Obama prods Congress on healthcare; Senate panel acts

WASHINGTON Wed Jul 15, 2009 7:11pm EDT

1 of 3. A customer leans against a pharmacy counter in a file photo.

Credit: Reuters/Jessica Rinaldi

WASHINGTON (Reuters) - Saying it was "time to get this done," President Barack Obama pressed Wednesday for swift congressional action on healthcare after a Senate panel approved a bill to overhaul the $2.5 trillion industry.

Panels led by his Democratic Party have stepped up activity on legislation that would meet Obama's goal of guaranteeing all Americans health care coverage, but they remain far from resolving the thorniest issue -- how to come up with about $1 trillion over 10 years in new taxes or savings to pay for it.

The first of five congressional panels to act, the Senate Health Committee approved on a 13-10 party-line vote legislation that would set up a government-run insurance program to compete with private insurers.

Obama praised the panel's action, but appealed to Americans to get involved, saying at the White House, "It's time for us to buck up Congress, this administration, the entire federal government, to be clear that we've got to get this done."

"This progress should make us hopeful, but it can't make us complacent," he said. "It should instead provide the urgency for both the House and the Senate to finish their critical work on health reform before the August recess."

The Senate bill would require most Americans to obtain health insurance and require employers of more than 25 workers to provide coverage or face a $750-per-worker penalty. Insurers could no longer bar people with pre-existing conditions. But, no one with insurance would be required to change insurers.

Health insurance reform is considered central to Obama's administration, building on his campaign pledge to expand coverage and control skyrocketing medical expenses, which are a burden on the federal government, businesses and individuals.

Most Americans have health insurance that is partially paid by their employers, but an estimated 46 million have no coverage. Insurers oppose the government-run health plan and say it would not lead to lower costs for consumers.

The National Federation of Independent Business, which worked to derail President Bill Clinton's reform push in the early 1990s, warned lawmakers the House bill would harm U.S. jobs and that it failed to meaningfully curb costs.

The trade group for small businesses called the employer mandate "punitive" and the tax "regressive" because it hits employers whether they have made a profit or not.

Some Republicans are trying to use the small business argument to defeat the Democrats' effort.

The senior Republican on the Senate health panel, Senator Mike Enzi, called the bill "a prescription for failure," and complained Republicans were shut out of the drafting process.

"If America is going to believe in what we do, this cannot be a bill just put together by one side."

In addition, the bill includes a provision sought by drug companies to give expensive biotechnology medicines protection from cheaper rivals for 12 years.

TAXES CONTROVERSIAL

Senators were cool to one of the most controversial parts of the House Democrats' bill, the so-called millionaires' tax on the wealthiest Americans to pay for the expanded coverage. The tax starts at 1 percent on income of $350,000 a year and hits 5.4 percent for millionaires.

"I don't think that is going to be part of the Senate Finance Committee's proposal," Senator Kent Conrad, a senior Democrat and member of the Finance Committee, told Reuters before a meeting of committee Democrats. Conrad is chairman of the Senate Budget Committee.

The second-ranking Democrat in the Senate, Richard Durbin, said the Senate would not follow the House lead on taxes.

"Their (House) revenue sources will be different from ours. We have a different political mix here. We're trying to put together 60 votes; a majority that will pass," he said.

Pressed on what type of tax increases, if any, he would support, Durbin would say only that Baucus spoke at the party lunch Tuesday and said he thought they would have to "come up with $300-400 billion he thought would be needed."

The Senate health panel is the first of five congressional committees to complete work on its version of a major overhaul for the industry. Its version costs about $615 billion over 10 years, but does not include changes to expand coverage for the elderly and poor.

The full Senate must vote on healthcare legislation and reconcile its bill with a House of Representatives proposal before it goes to the White House.

Three House panels are to start work this week on a plan that also sets up a government-run insurance plan. The Senate finance panel, which has jurisdiction over Medicare, Medicaid and taxes, was expected to begin debate soon, but a senior Republican said he doubted they would act this week or next.

"They tell me they are making progress," said Republican Senator Orrin Hatch, who is among a small group of lawmakers working with committee chairman Max Baucus on the effort. asked if legislation could emerge this week or next, he said, "I personally doubt it."

Hatch also said the idea of taxing employer-paid health benefits was not going to be part of the finance panel's plan, given opposition by both parties, and that the tax on the wealthy would meet strong opposition among Republicans.

A group of Senate Democrats called for the insurance industry to submit to new fees to help pay for the reforms, which they said could raise up to $100 billion over a decade.

"We need the insurance companies to step up to the plate," Senator Charles Schumer said. "It makes sense that private health insurers, who are going to gain 40 million customers in a reformed system, should pay their fair share."

The pharmaceutical industry has already agreed to measures that would raise $80 billion over 10 years for reforms and hospitals have agreed to $155 billion.

(Additional reporting by Kim Dixon, Donna Smith and Jeff Mason; Editing by Peter Cooney)

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