Should Hyde Amendment Apply to Tax Expenditures?

Most conservatives vehemently oppose public funding of abortion directly via government outlays and ardently support the Hyde Amendment which restricted such government spending. This issue has come to the fore because several dozen Democratic Members of the House of Representatives have joined Rep. Bart Stupak in trying to strip abortion funding from health care reform.

But aren’t these legislators ignoring huge federal subsidies for abortion through the tax code?

Currently, the tax exclusion for employer-provided health insurance is an implicit subsidy for private health insurance plans, many of which cover abortion procedures. Similarly, the itemized deduction for medical and dental expenses allows the cost of abortion procedures to be deducted. In other words, the current tax system is indirectly subsidizing abortion procedures, which causes higher tax rates on other income or reduced government spending. (Either way, the tax policy is not “abortion-neutral.”)

Conservatives often support any type of tax cut as a rule of thumb, but suppose some liberal member of Congress proposed a separate itemized deduction for abortion expenditures – there would be some social conservative outrage. But in fact, we already have such a deduction, and although it’s currently limited (must exceed 7.5% of AGI), some conservatives favor getting rid of this limitation (like Congressman Ron Paul’s proposal) because they see it as a tax cut.

I know many conservatives would quibble with this, arguing that a tax cut is technically different than an outlay (i.e. the legal classification by CBO). But last year during the presidential campaign, John McCain proposed overhauling the exclusion of employer-provided health insurance into a refundable tax credit, a large fraction of which would have legally been classified as an outlay (i.e. government spending). In other words, Sen. McCain proposed government spending for people to buy private health insurance plans, some of which presumably covered abortion procedures. He just called it a tax cut.

So my question is: If the Hyde/Stupak Amendment, which says that government should not be directly financing abortions or insurance plans that cover abortion, is good public policy, what about indirect subsidies via the tax system that also lower the costs of abortion at the expense of others?