Lawmakers seek late deal to scale back ‘Cadillac Tax’

Lawmakers are making a late push to repeal or scale back ObamaCare’s “Cadillac Tax” by the end of the year, eying inclusion of changes in a broader tax package. 

{mosads}But lawmakers in both parties say the missing piece is hearing from the White House, as it is unclear whether President Obama would veto the whole package, jeopardizing other tax breaks that lawmakers are eager to pass.

Democratic leaders in Congress, concerned about the effect of the tax on workers’ health coverage, have been looking to change or repeal the tax, but the White House defends it.  

Sen. Dick Durbin (Ill.), the Senate’s No. 2 Democrat, said Tuesday that he hopes to make changes to the tax, and that those modifications could be included in the end of year package of tax breaks known as “tax extenders.”

But he does not know the White House’s reaction. 

“I hope we can work something out and I don’t know what it might be,” Durbin said. “We’re waiting to hear from the White House if they’re open.”

Rep. Frank Guinta (R-N.H.) was a signer of a bipartisan letter requesting a meeting with President Obama on the tax last month, but said he had not heard back from the White House about his efforts. 

“We are kind of waiting on the White House,” Guinta said. “The House and Senate seem to be in sync on this.” 

The White House has made clear that it wants to keep the tax, but the pressure from Congress is building, at least for some sort of compromise. 

White House Press Secretary Josh Earnest defended the tax last month as a way to bring down healthcare costs and to pay for the Affordable Care Act. 

He also noted, though, that, “We are always in a position to have conversations with people that have an authentic interest in strengthening the Affordable Care Act.”

Unions are strongly opposed to the tax and a bipartisan group of lawmakers has warned that employers will increase the deductibles and other out of pocket expenses that employees have to pay in a bid to avoid hitting the tax. The tax hits plans with costs that exceed $10,200 for individuals or $27,500 for families. 

One wrinkle is that lawmakers are still working out a range of other tax issues in the extenders package before turning to the Cadillac Tax. 

Senate Democratic Leader Harry Reid (Nev.), asked on Tuesday about including the Cadillac Tax in the package, cast it as a Republican priority, saying Democrats are more concerned with a child tax credit in the package. 

“We’ll take a look at some of the other things they want, including the Cadillac Tax,” Reid said. 

Senate Finance Committee Chairman Orrin Hatch (R-Utah) has also expressed interest in changes to the Cadillac Tax. 

One step short of full repeal could be delaying the tax, currently set to take effect in 2018, or reducing the scope of health plans that are affected by it. 

Hatch’s Democratic counterpart on the panel, Sen. Ron Wyden (Ore.), said Tuesday that he is leaving options open on including changes to the tax in the extenders package. 

“I am not ruling out any vehicle for these last two weeks,” Wyden said. 

Full repeal of the tax, though, would mean losing $91 billion in revenue over ten years, according to the Congressional Budget Office. 

“You’re talking about very substantial revenue implications,” Wyden said. 

Sen. John Thune (S.D.), the Senate’s No. 3 Republican, acknowledged the interest in dealing with the tax but said it could fall outside of the scope of the extenders package. 

“It’s certainly something there’s a high level of interest in,” he said. “But I think that will get outside the scope of what extenders is supposed to be.”

Sarah Ferris and Jordain Carney contributed.