Shadowproof

House submits its Reconciliation proposal : eliminate Excise Tax altogether

In a little-noticed development yesterday, the House presented the Senate with its package of health care fixes. The best idea it contains is the removal of the excise tax altogether:

One of the biggest proposed House changes, the Senate aide said, would eliminate the Senate bill’s tax on high-end insurance plans at a cost of $150 billion. The tax is unpopular with many liberal House members, but supported by Senate Democratic moderates and President Barack Obama, namely because it is one of the chief mechanisms to curb rising health care costs.

Democrats and labor unions struck a deal earlier this month to ease the tax’s burden on state and local government workers and those with collective bargaining agreements and many insiders expect that deal to be included in the package of changes.

That is how you negotiate! You demand the total elimantion of the excise tax, with the end-goal of weakening it so much that it no longer burdens the middle class.

The total cost of this proposal is $300 billion, which Senate aides are calling "irrational". Ever watched a successful Middle Eastern negotiation? It starts off with each side saying "Are you crazy?", "Are you trying to rob me?", and a few steps later they’re in chummy agreement. That is what will happen with health care, since almost all Democrats know if they fail on it they might as well go looking for a job in the Middle East.

The final health care bill won’t contain a lot of the really good popular things like the public option. The best hope at this point is to remove the most offensive and politically stupid elements like having the excise tax or the individual mandate hit the middle class, which would make the overall bill decent. I think "We can do this," given that Pelosi and the House seem to be the ones who understand how to negotiate.

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