SERVING MINNEAPOLIS / ST. PAUL / MINNESOTA
Donate Now Sustaining Member


Our major sponsors




Sponsor of
Second Opinion



Our major advertisers


Our in-kind partners


MinnPost thanks these generous donors:

INDIVIDUALS AND FOUNDATI0NS
Blandin Foundation
Otto Bremer Foundation
Bush Foundation
Sage & John Cowles
David & Vicki Cox
Toby & Mae Dayton
Jack & Claire Dempsey
Ethics and Excellence in Journalism Foundation
Sam & Stacey Heins
John S. and James L. Knight Foundation
Joel & Laurie Kramer
Lee Lynch & Terry Saario
Martin & Brown Foundation
The McKnight Foundation
The Minneapolis Foundation
The Saint Paul Foundation
Rebecca & Mark Shavlik

(See all donors here.)

ERIC BLACK INK

  • Switch to Small Text Size
  • Switch to Medium Text Size
  • Switch to Large Text Size
Email Print Submit a Comment

    Taxing health benefits: A read-my-lips moment for Obama?

    By Eric Black | Published Wed, Mar 18 2009 9:35 am

    What is a campaign promise? And how seriously do we expect them to be kept?

    If, during your campaign for president, you criticize one your opponent's ideas, really, really rail against it, advertise against it, successfully convince the public that it's a reason to vote against your opponent, and you win, are you obliged to fight against that idea? To refuse to sign it into law? To rule it "off the table?"

    OK, let's get down to cases. We're talking about President Obama, and about the idea of eliminating the tax-exempt status of employer-paid health insurance.

    During the campaign, the elimination of this very significant tax benefit was a key part of John McCain's health care proposal. (McCain wanted to use it to offset the creation a big tax credit that would be available to every individual or family to use in buying health insurance.)

    Obama denounced the idea. Really, really slammed it. Advertised against it. One 30-second spot, containing the tell-tale "I'm Barack Obama and I approved this message," called the McCain proposal "a multitrillion dollar tax hike. The largest middle class tax hike in history."




    And this wasn't the only Obama ad that went after this idea. On the campaign trail, Obama said that his plan would not raise taxes for anyone earning less than $250,000 a year, whereas McCain, through his elimination of the health care exemption, would hit the middle-class hard.

    In October, campaigning in Virginia, Obama called McCain's plan "so radical, so out of touch with what you're facing, and so out of line with our basic values." There four TV spots and four mailers on the issue in the last weeks before the election, and the message was repeated in campaign appearances across swing states.

    The Washington Post's "Fact-Checker" column gave Joe Biden "four Pinocchios" for calling McCain's proposal "the biggest tax increase in history" without mentioning the offsetting tax credit.

    Kathleen Hall Jamieson of the University of Pennsylvania's Annenberg Public Policy Center, a top analyst of political discourse, said Obama not only ripped McCain for the proposal, but got results. "Obama took the tax issue away from McCain" by labeling McCain's idea as the biggest middle-class tax hike in history, Jamieson said, calling this line of attack "the single most damaging argument that the Democratic ticket made against McCain."

    In October, when Obama and Biden and their TV ads were hitting the issue, polls found that -- contrary to the norm -- the majority of Americans believed  that the Republican nominee was more likely to raise their taxes than the Dem nominee, Jamieson said.

    Why drag all this up now?

    Because on Sunday the New York Times reported that Obama is "open to taxing health benefits." The Times story didn't quote Obama, but it said that "several advisers say that while [Obama] will not propose changing the tax-free status of employee health benefits, neither will he oppose it if Congress does so."

    If that's a little vague for you -- since the advisers aren't named or quoted in that passage -- the Times reporters quoted Obama's budget director Peter Orszag, when asked at a recent Congressional hearing, about the idea of taxing the value of employer-paid health benefits, as saying that the idea “most firmly should remain on the table.”

    Let me make a couple of things clear. I'm not arguing against the merits of the McCain idea. (It's not really McCain's idea. Lots of health plans have versions of the same idea.) Getting to universal health insurance coverage is going to be seriously expensive. I've heard claims that it can be done simply through greater efficiency but color me skeptical. Taxing those benefits could raise trillions of dollars in revenue.

    The tax exemption itself was a historical fluke that came into common use as a way to get around wage and price controls during World War II. Using the income tax code to encourage employers to provide health insurance has a a built-in regressive quality, because the higher your tax bracket, the more you benefit. And the reporting so far leaves open the idea of a partial loss of the exemption, perhaps targeted at high-income employees (although, obviously, the more you target it, the less revenue you raise). So I'm fine with this idea remaining on the table.

    And I understand that Obama has not said he is for it. Even these advisors say only that he won't oppose the idea if that's how Congress chooses to finance the expansion of health care coverage (although I have trouble imagining the Congress forcing such a controversial idea on the president if he doesn't give them some cover). Christina Romer, chairman of Obama's Council of Economic Advisors, said Sunday on "Meet the Press" that Obama still opposes the idea and will not put it in the White House's health care proposal. (See page two of the Romer on "Meet the Press" transcript.)

    You could say, as Romer tried to say, that this is an example of Obama being open-minded and bipartisan, not caring whether an idea originated with Democrats or Republicans, only wanting ideas that work. The trouble is that Obama didn't just run against the idea, he called it radical, out of touch, an affront to our basic values. And he rode that atack for all it was worth, and it was worth quite a lot, politically.

    One of the reasons I called Jamieson to discuss this is that I know she has written that, contrary to public cynicism about campaign promises, most of the time campaign discourse is a very good guide to what a candidate will do if elected. So I asked her how big a dent it would put into Obama's integrity if he ended up signing a bill that removed the exemption for health benefits.

    She said that Obama appears to be off to a very strong start as a campaign promise keeper. And she said that, at present, the statements by Obama aides that he is "open" to the idea, but still personally opposed, are nothing but "trial balloons."

    But, she concluded, that if Obama does end up signing a bill that eliminates the exemption, it would go down with the first George Bush's famous "Read my lips, no new taxes" pledge, which he broke in 2000 by signing a tax hike, and Lyndon Johnson's promise in October 1964, while portraying himself as a peace candidate against Barry Goldwater, that "We are not about to send American boys 9 or 10,000 miles away from home to do what Asian boys ought to be doing for themselves."

    Like what you just read? Support high-quality journalism in Minnesota by becoming a member of MinnPost.

    Advertisement:

    10 Comments: Hide/Show Comments

    E-mail address

    Password

     

    Forgot Password? | Register to Comment

    MinnPost does not permit the use of foul language, personal attacks or the use of language that may be libelous or interpreted as inciting hate or sexual harassment. User comments are reviewed by moderators to ensure that comments meet these standards and adhere to MinnPost's terms of use and privacy policy.

    We intend for this area to be used by our readers as a place for civil, thought-provoking and high-quality public discussion. In order to achieve this, MinnPost requires that all commenters register and post comments with their actual names and place of residence. Register here to comment.


    Eric Black

    Eric Black Ink

    minnpost.com/ericblack


    Eric Black is a former reporter for the Star Tribune and Twin Cities blogger. He writes about politics and government of Minnesota and the United States, the historical background of topics and other issues. Click here to view Eric's previous postings at former blog, Eric Black Ink. He can be reached at eblack [at] minnpost [dot] com.

    Recent Posts by Eric Black