WASHINGTON - President Barack Obama's far-reaching plan to guarantee all Americans healthcare coverage faced trouble on Friday over its more than $1 trillion price tag, so Democrats looked for ways to reduce healthcare costs as they moved the bill forward.

The Democratic plan would revolutionize the $2.5 trillion healthcare industry by setting up a government-run health insurance plan to compete with private insurers. It will also bring insurance coverage to many of the 46 million uninsured.

A group of first-term House of Representatives' Democrats brought their concerns about higher taxes to White House chief of staff Rahm Emanuel on Friday. They are worried that new taxes would harm small business and further hurt employment.

Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery, Representative Jared Polis said in a letter to House Speaker Nancy Pelosi.

Doubts about the high cost of Obama's signature domestic policy effort emerged on Thursday when Congress' own independent budget analyst said reforms being considered would do little to control rising costs.

Republicans and fiscally conservative Democrats seized on this, and called for more controls on the scale and cost of the plan. They are concerned that the United States, with its $1 trillion deficit this year, cannot afford expanded care.

But White House spokeswoman Linda Douglass said on Friday Congressional Budget Office chief Douglas Elmendorf's prediction that it would expand federal spending on healthcare to a significant degree did not take into account the many ways it is expected to bring down healthcare delivery costs.

It does contain substantial savings, and it does also contain measures which cannot necessarily be measured in dollars and cents by the Congressional Budget Office, but clearly will have the effect of lowering costs, she told Reuters.

House Majority Leader Steny Hoyer told reporters on Friday lawmakers would look for more ways to save money in the government's Medicare and Medicaid programs before the full House votes on the bill in the next two weeks.

We will need to build on the cost containment measures we already have in this bill, Hoyer said, even as Democratic leaders touted passage of the overhaul plan by two committees. A third panel is to finish next week, and then the full House will debate with an eye toward passage by the end of July.

Pelosi said the Democratic-controlled chamber was on schedule to vote on the legislation this month.

The Senate Finance Committee is also looking for ways to pay for the expanded healthcare and lawmakers in that chamber hope to bring a bill before the full Senate by August 8.

HEALTHCARE COSTS WORRY MANY

Although most Americans have insurance partially paid for by their employers, insurance is a major worry for many, especially during a recession when a job loss could mean loss of insurance coverage.

Studies have shown that limits on coverage and rapidly rising medical costs have contributed to half the bankruptcies and 1.5 million of home foreclosures each year. This is despite the highest spending per capita on health care of any country.

The House Ways and Means Committee agreed on Monday on legislation that would raise taxes to pay for the plan's estimated $1 trillion cost in part by raising taxes on couples making more than $350,000. Those earning more than $1 million would see a 5.4 percent tax. Critics argue that measure would harm small businesses who fall into this tax category.
A second panel worked through the night Thursday and approved legislation that will guarantee no American can be turned down for health insurance. It will also require most employers to contribute to workers' insurance or face a penalty.

Three Democrats and all Republicans on each committee voted against it.

During about 15 hours of debate, Democrats who control the Ways and Means committee shot down a series of Republican amendments, including one to repeal a mandate that employers participate in the plan or pay into a fund.

If the private sector is so good ... why do we have 50 million people with no health insurance today, Democrat Jim McDermott said, in response to Republican warnings that the House bill would change the current system for the worse.

Moderate Republican Senator Olympia Snowe, who has been central to the Finance Committee talks, has urged Obama to be patient and said it was overly ambitious to set an August deadline for Senate passage.

(Additional reporting by Donna Smith, Kim Dixon and Lisa Richwine)

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