WASHINGTON (AFP) — President Barack Obama unveiled Thursday an unprecedented bid to reform the country's ailing health care system, aiming to endow millions of Americans with much-needed insurance and give a shot in the arm to the ailing economy.
Calling it a "down payment" on health care reform, the Obama administration proposed to set aside a whopping 634 billion dollars over 10 years to finance reforms to make health coverage affordable and move the country toward universal coverage.
The proposed health care fund is the heart of the administration's budget plans for the next decade, which begins with a bold 3.55 trillion dollar budget for 2010 unveiled by the six-week-old administration.
The United States's lack of universal health care coverage has left 46 million Americans uninsured.
As the world's largest economy struggles with recession, soaring unemployment threatens to tip millions more into the ranks, since most workers rely on employers or themselves to pay for coverage.
Obama's massive budget plan envisions a dramatic shift in government spending that pours more money into health care, education and green energy as well as other initiatives designed to promote long-term economic growth.
"There are some hard choices that lie ahead," Obama said at the White House as he officially unveiled the proposed budget.
To partly pay for the massive outlays, his administration wants to allow tax breaks for the rich to expire in 2011 to level the playing field for other Americans.
The administration said that the new health care fund in part would be financed by a reduction in the itemized deduction rate for families with incomes over 250,000, to 28 percent from 35 percent, raising an estimated 318 billion dollars over 10 years.
"The single most important thing we can do is bend the curve on health care costs," Obama's budget director Peter Orszag said at a news conference.
Obama has pledged to immediately make investments to computerize all US medical records within five years while protecting individuals' privacy.
"The cost of our health care has weighed down our economy and the conscience of our nation long enough. So let there be no doubt: Health care reform cannot wait, it must not wait, and it will not wait another year," the president promised in his first address to Congress two days ago.
Reform of Medicare, the federal health care insurance program mainly for seniors aged 65 and older and some disabled people that covers nearly 40 million Americans, would be a key area target of reform.
The Obama administration wants to reduce Medicare overpayments to insurers and weed out duplications and error.
Orszag, the director of the US Office of Management and Budget, said that previous federal budgets had assumed Medicare payments would be reduced to insurance companies, when in fact each year Congress would "fill in the hole" by not approving cuts.
The administration wants a "better system to provide higher quality care," he said.
Senator Ted Kennedy, chairman of the Senate health, education, labor and pensions committee and a health care reform champion, hailed his fellow Democrat Obama's proposed budget.
"With this budget, the president also makes an historic commitment to the goal of quality, affordable health care for all Americans. I?m optimistic that Congress is now ready to answer the challenge of enacting legislation to reach that goal, and the funds proposed in the budget are an essential starting point for our effort."
But Republican lawmakers charged that it was unwise to pay for health care reform through a tax hike during a recession.
"Everyone agrees that all Americans should to have access to affordable health insurance. But an increase in taxes in the middle of an economic recession especially on small businesses, is not the way to accomplish that goal," said Representative John Boehner, the Republican leader in the House of Representatives.
Orszag dismissed such arguments, saying taxes would not rise on the rich or businesses until 2011, when the economy is projected to have rebounded to a robust 4.0 percent growth rate.
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