Obama's budget builds in funds for health reform
THE ASSOCIATED PRESS
February 26, 2009
WASHINGTON - President Barack Obama's first budget, due to be released Thursday, will seek $634 billion over 10 years as a down payment on health care reform, a senior administration official said yesterday.
The official said Obama's proposal is meant to start a dialogue with Congress over how to provide coverage for an estimated 48 million uninsured while also slowing health care costs, which amount to $2.4 trillion a year and keep rising even as the economy is shrinking.
The senior official spoke on condition of anonymity because the budget won't be released until today.
The revelations about Obama's budget came as the Democratic-controlled House approved $410-billion legislation yesterday that boosted domestic programs, bristled with earmarks and chipped away at policies left behind by the Bush administration.
The vote was 245-178, largely along party lines. Reps. Gary Ackerman (D-Roslyn Heights), Tim Bishop (D-Southampton), Steve Israel (D-Huntington) and Carolyn McCarthy (D-Mineola) voted for the bill, while Rep. Peter King (R-Seaford) voted against.
Aside from health care, the Obama budget will extend his signature $400 tax cut for workers, originally enacted as part of the economic stimulus plan.
The budget also calls for an increase in the top income tax rate, from 35 percent to 39.6 percent for couples with incomes above $250,000 a year, said another administration official.
The biggest tax adjustment, however, would come from updating the alternative minimum tax for inflation. That would add $150 billion to the deficit by 2013. The AMT was originally designed to make sure the wealthy paid at least some taxes, but it threatens to ensnare some 24 million middle- to upper-income taxpayers next year.
The $634 billion Obama wants to set aside for health care would be almost evenly divided between spending reductions and tax increases.
Obama's plan would trim $316 billion over 10 years from Medicare. Some of the savings would come from scaling back payments to private insurance plans that serve older Americans, which many analysts believe to be inflated. Other proposals include charging upper-income beneficiaries a higher premium for Medicare's prescription drug coverage.