- The Washington Times - Thursday, February 26, 2009

President Obama’s first budget will seek $634 billion over 10 years as a down payment on health care reform, a senior administration official said Wednesday.

The official said Mr. Obama’s proposal is meant to start a dialogue with Congress on 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 the condition of anonymity because the budget won’t be released until Thursday.

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Also Wednesday, congressional sources told the AP that Mr. Obama is moving away from building a nuclear waste dump at Yucca Mountain in Nevada by slashing money for the program in his first budget, providing only enough funding for the Energy Department to answer questions from the Nuclear Regulatory Commission on the license application.

Senate Majority Leader Harry Reid of Nevada said Mr. Obama’s decision to cut Yucca funding is the most significant victory yet to block the dump from being built 90 miles from Las Vegas. The Yucca project was proposed more than two decades ago to hold radioactive waste from power plants.

Mr. Obama’shealth care request comes on top of recent expansions approved by Congress and also described by his administration as down payments toward overhauling the health care system. Those include $32 billion to expand coverage for the children of low-income workers and $19 billion to speed the adoption of computerized health records.

Aside from health care, the budget will extend Mr. Obama’s signature $400 tax cut for workers, originally enacted as part of the economic stimulus plan.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.

Mr. Obama has called on Congress to send him a health care reform bill this year, but even before the budget arrives on Capitol Hill, senior members of both parties say they are concerned about the cost.

Almost no one believes that Americans are getting good value for their health care dollars. Some experts say 30 percent or more of what the nation spends may be going for tests and treatments of little or no lasting benefit.

But bringing the uninsured into such a costly system won’t be easy. Experts say the cost could easily exceed $1 trillion over 10 years, a figure that the Obama administration does not dispute.

But administration officials say overhauling the health care system to slow increases in costs and get everybody covered is essential to solving the nation’s long-term budget problems. They argue that it may take a big investment up front to reap significant dividends over the long term.

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