House panel passes health bill, critics slam cost

WASHINGTON Mon Jul 20, 2009 7:34am EDT

Two men stand among a group of picketers pushing for healthcare reform outside Senator Sam Brownback's office in Overland Park, Kansas, July 9, 2009. REUTERS/Carey Gillam

Two men stand among a group of picketers pushing for healthcare reform outside Senator Sam Brownback's office in Overland Park, Kansas, July 9, 2009.

Credit: Reuters/Carey Gillam

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WASHINGTON (Reuters) - A key U.S. congressional committee on Friday approved healthcare legislation that includes a hefty tax on the rich but critics pointed to fresh warnings that President Barack Obama's health reform plan would do little to rein in skyrocketing spending.

The House Ways and Means Committee agreed to raise taxes to pay for the plan's estimated $1 trillion cost in part by higher taxes on couples making more than $350,000. Critics argue that it would harm small businesses who fall into this tax category.

The bill was approved on a 23-18 vote and must also be approved by two other House committees. It is part of a broad Obama plan to bring health insurance to many of the 46 million Americans who do not have it and trim excessive costs.

Further doubts about the high cost of Obama's effort emerged on Thursday when Congress' own independent budget analyst said reforms now being considered would do little to control rising costs. Republicans and fiscally conservative Democrats seized on this, and called for more controls on the scale and cost of the plan.

Congressional Budget Office chief Douglas Elmendorf told the committee its legislation would expand federal spending on healthcare "to a significant degree" while doing little to trim costs.

"Instead of rushing through one expensive proposal after another, we should take the time we need to get things right," Senate Republican Leader Mitch McConnell said.

During about 15 hours of debate, Democrats who control the committee shot down a series of Republican amendments, including one to repeal a mandate that employers participate in the plan or pay into a fund.

"If the private sector is so good ... why do we have 50 million people with no health insurance today," Democrat Jim McDermott said, in response to Republican warnings that the House bill would change the current system for the worse.

Most Americans have health insurance that is partially paid by their employers.

Three Democrats joined all Republicans voting against the bill, a sign that cost worries are beginning to cross party lines.

Two additional House panels are expected to move forward on their parts of the bill on Friday, while members of the Senate Finance Committee were expected to resume deliberations on their version of the legislation next week.

Obama has made overhauling the U.S. healthcare system his top domestic goal and is pushing the Democratic-controlled Congress to pass legislation before it recesses in August, but the timetable looks shaky.

Moderate Republican Senator Olympia Snowe, who has been central to the Finance Committee talks, has urged Obama to be patient and said it was "overly ambitious" to set an August deadline for Senate passage.

(Editing by Eric Beech)

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