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Bush’s Insurance Plan Looks DOA

President Bush’s call for a major overhaul of the employer-based health insurance system is unlikely to see much, if any, action in the Senate this year in the face of near-universal opposition from Democrats and a GOP base still stinging from the Social Security debacle in the 109th Congress.

Bush was expected to make the proposal a central aspect of the domestic policy section of his State of the Union address. The plan would create a new tax on individuals who have insurance through their work if the value of their coverage exceeded $15,000 a year. Those taxes would be used to help subsidize coverage for low-income citizens.

Senate Democrats have largely dismissed the proposal, charging it will cause a significant tax burden on middle-class families.

Senate Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.) said that while he is pleased the Bush administration is considering some sort of insurance overhaul, the president’s plan is inadequate.

“The President’s proposals are an opportunity missed. They will not improve access to good coverage, and won’t help working families afford the spiraling cost of health care,” Kennedy said in a statement.

Sen. Ron Wyden (D-Ore.), a longtime proponent of reforming the tax code’s health insurance provisions, said he opposes Bush’s plan. “I’m especially troubled by the example of a couple who makes $50-$55,000 a year, with a youngster who has big medical bills,” Wyden said. “They’ll pay hundreds of dollars in new taxes.”

Presidential hopeful Sen. Barack Obama (D-Ill.) said he would not support the plan. “It’s not going to be adequate,” Obama said, arguing it does not do enough to cover a number of problems with the current insurance system.

A Democratic leadership aide argued that with Democrats strongly opposed to the proposal it is unlikely GOP leaders will have the muscle necessary to force Senate Majority Leader Harry Reid (D-Nev.) to take up the issue.

Republicans could attempt to attach it to stem-cell research — the only major health care bill scheduled for consideration in the near future — but the Democratic aide said Republicans would have difficulty drumming up the 60 votes needed to do so.

“They don’t have the votes. It’s not going to come up,” the aide said.

A senior GOP leadership aide acknowledged that the insurance reforms would likely not get a serious look in the Senate.

However, the aide said Minority Leader Mitch McConnell (R-Ky.) could take a page from last year’s Democratic playbook and use the issue to try to paint Democrats as protecting upper-middle-class citizens at the expense of the poor. “It gives us something to talk about,” the aide said.

Democrats warned that should the GOP make a political push over the issue, they have begun laying the groundwork to use arguments similar to those Reid employed in 2005 to block Bush’s Social Security plan.

For instance, one leadership aide pointed out that since word of the proposal began to leak late last week, Democrats have been successful in portraying the plan as a tax increase on the middle class and that by framing the debate in such a way, Republicans would be forced into the position of having to defend the proposal.

Similarly, a second Democratic aide said the plan’s roots in the world of conservative think tanks and the seemingly arbitrary use of the $15,000 threshold will make it easy to paint as “this year’s Social Security privatization. Drop it in the dumb file.”

Emily Pierce contributed to this report.

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