Democrats open push to overhaul health care congress

Speaker of the House Nancy Pelosi address the students at Martin Luther King Jr. Middle School, Thursday April 16, 2009, in San Francisco, Calif. Speaker of the House Nancy Pelosi address the students at Martin Luther King Jr. Middle School, Thursday April 16, 2009, in San Francisco, Calif. Photo: Lacy Atkins, The Chronicle Photo: Lacy Atkins, The Chronicle Image 1 of / 1 Caption Close Democrats open push to overhaul health care 1 / 1 Back to Gallery

House Speaker Nancy Pelosi and top Democrats opened an all-fronts charge Tuesday to pass a $1 trillion, 10-year health care overhaul by August, unveiling legislation that would tax the wealthy to pay for universal coverage, create a public insurance plan and require individuals to carry insurance and businesses to offer it.

The bill would also begin wide-ranging experiments to change the way doctors and hospitals are paid in an effort to slow decades of relentless cost increases.

The legislation arrived after a strong shove from President Obama at a White House meeting Monday, when he ordered Democratic House and Senate leaders to begin moving bills that have languished for months as opponents have gathered force and polls show public skepticism on the rise.

Pelosi, D-San Francisco, and three key committee chairmen she has dubbed the "three tenors" - Democratic Reps. George Miller of Martinez, Henry Waxman of Los Angeles and Charles Rangel of New York - vowed to make history by achieving universal coverage, a dream of Democrats since President Harry Truman.

"Inaction is not an option," Pelosi said. The Democrats described a crisis among individuals, businesses and governments at all levels facing cost increases that are driving all of them toward financial ruin.

"You will never again be one treatment away from bankruptcy," Miller promised.

The bill would levy a surtax starting at 1 percent on individuals earning more than $280,000, rising to 5.4 percent for those earning $1 million a year. Businesses would have to pay a tax of 8 percent of their payroll if they do not offer coverage, with an exemption for businesses with payrolls less than $250,000.

Business groups immediately slammed the idea, saying it would impose an enormous tax on small businesses and kill jobs.

"If there's one sure way to kill the goose that lays the golden egg, this is it," said U.S. Chamber of Commerce President and CEO Tom Donohue.

Obama and Democrats see health care reform as central to their election victory last year and are determined to succeed for fear they will not have another chance.

But conservative "Blue Dog" Democrats threatened a revolt over mandates on small businesses. The House, Senate and administration are at odds over which taxes to raise. Two Senate committees are clashing with each other and the House.

In an effort to hold Democrats together, Pelosi has begun sounding like a Blue Dog herself, emphasizing "savings, savings, savings" and "squeezing" excess costs out of the system. "We are committed to fiscal soundness," she said. "Lowering costs is essential to this."

Rep. Pete Stark, D-Fremont, chair of the Ways and Means health panel and one of the House negotiators, predicted a close vote when the bill comes to the floor, with all but unanimous Republican opposition.

Health care is a giant, complex industry, representing more than one-sixth of the U.S. economy, an estimated $2.5 trillion or $8,160 per resident. Changing that system, however unpopular or dysfunctional in its individual parts, is an immense political and technical challenge.

While the health reform clashes are starting to look reminiscent of the failed effort by former President Bill Clinton, Pelosi has vowed not to let that happen. Rangel's Ways and Means Committee and Miller's Education and Labor Committee scheduled action on the legislation this week.

Rep. Mike Thompson, D-St. Helena and a member of the Ways and Means Committee, did not join the Blue Dog revolt last week, saying he favors a government-provided insurance option. He said his constituents are nearly split among three positions:

"About a third of the folks I hear from want single-payer," or one, government-provided system, Thompson said. "About a third of the people I hear from say that health care reform of any type is socialism, and the third group wants an improvement in health care, and they want access to quality health care, they don't want to continue to pay the prices they've been paying."

But nobody wants to pay for fixing the system, he said.

"I suspect everybody has concerns about having to pay more, or how it's going to be paid for," Thompson said. "The truth is, without fixing health care they're going to be paying more, and that's the problem."

This article has been corrected since it appeared in print editions.