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Sunday, July 19, 2009
N.M. Delegation Skeptical
By Michael Coleman
Journal Washington Bureau
WASHINGTON — A House bill that would levy new taxes on wealthy Americans — and some small-business owners — drew skepticism from most of New Mexico's all-Democrat congressional delegation last week, though some members said the proposal is worth considering.
Sen. Jeff Bingaman, a key Senate negotiator on health care legislation, said the proposed surtax in the House bill is dead on arrival in the Senate.
"I don't think that has any real prospect of being adopted in the Senate," Bingaman said. "It's not something we're talking about doing in any discussions I've been in."
Rep. Harry Teague of Hobbs said the bill would hurt small-business owners and Rep. Martin Heinrich of Albuquerque said Congress owes it to Americans to squeeze more savings out the health system before passing new costs onto taxpayers.
Bingaman sits on the Senate health committee that unveiled an as-yet unpaid for health reform bill this week. He's also a member of the Senate Finance Committee, which is still examining ways to pay for the health committee's bill.
Dramatic cutbacks on "unnecessary procedures" under Medicare, as well as taxing health care benefits for those who exceed average coverage costs are under consideration to finance the plan, a Senate staffer told the Journal.
The Democratic-controlled House and Senate proposals would both create a so-called "public option," or government-run health plan. President Barack Obama has asked both chambers to pass health care bills before their August recess, a task that appeared increasingly complicated late last week.
The House would pay for its plan in part by levying an extra 1 percent tax on single Americans who make more than $280,000 per year and couples making between $350,000 and $500,000. The bill would impose as much as a 5.4 percent income tax increase on Americans making $1 million per year or more.
Teague said small-business owners would get hurt by the tax hike because many of them report their profits on individual tax returns.
"I have some serious concerns about this version as its drafted right now," Teague said in a telephone interview. "I'm not sure we can afford that in southern New Mexico.
"Our small-business owners employ five, 10 and 20 people, and with the economy the way it is today they are vulnerable already — we wouldn't want to have to cause them to lay off more people," he said.
The House bill also would require employers with payrolls larger than $250,000 annually to provide insurance to employees or pay the government a penalty of 8 percent of payroll.
Teague said health care legislation is a "moving target" that will continue to change in the days ahead, but he would not support the House version as it is now.
Heinrich said there are "a lot of good things in the House bill," including the public option proposal and efforts to address regional disparities in the quality and delivery of health care. The congressman said less than 1 percent of New Mexicans would be affected by the surtax proposal because of the state's relatively low income levels, but that doesn't mean he will support it.
"I think we owe it to the public to pay for as much of this with savings before we go to (more spending)," Heinrich said.
Heinrich said he and other House members are "pushing hard" on Democratic leaders to force health care providers to cut back on the overuse of expensive "unnecessary procedures" such as magnetic resonance imaging and CT scans.
"We have this whole model that works on volume: The more people (doctors) see the more procedures they prescribe, the more they get paid," Heinrich said. "If we can squeeze those savings out of the system then that's money we don't have to raise some other way and it makes the whole system sustainable."
Luján likes tax proposal
Rep. Ben Ray Luján of Santa Fe agreed that cost savings should be a priority, but he said the surtax proposal is not necessarily a bad one.
"This surcharge associated with reforming health care would only apply to those that are earning the highest 1 or 1.2 percent," he said. "I'm sure there would be some households (in New Mexico) that would be affected, but they are also households that benefited from the Bush tax cuts ..."
Luján said opponents of health care reform focus on the costs without acknowledging the savings he said would occur under the Democratic plans.
"This bill is a step in the right direction," he said. "Opponents are finding anything they can do to scare the American people and that's wrong."
Sen. Tom Udall, also a Democrat, called the Senate plan "a good solid bill."
He said bipartisan support is growing in the Senate to boost fees on the insurance industry as a way to help pay costs of a new system. Udall also said the surtax proposed by the House "should be on the list to be considered," even though there doesn't appear to much support for it in the Senate.
"Whether that will be in the final bill, I don't know," he said. "That will be in the negotiations."
Meanwhile, Bingaman — the New Mexico delegation's major player on national health care negotiations — said it's still to soon to predict what a final bill will look like in either chamber of Congress.
"There are lots of moving parts here, and I can't tell you how it will play out," he said.
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