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Undaunted by the economy, Obama presses ahead on healthcare reform

His introduction of Kansas Gov. Kathleen Sebelius (D) for secretary of health and human services marks an attempt to press for reforms even amid the economic crisis.

By Staff writer / March 2, 2009

KATHLEEN SEBELIUS: Obama’s new choice for health secretary.

Jim Young/Reuters



President Barack Obama is pressing forward this week with plans to recast American healthcare despite the nation’s worsening economic condition, ignoring criticism that he is taking on too much.

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On Monday, President Obama introduced his new nominee for secretary of health and human services, Kansas Gov. Kathleen Sebelius (D), who will play a central role in the reform effort. On Thursday, the White House will hold a major policy summit about runaway healthcare costs.

Since unveiling his proposed budget last week, which includes $634 billion toward universal health coverage, critics have said reform should wait until the economy improves. But Obama insists he was elected to provide “sweeping change,” and budget analysts say healthcare spending is a key factor in the nation’s chronic deficits.

“The high rate of growth of healthcare costs is at the root of the nation’s long-term fiscal problem,” writes Robert Greenstein, executive director of the Center on Budget and Policy Priorities in Washington, in a statement on the center’s website.

The costs of public healthcare programs are increasing at a rate well above overall inflation, consuming more of the federal budget.

Thursday’s healthcare summit will bring together members of Congress from both parties as well as stakeholders and advocacy groups in the healthcare industry.

“They’ll be testing the waters” at Thursday’s healthcare summit, says Maggie Mahar, a healthcare fellow at the Century Foundation in New York. “Obama will take whatever he can get from it.”

“He knows that if a Republican stands up and says something reasonable, [budget director Peter] Orszag will say, ‘I’m glad to hear someone say this, it’s a brilliant idea,” she adds.

The beginnings of Obama’s effort at healthcare reform come in marked contrast to the failed effort by the Clinton administration 16 years ago, when then-first lady Hillary Clinton led a task force that conducted its business behind closed doors and issued a 1,000-plus page plan that sank under its own weight. In his budget outline, Obama signaled his intentions by setting up a reserve fund of $634 billion – more than half the $1 trillion needed over the next decade to put reforms into practice. Half the $634 billion would come from tax increases. The other half from program changes, including efficiencies to Medicare and Medicaid, the government’s health programs for the elderly and the poor, and higher discounts from pharmaceutical companies for Medicare drugs.