Obama to hike taxes to improve healthcare

The taxes on tobacco have already been increased and a proposal has been put forward to increase taxes on alcohol, to raise $62 billion over the decade.

Also, a new tax on sugary drinks, like soda, is to be introduced to further raise $52 billion. A rise in business taxes and accounting charges could raise an additional $30 billion.

Kenneth Baer, a spokesman for the OMB, said cost cuts and tax increases amount to "a plan which gets you really close to what you need".

The voluntary insurance program hopes to pay least $50 daily to people to cover their nursing home expenses.

"Congress has other ideas," Baer said. "We'll work with them."

Subsidy cuts to hospitals
The U.S. hospitals have reached an agreement with the administration to accept $100 billion less from the government's Medicare and Medicaid schemes.

Announcing the agreement on Wednesday, Vice-President Joe Biden said, "Folks, reform is coming… It's on track. It's coming."

The hospitals have also agreed to forgo $40 billion in government subsidies received for giving emergency treatment to the people who are uninsured.

Debate over healthcare plan
Obama has yet not offered a detailed plan on healthcare. His advisers are working with lawmakers to craft proposals.

A number of proposals have been discussed in Congress without conclusive agreement on what reforms should take place.

Senate Democrats this week discarded the suggestion by Finance Committee Chairman Max Baucus, D-Mont., to tax health benefits.

According to tax experts, it is implausible for Americans to get free benefits.

“We're all going to have to contribute," said Eugene Steuerle, a former treasury official in the Reagan administration and now the vice president of the Peter G. Peterson Foundation.

“The dilemma is trying to do the new while the old is still unpaid for," he added.