Obama Lays Out Ambitious Agenda

When President Obama submits his ambitious first budget outline for 2010 Thursday, it will include a 10-year, $634 billion health care reserve fund that will pay for reforms to the health care system.

In the sweeping agenda he laid out Tuesday night in his first presidential address to Congress, Obama outlined four priority areas for significant investments -- health care, education, energy and deficit reduction -- and declared that the "time to take charge of our future is here" after years of passing problems on to future administrations and generations.

He called health care reform an immediate priority for his administration, saying the cost of health care is "crushing" and calling it one of the largest and fastest-growing parts of his budget.

The president spoke of the costs of health care as a significant drain on American consumers in this time of economic uncertainty.

"We can no longer afford to put health care reform on hold.  We can't afford to do it," he said. "It's time." 

A senior administration official told ABC News the reserve fund will be $633.8 billion over 10 years, and that will be just a "down payment."

The official identified several sources to fund the plan:

$176.6 billion in savings over 10 years will come from adding competitive bidding to Medicare.

Additional billions would come from incentivizing better post-discharge care, quality incentive programs, incentives for physicians and from providers.

$8.1 billion in savings would come from applying the same income standard for premiums for Medicare Part D (prescription drugs) that applies already to Medicare Part B (doctors' visits). That is to say, right now, couples who make more than $170,000 a year already pay higher premiums for Medicare Part B. If the president's proposal goes through, they will also pay higher premiums for prescription drugs. This will affect the top 5 percent of Medicare recipients, the Obama White House anticipates, or about 1.5 million people.

Most of these Medicare/Medicaid changes would start in FY 2011, though a small part -- $1.8 billion -- would start in fiscal year 2010, just from efficiency improvements.

The other half of the funding -- $317.8 billion over 10 years -- would come from a tax increase on those making more than $250,000, or the top 5 percent of the nation. Itemized deductions -- which are generally for mortgage interest payments or donations to charity -- would be reduced from 35 percent to a maximum of 28 percent.

'Aim' of Health Care Plan Is Universality

Key health care reform priorities for the Obama administration are guaranteeing choice, making health coverage affordable, protecting families' financial health, investing in prevention and wellness, providing portability for coverage, improving patient safety and quality care, and maintaining long-term fiscal sustainability. The administration says it will "aim" for universality.

The president will convene a summit on health care reform next week to begin to tackle the issue and is under no illusions that the path for such legislation will be difficult on Capitol Hill, his spokesman said today.

"[The president] understands the only way to do that is bring together the stakeholders on both sides of the aisle, business and labor, doctors, providers," White House spokesman Robert Gibbs said.

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