House Democrat says health bill may not need surtax

WASHINGTON (Reuters) - House of Representatives Democratic Whip James Clyburn said on Monday he did not think Congress would need to include a surtax on the wealthy as part of its healthcare overhaul legislation, but the tax could be triggered if more money is needed to expand healthcare.

Interviewed on MSNBC's "Morning Joe," Clyburn said lawmakers have been working on an alternative that would use the tax as a trigger if the healthcare savings in the bill are not large enough. "We believe that the savings are in the system," he said.

A number of Democrats as well as Republicans object to the surtax included in the House Ways and Means Committee's legislation. It sets a surtax at 1 percent for individuals with incomes above $280,000 and would hit 5.4 percent at $1 million annual income. The tax was expected to raise $544 billion over 10 years.

But lawmakers are also looking for ways to save money in the government-run Medicare and Medicaid healthcare programs while expanding coverage to many of the 46 million uninsured.

"I don't think we have to have the surcharge at all," Clyburn said. "But we have said that because we think there is a chance that some funding may need to come far down the road, we could have this trigger ... a trigger which we don't think ever will need to be pulled."

Clyburn added that he expected the House and Senate could act on their versions of a healthcare overhaul before lawmakers leave for their August break, with a compromise worked out and ready for a final vote in September.

"If we don't get every provision right, we can adjust and improve the program next year or in the years to come. What we can't afford is to wait another generation," he said.

(Reporting by Jackie Frank, editing by Vicki Allen)