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New U.S. effort on health care

Obama urges Congress to weigh limiting tax breaks for the richest to pay for reform.

WASHINGTON - President Obama wants Congress to consider paying for a health-care overhaul by limiting certain tax deductions for wealthy Americans rather than by taxing employer-provided health benefits, top advisers said yesterday.

The Obama administration stepped up efforts to influence health-care legislation yesterday as advisers David Axelrod and Austan Goolsbee appeared on television talk shows to discuss the issue.

Obama "made a very strong case for the proposal that he put on the table, which was to cap deductions for high-income Americans, and he urged them to go back and look at that," Axelrod said on CNN's State of the Union.

Goolsbee, on Fox News Sunday, said Obama was mindful of how "ordinary Americans are able to foot the bills" and never proposed taxing employee benefits.

House Democrats are weighing a new proposal in response to Obama's call for legislation to be enacted by August. An outline of the plan obtained by Bloomberg News would require all Americans, with some exceptions, to have insurance.

It would probably exempt those who can prove they cannot find an affordable policy. There could be a tax penalty for others who elect not to get insurance.

The outline suggests that consumers who have individual health insurance policies they like could keep them.

Still, it says that "by and large" the nation's market for individually purchased health insurance policies would move to a new, federally operated exchange. It would permit both individuals and employees of small firms to buy policies at less expensive group rates.

All House Democrats are to be briefed tomorrow on the details of a single piece of legislation that three House committees will work on, with the House scheduled to act by the end of July.

The proposal is part of a broader push by Democrats in Congress to complete a revamping of the U.S. health-care system by early fall, the deadline Obama set.

In the Senate, Health Committee Chairman Edward Kennedy has an early draft of legislation that also includes a so-called individual mandate, and that would require all employers to supply health insurance for workers or contribute to the cost of a plan.

Kennedy, a Massachusetts Democrat, would also create a public health plan to compete with private insurers, a priority of Obama's that Republicans oppose and that would bar insurers from limiting coverage.

The effort to overhaul health care affects a sector that constitutes 17 percent of the U.S. economy. The goal of Democratic supporters is to provide insurance to most of the 46 million uninsured and lower the soaring cost of care.

Google Inc. chief executive officer Eric Schmidt, speaking on Fox, said reducing costs would also ease burdens on business.

"The only way to really address this is to address the combination of coverage and cost. So anything that the Congress and the president does has to do that. And from my perspective, the sooner the better," Schmidt said.

Lawmakers have a plethora of proposals on how to raise the hundreds of billions needed for an overhaul, including new taxes on soda, beer, and wine, and a partial tax on employer-provided health insurance for the first time.

The tax-free nature of employer-provided insurance is the biggest tax expense in the federal budget.

To raise money for a health-care overhaul, Obama proposes a 28 percent cap on tax deductions for items such as mortgage interest, investment expenses, and charitable gifts for Americans in the two highest tax brackets, which would be 36 percent and 39.6 percent under his proposals.

Without the cap, taxpayers in those two brackets would be able to deduct 36 cents and 39.6 cents on the dollar for those expenses, respectively.

Obama Tweaked With Tweets

Republican Sen. Chuck Grassley let off a couple of angry "tweets" yesterday aimed at President Obama.

His first: "Pres Obama you got nerve while u sightseeing in Paris to tell us 'time to deliver' on health care. We still on skedul/even workinWKEND."

A short time later: "Pres Obama while u sightseeing in Paris u said 'time to delivr on healthcare' When you are a 'hammer' u think evrything is NAIL I'm no NAIL."

A spokeswoman verified that the senator was the author of the mass text messages sent via the Internet social site Twitter.

Grassley is the top Republican on the Finance Committee and is key to any bipartisan health-care deal.

For months, Obama had left the details of health-care legislation to Congress, then inserted himself firmly into the debate in recent days, including using his weekly radio address Saturday, while in Europe, to declare "it's time to deliver" on health reform.

- AP