Obama Considered Paying for Health Care with Tax on Sugary Beverages

Progress Ohio Via Flickr/CC BY 2.0

Obama was against the individual mandate before he was for it. And, as you have no doubt heard, that mandate has landed the health care law in court this week. Since the primary fight is over the constitutionality of the mandate, the New Yorker's Ryan Lizza did some investigating into why the president eventually swung in favor of it (the IM theoretically brings costs down by expanding the pool of the insured), and what he would have done without it.

Some of that cash, it turns out, would have come from imposing a small tax on sugary drinks. This proposal is from a memo Obama's top health-care adviser Nancy-Ann DeParle sent to him:

"Impose a 10-cent excise tax on sugar-sweetened beverages. This proposal would impose a Federal tax on most soda and other sugar-sweetened beverages. It is estimated to generate revenue of about $170 billion over 10 years."

Obama never did push for such a tax—perhaps sensing that the last thing he needed to throw into the super-contentious health care proceedings was a suggestion for higher taxes—but it makes perfect sense.

In fact, it would have been brilliant, if this weren't the era of extreme anti-tax hysteria. One of the prime drivers of ballooning health care costs are the nation's ballooning waistbands, and such a tax could serve to disincentivize junk food. Less people hooked on sugary sodas would have meant better eating habits and less obesity and ... lower health care costs. The tax, in other words, would have helped cut health care costs on two fronts.

Tags: Barack Obama | Health Care