‘Cadillac tax’ repeal could get floor action, thanks to Pelosi’s new rule

The tax is aimed at high-cost health care plans

Speaker Nancy Pelosi ushered in a new way to bring bills to the floor. Now members of her party want to use it to repeal the so-called “Cadillac Tax.” (Bill Clark/CQ Roll Call file photo)

Moderate Democrats in the House won a major victory last year when incoming Speaker Nancy Pelosi supported a new rule that can force her to bring to the floor bills with at least 290 co-sponsors.

Ironically, one of the first to benefit from the process could be a bill to repeal a feature of the 2010 health care law. The provision imposed a tax on high-cost health care plans in order to pay for the law’s new spending. Health care economists supported the tax as a way of suppressing rising health costs, but labor unions — which often negotiate generous insurance benefits for their members — don’t like it.

The tax— sometimes called the “Cadillac tax” — was to go into effect in January of last year, but Congress delayed it until 2022.

On May 21 the bill’s sponsor, Connecticut Democrat Joe Courtney, asked that the bill be put on the “consensus calendar,” which starts the process of getting it to the floor. It has 348 co-sponsors.

Courtney’s move could force Pelosi’s hand. If the committee of jurisdiction, Ways and Means, does not mark it up, she must bring it to the floor for a vote in mid- to late July, when a 25-day legislative clock expires.

However, a markup by Ways and Means Chairman Richard E. Neal, a Massachusetts Democrat, would give Pelosi a free hand to decide how to proceed. Neal is a co-sponsor but has not scheduled a markup.

Courtney’s spokesman, Patrick Cassidy, said his boss is happy to see the bill move either directly to the floor, or there via Ways and Means: “He feels strongly that the House should act not just to delay the tax but take it off the books entirely.”

Whether that happens is an open question. Beyond the reasons espoused by health care economists, another motive to oppose repeal of the tax could be its cost. Because the bill would reduce revenue, it might have to be offset with cuts to other programs or new taxes totaling tens of billions of dollars.

The Blue Dog Coalition of fiscally conservative Democrats sent a letter to Pelosi on June 5 that urged her to make up for any revenue lost to a tax cut.

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