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Lack of Congressional Action On Health Insurance Tax Deduction Proposal

Armen Hareyan's picture

The Washington Post on Monday examined the lack ofcongressional action on a proposal from President Bush that would providefederal tax deductions to help U.S. residents purchase health insurance,"with administration officials falling short in their efforts to sell theidea to key lawmakers, failing even to get a committee hearing." Theproposal would provide tax deductions of $7,500 for individuals and $15,000 forfamilies to help residents purchase individual health insurance or coveragethrough employers. In addition, the proposal would eliminate tax breaks foremployer-sponsored health insurance in some cases.

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The proposal "would have been a major change in both the tax code and thehealth care system, difficult to achieve under the best of politicalcircumstances," and "last year was hardly that," with Democrats"not eager to compromise with a Republican president on a signature Democraticissue" and the "lack of working relationships" betweenadministration officials and Democrats, according to the Post.According to individuals familiar with the situation, administration officialsnever expected the proposal to advance but hoped that the plan would "laydown a 'marker' of what a GOP approach to the uninsured would look like,"the Post reports.

A senior Senate Republican aide said, "If there was any kind of failurehere, it was really a failure to recognize that while it was a greatcontribution to the debate ... an idea of that magnitude was going to need alot of work," adding, "It couldn't be put together in a few weeks,and it wasn't going to be politically viable last year in any sort ofmeaningful way" (Lee, Washington Post, 1/28).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.