The Corner

Mixed Signals

As Jim Capretta and Jonah have noted, there have been lots of reports in the past week suggesting that the Obama Administration is now looking at taxing employee health benefits to pay for their health care reform.

Last year, when John McCain proposed transforming the existing exemption (which only people who get health insurance through their employer receive) into a tax credit that everyone would receive—thus beginning to make a private individual health insurance market a real possibility without increasing the tax burden of people who now receive the exemption—Obama attacked him for taxing health benefits. Now it seems Obama is willing to tax those benefits without providing the tax credit, so that rather than rebalance the system he would just increase the tax burden of millions of families.

And yet even this is not quite clear. After a week of unmistakable signals in this direction from high ranking administration officials, Obama economic advisor Christina Romer had this exchange with David Gregory on Meet the Press yesterday:

MR. GREGORY:  I want to ask you about a few items in the news.  One is health care, the administration signaling that the president is now open to taxing employer health benefits for employees.  This was something that John McCain proposed in the election and President, then-candidate Obama was opposed to it.  Is he changing his view?

DR. ROMER:  He is still opposed to it.  He certainly was very critical and very skeptical of it.  It is certainly not in our proposal.  And we have proposed other ways to, to deal with health care and to fund it.  And so no, it is not something that he supports.

MR. GREGORY:  So the reports about him now considering this being open to it are wrong?

DR. ROMER:  He–his, his, his skepticism from the campaign absolutely is, is still there.

MR. GREGORY:  So he’s opposed to it.  It’s off the table.

DR. ROMER:  He is absolutely opposed to it and skeptical and…

MR. GREGORY:  You’re not saying it’s off the table.

DR. ROMER:  I, I’m not going to say one way or the other that…

MR. GREGORY:  But he, he might consider it, in other words?

DR. ROMER:  I think what he has said from the beginning is there are no such thing as Democratic and Republican ideas, there are just good ideas.  He will listen to good ideas.  This is not one that he has, has ever supported.

Clear as mud.

Yuval Levin is the director of social, cultural, and constitutional studies at the American Enterprise Institute and the editor of National Affairs.


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