The Kerry Fee

by digby

For the latest news around health care, be sure to check out Bill Sher’s Progressive Breakfast every morning. It’s the best round-up out there and will give you a quick rundown of where we are day to day.

Today, he points to this part of an article in the Wapo that I think may end up being important:

Orszag also said the White House is open to a proposal by Sen. John F. Kerry (D-Mass.), a Finance Committee member, to tax insurers for very generous health policies. The idea is a variation on a provision that Baucus, Grassley and others on the committee had pushed: to tax beneficiaries who receive generous policies through their employers. Obama staunchly opposed taxing beneficiaries as a candidate, and on Monday he threatened to veto a bill that targets individuals. But Orszag said that the White House is open to the Kerry alternative, noting that a fee on high-value policies would “create an incentive for companies to create more efficient plans.” A senior House leadership aide said Democratic lawmakers there are keenly interested in the Kerry provision, along with other revenue measures with consensus support in the Finance Committee, to replace the wealth surtax that Baucus and others have already declared dead on arrival. “Our guys want to see some movement there,” the aide said. “They’re loath to vote on a tax increase if it is not going anywhere in the Senate.”

I totally agree with dday in his post below about changing the dialog on taxes. I’ve been agitating for that for years. (I use the term “paying the bills.”) All you have to do is look at the Mad Max Thunderdome that is California to see the results of fetishizing tax cutting. It’s part of the long term progressive project that has been ignored for years.
Having said that, I still think the Kerry proposal is a good one, although I’d be happy to pass the surtax as well. I realize that unions were upset about the earlier proposals because they have fought long and hard for good health benefits. But if this Kerry proposal really goes after the Cadillac plans of the small number of people who get 1/3rd of all the compensation in this country (!) then it’s worth doing. Making the insurance companies pay the “fee” is brilliant. (It will be passed on to the companies that buy them, of course, but because we have even fetishized the idea that businesses can’t be taxed — only the insurance companies are villainous enough at the moment to be targeted.)The fact that these masters of the universe believe they are entitled outlandish policies on top of their other compensation — at at the expense of their own employees — is yet another scandal. I’ve fumed about it for years. If they can raise some money for health reform by demanding a tribute for the privilege of being greedy, piggish bastards, then I’m all for it.And, by the way, members of congress have the best cadillac plan available.
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