More military funding but $100 billion less on health; Bush's budget worries Americans, writes Denis Stauntonin Washington.
As Congress debates the Iraq war this week, Americans are becoming more conscious of the financial, as well as the human, cost of keeping more than 150,000 US troops there.
President George Bush's latest budget proposal calls for more military spending without tax increases but aims to reduce the ballooning US budget deficit.
The administration wants to make almost $100 billion in savings over the next five years in Medicare, a federal insurance programme for the disabled and people aged over 65; and in Medicaid, a federal and state programme that helps pay for medical care for the poor.
The White House insists the cuts will simply mean that spending on the two programmes will be slowed down rather than reduced, but Democratic senator Chuck Schumer maintains it is the old and the poor who will suffer.
"Cuts of this magnitude, to hospitals and health systems, proposed by President Bush are cuts in benefits to Medicare and Medicaid beneficiaries and will result in weakened access to health services for patients," he says.
The budget proposal comes as healthcare is emerging as the biggest domestic issue in the 2008 presidential election campaign. With 47 million Americans uninsured, including six million children, the three Democratic frontrunners - Hillary Clinton, Barack Obama and John Edwards - have promised to introduce universal health coverage, if elected.
Last week, an alliance of business and trade unions - including Wal-Mart, America's biggest employer, and the Service Employees International Union (SEIU), the country's biggest union - joined forces to call for a new American healthcare system by 2012.
"What unites us here today is our shared belief that it will be a far greater America when we get affordable healthcare for all Americans," said SEIU president Andy Stern.
For the uninsured in America, a health crisis can be a financial, as well as a personal, disaster and illness is, along with divorce and job loss, the most common cause of bankruptcy.
Those who cannot afford to pay a doctor can receive treatment only in the accident and emergency rooms of hospitals, which are not allowed to refuse treatment.
This not only lengthens waiting times in emergency rooms but leads many patients to postpone treatment until late in the progress of an illness, increasing costs and reducing their chances of recovery.
Even those with health insurance can be financially ruined by serious illness, as insurers demand hefty co-payments and often refuse to cover some medicines and procedures.
The inadequacy of the US healthcare system is all the more galling for Americans in view of the fact that they spend twice as much on healthcare as their European counterparts.
According to the Organisation for Economic Development and Co-operation, the US spent an average of $6,102 per person on healthcare in 2004 (the latest year for which figures are available). By contrast, Ireland spent $2,596; Canada $3,165 per person; France $3,159; Australia $3,120 and Britain $2,508.
At the same time, life expectancy in the US was lower than in each of the other countries as of 2004, and infant mortality was higher.
Most Americans fortunate enough to have health insurance are part of work-based schemes in which employers pay part of the cost. In recent years, however, many employers have stopped offering health benefits and US companies that still insure staff complain that they can no longer compete against rivals in European countries where the state bears much of the healthcare burden.
There is no shortage of ideas for improving healthcare in America, ranging from expansion of the current employer-based insurance system to switching to a government-run system.
Edwards last week proposed a $100 billion plan, to be funded by higher taxes on the very rich, that would require every American to have health insurance.
The plan would create tax credits to subsidise coverage, expand Medicaid and require businesses to offer a comprehensive healthcare plan to employees or contribute to their coverage through newly created regional non-profit purchasing pools that would offer competing insurance plans and help hold down costs.
"Our healthcare system has grown more dysfunctional in the last few years. The undercurrent for healthcare reform has become more powerful. People are concerned, not only about the millions of Americans without healthcare coverage, but if they have it that they will lose it and the cost is so high," says Edwards.
Last year, outgoing Massachusetts governor Mitt Romney, who is seeking the Republican presidential nomination in 2008, introduced a universal healthcare plan for his state. It makes health insurance compulsory in the same way car insurance is but aims to ensure that those who cannot afford to pay the full cost are subsidised.
With business leaders leading the call for change, Democrats see an opportunity to transform the US healthcare system and win votes in the process. A key element of any change will be reducing costs, partly by eliminating some of the bureaucracy that surrounds the web of different health plans available.
Another problem is the cost of pharmaceuticals, which are much higher in the US than in Europe because states are not allowed to negotiate with pharmaceutical companies for lower prices. While the Republicans controlled Congress, pharmaceutical companies - which are among the party's biggest donors - were confident of preserving the lucrative status quo but the new Democratic majority is determined to confront Big Pharma and reduce prices.
Edwards proposed increased health insurance coverage for children when he was the Democratic vice-presidential candidate in the 2004 campaign but stopped short of a universal plan for adults.
He believes the problem is worse now and will be one of the top three campaign issues in 2008, along with the war in Iraq and America's dependency on foreign oil.
"We can't make America stronger with incremental changes. We need significant, transformational change - it's true in healthcare, it's true in energy and it's true in how America deals with the world," he says.
