Obama steps up push for healthcare overhaul

* Report says health overall to boost U.S. economy

* Senator confident Congress will enact reform this year

By Donna Smith

WASHINGTON, June 2 (Reuters) - The White House stepped up efforts to build public support for a far-reaching revamp of the U.S. healthcare system on Tuesday, arguing in a new report that it would greatly improve the U.S. economy.

The report issued by the White House Council of Economic Advisers said an overhaul that stems costs and expands medical coverage to an estimated 46 million uninsured Americans would boost economic output, lower government budget deficits and raise workers' incomes.

"It shows so clearly that to enact healthcare reform now means we are on the path to economic recovery," said Senate Finance Committee Chairman Max Baucus, who is playing a lead role in writing the legislation that President Barack Obama wants Congress to enact by the end of this year.

Baucus was confident Congress would give Obama a major domestic legislative victory on healthcare.

"We will pass comprehensive, meaningful healthcare reform bill this year," Baucus said. "It's going to happen."

Republicans expressed skepticism about the report.

"This 56-page press release lacks any real answers about how the administration will deliver promised savings and improve Americans' health care," House Republican Leader John Boehner said in a statement.

OUTPUT BOOST

The White House report said healthcare spending, which currently accounts for about 18 percent of the country's economic output, could reach 34 percent by 2040 if the current rate of cost growth continues.

Most working Americans with health insurance get it through their employers and the study said rising costs have increased insurance premiums and cut into workers' wages. A reform that reins in costs would improve economic efficiency and boost economic output by more than 2 percent in 2020 and by 8 percent in 2030, the report concluded.

That would translate into $2,600 in higher income for a family of four in 2020, rising to $10,000 by 2030, the report said. Since about half of healthcare costs are paid by federal, state and local governments, their budgets also would benefit greatly by reform, it said.

Providing medical coverage to the uninsured will also help the economy by improving the overall well-being of the work force -- providing a net benefit to the economy of about $100 billion a year, the report said.

Without the overhaul, the number of uninsured Americans would rise to about 72 million in 2040, it said.

Covering the uninsured will be costly, just as U.S. government fiscal deficits are hitting record levels because of a huge economic stimulus package, financial and auto industry bailouts, and reduced revenue from taxes due to recession.

Lawmakers are trying to find cost savings through Medicare and Medicaid, the government health programs for the elderly and poor. The White House has proposed about $300 billion in savings from those two programs.

Baucus also made clear he is considering limiting the tax benefits of employer-provided insurance.

Workers now pay no taxes on that benefit but Baucus said a cap on the tax exclusion would likely be a part of legislation his committee is writing, even though Obama opposes taxing employer-provided health benefits. (Reporting by Donna Smith; Editing by Eric Walsh)