Why Obama wants healthcare bill by August -- think 2010 elections

The White House drumbeat is unrelenting: President Obama wants comprehensive healthcare reform -- with a public option -- on his desk before Congress leaves town for its summer recess Aug. 7.

"Don't bet against us. We are going to make this thing happen," Obama said this week during a Rose Garden appearance with his new surgeon general, Dr. Regina Benjamin.

Just back from a weeklong trip to Russia, Italy and Africa, the president said he did not want Congress to think he'd forgotten the issue. "I just want to put everybody on notice, because there was a lot of chatter during the week that I was gone," Obama said. "Inaction is not an option."

Republican critics have been quick to question why the rush, especially on a bill that could end up costing taxpayers $1.5 trillion over the next 10 years. And one of the doubters is Maine Republican Olympia J. Snowe, a moderate invited to the White House today in hopes Obama can sway her to support the plan.

"I don’t know why there’s this insistence on getting it done yesterday," Snowe told reporters last night.  "If you use President Johnson’s model on Medicare, for example, it took a year and a half, for good reason.”

So why is the White House rushing? In part, it's a calculus that Obama's still-high approval ratings are likely to soften as his term lengthens. So, use your political chits while you have them.

But another compelling reason is that the 2010 elections loom. Already, Blue Dog Democrats -- those moderates from Southern and rural parts of the country -- are balking at supporting a bill they say costs too much and saves too little. As Democrats in other swing districts get closer to reelection campaigns, they too could have qualms about backing a bill that will mandate that every American get health insurance and will pay for it with sizable tax increases on the wealthiest of their constituents.

"Very soon we'll be in the gravitational pull of the midterm elections, and it seems clear that Republicans . . . will run on tax cuts, deficit reduction and a much more scaled-down and privatized healthcare plan," former Clinton Labor Secretary Robert Reich told the Washington Post recently. "If the public begins to lose patience by election day, Democrats could have some real problems. And those problems of course could possibly extend through 2012."

-- Johanna Neuman

Photo credit: Marc Vaughn / Masterfile

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Comments

[mike]

A draft of the House Democrat health care bill is out, and it's been leaked to ATR staff. There are several major tax increases in here, most of which violate the Taxpayer Protection Pledge. They include:

a tax on individuals failing to sign up for health care equal to the lesser of 2.5% of adjusted gross income (AGI) or the average individual premium amount

a tax on employers for not providing a health care plan equal to 8% of payroll. This becomes 0, 4, or 6 percent of payroll as payday totals dip below $400,000 annually
a new and undetermined excise tax on health insurance plans

codification of the "economic substance doctrine," whereby businesses would not be able to engage in legal tax avoidance techniques without demonstrating a bona fide business purpose
delay of worldwide interest allocation, a baby step toward the full double-taxation of corporate profits earned overseas

the big one--a new "surtax" on the AGI of small businesses and other high income earners. Here's the details:
1% on AGI of $350,000 to $500,000
1.5% on AGI of $500,000 to $1,000,000
5.4% on AGI of over $1,000,000
Those brackets are 50% if you're Married Filing Separately, and 80% if you're Single or Head of Household

This will result in a top rate of 45%, and a capital gains rate of over 25%. It's more than that when you factor in that this surtax is NOT on taxable income, but on adjusted gross income (AGI). Factoring that plus state income tax in means that the top rate will exceed 50%, and the capital gains rate will exceed 30%.

And it actually gets a lot worse. Employers would also be mandated to provide health insurance under the bill, and the cost of health insurance would likely skyrocket because of new regulations called guaranteed issue and community rating. The only alternative, which many companies would either be forced into by cost considerations or choose for simplicity, would be to pay a payroll tax of as much as 8 percent. That's on top of the existing 15.3 percent payroll tax for Social Security and Medicare, creating a new total payroll tax of 23.3 percent.

[maz hess]

the third reason maybe that nobody knows how long the senators Ted Kennedy and Byrd will still be alive. And a near dead Kennedy coming from his grave to the senate to vote for health care will make it very very very hard for every democrat to look in his eyes and to vote no.

[VDavisson]

I am on dialysis. I am over 55. In Britain, if you're over 55, you don't get dialysis. I have worked hard to recover from Multiple Myeloma. I still work but I can't possibly earn enough to cover my medical expenses. So I suppose I'm on the path to becoming a "useless eater" in the eyes of the new Health Bureaucrats. Under this nightmare plan I'll be kicked off the dialysis machine to make way for the new young people with kidney failure. It will be my "turn to die."

[steve rodriguez]

I don't want the Govt. coming into my bedroom!
Can the Govt. do anything right? So were gonna let them handle health care? Look how they failed in education, the economy and and state govt. California is almost bankrupt!

" The best government is less government!"
- Ronald Reagan

[JC]

The government couldn't run a lemonade stand. Why would we think they could run health care at a cost savings! They have done such a great job with the USPS, Medicaid, and Medicare. And lets not forget about the Social Security System. And that ever popular money making machine called AMTRAK! No they will screw this up like they do everything else. Private industry is always cheaper. They just need some guidelines to help them along. Get people off the government dime and you would save BILLIONS!

[Sandra Grabman]

Why does Obama think members of the Senate and House of Representatives are his employees? The way I understand it, the legislative, judicial, and executive branches are equal in power, with no one branch subordinate to the other. So he has no business giving them ultimatums.

[skraft]

Everyone keeps hammering on how for the money the US spends on healthcare, we should be in better health etc. That's like saying for all the shoes and cars and electronic gadgets americans own, we should be much happier. When I go to the doctor, it isn't because I'm sick, its because I want to stay in good health forever. But since I'm not sick, my preventive tests are not considered a good value for society. Of course, my shoe purchases probably aren't either. So obviously, congress should but a 95 percent tax on anything beyond a woman's first pair of shoes because there is no societal value.

[David]

Reform is a necessary part of improving the US economy. Private insurance is just another big business fail ):
There is nothing wrong with the current administartion's desire to get results before 2010/2012 elections when the voters will be judging their job performance.

[Monica]

Subject: Health care
Message:
I am not the smartest banana in the bunch, but I do know that if there are 45 million people without health insurance or health care, then I know that there is approximately 20 to 30 million illegal aliens in this country. We, Americans will be paying for them to have free health insurance so that they can become legitimate in this country.
The American people are being used for political advantage by the Democrates and that needs to be stopped.
I know you will not vote for this HealthCare Program. If there is something I can do Please let me know. Even if it means going to DC and marching on the Captiol.
I am so afraid and disgusted the country that my grandparents helped build and were proud of is being abused by the Democratic Party for their own gain. For a Dictatorship which this country was not built on, but American blood fought to stop on our shores
I do know from experience with my daughter who is a 25 year old college student and was unemployed for awhile, that she could get medical paid for her when she was at MUSC with a skin condition, if she took the time and filled out the paperwork. There is help for those who do not have medical insurance if they ask for it.
This Health insurance issue is blown way out of proportion, so those with an agenda can control the people in this country with programs we do not need.
Here is a suggestion for you. Stop printing literature in Spanish and interpretors on phones and other voice machines. Can u imagine the amount of money this country would save? I can. Since we are paying for the 20 or 30 million people in this country illegally.
It is time to take back our country and make others follow the laws our forefathers created to stop the kind of take over this country is experiencing today in Congress by the Party in Power.