A READ MY LIPS MOMENT:

Obama is taking 2nd look at tax on benefits: It would help pay for a health system overhaul. He had opposed a similar plan. (JACKIE CALMES and ROBERT PEAR, 3/15/09, New York Times)

The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for an overhaul of the health care system.

The proposal is politically dicey for President Obama, however, since it is similar to one he denounced in the presidential campaign as "the largest middle-class tax increase in history." Most Americans with insurance get it from their employers, and taxing the benefit is strongly opposed by union leaders and some businesses.

In millions of dollars worth of television advertisements last fall, Obama criticized his Republican rival for the presidency, Sen. John McCain of Arizona, for proposing to tax employer-provided health benefits. The benefits have long been tax-free, regardless of how generous they are or how much an employee earns. The attacks did not note that McCain, in exchange, wanted to give all families a tax credit to subsidize the purchase of coverage.

At the time, even some Obama supporters said privately that he might come to regret his position if he won the election; in effect, they said, he was potentially giving up a meritorious and lucrative option to help finance his ambitious health care agenda to reduce medical costs and expand coverage to the 46 million uninsured Americans. Now that Obama has begun the health debate, several advisers say that while he will not propose changing the tax-free status of employee health benefits, neither will he oppose it if Congress does so.

In his defense, Mr. Obama has so little experience and knowledge about running a government that he was just talking through his hat.

Posted by Orrin Judd at March 14, 2009 6:14 PM