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Baucus Scrounges to Find Health Reform Money

Senate Finance Chairman Max Baucus (D-Mont.) has learned to stop offering deadlines for when his panel might mark up health overhaul legislation.

“We’re going to agree when we agree,— Baucus said after a closed-door meeting last week with committee members over how to pay for legislation that would provide health care coverage for the nearly 50 million Americans who currently lack it. “We’re ready when we’re ready.—

Differences over paying for the plan, which could cost $1 trillion over 10 years, have repeatedly forced Baucus to delay writing the bill. Already, a markup scheduled to take place before the July Fourth recess never materialized and the multiday markup expected this week has now been tentatively moved to the final week of July.

As a result, the Finance Committee will spend much of this week in continuing talks over finding $320 billion in revenue raisers, such as taxes, to cover the cost of the plan that’s not paid for by other health system reforms.

“We’re trying to figure out a way to raise $320 billion over 10 years in a way that minimizes Senators’ angst — which always occurs when you’re raising revenue,— Baucus said. “It’s always difficult to raise revenue — always, always, always. But we have to pay for the bill.—

Some of Baucus’ revenue-raising woes are self-inflicted. His push to tax employee health benefits, which affects a broad swath of taxpayers, has been roundly criticized by Congressional Democrats and the White House — though he won’t rule it out.

“There are infinite ways to draft each provision,— said Baucus, who last week was asked by Majority Leader Harry Reid (D-Nev.) to stop pushing the plan.

Adding a tax on health benefits could cost the support of moderate Democrats — which would likely be critical to getting any health overhaul legislation through the Senate. “I don’t see how I could support that,— said Sen. Ben Nelson (D-Neb.), who added that “people back home are really raising red flags about it.—

Other revenue options on the table include rescinding the nonprofit tax status of hospitals that operate like for-profit entities and no longer offer charity care. For years, Sen. Chuck Grassley (R-Iowa), the ranking member on Finance, has sought to end the exemption, and now he may have some leverage to do so to pay for health reform.

Another possibility being considered is a surcharge that could reach 4 percent on those earning more than $200,000 a year or a couple taking home $250,000. Senate negotiators say a “Paris Hilton tax— aimed at the wealthy’s investment income might be in the mix, but critics charge it would hurt retirees who have already seen their retirement accounts suffer during the economic downturn.

Also on the table is taxing sugary soda and alcohol, but Senate Budget Chairman Kent Conrad (D-N.D.) said those are less viable options.

“I don’t think taxing beer has much prospect,— he said. But “everything is on the table — everything you have heard about or read about is on the list. The rule we follow is nothing is decided until everything is decided.—

Conrad’s rule, however, may not apply to a plan for increasing taxes on the foreign profits of U.S. multinational companies that seems to have been dropped. Multinational corporations, along with the U.S. Chamber of Commerce, have fiercely opposed the tax increase and said it could ultimately force companies to make layoffs to recoup lost profits.

“There’s a block of opposition,— said Sen. John Kerry (D-Mass.), a Finance member. “Certain things you get a pretty quick read on that it’s not going to fly … [and] there are enough people that you don’t get the critical mass [of support] that you need— to increase taxes on foreign profits.

But some liberals, as well as the White House, still say it should be on the table.

“That ought to be taxed just like any other income,— said Sen. Tom Harkin (D-Iowa), a leading backer of the health overhaul.

Sen. Jon Tester (D-Mont.) agreed with Harkin, saying, “If these people are pumping their profits offshore to get out of paying taxes, that’s not fair.—

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