"Broad tax increases" probably will be required to finance health-care coverage for all Americans, the chairman of a key House panel predicts.
In a break with President Clinton, House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., whose help Clinton needs to shepherd his health-care reform package through the House, says in a speech today that "tens of billions of dollars annually" to pay for health reform cannot be raised without such a tax increase.
Clinton has maintained that his plan can be financed without new taxes other than a 75-cent cigarette-tax increase. He also wants a 1% payroll levy on large, self-insured employers.
Rostenkowski refuses to predict the type of tax increase his panel will settle on, but says a value-added tax - akin to a national sales tax - is the least likely. The White House also dropped a value-added tax. "Everyone may have to make a tangible contribution to finance this program," Rostenkowski says. His comments, in the advance text of a speech to be given at the Harvard School of Public Health, complicate the status of Clinton's proposal as it gets rewritten by key congressional committees.
Thursday, those panels moved to ease the burden on small business and expand benefits, while warning of additional changes to come.
Clinton hopes to finance expanded coverage, guaranteed benefits and subsidies for small business and low-income people with requirements that employers pay 80% of workers' premiums, savings in Medicare, and tax increases - such as the cigarette tax.
But the Congressional Budget Office has ruled the plan leaves a $ 74 billion pool of red ink after five years, and many in Congress call Clinton's financing plan unrealistic.
"There's ample reason to wonder whether a broad tax increase will be required that has some impact on virtually every American," Rostenkowski says.
Rostenkowski predicts his committee will approve a package guaranteeing health insurance for all - Clinton's top goal, not shared by most Republicans and some Democrats. Rostenkowski predicts employers will be required to provide "and partially pay for" that insurance, but he stops short of using Clinton's proposed 80% employer share.
"I am cautiously optimistic, but this is not a done deal," Rostenkowski says. Part of his caution stems from the actions of other House committees:
-- The labor-management relations subcommittee of the House Education and Labor Committee began work on a revised plan that expands the Clinton plan's benefits and subsidies, at a cost of up to $ 30 billion more over five years.
"If this nation attempts to do health care on the cheap, we will be back here in a decade or two . . . trying to fix it," says subcommittee chairman Pat Williams, D-Mont.
-- The House Energy and Commerce Committee inched closer to attaining the Democratic votes needed to advance a plan in which employers with 20 or fewer workers would be exempt from any federal mandate. "We're making headway," says Rep. John Dingell, D-Mich., the panel's chairman.
But Rep. Jim Slattery, D-Kan., who is undecided, says: "We're going to have to figure out what to do without an employer mandate."
