Gephardt Proposes Massive Health Care Overhaul

Hoping to claim the health care issue as his own, Democratic presidential hopeful Dick Gephardt unveiled the most sweeping, costly and politically risky proposal for near-universal health care since the unsuccessful Clinton administration plan of 1994.

Naming the proposal "Matt's plan," after his son who survived childhood cancer, Gephardt said he would pay for the program by completely eliminating President Bush's tax cuts.

"Forty-one million Americans have no health insurance. That's 41 million reasons why the George Bush economy and the George Bush indifference have got to go," the Missouri congressman said in a speech to the Service Employees International Union, which represents 1.5 million health care workers.

Gephardt's plan requires all companies to insure their employees, whether full-time, part-time, self-employed or retirees. Employers would get a 60 percent tax credit to cover the cost, up from 30 percent.

Workers still would have to pay their portion of premiums to help cover health care costs, but companies that increased employee contributions would not qualify for the tax credit. Gephardt would subsidize the employee contribution for workers below or near the poverty line.

"The short answer is that we pass a law requiring every employer to provide access to quality coverage with employer tax credits covering most of the cost," he said.

To cover the unemployed, Gephardt plans to expand and reform Medicare, Medicaid and related programs, state and local governments would receive a federal subsidy for up to 60 percent of their health care costs.

By Gephardt's own estimates, the plan would cost $213 billion in 2005, increasing by $15 billion to $20 billion each of the following two years.

He also made no bones about where the money would come from. Gephardt not only wants to repeal the $1.3 trillion tax reductions of 2001, he is counting on the elimination of the $726 billion in tax cuts that Bush is proposing this year, even though the plan has yet to pass Congress.

"This is the right way to stimulate the economy — not knee-jerk tax cuts that do nothing but pay off George Bush's wealthy campaign contributors while killing economic growth," Gephardt said.

Many view the elimination of tax cuts the same as a hike, since they have already been scheduled to take effect. Gephardt disputes that charge, saying that the new tax credit for employers amounts to a much bigger break for corporate America than anything in the president's tax relief packages.

Bush's tax relief plan included cuts for married couples, increased the child credit and reduced the inheritance tax. Gephardt spokesman Erik Smith said the lawmaker is open to revisiting the marriage provision, the child credit and the inheritance portion.

The law created a new 10 percent rate for the first $6,000 of each person's income and reduced the top 39.6 percent rate to 35 percent. Most other rates dropped by 3 percentage points.

Gephardt acknowledges that the price tag is so high that it could add to the federal deficit. He admits he does not plan to propose a balanced budget.

But that doesn't deter Gephardt, who said repealing the tax cuts and using the money "to pay for universal access to health care" is the "moral issue of our time" and the first bill he will send to Congress if elected president.

By getting out in front of the issue, Gephardt hopes he can get ahead of his eight rivals for the Democratic nomination. Several of his rivals in the nine-way Democratic primary race plan to unveil their ideas to expand coverage in coming weeks.

Of course, trekking the treacherous water of universal health care can also sink a candidate. Many say the Clinton plan was responsible for the loss of the Democratic majority in the House in 1994 and the loss of Gephardt's majority leadership post.

Fox News' Carl Cameron contributed to this report.