Speaker Pelosi signals she's open to compromise on health care funding options


House Speaker Nancy Pelosi, D-Calif., has signaled that House negotiators would be open to a compromise regarding the income tax increase required for the universal health care program. And that's a good sign.

Pelosi said a proposed income tax increase on high-income Americans is "at the high end" and the rate could be reduced by "squeezing" more savings out of the health care system, Bloomberg News reported Thursday.




The House bill, which if passed would have to be reconciled with a pending Senate bill, represents the first volley in the revenue negotiations, and it served two purposes: 1) it shored-up the ranks of the House Democrats, who expected the bill to contain a substantive way to pay for health care by increasing taxes on upper-income Americans; and 2) it sent a signal to House Republicans that there will be no dubious revenue streams in the bill: those who benefited the most financially from the U.S. free enterprise system over the past decade will pay the most.

The House bill would be financed by a 5.4% surtax on couples with more than $1 million in income; a 1.5% tax on couples with incomes between $500,000-$1 million, and a 1% percent tax on incomes over $350,000.

Does a compromise loom?

Further, by signaling a possible compromise, Pelosi opens the door to increased support from moderate House Dems, and perhaps even a few House Republicans (But don't hold your breath on that last part of the health care reform coalition). It will also ultimately make reconciliation with a potential Senate universal health care bill that much easier. The Senate bill will likely look more toward cuts in existing government health payments, adding a tax on health care coverage, instituting fees on the health insurance industry, and a lower income tax increase on higher-income Americans, to pay for universal health care.

In sum, Pelosi's stance signals that she's open to compromise, from a funding standpoint, to ensure the broadest coalition possible for universal health care, which is good news for public policy formation.

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Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.

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