In Washington DC, September is the new July as a series of events over the weekend has made passage of health care reform legislation before the August recess unlikely, and even endangered the prospects of a bill’s passage this session of Congress.

On Friday, House Democrats announced a key component of financing to their comprehensive legislation: a surtax on high-income earners.  The plan would be to impose a sliding-scale tax on household earning in excess of $350,000 annually, with the surtax increasing at $500,000 and $1 million.  The bill’s authors estimate that such a surtax would raise $540 billion for their legislation.  The other estimated $600 billion would come from savings from the Medicare system, according to Ways & Means Committee member Allyson Schwartz (D-PA), but if that proposal is not scored by the Congressional Budget Office other ideas are being considered, including adding a trigger to increase the surtax.

The announcement of the savings plan came on the heels of a statement against the current health care proposal by the moderate Blue Dog coalition.  On July 9, 40 members of the coalition sent a letter to Speaker of the House Nancy Pelosi (D-CA) arguing that the current House proposal “lacks a number of elements essential to preserving what works and fixing what is broken.”  The letter states that the Blue Dogs signatories could not support the bill as currently outlined, which includes a lack of support for small business, concerns about the bill’s deficit neutrality, and lack of sufficient delivery system reforms.

On the Senate side, the Finance Committee is no closer to releasing their version of the legislation after internal debate over how to pay for their version of the bill (subscription).  After committee chair Max Baucus (D-MT) last week was told by the party leadership not to include language removing the employer-sponsored healthcare deduction, any number of other revenue raisers are being considered.  Nonprofit hospitals and charitable groups seemed to have been the ones most hurt by the decision from the Democratic leadership; the committee is considering both removing the tax-deduction from charitable hospitals and enacting President Obama’s proposal to limit the itemized deduction, including charitable giving.  Last week, a letter signed by over 600 state and local organizations was sent to Congress supporting the president’s proposal.

Quick Hits

White House calls Baucus and Rangel in for a health care visit… Vice President Biden talks health care with small businesses on Friday… Co-ops as a public plan alternative still being discussed…. Will the climate change legislation vote hurt a health care bill’s chance of passing? (subscription).

From this weekend’s talk shows: Sen. Schumer discussed health care on Meet the PressSens. Kyl and Durbin debated health care, plus the health care roundtable, on ABC’s This Week with George Stephanopoulos… CNN’s State of the Union had an interview with HHS Secretary Kathleen Sebelius, and discussed the Senate’s health care bill with Sens. Alexander (R-TN), Conrad (D-ND), Gregg (R-NH), and Stabenow (D-MI).