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« Dem Leaders See GOP Support for Sotomayor | Blog Home Page | Chu Can Get Comfortable »

Pressure Building On White House Over Health Care Exclusion

On several fronts today, the White House is facing pressure to abandon its resistance to taxing employer-based health insurance plans to finance a reform plan.

That was a major campaign issue in 2008, and then-Sen. Obama's campaign harshly criticized John McCain for proposing to eliminate the exclusion that health insurance received. A TV ad said health care would "unravel" under McCain's plan. When the White House has been asked about any specific proposals with regard to financing health care it has generally declined to comment, with the exception of the exclusion.

Today, Sen. Max Baucus (D-Mont.), chair of the Finance Committee, told reporters today that Obama "is not helping us" by holding firm to his opposition to taxing benefits. "That is making it difficult," he said.

Sen. Olympia Snowe (R-Maine), who met with Obama at the White House today, said she understands Obama's concern about eliminating the exclusion, and said they'd have to "draw a very high line to make sure the average worker wasn't effected" by such a change. But, in an interview with NBC's Andrea Mitchell, she suggested that he may have to change course. "The president would obviously have to come out and express support or endorse that because obviously he was opposed to that during the presidential campaign," she said.

But the most damaging blow to the White House came from Doug Elmendorf, head of the Congressional Budget Office. Testifying in the Senate today, he warned that rather than "bending the curve" of government health care spending, as the White House has repeatedly argued reform would, the proposals currently under consideration "significantly expands the federal responsibility for health care costs."

"The way I would put it is that the curve is being raised, so there is a justifiable focus on growth rates because of course it is the compounding of growth rates faster than the economy that leads to these unsustainable paths," he said.

Asked what would "bend the curve," Elmendorf suggested -- you guessed it -- eliminating the health care exclusion.

"We have a subsidy for larger health insurance policies in our tax code, and that like other subsidies encourages more of that activity. Reducing that subsidy would reduce that," he said.

The White House has not yet responded to requests for comment.