While millions of Americans lose their health-care coverage, Senator Tom Daschle has taken a defiant stance in order to prevent the enactment of tax credits for individuals who purchase their own health insurance.

Last fall, the passage of an economic stimulus bill stalled over the issue of health care. A bill supported by Republicans and a few Democratic senators would have allowed laid-off workers to purchase any health-insurance policy with the help of a tax credit.

Senator Daschle and his Democratic followers supported a spending subsidy that would only allow laid-off workers to purchase coverage through COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985. Under COBRA, workers who lose their jobs are allowed to temporarily continue purchasing health insurance from their former employer, at full premium plus a two-percent administrative charge.

The debate over the merits of the two plans was just getting underway. Then at a press conference on December 20, just before Congress recessed for the year, Daschle stunned reporters by saying that health care was, in fact, not the main sticking point on the stimulus package. Daschle subsequently prevented the Republican bill, which had earlier passed the House of Representatives, from coming up for a Senate vote because it would not receive a filibuster-proof 60 votes.

After the holiday break, Daschle reemerged with a new “stimulus-lite” plan that no longer included the spending subsidy for COBRA coverage. So what happened? For one thing, Daschle recognized that he would lose the debate over how best to help laid-off workers continue health insurance coverage. Second, he was unable to come up with a better solution than a COBRA subsidy, and decided he wanted the issue to go away.

Perhaps Senator Daschle believes that affordable health-care coverage is only an issue when he and his followers decide to make it one. If so, he couldn’t be more wrong at the worst possible time. Some estimates now put the number of uninsured at 43 million, and with double-digit percentage increases in premiums looming, that number is sure to increase significantly if no action is taken.

Prior to the stimulus meltdown, individual tax credits for health insurance had been gaining bipartisan support. Representatives Richard Armey (R-TX) and Bill Lipinski (D-IL) and Senators Richard Santorum (R-PA) and Robert Torricelli (D-NJ) introduced identical bills in their respective chambers last year that provided individual tax credits for health insurance. Likewise, Senators James Jeffords (I-VT), John Breaux (D-LA), and William Frist (R-TN) co-sponsored their own bill last year providing individual tax credits for health insurance.

But with Daschle, everything is seemingly calculated so he can tell reporters that Republicans refused to compromise with him. Meanwhile, the employer-based health insurance system continues to show signs that it can’t carry the load. Even many Americans who still have job-based health insurance must wonder whether their boss will still offer it in another year or two.

With the stimulus bills dead once again, President Bush has taken up a new call for “health credits” in his 2003 federal budget. His new proposal is similar to the Armey-Lipinski and Santorum-Torricelli bills in that individuals would be eligible for up to a $1,000 credit, while families could receive up to $3,000. It is also similar to the Jeffords-Breaux-Frist bill in that the credits would be phased-out for higher-income earners.

The new feature of the president’s proposal is that, starting in July 2003, individuals and families would not have to pay the entire premium out of pocket and then wait until tax time to receive the credit refund. The money representing the credit amount would be advanced, thereby subsidizing the premium at point of purchase.

Of course, the partisan Daschle has no intention of going along with any of this. He can rest on polls that show Americans still believe Democrats are better able to deal with health-care issues than Republicans. But in this election year, Americans should remember that President Bush, Republicans, and some Democrats, have offered a real solution to the growing number of uninsured. On this vital issue Senator Daschle and his hard-line team prefer to punt and play prevent defense.

Chris Middleton is the Senior Health and Tax Policy Analyst for the Center For Entrepeneurship of the Pacific Research Institute in San Francisco. He can be reached via email at cmiddleton@pacificresearch.org.