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Schwarzenegger calls for special session on health care reform

SACRAMENTO Calif. California Gov. Arnold Schwarzenegger on Tuesday called for a special session of the state Legislature to forge an agreement on health care reform.

The governor also pledged to veto a health care bill passed Tuesday by the legislature that calls for a 7.5-percent payroll fee on employers who do not provide health insurance. Earlier this year, the governor proposed a universal health care program that would have been paid for in part by a 4-percent payroll fee on companies that donÕt offer coverage. In addition, the governorÕs plan would include funding from doctors, hospitals, insurers, state and local governments, and individuals.

Saying that they ran out of time despite progress on a compromise, Schwarzenegger said lawmakers would attempt to find middle ground on health care in the special session, which will be held after the current legislative session ends Friday. The goal is to develop a proposal that could be on the Feb. 5 ballot.

One alternative funding mechanism to be considered is a 1-cent sales tax, which the California Restaurant Association contends is the most equitable way to finance health care reform. The board of the association voted last month to support the broad-based tax, which was forecast to generate $5 billion in funding. The vote marked a strategic shift for the CRA, which led opposition to a universal health care proposal in 2003.

"Because of what is being proposed [in the Legislature], this action seemed to the board to be a proactive position and a viable solution," CRA spokeswoman Kearsten Shepherd said after the August vote.

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