Obama says health-care overhaul vital to rebuilding economy

WASHINGTON -- Six months in office, President Barack Obama sought Wednesday night to rally support for health-care legislation he's trying to push through Congress, expressing support for a surtax on families making more than $1 million a year to help pay for it.

Under pressure from Democrats to weigh in on the details of legislation, Obama also promised at a prime-time news conference to reject any measure "primarily funded through taxing middle-class families."

The president said that in addition to helping millions who lack coverage, the health-care legislation is central to eventually rebuilding the economy stronger than it was before the recession that began more than a year ago.

He said Medicare and Medicaid, government health-care programs for the elderly and the poor, are the "biggest driving force behind our federal deficit."

Unless they are tamed, he said to a national TV audience, "we will not be able to control our deficit. If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket."

The president said he believed it was possible to fund more than two-thirds of the cost of health-care legislation by eliminating waste and redirecting federal funds already being spent. The rest must come from higher taxes, he said.

The administration proposed last winter a plan to raise taxes on upper-income wage earners by limiting their ability to claim deductions.

Congress looked unfavorably on the proposal, and Obama said he was open to alternatives -- with one exception.

"If I see a proposal primarily funded through taxing middle-class families, I'm going to be opposed to it," he said.

It was not immediately clear whether the president was signaling he would accept at least some higher taxes on middle-class families as the price for winning passage.

As a candidate he vowed repeatedly that no one earning less than $250,000 would face higher taxes if he won the White House.

Obama's remarks about a proposed tax on million-dollar families aligned him with Speaker Nancy Pelosi. Draft legislation in the House calls for the surtax on individuals making $280,000 and families with $350,000 income or more, but she suggested earlier in the week those levels should be increased.

The president stepped to the microphone as Congress labored over his call for legislation to expand health care to millions who lack it as well as control the costs of medical care generally.

In his opening statement, he stressed the second of those two goals.

"In the past eight years, we saw the enactment of two tax cuts, primarily for the wealthiest Americans, and a Medicare prescription program, none of which were paid for."

He said he wouldn't sign health-care legislation that wasn't paid for, although his administration has exempted from that pledge an estimated $245 billion to raise Medicare fees for doctors.

"This debate is not a game for these Americans, and they cannot afford to wait for reform any longer," Obama said. "They are looking to us for leadership. And we must not let them down."

The president said he was pleased banks are returning to profitability. But he added, "What we haven't seen, I think, is the kind of change in behavior and practices on Wall Street that would ensure that we don't find ourselves in the fix where we've got to bail out these folks again." He said legislation he has proposed to Congress includes new regulations to control executive compensation and limit excessive risk taking.

Obama defended his decision to set a midsummer deadline for the House and Senate to act on health care, even if it isn't met. "I'm rushed because I get letters every day from families that are being clobbered by health-care costs, and they ask me, 'Can you help?'" he said.

Without a deadline for action, he said, a recent proposal to curtail the growth in Medicare costs would not have materialized "until who knows when." He said that in the past few days, leaders in both houses had agreed to incorporate it into legislation taking shape.