Health-Care Plan Will Pass Finance Panel by August, Conrad Says

The Senate Finance Committee will approve a U.S. health-care overhaul plan by early August, said Senator Kent Conrad, a top Democrat on the panel, even though setbacks have slowed the drive for a bipartisan compromise.

Conrad said while members of both parties are making substantial progress, Democrats probably won’t reach their goal of getting the bill through the full Senate before Congress’s month-long August recess.

“We can get it out of the Finance Committee,” Conrad, of North Dakota, said in an interview with Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “I don’t think we’ll be through the floor during this work period. I think that’s too big a lift, but that really isn’t that important.”

Conrad’s optimism stands in contrast to signs that the health-care bill is bogged down in the committee. Senate Majority Leader Harry Reid told panel Chairman Max Baucus there wasn’t strong support among Democrats or the public for a new tax on employer-provided health-care benefits, a key part of the plan to help cover the plan’s $1 trillion cost.

Conrad isn’t backing down from the tax plan.

Such a levy “has to be on the table,” said Conrad, 61, who also is chairman of the Senate Budget Committee. “To say we can’t touch any of it -- how about plans that are worth more than $30,000 a year?”

Right Direction

He insisted this week’s negotiations were “incredibly productive and that this is moving in the right direction.”

A health-care overhaul is President Barack Obama’s top domestic initiative. The president wants Congress to send him a bill by mid-October to slow the pace of cost increases and provide coverage to the 46 million Americans who don’t have health insurance.

Conrad said he supports having a commission impose spending reductions if the health-care plan doesn’t achieve its projected savings in four or five years. A federal panel -- similar to the one that recommended military-base closings -- would provide a list of cuts, and Congress would either approve or reject them.

Conrad said such an approach is vital for preventing the rapid rise in health costs from crippling the economy.

“Look, as a country, we’re headed for the cliff,” Conrad said. “We’re headed for a debt 100 percent of the total size of our economy.” The main part of “this fiscal problem is health- care costs,” he said.

Second Stimulus?

Turning to the U.S. economy, Conrad said it’s too early to consider enacting a second economic-stimulus package. Some Democrats, including House Majority Leader Steny Hoyer of Maryland, have said they are leaving open the possibility of another measure to augment the $787 billion plan passed in February.

Only about 15 percent of the first measure’s funds have been released into the economy, and another 50 percent or more will be spent during the next year, Conrad said.

“The package really is not working fully because it’s not been deployed in any serious measure at this point,” the senator said.

A health-care overhaul needs to be followed by broad changes in the U.S. tax code, Conrad said. The tax system is a “crazy quilt of provisions” that only collects 76 percent of what’s owed, partly because U.S. companies are using offshore tax havens.

‘On the Table’

“If you look at the leakage in the system, if you look at our competitive position in the world, if you look at basic equity and fairness and you look at how serious our long-term debt and deficit situation is, it’s got to be on the table,” he said.

He said he favors raising taxes on the wealthy and creating a value-added tax. Such a tax is imposed on each stage of production, often including retail sales to consumers.

“We very seriously have to consider a value-added tax in combination with a high-end income tax to keep the system progressing,” he said.

Conrad said Congress also must prepare to make some long- term changes to the Social Security retirement system to help curb the budget deficit. He said the eligibility age for receiving retirement benefits should be raised, and the inflation index that helps to set benefit levels should be adjusted downward to more accurately reflect the inflation rate.

“Even by a small amount over many years makes a big difference,” he said.

Source: bloomberg.com