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House Leaders May Put 'Trigger' on Surtax, Seek More Health Savings

By Alex Wayne, CQ Staff

July 20, 2009 -- House Democratic leaders are showing cold feet on a plan to tax the wealthy to finance a health care overhaul and may rewrite the legislation to seek more savings from payment changes in Medicare and Medicaid.

The bill's surtax on high earners, meanwhile, could be adjusted so that it is only implemented if expected savings don't materialize, the No. 3 House Democratic leader said Monday on MSNBC's "Morning Joe.

"I don't think we have to have the surcharge at all. There are a lot of Democrats on my side of the aisle believe that," James E. Clyburn, D-S.C., said. He added that "because we think there is a chance that some funding may need to come far down the road, we could have this trigger in here" for a surcharge on the wealthy, "a trigger which we don't think ever will need to be pulled. And so, that's what we've been working on."

That pronouncement brought jibes from Michael Steel, a spokesman for House Minority Leader John A. Boehner, R-Ohio. "With two weeks to go before their self-imposed deadline for passing a bill that will radically alter nearly 20 percent of the American economy, maybe House Democratic leaders should get on the same page," he said.

The Ways and Means Committee, which shares jurisdiction over the health bill (HR 3200) with two other House panels, approved a surtax on the adjusted gross income of upper-income Americans designed to raise $544 billion over a decade, with a top rate of 5.4 percent for individuals making $800,000 and married couples making $1 million. The surtax would affect the top 1.2 percent of taxpayers.

Clyburn, like other Democratic leaders, complained that the Congressional Budget Office is not giving official credit to savings that the bill's supporters say would occur as a result of provisions designed to promote wellness and avoid expensive medical treatments.

"You know, CBO is not scoring a big part of this bill on the savings side...And we believe that the savings are in the system. We don't need to have any kind of new monies coming into the system if we were to score these savings," he told MSNBC.

Clyburn said House Democrats are prepared to push forward with a bill before the August recess no matter what CBO says in its formal scoring.

"We've had six listening sessions of our members. And we have come away from those sessions believing that we can do this with the savings that we will get out of the [health care] system. If we don't get the scoring from CBO, we can still go ahead and do the plan as we envision the savings to be," he said.

President Obama, speaking briefly after an event at the Children's National Medical Center in Washington, tried to rebuild momentum lost over the past week as lawmakers struggled with the CBO's assessment that the current proposals would increase health cost, not reduce them, over the long term and would not be deficit neutral within the 10-year budget scoring period.

"The need for reform is urgent, and it is indisputable," Obama said.

"We can and we must make all these reforms, and we can do it in a way that does not add to our deficits over the next decade," he insisted. He urged lawmakers to "fight our way through the politics of the moment" and keep on track to enact a health overhaul by year's end.

The House Energy and Commerce Committee was set to resume marking up its section of the House bill at 4 p.m., while talks continued on the Senate side among members of the Finance Committee.

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