Democrats unhappy with proposed tax

  

updated 6:46 p.m. ET Sept. 17, 2009

WASHINGTON - Unhappy Senate Democrats on Thursday found plenty to complain about in the fine print of the latest health overhaul bill, particularly a tax provision they fear would hit hard at middle-class Americans, from coal miners in West Virginia to firefighters in New York.

The opposition sprang up a day after Senate Finance Committee Chairman Max Baucus, D-Mont., unveiled long-delayed legislation that would transform the nation's health care system, requiring almost everyone to buy insurance, making insurance companies cover people with pre-existing medical conditions and reining in spiraling health care costs.

The bill has given fresh momentum to President Barack Obama's top domestic priority of extending health coverage and controlling costs.

To pay for the 10-year, $856 billion bill Baucus wants to tax high-value insurance plans, those worth $21,000 for a family and $8,000 for an individual. Baucus says those are "Cadillac plans" enjoyed by a small minority of Americans. Aides said about 10 percent of plans and 8 percent of taxpayers could be affected.

But other Democratic senators fear that the tax would reach deep into middle-class pocketbooks, and labor unions are upset. Two Democrats on the Finance Committee, Sens. John Kerry of Massachusetts and Jay Rockefeller of West Virginia, along with other senators, say they want to limit the tax before signing off on the bill.

"We need to make it fairer to working people so that working folks don't get dragged into this at a level where they just don't have the incomes to support it," Kerry told reporters after a closed-door committee meeting to discuss the bill. The panel will begin voting on the bill Tuesday.

Rockefeller, who met privately with Obama on Wednesday, said the proposal "could prevent workers in high-risk professions from getting the health benefits that they need, particularly coal miners," a significant constituency in his state.

It was one of several concerns raised Thursday by Democrats, forecasting contentious debate when Baucus' committee acts on the bill and during later votes in the Senate. Beyond the question of how the legislation would impact working-class Americans, liberal lawmakers are concerned about the absence of a new government-run insurance plan.

Instead of the so-called public plan, Baucus went with nonprofit cooperatives.

Although he failed in his monthslong quest to get Republican backing for his bill and now faces a host of Democratic concerns, Baucus defended his efforts Thursday.

"I don't think there will be any changes in the core provisions of the bill," Baucus said.

At a campaign-style rally at the University of Maryland on Thursday, Obama called reinventing health care a "defining struggle of this generation," though he barely mentioned Baucus' bill. For many of the students, after graduating they would be faced with the requirement to buy health insurance under the Baucus plan.

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