Dems eye health care tax on wealthy

By Associated Press Writer ERICA WERNER (The Associated Press)

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Vice President Joe Biden listens to Health and Human Services Secretary Kathleen Sebelius speak to small business leaders Friday about the rising costs of health care for people who work in small businesses and their small business employers. The presentation took place in the Eisenhower Executive Office Building in Washington. (AP)

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WASHINGTON (AP) – Key House Democrats decided Friday to raise taxes on the wealthy to help pay for health care legislation, at the same time they sought to quell concerns among moderate and conservative lawmakers about other elements of the bill atop President Barack Obama’s domestic agenda.

The decision, made behind closed doors, capped an up-and-down week as Obama, traveling overseas, reflected that “We’re closer to that significant reform than at any time in recent history. That doesn’t make it easy. It’s hard.”

A new surtax agreed to by Democrats on the tax-writing Ways and Means Committee would start with households making $350,000 a year and begin in 2011, said the committee’s chairman, Rep. Charles Rangel, D-N.Y.

It would raise some $540 billion over 10 years, about half the cost of Obama’s ambitious plan to reshape the nation’s health care system and provide care to the 50 million uninsured.

But the proposal faces an uncertain reception in the Senate and from moderate and conservative Democrats in the House, who rebelled Thursday over various aspects – including costs – of the plan.

Democratic leaders spent hours Friday trying to soothe those concerns without reaching resolution, even as Rangel’s panel met to come up with a payment proposal.

Obama acknowledged obstacles to the legislative timetable but said failure to meet a self-imposed August deadline for moving bills through the House and Senate didn’t doom the endeavor.

“I never believe anything is do-or-die,” the president said at a news conference in Italy. “But I really want to get it done by the August recess.”

Rangel said the new surtax would be graduated, starting with households at $350,000 and then rising at $500,000 and again at $1 million. In combination with cuts to Medicareand Medicaid and fees paid by employers who don’t provide insurance to their employers, that would pay for a comprehensive health bill costing around $1 trillion over 10 years.