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National Exchanges, Anti-trust Exemption Repeal In; Employer Mandate, Wealth Surtax Out?

Hemmed in by the House Democratic caucus, which simply will not pass a bill with the Senate’s excise tax as part of the financing, Barack Obama is making some nods in the House’s direction, in the interest of finding a bill that can get majority support in the lower chamber.

President Barack Obama has indicated support for a national clearinghouse to buy health coverage and an end to the decades-old antitrust exemption enjoyed by insurance companies, Democratic officials said Tuesday.

In signaling his preference, Obama is siding with House Democrats over their Senate counterparts on both issues crucial to negotiations on his health care overhaul.

The national exchange is a good policy, and while the anti-trust exemption repeal may not mean much, with a national exchange you’d almost have to include that as well.

In a separate article reflecting how fast and furious negotiations on the health bill are occurring, AP reports that the House surtax on high wage-earners, as well as the employer mandate, are out.

Democratic officials say House and Senate negotiators working with the White House on a health care bill appear likely to drop a proposed income tax increase on high-wage earners. They also may jettison a requirement for large corporations to offer coverage to their employees.

These officials also said that key lawmakers and the White House were hoping to include more money to protect state governments from the cost of an expansion of Medicaid.

The employer mandate was always going to be more crucial to financing health care reform than even the excise tax, however, so it’s really a shame to see that go, if this is true. But the excise tax, as written, cannot pass the House. So without the wealth surtax and with a necessary tweaking of the excise tax, more money will need to be raised, which could be where that Medicare tax on investment income comes in. And that would hit functionally the same people as the wealth surtax. So this all seems semantic.

Lurking in the background of all of these negotiations is the crumbling support from the most conservative Democratic Senator, Ben Nelson, who is simply taking a beating on all of this in Nebraska, to the extent that he’s forced to waver on final support. Some of that is posturing, of course, but it’s no secret that Nelson was blindsided by the reaction to the exemption on Medicaid expansion funding for Nebraska which he carved out of the bill for himself. He’s in a very bad position.

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David Dayen

David Dayen

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