The reaction to President Bush's health-care proposal, introduced in his State of the Union speech, was sadly and predictably partisan.

Rep. Charles Rangel, chairman of the House Ways and Means Committee, called it "bad policy." Senate Demo-crats called it a tax increase for the middle class.

Missouri Progressive Vote — a coalition of unions and activist groups favoring universal health care — struck a similar note.

"President Bush wants to raise taxes on middle-class families to fund a proposal that will provide little assistance to the 47 million uninsured," the group said in a news release, issued ahead of Bush's visit last week to the Kansas City area.

This is not only incorrect, it was an odd, knee-jerk response to a proposal that ought to prompt bipartisan support, as the Washington Post recognized in an editorial. Bush's plan, the paper said, was budget-neutral and progressive. It would help correct the tax code's unfairness toward people who don't work for large companies.

Bush proposes giving families a $15,000 deduction for those who obtain health insurance, whether they get it on the open market or from their employer. The write-off for individuals would be $7,500. If the policy costs less than the deduction, they get a tax write-off.

Since the average premium for a family policy is about $11,500, most people — around 80 percent — would end up with a lower tax bill. It's progressive because it would raise taxes on the top fifth of earners, or any worker with a gold-plated health plan.

According to Treasury Department estimates, the number of insured Americans would rise by about 5 million. More buyers in the health-insurance market would increase competition and help hold down rising health-care costs.

Fewer Cadillac health plans would reduce the currently inflated health-care demand that puts upward pressure on costs.

Here's why those crying "tax hike for the middle class" are wrong.

The deduction wouldn't apply only to income taxes. It also would allow workers who don't pay income tax to reduce what they pay in payroll taxes, which support Social Security and Medicare.

Most of the critics missed this feature and contended — wrongly — that it would do nothing to aid workers who face no income tax liability.

John Hickey, executive director of Missouri Progressive Vote, said the plan would probably hit workers at Ford's Claycomo plant, because of the high-dollar health plans enjoyed by auto workers.

That's probably true. But as economist Arnold Kling puts it, to some extent we've gone beyond insurance to "insulation" — a trend that helps balloon the nation's ever-rising health-care bill.

In a conference call with editorial writers prior to Bush's speech, presidential counselor Dan Bartlett acknowledged that some workers would have trouble buying policies in the open market because of disease or chronic injury.

That's why the other part of Bush's plan, he said, would use revenue gained by capping the health-insurance deduction to encourage state governments to set up risk pools to help uninsured workers obtain health plans. This part of the plan still must be fleshed out.

Last year, Jason Furman, a leading Democratic economist, wrote that "we should spend less subsidizing more expensive insurance and more health care for higher-income people and spend more to help moderate-income families obtain the health insurance they lack."

That's exactly what Bush's plan would do. Furman suggested a cap on health-insurance deductibility of $7,500 per family. Bush borrowed the idea but doubled the cap.

No, it wouldn't solve all the problems with our health-care system — far from it. And it might encourage some employers to drop insurance and tell workers to rely on the private market.

Bartlett replies that companies must still compete for labor, and health insurance is part of the compensation package. If the health plan is lousy, companies won't get the best workers. And as Furman argued, capping the insurance deduction would boost consumer consciousness and help restrain spending on health care.

Republicans like this plan because it gives more scope for the competitive market. Democrats ought to like it because it shifts more costs to higher-income workers.

You'd think this would be the basis for a bargain.