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Obama Seeks $634 Billion for Health Care

WASHINGTON -- President Barack Obama is asking Congress to raise taxes on the wealthy and cut Medicare costs to provide health care for the uninsured while making the just-enacted $400 tax cut for most workers permanent.

In a budget blueprint easily exceeding $3 trillion for 2010, Obama proposes setting aside $634 billion over the next decade to expand government subsidized health coverage -- a little more than half the money needed to ensure that every American gets medical care.

Obama is also expected to ask Congress for an additional $75 billion to cover the costs of wars in Iraq and Afghanistan through September.

The disclosures came from three administration officials, who spoke on condition of anonymity because the budget won't be made public until later Thursday.

All told, the deficit for the ongoing 2009 budget year would reach $1.75 trillion, up from a $1.5 trillion estimate revealed just days ago by the White House. The increase seems to reflect concerns that more money may be needed to rescue banks and other companies.

Obama's budget proposal would effectively raise income taxes and curb tax deductions on couples making more than $250,000 a year, beginning in 2011. By not extending former President George W. Bush's tax cuts for such wealthier filers, Obama would allow the marginal rate on household incomes above $250,000 to rise from 35% to 39.6%, said an administration official. Individuals making more than $200,000 would pay the higher rate.

About half of what officials characterized as a $634 billion "down payment" toward health care coverage for every American would come from cuts in Medicare. That is sure to incite battles with doctors, hospitals, health insurance companies and drug manufacturers.

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