House Republicans Drop Stimulus Package With Health Provisions in Favor of Smaller Measure Similar to Senate Proposal

House Republican leaders on March 7 plan to bring to a vote a "stripped-down" economic stimulus package lacking some provisions that "had drawn strong Democratic opposition," including a tax credit to help unemployed people buy health insurance, the Wall Street Journal reports (Murray, Wall Street Journal, 3/7). The GOP leadership on March 6 "scale[d] back their plans" for a "more controversial bill" that included the health insurance tax credits and about $100 billion in tax breaks aimed largely at businesses. The new bill "closely track[s]" a proposal in the Senate to provide up to 13 weeks of extra unemployment benefits to workers displaced by the economy. It also proposes $43 billion in tax breaks for businesses, a proposal considered to have wider bipartisan support (Eilperin/Kessler, Washington Post, 3/7). House GOP leaders "abruptly pulled" the broader legislation from consideration after several "rank-and-file" Republican House members raised concerns about the "election-year ramifications of continued delay" on economic stimulus legislation, several unnamed GOP aides said (Anderson, AP/Nando Times, 3/6). The bill that Republicans dropped would have provided one-year tax credits to cover up to 60% of the cost of health insurance for unemployed workers. Unemployed workers who lost their jobs between March 15, 2001, when most economists estimate that the recession began, and Jan. 1, 2004, and had health coverage for the previous year, would have qualified for tax credits (Kaiser Daily Health Policy Report, 3/5).

Democratic Objections
Democrats in the Senate, which has twice approved a 13-week extension of unemployment benefits, opposed the tax credit provision, and Senate Majority Leader Tom Daschle (D-S.D.) said that he would not allow a Senate vote on legislation that included the provision (Kaiser Daily Health Policy Report, 3/6). According to Democrats, health insurance tax credits would "do nothing for people who are out of work and not paying taxes" (Tumulty, Gannett News Service/USA Today, 3/7). Democrats also said that tax credits could undermine the system of employer-sponsored health insurance. The House has passed three economic stimulus bills in the past six months, and two of the three bills included the tax credit provision. None of the bills passed in the Senate (Kaiser Daily Health Policy Report, 3/6). House Democrats "in large numbers" will likely support the new House bill without the tax credit provision, and the legislation is "uncontroversial enough" that it could also pass in the Senate, Wall Street Journal reports (Wall Street Journal, 3/7).