Obama pushes healthcare reform, critics slam cost

(For a TAKE A LOOK on healthcare, click on [ID:nN07323916])

* Preliminary analysis sees reforms adding to deficits

* House Democrats look for more medical savings

* Two of three House panels finish legislation

* Freshman Democrats concerned taxes hurt small business (Adds new analysis on budget deficit impact)

By Jackie Frank

WASHINGTON, July 17 (Reuters) - President Barack Obama's far-reaching plan to guarantee all Americans healthcare ran into trouble on Friday over its more than $1 trillion price tag, forcing Democrats to look for ways to reduce costs as they moved the bill forward.

Obama took his case for his signature domestic issue to the American public, insisting that "now is not the time to slow down" the effort to overhaul the troubled system.

"Now we've got to get over the finish line, and part of this process is figuring out how to pay for it," he said at the White House.

A preliminary analysis of the plan being pushed by Democrats in the House of Representatives concluded the legislation would increase federal budget deficits by $239 billion over 10 years.

The analysis was conducted by the Congressional Budget Office and the Joint Committee on Taxation, both of which work for Congress.

But changes to the House Democrats' plan were already under consideration and the House Energy and Commerce Committee late on Friday insisted that the healthcare reform effort will be fully paid for.

Three of five congressional committees have agreed to a plan that would revolutionize the $2.5 trillion healthcare industry by setting up a government-run health insurance plan to compete with private insurers. It would also bring insurance coverage to many of the 46 million uninsured and ease the burden of high medical costs on millions more.

Obama, who said he was "absolutely convinced" it could happen this year, has high public approval ratings that give him the political capital to spend when hammering out a deal with lawmakers. A delay to 2010, a congressional election year, could make it harder to reach a final deal.

But there is dissent among his own Democrats, who control Congress. Two groups totaling about 70 lawmakers have said healthcare costs must be brought down further if they are to back the bill. The loss of these votes could scuttle the bill in the House of Representatives.

One of these, a group of first-term House Democrats, brought their concerns about higher taxes to White House chief of staff Rahm Emanuel on Friday. They are worried that new taxes would harm small business and further hurt employment.

"Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery," Representative Jared Polis said in a letter to House Speaker Nancy Pelosi.


Doubts about the high cost of the overhaul emerged on Thursday when Congress' own independent budget analyst said reforms being considered would not control rising costs.

Republicans and fiscally conservative Democrats seized on this analysis, and called for more controls on the scale and cost of the plan. They are concerned the United States, with its $1 trillion deficit this year, can't afford expanded care.

But White House spokeswoman Linda Douglass said on Friday that Congressional Budget Office chief Douglas Elmendorf's prediction that it would expand federal spending on healthcare "to a significant degree" did not take into account the many ways it is expected to bring down healthcare delivery costs.

House Majority Leader Steny Hoyer told reporters lawmakers would look for more ways to save money in the government's Medicare and Medicaid programs before the bill is brought to the full House for a vote in the next two weeks.

"We will need to build on the cost-containment measures we already have in this bill," Hoyer said, even as Democratic leaders touted passage of the overhaul plan by two committees. A third panel is to finish its version next week, and then the full House will debate the legislation with an eye toward passage by the end of July.

Pelosi said the Democratic-controlled chamber was "on schedule" to vote on the legislation this month.

The Senate Finance Committee is facing the most difficult task next week because it has not agreed on ways to pay for the expanded healthcare despite a hoped-for Aug. 8 vote by the full Senate on the bill.


Although most Americans have insurance partially paid for by their employers, insurance is a major worry for many, especially during a recession when a job loss could mean loss of insurance coverage.

Studies show limits on coverage and rapidly rising medical costs contributed to half the personal bankruptcies and 1.5 million home foreclosures each year, despite the highest spending per capita on healthcare of any country.

The House Ways and Means Committee agreed on legislation on Monday that would raise $544 billion over 10 years to pay for the plan's estimated $1 trillion cost in part by raising taxes on the wealthy. Critics say that measure would harm small businesses who fall into this tax category.

A second panel approved legislation that will guarantee no American can be turned down for health insurance. It will also require most employers to contribute to workers' insurance or face a penalty.

Three Democrats and all Republicans on both panels voted against the bills.

Moderate Republican Senator Olympia Snowe, who has been central to the Senate talks, has urged Obama to be patient and said it was "overly ambitious" to set an August deadline for Senate passage. (Additional reporting by Donna Smith, Kim Dixon, Lisa Richwine and Richard Cowan; Editing by Paul Simao)