US Senate Finance Panel Seeking $320 Bln For Health Bill

WASHINGTON (Dow Jones)--Members of the Senate Finance Committee said Wednesday that the panel is seeking $320 billion in new revenue to pay for health-care legislation, which has become a harder task as proposals to tax health benefits have lost favor.

Senate Finance Chairman Max Baucus, D-Mont., and Sen. Kent Conrad, D-N.D., both pointed to a $320 billion gap between the cost of a bill to overhaul the U.S. health system and the revenue and cost savings they have generated so far under current proposals. Senate Democratic leaders on Tuesday warned Baucus not to tax health benefits, which has sent committee members searching for new sources of revenue.

Still, Baucus insisted Wednesday that taxing health benefits, which are excluded from any taxation under current law, is still possible. The committee could set a higher cap for the amount health benefits excluded from taxation than it had originally planned, he suggested.

"It really depends if there's a way to set a cap high enough that basically addresses most of the concerns of those who have the concerns," Baucus said.

But a higher cap would also generate less revenue. Conrad said that committee members discussed capping the tax exclusion at $25,000 per household, which he said would generate $90 billion. That would still require the committee to generate over $200 billion in new revenue.

Conrad said the committee also discussed a surtax on wealthy Americans, which Democrats in the House of Representatives are also discussing. But, he acknowledged, Republicans "are less likely to support" a tax skewed toward high-income earners.

The delicate negotiations illustrate how difficult it will be for Baucus to craft an agreement that both enjoys the support of liberal Democrats as well as at least some Republicans. Historically, the finance panel rarely approves major legislation without bipartisan support.

Source: online.wsj.com