Conservative Dems rebel on health bill

By ERICA WERNER

WASHINGTON

Conservative Democrats in the House rebelled against their party leaders Thursday, raising concerns about the cost of President Barack Obama's health care overhaul and seeking to put the brakes on legislation.

The fiscally conservative Blue Dog Coalition planned to present a letter to House Democratic leaders asking for more time, members of the group told The Associated Press.

Democratic Rep. Mike Ross of Arkansas said that if the Democrats' liberal legislative plan came to the floor as proposed, an "overwhelming majority" of his group would oppose it. The Blue Dogs claim 52 members, so that could endanger the bill.

The move comes just as House Democratic leaders are trying to finalize the proposed legislation and unveil it Friday. Committees plan to vote next week and House leaders want to pass a bill before the August recess.

"We've just got a lot of questions and the top of the list would be how to pay for it," said Rep. Marion Berry, D-Ark.

Pushing to complete a comprehensive health care overhaul plan, House Democrats focused on an income tax surcharge on the highest-paid wage earners to help subsidize insurance for the 50 million people who lack it.

As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion. Most spoke on condition of anonymity because the talks were private.

Rep. Shelley Berkley, D-Nev., a member of the panel, said the panel is looking at a surtax of around 3.5 percent on income above those amounts. Other members suggested it would be closer to 3 percent.

In addition, key lawmakers are expected to call for a tax or fee equal to a percentage of a worker's salary on employers who do not offer health benefits.

Ways and Means Chairman Charles Rangel, D-N.Y., has said his committee needs to come up with $600 billion in new taxes to deliver on Obama's goal of sweeping changes to the nation's health care system to bring down costs and cover the 50 million uninsured. Hundreds of billions of dollars more would come from cuts to Medicare and Medicaid to pay for legislation expected to cost around $1 trillion over 10 years.

Lawmakers cautioned that no final decisions have been made. Smaller tax options remained possibilities, depending on the overall cost of the legislation, including a tax on sugared soft drinks and ending a tax break that drug companies receive for advertising.

In the Senate, Democrats edged away from their goal of passing health care legislation by early August amid heightening partisan controversy over tax increases and a proposed new government role in providing insurance to consumers.

Sen. Chuck Schumer, D-N.Y., told the AP he believes the "ultimate goal" is to have a bill by the end of the year that is signed into law by the president.

Separately, Republicans who met Wednesday with Senate Majority Leader Harry Reid, D-Nev., said he indicated he was willing to allow more time before legislation is brought to the floor.

Failure to meet the August goal would be a setback -- but not necessarily a fatal one -- for Obama's attempt to achieve comprehensive health care legislation this year. A group of Democratic and Republican senators led by Finance Committee Chairman Max Baucus, D-Mont., is still trying to work out a bipartisan deal.

But the Finance Committee work appeared to have suffered a setback when Reid relayed concerns to Baucus about the compromise taking shape. Finance's proposal was expected to omit a new government insurance option to compete with private insurers -- something Republicans oppose but most Democrats favor. A leading contender to pay for the measure was a new tax on employee health benefits, which Obama campaigned against and many Democrats oppose.

Pelosi made clear Thursday that whatever the Senate comes up with, the House bill will have a public plan and will not tax benefits.

"We will not be taxing benefits, health care benefits in any legislation that comes from the House," Pelosi said. "And it will have, coming out of the House, a public option," she said. "The only debate on that is what it will be called: a patient option, public option. Write in your suggestions."

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Associated Press writers David Espo, Ricardo Alonso-Zaldivar and Alan Fram contributed to this report.