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From This Week with George Stephanopoulos, a conversation with Christina Romer, chair of the White House Council of Economic Advisers about the proposed excise tax on "Cadillac plans" to fund the healthcare bill.

As someone who got into the nuts and bolts of union health care plans when I was a reporter, I can tell you there's almost always some lard in there. (I remember one contract that covered a week-long hospital stay for normal childbirth.) The insurance broker is usually politically connected, and the premiums are inflated so the broker can kick back a percentage to the politicians. So theoretically, this tax will put some useful pressure on inflated plans - but create some very unhappy politicians:

STEPHANOPOULOS: Senator Harry Reid, though, the Democratic leader in the Senate said that has to wait until health care is done and the negotiations between the House and Senate have begun this week. The president weighed in with the leaders on behalf of this so-called Cadillac tax, the excise tax on high-priced health insurance plan. That is facing some real resistance in the House. Here's Congressman Joe Sestak.

(BEGIN VIDEO CLIP)

SESTAK: They're not just pulling the Cadillac. They're pulling the Chevrolets. By 2019, because they index it to a wrong inflation rate, we're going to have one-third of all the workers in employer-based plans paying a middle-class tax. No, this has to change.

(END VIDEO CLIP)

STEPHANOPOULOS: He and labor leaders like Gerry McEntee say this is going to be a middle-class tax increase that could hit up to 40 percent of union workers.

ROMER: All right, so the -- the important thing the president has said that he thinks that this excise tax on Cadillac plans is important. He's been convinced by experts across the ideological spectrum that say this is one of those things that genuinely slows the growth rate of costs, and anybody that's worried about the budget deficit knows that we've got to -- to do that.

You know, what the president has said is, you know, he's always open to -- you know, there are design issues here. He's going to be continuing to -- to work with the Congress to say, are there ways to -- to make it work better? But we want to maintain that -- that crucial focus on cost containment.

STEPHANOPOULOS: Even if it's a middle-class tax increase?

ROMER: You know, I think that the numbers that you were hearing, you know, that the levels where this is being set -- I think the current number is something like $23,000 for a plan, a family plan -- that's a very high level and -- and exempts an awful lot...

(CROSSTALK)

STEPHANOPOULOS: Well, except union leaders say it's not. They say that at $23,000, it affects 1 in 4 union members. If you raise the threshold to $27,000, it'll be 1 in 14. Are you willing to raise that level?

ROMER: No, you -- you absolutely -- I think you've got to be very careful on the numbers. They're actually, as it's being developed -- they're being, you know, changes made to make sure that, if you've got just older workers and that's why your costs are higher, or things like that, if you're a first-responder, so we've been very receptive to -- to, you know, arguments like that, and, also, the -- you know, sort of the -- the level at which you set.

I think the important thing is the -- you know, the incentives that it provides to genuinely slow the growth rate of costs (ph). If this thing works just right, nobody hits it, right, because -- precisely because it slows the growth rate of costs.

ABC News

(ABC News)

STEPHANOPOULOS: Well, that's because insurance plans might be dropped, as well. But, still, even with this in there, the Senate bill, your own chief actuary of Medicare and Medicaid says that this is going to increase health care costs by $222 billion over the next 10 years.

ROMER: All right, so you need to be very careful. There are lots of estimates out there. I think, you know, the Congressional Budget Office...

STEPHANOPOULOS: But that's your own actuary.

ROMER: The -- the actuary is independent, right, and the Congressional Budget Office is nonpartisan, highly respected organization, as well. They have said that the Senate bill as it came out would genuinely reduce the deficit over the 10-year window and, even more important, said that it would slow the growth rate of costs so that those -- that deficit reduction was going to be growing over time.

So I do think you need to -- to -- to look at the range of estimates. And we, certainly, have looked very hard at the CBO estimates and -- and think they're very reasonable.

I've been screaming here and on TV that it's up to the House to change the health-care bill as much as possible, even if it's happening in a conference-lite type setting. Rep. Raul Grijalva has been very vocal lately and now says the President needs to get involved.

"The president is having his listening sessions, right?" Grijalva asked rhetorically. "After all we've been through at some point the administration can not be neutral players in this process."

Noting that the President stands foursquare behind the Senate's proposal to tax so-called "Cadillac" insurance policies to raise money, Grijalva put it to him to weigh in on some of the House's priorities. "How do you weigh in on a national exchange? How do you weigh in on a public option? How do you weigh in on the anti-trust exemption?"

The public option is a non-starter at this point, and House leaders, progressives, and key chairmen are pushing the White House to support other priorities, including organizing insurance exchanges at a national level, moving the implementation date for major reforms forward by one year, and, at least, diminishing the impact of the Cadillac tax.

"Watching the fight is not enough," Grijalva said. "The pressure shifts to the White House now."

I received an email with a wrap up and pdf from Rep. Grijalva. Here's the entire document that the House has put together, called CPC Conference Comparison.

I continue to feel that the House language provides better solutions to a wide range of problems with our health care system, especially regarding the public option and the creation of a national insurance exchange. Those and many other unresolved issues, including affordability mechanisms and insurance company oversight, will be discussed thoroughly over the next few weeks. As those conversations take place, I look forward to promoting the same publicly supported, money-saving progressive agenda that I have championed since this process began.”

The attached list of policy priorities was recently sent to Speaker Pelosi, Majority Leader Reid and the White House.

I think the bill is not all that certain to pass at this point.

Recently the Senate passed Sen. Barbara Mikulski's Women's Health Amendment, which requires health insurance companies to provide free mammograms and other preventive health services for women. Sounds good, doesn't it? Women's health needs have traditionally been underserved by the insurance system. But, ironically, the Senate's excise tax will force many women to pay indirectly for these "free" services.

Here's how: For one thing, the cost of the services mandated in the Mikulski Amendment will cause even more health plans to exceed the cost cap for the excise tax. And it's expected that 20% of plans will already be over the limit when the tax takes effect. In practical terms, any added costs for new services provided by these plans (like those mammograms) will be taxable. So, in one very real sense, the Senate plans to tax some of this preventive care for women - at a staggering 40% of cost.

The Mikulski Amendment looks like a step forward, but many women will pay for these services indirectly - in the form of higher premiums or increased out-of-pocket costs. One hand giveth and the other taketh away. And speaking of irony ...

Guess who voted for the Mikulski amendment? Some Senators who haven't even committed themselves to voting for the final bill, including Lieberman, Landrieu, and Snowe (who even cosponsored the amendment. Here's an idea: They can make sure these women's services really remain "free" by supporting the Sanders-Franken-Brown Amendment, which would replace the excise tax with a tax on the extremely wealthy (the way the house does it.)

That would remove the irony in the Senate's actions and replace it with fairness.