Republicans to attack healthcare law funding

WASHINGTON (Reuters) - U.S. congressional Republicans will try to repeal President Barack Obama's healthcare law next year but their leader in the Senate acknowledged on Thursday they will likely have to settle for far more modest changes.

Two days after Republicans scored big victories in congressional elections, Senate Minority Leader Mitch McConnell took a hard line against Obama's landmark law and showed no sign of compromise when the new Congress opens for business in January. "We can and should propose and vote on straight repeal repeatedly" of the healthcare law, he said.

McConnell's remarks, in a speech delivered to the conservative Heritage Foundation, acknowledged that Obama would veto such legislation, which probably would be blocked by the president's fellow Democrats in the Senate anyway.

More realistically, McConnell said Republicans, who will hold a majority in next year's House of Representatives, should aim to hobble the healthcare law by "denying funds for implementation" of the measure. Annual spending bills for agencies, including ones that implement the healthcare law, are normally written first in the House.

Democrats accused Republicans of putting the interests of large corporations ahead of families.

"It speaks volumes that the first thing on Republicans' 'to do' list is to give power back to big health insurance companies," said Jim Manley, a spokesman for Senate Majority Leader Harry Reid.

Kim Monk, a healthcare analyst for Capital Alpha Partners in Washington, suggested Republican efforts to repeal parts of the new law could run up against the harsh reality of huge U.S. budget deficits.

"Even tweaks are going to cost money and that's a problem because it's a deficit-cutting environment," she said in a telephone interview.

Instead, Republicans most likely would continue speaking out against the law "just to keep the message alive. This is all about 2012 (election) strategy," she said.

The healthcare law, passed this year over Republican objections, provided the most sweeping reforms of the U.S. healthcare industry in decades. It aims to provide coverage to millions of people who have been going without insurance.

It imposes tough new standards on health insurers such as Aetna Inc and WellPoint Inc and requires all Americans to buy health insurance policies starting in 2014 or face fines, among other changes.

Repealing healthcare reform was one of the campaign promises of Republicans, who staged an election rout on Tuesday that gave them control of the House and narrowed the Democratic majority in the Senate.

Republicans said the healthcare law would fail to achieve promised healthcare savings and was an overreach by government with provisions requiring all Americans to buy coverage starting in 2014 or face fines.

The Senate Republican leader said that he would attempt to stage votes in his chamber next year "against its most egregious provisions" of the law.

Those could include measures that penalize large employers if they do not offer health insurance to their workers and mandates on individuals to purchase health insurance.

On Wednesday, Obama said he would welcome Republican ideas for improving the healthcare reform, one of the president's biggest accomplishments, but that it would be a mistake to have the fight over again.

While Republicans can try to use annual funding bills to block implementation of the law, many of the provisions that are rolling into effect do not require government funding and will occur outside the federal appropriations process.

But withholding funds, say to the Department of Health and Human Services, could slow federal oversight of new regulations.

House Republicans, who will become heads of committees that oversee Obama administration agencies, could use their new majority next year to repeatedly haul officials to testify on Capitol Hill. That could take away some of the time these officials otherwise would use to implement the healthcare law.

Along those lines, McConnell said in his speech that "oversight will play a crucial role in Republican efforts going forward."

(Additional reporting by Susan Heavey and Donna Smith; Editing by Eric Beech)