A revolt by “blue-dog” supposedly fiscal-conservative Democrats threatened to wreck Obama’s health care package. The “solution” was to raise taxes and if that does not bring in enough money (it’s wont), then raise them again until it does.

Inquiring minds are reading Health-Care Bill Would Tax High-Income Americans for details of the double tax increase plan.

Democratic lawmakers in the U.S. House of Representatives want to increase taxes on the highest- earning American families to help pay for an overhaul of the nation’s health-care system.

Legislation to be unveiled on July 13 would raise $540 billion over the next decade by setting a 1 percent surtax on couples with more than $350,000 in annual income, said Representative Charles Rangel, chairman of the tax-writing Ways and Means Committee. Higher rates would take effect for those earning $500,000 and $1 million, Rangel said.

There was a fresh round of talks yesterday as Democratic leaders tried to quell a rebellion over the cost of health-care legislation by dozens of members of their own party.

In a letter to party leaders, 40 members of the Blue Dog Coalition, a group of self-proclaimed fiscally conservative Democrats, raised “strong reservations” about the draft of a bill they said would fail to sufficiently reduce health-care costs and may hurt doctors and hospitals.

The protest forced party leaders to postpone yesterday’s scheduled release of the draft, as well as a House Energy and Commerce Committee debate that was expected to begin July 13. The objections from Blue Dog Democrats prompted the legislation’s authors to revise the measure, said the aide, speaking on condition of anonymity.

The plan the Ways and Means panel agreed on yesterday would require individuals to begin paying the surtax when their income hits $280,000, with higher rates taking effect when those incomes reach $400,000, and again when they hit $800,000.

It would be levied on adjusted gross income, before deductions for items such as mortgage interest and charitable gifts. Regular income taxes are assessed after such write-offs.

While the surtax would go into effect in 2011, Representative Allyson Schwartz of Pennsylvania said it would increase if projected savings that Democrats expect the legislation to achieve aren’t realized. “We were discussing doing it at a lower rate, then building to a higher rate in later years if we don’t get enough savings,” Schwartz said.

“We need small businesses and entrepreneurs to create new jobs and jumpstart economic growth,” Senator Jon Kyl of Arizona said in a statement. “But they can’t if they are saddled with an onerous surtax on their business income.”

The plan “shows once again that there are some who have no concept of how private industry creates jobs and grows the economy,” Kyl said.

President Barack Obama said yesterday that passing a comprehensive overhaul of the system is his “highest legislative priority” and he expects it will be achieved.

“I’m also looking at the federal budget,” Obama said. The only way to reduce the deficit is to “corral and contain” health costs. Referring to Obama’s push to extend coverage to the estimated 46 million uninsured Americans, the group said: “We cannot ‘add’ new consumers to a broken system.”

Assumptions are Cornerstone of Boondoggle

The cornerstone of this boondoggle is the assumption there will be “savings” as a result of this plan. The idea is lunacy. Something that costs over a $1 trillion by definition has a savings of NEGATIVE $1 trillion. That of course is why taxes need to be raised, and will be raised again when the “savings” magically do not appear. Indeed it is rational to expect a bigger deficit than what has been proposed.

As expected, the so-called fiscal conservative “blue dogs” are willing to go along with this monstrosity.

The real deal: Obama’s health care package has no provisions for capping costs, rationing health care for terminally ill patients, limiting the plan to basic essential needs, allowing group bargaining of costs by the government, or allowing cheaper imports of drugs come in from Canada.

Thus, Obama’s talk that he will “corral and contain” health costs goes beyond disingenuous to the point of being a blatant lie.

Please write your legislative representative and let them know what you think.

Mike “Mish” Shedlock
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