By Tom Curry National affairs writer
msnbc.com
updated 11/30/2009 11:25:02 AM ET 2009-11-30T16:25:02

Claim: An Afghanistan war surtax could help pay for a health insurance expansion.

Many Democrats in Congress are unhappy that President Obama and party leaders decided that the insurance overhaul had to fit within a $900 billion limit, while no ceiling has been placed on Afghanistan and Iraq war costs. According to the Congressional Research Service, since Sept. 11, 2001, Congress has spent about $220 billion on Afghanistan operations. In the fiscal year that ended on Sept. 30, the Afghanistan war cost about $55 billion. The insurance expansion being debated in Congress will cost nearly $200 billion a year by the time it is fully implemented in 2019, according to the Congressional Budget Office. That cost will be offset by cuts in Medicare spending, penalty payments by the uninsured, and tax increases. Some high-ranking House Democrats say that a separate tax increase will be needed if Obama sends more forces to Afghanistan. Does Afghan war spending threaten health care outlays?

Fact or fiction?
Fact. In 1968, President Lyndon Johnson persuaded Congress to enact a 10 percent surtax on income to help pay for the Vietnam War. House Appropriations Committee chairman David Obey, D-Wisc., first elected to Congress in 1969 as a Vietnam War opponent, has introduced a bill to raise taxes on people earning more than $30,000. A couple earning $200,000, for instance, would pay $579 more a year in taxes. "If we don't pay for it, then the cost of the Afghan war will wipe out every other initiative that we have to try to rebuild our own economy," Obey told ABC News. Obey labels it a surtax to offset Afghanistan costs, but the revenue would go into the Treasury to help pay for all of the government's operations. "War surtaxes usually are treated as general revenues, just like income taxes," said former Treasury Department official Eugene Steuerle.

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