Key Senate Democrats, bidding for bipartisan support on health care, pared back subsidies designed to make insurance more affordable on Thursday and floated a compromise that rules out direct government competition against private insurers.
Despite the cost-cutting, the proposal backed by Sen. Max Baucus, chairman of the Senate Finance Committee, requires most individuals to purchase coverage and forbids insurance companies from denying it on the basis of pre-existing medical conditions.
The brief outline did not specify how the government's costs would be covered, although Baucus and many Republicans favor a tax on certain employer-provided health benefits. The Montana Democrat has said he intends to hold the cost of the legislation to about $1 trillion, well below the $1.6 trillion estimate the Congressional Budget Office made of an earlier set of options.
Across the Capitol, Democrats on the House Ways and Means Committe e privately circulated a list of possible tax increases to pay for expanded healthcare.
They ranged from raising the Medicare tax, slapping a 10-cents-per-can increase on sweetened drinks, raising the alcohol tax, imposing a new payroll tax on employers equal to 3 percent of their health care expenditures and taxing employer-provided health insurance benefits above certain levels.
House Democrats were expected to unveil an outline of their own to expand health coverage on Friday, although several officials said they did not plan to include mention of the tax increases under consideration.
Taken together, the developments reflected an eagerness by congressional Democrats in both houses to meet a self-imposed deadline of having healthcare legislation to the floor of both houses of Congress by summer. President Barack Obama has made the issue one of his top priorities.
Neither the Senate Finance Committee outline nor the list of tax options under review by House Democrats was made public. The Associated Press obtained copies of both.
"There's no doubt in my mind we're going to get a bipartisan bill," Baucus told reporters as he emerged from a meeting with a small group of Republicans he referred to as a "coalition of the willing."
The senior Republican on the Finance Committee was not nearly as bullish.
"I'm still at the table. I wouldn't be at the table if I didn't think there was some hope for it," said Sen. Chuck Grassley, R-Iowa. "But tomorrow it could be an entirely different story."
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