Sen. Max Baucus, chairman of the Senate Finance Committee, said today that President Obama’s proposal to curb tax breaks for charitable deductions remains on the table as one way to pay for changes to the health-care system, but it will compete with other ideas for raising money.
“Everything’s on the table,” he told reporters at a breakfast briefing. That includes the president’s plan, he said. “But a lot of other revenue ideas are on the table, too.”
He added: “We’re going to have to work our way through it, talk to senators, the White House, and see what works here.”
The president has proposed limiting to 28 percent the tax break that the wealthiest Americans get on their itemized deductions, including donations to charity, to help finance a 10-year “down payment” on a plan to bring down health-care costs and extend health insurance to more people. It would take effect in 2011.
“That’s run into a little bit of headwind,” said Senator Baucus, who is shepherding through the Senate his own proposals for revamping the health-care system. “But most tax increases do.”
Many Republicans, and some Democrats, have criticized Mr. Obama’s proposal, saying it would harm charities at a time when they are already under strain because of the recession. Many charities agree, although some have decided not to oppose the plan because they believe bringing down health-care costs would greatly benefit charities and the people they serve.
The Senate and House both adopted budget resolutions earlier this month that proposed creating a deficit-neutral reserve fund for health-care changes but did not specify where the money would come from.
Senator Baucus, Democrat of Montana, has said he favors finding the money within the health-care system itself, for example by taxing employer-paid health benefits above a certain dollar amount. The Senate Finance Committee is now holding a series of discussions on different aspects of health-care policy. It will hold one on “financing comprehensive health-care reform” on May 14.
The senator said the finance committee aims to produce a bill by June, then work to forge a joint text with the Health, Education, Labor, and Pensions Committee by mid-July.
He said he has been asking people to “suspend judgment if only for a nanosecond” if there is a proposal on the table they don’t like. “This is so complicated that your initial reaction might be ameliorated by something else you see in this plan.”
