Taxing Health Care Benefits

During the 2008 presidential campaign, then candidate Obama was a strong critic of Senator John McCain's health care plan.

Part of Senator McCain's health care plan, according to many Democrats including Obama, was to tax health benefits, which was argued at the time of being a really bad idea.

However, now President Obama seemed to have changed his rhetoric from the campaign, according to this recent Associated Press article. Now, Obama is said to be open to the idea of taxing health benefits, which was something he criticized McCain for supporting in 2008.

Obama said that he was open to the idea of a tax on health benefits, according to Democratic Senator Max Baucus of Montana and what he said to the Associated Press.

"It's on the table. It's an option," Obama reportedly said to Senator Baucus.

In response to this statement, an Obama spokesman told the Associated Press that Obama was concerned about taxing health benefits during the campaign, but added that health care reform couldn't wait, which made him open to the idea.

"The president made it clear during the campaign that he has serious concerns about taxing health care benefits. He stated again his belief that health reform can't wait another year, and that while all options should be considered, those options should include the revenue proposals that he included in his budget," Obama spokesman Reid Cherlin said to the Associated Press.

Is this hypocrisy? People can make up their own minds about that, but the criticism potentially could be fierce, especially from conservatives and Republicans who might accuse the president of a flip flop.

Some people say that taxing benefits is the only way to pay for sweeping health care reform that liberals, such as Senator Edward Kennedy of Massachusetts wants. But, taxing health benefits does draw criticism from the left and labor unions.

Among those in the Associated Press article include Democratic Congressman Charlie Rangle of New York. He said to the Associated Press that there was "no way" he would support that kind of measure.

But there are other Democrats who might support it, including Senator Baucus, which means a possible divide might break out in the Democratic Party of how to best pay for a bold, sweeping health reform plan.

Obama did say he supports drastic cuts in Medicare and reducing tax credits the wealthy got for health care. However, the plan does risk drawing some heavy criticism from Republicans.

There is no word on whether or now that taxing health benefits will be a product of a final health bill. But White House budget director Peter Orszag said to the Associated Press that Obama will support whatever is passed through the Congress.

"It was not in our plan, it was not in our budget," Orszag said. "We are saying we want the legislative process to play out, and that's all we have to say on that right now."

Either way that you look at it, this will look like a flip flop by the Obama Administration by many.