Rostenkowski, Clinton at Odds Over Health Tax

Additional tax revenues of as much as $40 billion may be needed by 1998 to meet President Clinton’s goal of providing health insurance to all Americans, House Ways and Means Chairman Dan Rostenkowski (D-Ill.) said Tuesday.

But Clinton opposes such a tax increase, according to White House Press Secretary Dee Dee Myers. And as recently as Monday afternoon, Clinton strongly rejected Rostenkowski’s proposal, first advanced in late April.

It would not be “sound policy or fair” to ask the middle class to pay more than they already do for the cost of treating the uninsured, Clinton said during a round-table discussion with health reporters.

The disagreement between Clinton and one of his chief congressional allies underscores the daunting task of finding a consensus on how to finance health care reform.

Rostenkowski conceded that Clinton’s approach ultimately would bring medical costs under control but he said that he believes the tab will be high in the early years.

“Failure to include a sound and sensible funding mechanism in any reform bill will be a fatal blow to the long-term prospects of reform,” Rostenkowski said in a speech here Tuesday to the International Foundations of Employee Benefits Plans. “People must understand the true costs of health care and the best way to do that is to let them see the tab,” he added.

But Clinton appears to be dead-set against such an unspecified tax increase. “Why should we have a broad-based tax in which you pay (with employer-provided insurance) even more money for health care--not for the unemployed-uninsured but for the employed-uninsured?” the President said.

“I simply don’t think it’s fair,” Clinton added. “Why should we substitute--for the responsibility of other employers--by putting an even heavier load on those that are already doing their part, whether they’re employers or employees? I don’t agree with that. I don’t think that’s the right way to do it.”

The President wants all employers to “share” the burden of providing at least 80% of a worker’s premiums, with the employee paying the rest.

Despite their differences on the issue, the President was quick to praise the influential chairman of the tax writing panel. “He is a very able person who is trying to get his committee to come to grips with what the real choices are. And I respect that,” Clinton said.

Rostenkowski, who said that his committee soon will begin marking up a bill that will provide both universal coverage and cost containment, faces a possible criminal indictment, which would mean that he would have to step down as committee chairman. Most analysts believe that his departure would be a serious blow to the chances of comprehensive health reform this year.

In his speech, Rostenkowski made no mention of the possible legal difficulty. Instead, echoing Clinton’s sentiments on Monday, he expressed confidence that Congress will enact a “major health care reform bill this year.”

“I don’t believe that members of Congress can return to their districts this fall empty-handed,” Rostenkowski said.

Earlier this year, the Congressional Budget Office said in a report, disputed by the Administration, that the President’s plan would drive up the federal deficit by $74 billion by the year 2000.

Meanwhile Tuesday, three female Cabinet members released a study showing that 12 million working-age women--8 million of them with jobs--have no health insurance. It predicted that the Administration’s health reform proposal would ensure coverage for everyone.

They also said that the Administration would stand firm in insisting that abortion be covered as part of the reproductive services guaranteed in the package of basic medical benefits. The issue is expected to provoke a huge battle on Capitol Hill.

“Under our legislation, all plans will have to provide the full range of reproductive services--and that includes abortion,” said Health and Human Services Secretary Donna E. Shalala, who, along with Energy Secretary Hazel O’Leary and Environmental Protection Agency Administrator Carol Browner, briefed reporters at the White House.

“We want to build upon existing insurance plans,” Shalala said, noting that many such private plans cover abortion. If it were not covered under the Administration’s plan, “we would be taking something substantial away from women who now have it,” she added.

Shalala and the others said many of the problems women now face--such as losing coverage when they change jobs or become divorced or widowed--would be eliminated under Clinton’s proposal.

“All women will be guaranteed coverage regardless of their health status, regardless of their marital status, job status or their ability to pay,” Shalala said.

The study, conducted by the Institute for Women’s Policy Research and funded by the Henry F. Kaiser Family Foundation, found that women were more likely to work part time, have shorter job tenure and lower earnings than men.

As a result, “women have more marginal places in the labor market than men and so have less health insurance from their own employers than men do,” the report said.

But even in large firms, in higher paying positions and industries and in full-time stable work, “women have less direct insurance from employers than do men.”