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Going, Not Gone--Bush Remains Relevant to 2008 Health Care Debate

By John Reichard, CQ HealthBeat Editor

January 30, 2008 -- It's his last year in office, and the health care proposals in his State of the Union address Monday night sounded recycled, but that doesn't mean President Bush is no longer relevant to the health care debate.

His veto pen assures—as does his continuing espousal of tax code changes that partly entail taxing richer health coverage benefits—that an approach to raising money to cover the uninsured that even has quietly found its way, in part, into the health overhaul plan of Democratic presidential candidate Sen. Hillary Rodham Clinton of New York.

"Members of Congress should know: If any bill raises taxes reaches my desk, I will veto it," Bush declared in his State of the Union address Monday night. But the proposal for health care-related tax code changes that Bush also made Monday night is tantamount to a tax hike for some Americans, assuming it is the same as a proposal he unveiled a year ago.

Rather than spark outrage, however, the proposal intrigues many Republicans and some Democrats, perhaps because it doesn't immediately sound like a tax hike and also because it could help raise many billions of dollars to help Americans buy health care coverage.

In effect, it would make health insurance premiums taxable above a certain level, an approach similar to one taken by Oregon Sen. Ron Wyden, a Democrat, and Utah Sen. Robert F. Bennett, a Republican, in a bipartisan bill (S 334) that has attracted a fervent following among some influential policy analysts and among a still small but growing number of senators (thirteen so far). And the health overhaul plan developed by Clinton also would partially fund coverage of the uninsured by making premiums taxable for "very generous" plans provided to individuals making over $250,000.

Bush would direct far more money to buy policies on the individual market, a shift away from employment-based insurance many Democrats decry. His approach to tax code changes would cover far fewer uninsured Americans than Democrats want.

But conservatives seem energized by the approach Bush has taken.
"Health care has been a sleeper issue in the Republican presidential primaries," observed conservative policy analyst Grace-Marie Turner in an op-ed piece in the Wall Street Journal on Tuesday. "But as we heard in President Bush's State of the Union address last night, the GOP does have ideas — big and transformative ideas designed to energize the free-market to target many of the problems that plague our health sector."

"We share a common goal: making health care more affordable and accessible for all Americans," Bush said in his speech. "The best way to achieve that goal is by expanding consumer choice, not government control. So I propose ending the bias in the tax code against those who do not get their health insurance through their employer. This one reform would put private coverage within reach for millions, and I call on the Congress to pass it this year.

"Congress must also expand health savings accounts, create association health plans for small businesses, promote health information technology and confront the epidemic of junk medical lawsuits," he said. But with the possible exception of health information technology, those items appear to be non-starters this year in Congress.

Now that he's leaving office, Bush also has an opportunity to more freely talk about major changes to the Medicare program to control entitlement spending. It's a debate that sooner or later will begin in real earnest with baby boomers reaching retirement age, and Bush may be able to help Republicans score some points with voters by highlighting it first, particularly if they handle it gingerly.

"Every member in this chamber knows that spending on entitlement programs—like Social Security, Medicare and Medicaid—is growing faster than we can afford," he said. "We all know the painful choices ahead if America stays on this path: massive tax increases, sudden and drastic cuts in benefits and crippling deficits. I've laid out proposals to reform these programs. Now I ask members of Congress to offer your proposals and come up with a bipartisan solution to save these vital programs for our children and grandchildren," he said.

On the issue of embryonic stem cells, few doubt that the door is closed this year to changes in the current policy that prevents federal funding of studies of embryonic stem cells obtained by destroying additional days-old embryos. Bush reminded Congress of the unwavering stand he's taken on the issue and of recent findings that may help speed research on regenerative medicine bottled up by his policies.

"In November, we witnessed a landmark achievement when scientists discovered a way to reprogram adult skin cells to act like embryonic stem cells. This breakthrough has the potential to move us beyond the divisive debates of the past by extending the frontiers of medicine without the destruction of human life," he said. "So we're expanding funding for this type of ethical medical research. And, as we explore promising avenues of research, we must also ensure that all life is treated with the dignity it deserves."

Bush also called on Congress to pass legislation "that bans unethical practices such as the buying, selling, patenting or cloning of human life." With a study released Jan. 17 by the California company Stemagen Corp. reporting that human embryos had been cloned using adult skin cells, fears over the prospect of cloning of human embryos leading to the birth of a fully formed cloned human being could rekindle the dormant debate in Congress over a ban on cloning.

Bush also highlighted another health care issue that he has championed which seems sure to see action in Congress this year: the reauthorization of the President's Emergency Plan for AIDS Relief, the five-year, $15 billion program to counter global AIDS and malaria that is set to expire after this year.

"America is leading the fight against disease," he said. "With your help, we're working to cut, by half, the number of malaria-related deaths in 15 African nations. And our emergency plan for AIDS relief is treating 1.4 million people," Bush said. "I call on you to double our initial commitment to fighting HIV/AIDS by approving an additional $30 billion over the next five years."

On veterans' health care, Bush urged lawmakers to enact changes recommended by former Senate Majority Leader Robert Dole and former Health and Human Services Secretary Donna Shalala to improve care for wounded veterans. But Democrats reacted skeptically to the changes proposed by Bush to aid military families.

"The difficulty . . . that we've had on this issue is that the budgets for Iraq have sucked out all the air," Susan A. Davis, D-Calif., chairwoman of the House Armed Services Military Personnel Subcommittee, said. "Families have not been nearly as high a priority as they should be. Maybe that'll change. I doubt it."

Bush said that VA funding had increased by more than 95 percent since he had taken office, but "he didn't tell them that his budget proposals have repeatedly cut funding for veterans, and that the only reason spending on veterans' programs has increased is because Congress raised the level of spending," Daniel K. Akaka, D-Hawaii, chairman of the Senate Veterans' Affairs Committee, said.

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