Editorial: A healthy debate

President Obama has demonstrated that on the most heated political issues, he can be shrewdly pragmatic, often to the frustration of both liberals and conservatives.

That is certainly the case as Obama adjusts his game plan for what he calls a "make or break period" in moving health-care legislation through Congress over the second half of this year.

That explains why Obama recently backed off a campaign pledge not to tax the health benefits of working Americans.

As the president noted in a letter to Senate leaders, the goal is "quality, affordable health care for all Americans."

That means finding a way to cover the nation's 46 million uninsured, as well as reducing the staggering health-care costs. Those costs threaten household and government budgets alike, and business bottom lines.

The overhaul won't be easy, but there's no arguing with the president's claim that the status quo is unsustainable for all of the stakeholders. A recent report from White House economists showed that by 2040, the uninsured ranks would rise to 72 million, and health-care expenditures would consume nearly one-third of all U.S. economic output.

So it was encouraging to hear Senate finance chair Max Baucus (D., Mont.) respond to the president with confidence that the Senate would deliver a health-care measure this summer.

While the need for reform is great, the president and Congress need to be wary about pitfalls in the sausage-making process, especially in funding health care.

As a candidate, Obama dismissed John McCain's proposal to tax employer-sponsored health benefits to help pay the estimated $1.2 trillion cost of expanding coverage over a decade.

Last week, though, Obama said he was willing to consider the move - even though it would have huge ramifications, and essentially result in a sizable middle-class tax hike.

Well, Obama was right the first time. Taxing benefits hardly seems like the best approach, since it could have a negative impact on the economy in the Northeast while rewarding Southern and Western companies that don't provide adequate health benefits.

The main effort should be on reducing the cost of health care rather than taxing benefits, and rolling back the Bush tax cuts for the wealthy to cover the cost of new coverage.

On controlling costs, at least, the president is hanging tough on what may be the best hope: a little healthy competition from a new government-run health plan that would be an affordable option for Americans without workplace coverage.

Obama told Senate leaders that a public plan would "make the health-care market more competitive, and keep insurance companies honest."

Since health-care industry players already are hedging their bets on the cost savings they've pledged, they might well respond better to the pressures of the marketplace.

At the same time, it's good to see Obama now open to the sensible concept of mandating that all Americans obtain health coverage. Widely sharing the costs will make insurance more affordable.