By Deborah Charles
CHICAGO (Reuters) - U.S. President-elect Barack Obama on Thursday chose Tom Daschle, a Washington veteran who knows how to wrangle lawmakers, to spearhead healthcare reform -- potentially one of the most ambitious and expensive gambles of his administration.
Although Obama wanted to stick to the issue that many Americans say is their top priority, he was forced to spend most of a news conference talking instead about a scandal involving Illinois Gov. Rod Blagojevich, who has been accused of trying to sell Obama's now-vacant U.S. Senate seat.
Obama said he had not discussed the issue with the governor and had asked his staff to gather information about any contacts with Blagojevich. He also said the Illinois governor had lost his ability to govern and should step down.
Focussing on healthcare, Obama said it was "hard to overstate the urgency" of fixing the broken American system, where many people cannot afford basic care and 15 percent of the country -- about 46 million people -- are uninsured.
"Over the past eight years, premiums have nearly doubled and more families are facing more medical debt than ever before," said Obama.
"Day after day, we witness the disgrace of parents unable to take a sick child to the doctor, seniors unable to afford their medicines, people who wind up in emergency rooms because they have nowhere else to turn," he said.
Obama said he would create a new White House office on health reform. Daschle will head up the office and was also picked for secretary of health and human services.
Obama's choice puts an experienced and mild-mannered congressional operator in charge of a political issue the president-elect has identified as one of his top legislative priorities, but one that has yet to be successfully accomplished in previous administrations.
"He brings the respect that he earned during his years of leadership in Congress," Obama said of the former Senate Democratic leader. "He knows how to reach across the aisle and bridge bipartisan divides. And he has the trust of folks from every angle of this issue."
INDUSTRY WELCOMES NOMINATION
Daschle's nomination was widely welcomed by the industry and lawmakers who noted that he was well respected on Capitol Hill.
The American Medical Association praised Daschle as a leader who "has demonstrated a commitment to working with physicians" and said the creation of a White House office on health reform "highlights the importance and priority" that Obama places on the issue.
Obama, who beat Republican John McCain in the November 4 election in part because of his promises to provide affordable healthcare to all Americans, said the country had to move ahead with the plan despite the current financial crisis.
"Some may ask how at this moment of economic challenge we can afford to invest in reforming our healthcare system. I ask a different question. I ask, 'How can we afford not to?'"
"Instead of expanding and creating new jobs, our companies are pouring more and more money into a health care system that is failing too many families," Obama said. "If we want to overcome our economic challenges, we must also finally address your healthcare challenge."
Reforming the system could cost up to $75 billion (50 billion pounds), according to consulting firm PricewaterhouseCoopers.
Obama originally planned to pay for it by rolling back Bush administration tax cuts for Americans earning more than $250,000 a year and keeping the estate tax at its 2009 level.
But with the current economic crisis, analysts think he will no longer be able to carry out that plan.
Obama said on Thursday he had not yet decided if he would get rid of the Bush tax cuts. He said the plan needed to be paid for in part by streamlining and rationalizing the system.
"My charge to my team is figuring out how do we make sure that it pays for itself over, say, a 10-year period so that we're actually saving money over the long term," he said.
This month, Daschle and his team will holding a series of meetings across the country to discuss what ordinary Americans thought were the biggest problems with the healthcare system.
"We have the most expensive health care system in the world, but are not the healthiest nation in the world," said Daschle. "Our growing costs are unsustainable, and the plight of the uninsured is unconscionable."
U.S. healthcare costs now account for about 16 percent of U.S. gross domestic product -- or $2.3 trillion -- a proportion projected to grow to 20 percent or $4 trillion by 2015.
(additional reporting by Steve Holland and David Alexander; editing by David Wiessler)
