected a House on the matter the week after Obama’s inauguration. She further said that the House will not take a break until the package is passed. Traditionally, the House takes a weeklong break in mid-February.
(Note to self: with almost two months off over the Thanksgiving and Christmas holidays, then one month of work before a week long break… consider running for Congress.)
Obama has encouraged a speedy resolution on the package, saying: “We start 2009 in the midst of a crisis unlike any we have seen in our lifetime, a crisis that has only deepened over the last few weeks.”
However, specifics of the package have been met with criticism on both sides of the aisle. What’s being critiqued the most? The tax proposals. And interestingly, though I’ve heard quite a number of Congressional officials speak up against the current proposal, I haven’t heard one propose a working alternative. My mother always told me that you don’t criticize someone unless you have a better plan. Congress, are you listening?
In a move that should surprise very few, House Speaker Nancy Pelosi confirmed yesterday that Congress is “unlikely” to approve an economic stimulus package that included tax rebate checks during this calendar year.
The Democrats are, however, still pressing for approval on their $61 billion “economic stimulus package” which includes relief for the jobless and expanding Medicaid provisions; that package as currently proposed does not include any tax rebates. However, Pelosi rejected the notion that she would pad the bill with tax cuts or other measures to attract GOP votes. Right, cause Congress would never tack things onto a bill just to make it pass.
Earlier today, the GOP indicated that they are not on board with the Democrats’ proposal for a second economic stimulus package. There’s no surprise there.
Rep. John Boehner (R-OH), the top ranking Republican in the House, wrote a letter to Rep. Nancy Pelosi (D-CA) calling the proposal:
an irresponsible, business-as-usual approach that has earned this Congress the lowest approval ratings ever recorded.
Harsh. But here’s my take: the proposal, as currently being touted, is, in fact, irresponsible. And I sincerely hope that Pelosi takes that to heart.
That said, the idea that Boehner is trying to pin the current low approval ratings on the Democrats is laughable: everyone had a hand in this nonsense.
Handing out small checks and increasing Medicaid programs will not stimulate the economy. If that’s the purpose of this package – and you’d think so, since they’re calling it an economic stimulus package – then the Democrats are way off base. And despite the fact that Pelosi says her package will “provide relief for the middle class, to encourage consumer confidence and to have regulatory reform by re-writing the rules for financial institutions,” there’s no real relief proposed for the middle class.
What does the GOP propose instead? The usual suspects. Some of the ideas floated by the GOP are:
1, Allowing offshore oil drilling.
2, Cutting taxes for US corporations with foreign subsidiaries;
3, Expanding capital gains relief on the sale of homes; and
4, Eliminating capital gains on stock purchases for the next two years.
Jeez. Can’t either party get this right?
Middle class. Two words. Don’t forget about them.
