
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, May 1, 1993                   TAG: 9305010149
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-10   EDITION: METRO 
SOURCE: The Los Angeles Times
DATELINE: WASHINGTON                                LENGTH: Medium

ADMINISTRATION EYES PAYROLL TAX TO PAY FOR HEALTH PLAN

Seeking to raise about $60 billion to pay for health-care reform, the Clinton administration is eyeing a new payroll deduction akin to the taxes already being taken out of paychecks for Social Security, Medicare and disability insurance, first lady Hillary Rodham Clinton said Friday.

Consulting with more than 50 Republican and Democratic senators in a Friday morning meeting, Clinton also made clear that the White House has all but ruled out a national sales tax, also known as a value-added tax. The idea met with bipartisan opposition in Congress.

The first lady further disclosed that the administration was now inclined to give medical providers a year or two to voluntarily restrict price increases, with a mandatory price freeze in the wings if voluntary efforts do not keep medical inflation in line with the rest of the economy, senators said.

In her meeting with senators, Clinton described the new payroll deduction under discussion as a "premium" and not a tax because, rather than going to the government, the funds would go directly to large consumer cooperatives set up throughout the nation to buy insurance for members, according to Sen. John D. Rockefeller IV, D-W.Va., the administration's point man on health care.

Such a new payroll levy - perhaps 1 percent or 2 percent for the individual wage-earner - would be an alternative to a government mandate that all companies buy health insurance for employees, according to administration proponents of the payroll deduction.

The payroll deduction plan would also require employers to pay a certain percentage of their payroll directly to insurance-purchasing cooperatives. Typically, companies that provide insurance to their employees now pay premiums directly to the insurers.

Some exemptions are likely for very small businesses, perhaps to be determined by the size of payroll, sources said. Other details about the tax were not available.

Clinton disclosed little more about the administration's emerging reform agenda - largely because many fundamental decisions have not been made.

The process has been delayed in part by a lack of reliable medical statistics, she said.

The stated purpose of the her latest visit to the Capitol was bipartisan consultation. And it appeared to be a rousing success, judging from the post-meeting rhetoric.

Republicans and Democrats alike hailed her appearance as reflecting a spirit of bipartisanship that they say will be vital if health care reform is to be enacted.

by CNB