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Angie Drobnic Holan
By Angie Drobnic Holan May 19, 2009

Democrats still pondering how to pay for healthcare

With high-profile support from President Barack Obama, Congress is preparing a major overhaul of the nation's health care system. The details have yet to be revealed, but that hasn't stopped critics in Congress from going on the attack.

Rep. Roy Blunt of Missouri said Democrats haven't come up with a way to pay for their ambitious health plan.

"We agree that reform is needed, but Democrats have failed to answer the most basic question of how they want to pay for the more than $1 trillion of health care spending they’re advocating," Blunt said.

It's not clear how much the health care plan will cost. During the presidential campaign, Obama estimated his plan could cost $50 billion to $65 billion a year. That could come to $1 trillion over about 15 to 20 years. But independent sources that favor a health care overhaul put the expense much higher, at about $150 billion a year. That comes to $1.5 trillion over 10 years.

Blunt says that "Democrats have failed to answer the most basic question" of how they want to pay for health care. But Obama has put forward some relatively concrete proposals. His current budget includes a $635 billion fund for health care that includes savings from greater efficiencies and changing the tax code so the wealthy don't get as much in deductions. It's not clear if Congress will go along with the tax changes, though, and analysts have questioned whether the savings will be as great as Obama says.

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Democrats in Congress are still debating how they want to pay for health care. Sen. Max Baucus of Montana of held a hearing on May 12, 2009, to discuss ways of financing health care, and senators during the hearing expressed a great deal of skepticism about new taxation strategies. After Blunt made his comments, Baucus put forward a policy paper that included several ways to potentially pay for health care, including modifying tax exemptions on employer-provided insurance and taxing alcohol and soda.

Len Berman of the nonpartisan Tax Policy Center, who testified during the hearing, said later Congress seems unsure how it will pay for health care. He wrote in a blog post that they seemed to be in the grip of "magical thinking."

"If there was the easy answer they'd have figured it out already," Berman told PolitiFact. "The idea of a new federal tax terrifies legislators. ... If they're serious, and it's not going to be smoke and mirrors, then they're going to have to make decisions that they haven't been willing to make so far."

So Blunt is largely correct that that Democrats "have failed to answer" how to pay for health care. But they are putting forward ideas, and the Obama administration has identified $635 billion — perhaps optimistically — to get a plan started. So we rate Blunt's statement Mostly True.

Our Sources, Blunt calls for bipartisan health care discussions , May 14, 2009

White House Office of Management and Budget, Update Budget Summary Tables , May 2009

White House Office of Management and Budget, The Health Care Reserve Fund: A Historic Commitment to Reform , May 9, 2009

U.S. Senate Finance Committee, Health Reform 2009 , (Democratic plan) Nov. 12, 2008

U.S. Senate Finance Committee, Description of Policy Options Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options , accessed May 19, 2009

The New America Foundation, The Case for Health Care Reform , February 2009

Interview with Len Burman of the Tax Policy Center




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