Schwarzenegger supports health overhaul goals

California Gov. Arnold Schwarzenegger praised President Barack Obama's drive to overhaul the nation's health care system on Tuesday and urged fellow Republicans to join in efforts to finish the job this year.

The new Republican support for Obama's top domestic priority came as a potential setback emerged for Senate health legislation: Congressional tax experts reported that the bill would impose $29 billion more in taxes on health care industries than originally thought - levies that could be passed on to consumers in the form of higher premiums.

That could be troublesome news for an overhaul bill facing a crucial vote in the Senate Finance Committee this week, and with Republican senators already complaining that the legislation contains too many taxes.

Although Schwarzenegger stopped short of embracing a Democratic bill, his words of encouragement came on the heels of similar statements from other Republicans outside Congress, including former Senate Republican leader Bill Frist. The White House and Democrats highlighted them as evidence of momentum and division within GOP ranks.

Schwarzenegger, who two years ago tried but failed to pass a universal health care plan in California, said in a statement that he appreciated Obama's partnership with the states and his effort to hold down costs and improve quality. He urged lawmakers from both parties to "move forward and accomplish these vital goals for the American people."

Congressional Republicans responded that they have been calling for health care improvements for months - just not the kind that Democrats are offering.

"Americans want commonsense reform," Senate Minority Leader Mitch McConnell, R-Ky., said in a speech on the Senate floor, arguing that Democratic plans would expand government control, raise taxes on the middle class and cut Medicare benefits.

Tommy Thompson, who headed the Health and Human Services Department under President George W. Bush, said Monday the Senate Finance Committee bill "is another important step toward achieving the goal of health care reform." Frist, a heart surgeon, told Time magazine he would vote for the committee bill if he were still in Congress. However, both Frist and Thompson said they thought the bill could be improved.

New York Mayor Michael Bloomberg, a political independent first elected as a Republican, said Monday that health care legislation deserves support across the political spectrum.

Questioned about the disparate Republican voices, White House Press Secretary Robert Gibbs said, "I hope that Republicans in Washington hear the message of Republicans all over the country that it's time to come in off the sidelines and actively get involved in making some serious progress on health care reform this year."

On the tax issue, the Joint Committee on Taxation said in a memo prepared for Finance Committee Republicans that drug companies, medical device manufacturers and insurers would pay $121 billion over 10 years as a result of fees in the committee's bill. That compares with $92 billion originally calculated.

The tax experts said the reason for the change was that the companies wouldn't be able to deduct the fees.

The Finance Committee's top Republican, Chuck Grassley of Iowa, said in a statement: "These taxes will increase insurance premiums and health care costs for individuals and families."

At the same time, they also could mean more revenue to help pay for expanding coverage to the uninsured.

The industry fees are separate from a proposed new tax on high-value insurance plans that's also in the Finance Committee bill.

The committee, the last one in Congress yet to act on sweeping health care legislation, had planned a final vote for this week but has been waiting for a more complete set of calculations from the Congressional Budget Office.

Tuesday's tax report didn't shed light on the total cost of the bill, which stood at under $900 billion over 10 years going into a two-week drafting session that ended this past Friday. Dozens of amendments were added during the session, some making substantial changes, so senators want to see where that leaves the price tag of the bill before they go to a final vote.

That figure could be available as early as Wednesday, according to Finance Chairman Max Baucus, D-Mont. Baucus has a 13-10 Democratic majority on the panel so the outcome is hardly in question, though the margin may be.

Sen. Olympia Snowe of Maine, the only Republican seen as a possible "yes" vote, declined to tip her hand on Tuesday, but said she still thought the bill needed more work to ensure coverage plans were made affordable to low- and middle-income families. She suggested that the value of the lowest-value plan to be offered within a new purchasing exchange might have to be lowered even more.

"I'm still grappling with the question of affordability," she said.

Senators continued to debate whether to allow the government to sell insurance in competition with private industry. A compromise by Sen. Tom Carper, D-Del., that would give states menus of options to choose from to advance as alternatives to the private market was getting interest from some senators.