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The Revenue Deadlock

By Matthew Yglesias  

"The Revenue Deadlock"

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Brian Beutler points out that health reform’s not out of the woods yet. For all the hubub about the public option, the lower-profile dispute between House Democrats and Senate Democrats about tax measures has long struck me as a potentially larger sticking point, just on the general principle that in America it’s always taxes that are the sticking point in progressive policy. From where I sit, the House’s surtax on the super-rich is a good way to pay for health care and the Senate’s excise tax on unusually generous insurance plans is a better way to pay for health care. If it were up to me, we would take when the Senate has on the table, then increase spending on subsidies up to the House’s level, and use a House-style surtax to make up the difference.

But most House Democrats regard the excise tax as anathema, and a critical block of Senate Demcorats regard the surtax as anathema. Right before Christmas you would sometimes hear rumbling from people that this issue had already been more-or-less squared-away behind the scenes in favor of the Senate’s approach. But Beutler’s reporting makes it seem that things are pretty much how they appear—the two sides are at loggerheads.

I note that if union-friendly House Democrats ultimately decide they’d rather scuttle health care than vote for the Senate’s approach to taxes, they’re likely to say they’d rather scuttle health care than vote for a bill with no public option. If you want to explain to the progressive base why you’re voting no on health care, then citing the public option is likely to play better. But the excise tax actually takes something concrete away from some union leaders and union members who matter. I don’t think that’s a good reason to kill the bill, but it is a reason and I can imagine someone finding it compelling. At the end of the day, the idea of passing a health care bill with zero Republican votes makes some sense. The idea of passing a health care bill without the support of the AFL-CIO also makes some sense. But can you really do both simultaneously?

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