WASHINGTON — Senators who are negotiating how to overhaul the nation's health care system broke off formal talks Thursday until after the July Fourth holiday, saying that they lack consensus on how to pay for the $1 trillion or more that the changes could cost over the next decade.
Thousands of their constituents rallied outside the Capitol to show their support for change, and the Obama administration called for action.
Mayela Hernandez brought her family of six from Charlotte, N.C., and explained how a government health program, or public option, would benefit her greatly. Hernandez, who makes $280 a week working in a pen factory, has no health insurance.
"It's just too expensive," she said.
At the end of the day, however, three Democrats and three Republicans on the Senate Finance Committee, which determines funding — who had been seeking common ground for days — issued a three-sentence statement saying that while the issues are "difficult and complex," they have made "progress toward workable solutions."
However, said Sen. Charles Grassley of Iowa, the committee's top Republican, "There are still a lot of decisions that have to be made."
Finance Committee Chairman Max Baucus, D-Mont., said he'd come up with a way to get a health care bill's cost at less than $1 trillion over 10 years, down from an earlier estimate of $1.6 trillion.
Committee members are considering trimming $400 billion in government subsidies to lower-income people and another $200 billion by reducing payments to certain health care providers, and other means.
President Barack Obama has said that another $622 billion could be saved with other cost savings and efficiencies, leaving a hole of about $380 billion, which presumably would come from higher taxes to meet his goal of ensuring that the plan wouldn't add to the federal budget deficit.
There's talk of taxing at least a portion of employer benefits or charitable contributions from the wealthy, or perhaps cutting the tax deduction for medical expenses or some combination. There's resistance to every idea, however.
Sen. Bernard Sanders, a Vermont independent, objected to taxing health care benefits. "I don't want to support regressive taxation," he said.
Baucus has said that changing the charitable deduction "raises concerns."
Obama says he'd prefer not to tax health care benefits. In an ABC News special Wednesday night, however, he drew a distinction between taxing full benefits and taxing so-called Cadillac coverage, worth perhaps $13,000 or more a year.
The president and his aides are trying to let lawmakers write the details of any overhaul, while he sells the overall concept to the American public. Polls show that Americans fear that the system has become too exclusive, but they worry that changing it could have unintended consequences.
White House Chief of Staff Rahm Emanuel said at a roundtable Thursday that he thought that Congress was still on track to pass an overhaul this year.
He indicated that the administration wants to drill two trends into Americans' minds: that 14,000 people lose health care coverage each day, and that health care cost inflation is roughly 10 percent a year.
As for concerns about raising taxes or reducing deductions, Emanuel said that advocates of an overhaul need to change Americans' perception: "It's rearranging the dollars within the health care system; it's not a trillion new dollars."
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