The Democrats could pay for much of the health care bill by taxing people who make a million dollars a year in income. Or, they could pay for much of it by taxing so-called ‘Cadillac’ health care plans that cost way over the national average. Never mind that Cadillac’s General Motors recently went bankrupt, the name is still supposed to have some caché. And the auto workers who build those Cadillacs have Cadillac health care plans because they negotiated for them in lieu of pay raises. Labor hates the idea of seeing those plans taxed so that millionaires can keep their money.

Rep. Joe Courtney (D-Conn.) announced Friday he’s collected more than 100 signatures on a letter to Pelosi asking her not to support the tax on health plans. The tax on benefits, he said, violates Obama’s campaign pledge not to raise taxes on the middle class.

“It shifts the burden of who’s really going to pay to those making below $250,000,” Courtney said.

It’s counterintuitive that a representative from our richest state, Connecticut, is leading the charge to protect Labor and stick it to the investment bankers. So, make a mental note: Joe Courtney is one of the good guys. Not so for freshman Jared Polis of Boulder, Colorado. He may be popular to some because he is one of the very few openly gay members of Congress, but he’s not looking out for the little guy.

None of the three versions of the healthcare bill passed by committees in July include the tax on benefits. Pelosi and most House leaders have long backed an income surtax on the wealthy to pay for the portion of the bill not funded by “squeezing the savings” out of the Medicare system.

But the surtax is unpopular among many business-minded New Democrats, centrist Blue Dogs and freshman facing their first re-election test next year.

As soon as the surtax plan was unveiled in July, Rep. Jared Polis (D-Colo.), a New Democrat from a wealthy district, led the charge against the tax. He circulated a letter with the signatures of 20 fellow freshman protesting the burden it would place on small businesses.

We talk a lot about the schism between the progressives and the Blue Dogs, but this is a schism between the suburbanites and the blue collars. We have been winning lots of traditionally Republican suburban districts lately. We’ve been winning because the Republican Party has become too Southern and too culturally conservative to represent northern and coastal suburban voters’ values. But that doesn’t mean that affluent people have ceased being tax-averse. Obama pledged to raise taxes only on people making over a quarter of a million dollars a year because he wanted to win those suburban districts. Ironically, the Dems that represent those districts now want him to tax people making less than that to protect the many millionaires in their districts.

Go figure. Most Blue Dogs oppose a public option even though it is the best solution for the budget. Many New Dems oppose a surtax on the wealthy, even though it will protect the vast majority of their constituents from seeing a tax-hike.

This is probably the first time I’ve seen the progressives take a position that is not only in the interest of the poor, but also the best position for budget hawks and the tax-averse. The public option with a surtax on millionaires is the best policy for the entire Democratic Party, across every constituency and every district. I think, ultimately, that is why we will succeed. But, we might not get everything we want in the first pass. That doesn’t worry me too much, though, because the logic is on our side. And, when it comes to the budget, logic actually does prevail in the end. Money is found where it causes the least amount of political pain. We’re fortunate to have logic on our side for once.

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