Today, Secretary of Health & Human Services Leavitt and Director of National Economic Council Hubbard elaborated the President's proposal for a health coverage tax credit.  Meanwhile, the New York Times is stuck in a rut on health policy.

The Times yesterday published a poll "revealing" that 62% of young Americans favor "having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers."  But the Times only gave respondents one alternative: "keeping the current system where many people get their insurance from private employers and some have no insurance."

Some choice.  How about a 3rd: "Take your own money and spend it on the health plan that you want"?  That's what President Bush proposed last January.  Instead of receiving health care as a non-taxable corporate benefit, you'd get a raise alongside a deduction of $7,500 (single) and $15,000 (family) for health insurance.

It would be a big improvement but not rectify one flaw: in America's progressive tax system, the rich benefit more from the tax advantage (just like they do now).  So, the President's team now proposes the alternative of a tax credit: $2,500 (single) and $4,500 (family).

Suppose your combined marginal tax rate is 30%.  You'd be indifferent because the $15,000 deduction would save you $4,500 in taxes.  However, the higher earner, in a 40% tax bracket, would prefer the deduction because it would save him $6,000.  The lower earner, in a 20% tax bracket, would prefer a credit because the deduction only saves him $3,000 in taxes.

So, this new proposal should appeal to "Class Warrior" Dems in Congress, who currently occupy themselves throwing more money at a bill to re-authorize State Children's Health Insurance Program (SCHIP) funding.  President Bush and Secretary Leavitt are resisting this spending spree.  (They could be even tougher on SCHIP than they are: it's a program that ropes lots of our kids into government dependency and distorts private insurance markets.)

Nevertheless, if President Bush and Secretary Leavitt can get this tax credit in exchange for re-authorizing SCHIP they will have done Americans a great service: freeing every family to choose its own health plan.