Obama signs milestone healthcare reform bill into law

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REUTERS - A jubilant President Barack Obama signed the most sweeping U.S. social policy legislation in decades into law on Tuesday, putting his name on a healthcare bill that will help shape his legacy and the Democrats' chances of holding on to power in Congress.

Fourteen states quickly filed suit in federal court to challenge the law, arguing that it undercuts states' rights, and congressional Republicans, who had unanimously opposed the bill, vowed to keep fighting it.

"We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their healthcare," a jubilant Obama said in a ceremony in the jammed East Room of the White House, with Democratic members of Congress and other supporters cheering heartily.

Designed to revamp the $2.5 trillion U.S. healthcare industry, the law will extend health insurance to 32 million Americans who currently have none, bar practices like insurers' refusing coverage to people with pre-existing medical conditions, expand the Medicaid government health insurance program for the poor, and impose new taxes on the wealthy.

Republicans fought bitterly but failed to prevent Democrats in Congress from passing the bill on Sunday. Republicans hope public skepticism over the measure will help them regain control of Congress in November's mid-term elections.

The Senate is taking up a package of changes to improve the $940 billion overhaul. Republicans have vowed to fight those changes, but Democratic leaders say they are confident they have the votes to push them through.

State attorneys general -- all but one of them Republicans -- filed two separate suits challenging the law on the grounds that it violates states' rights enshrined in the U.S. Constitution. Thirteen sued in Florida minutes after Obama signed it. Virginia brought its own case.

The White House has said it does not expect such suits to be successful.

'Constitution does not allow'

"It forces people to do something -- in the sense of buying a health care policy or paying a penalty, a tax or a fine -- that simply the constitution does not allow Congress to do," Florida Attorney General Bill McCollum, a Republican running for governor, said at a news conference.

Senate Majority Leader Mitch McConnell said the Republican campaign slogan for November would be "repeal and replace," acknowledging that many feel that at least some change is needed to the current costly healthcare system.

By FRANCE 24 Obama's biggest achievement was to unite the Democrats behind him to support the healthcare reform G.Meyer, FRANCE 24 correspondant reporting from Washington DC

The healthcare revamp was the latest step in a series of Democratic moves to drive the United States "down a road towards a European-style government," Republican Senator Judd Gregg told reporters.

The drive "started off by essentially quasi-nationalization of the financial system, nationalization of the automobiles, quasi-nationalization of the health industry, and now this bill has in it, which nobody has focused on, the nationalization of the student loan industry."

The "reconciliation" package of healthcare changes to be considered by the Senate also would revamp the federal student loan program to end government subsidies to private lenders, shifting almost all student loan activity to the government.

As investors continued to digest the law on Tuesday, the Morgan Stanley Healthcare Payor index of insurers was down about 1 percent, compared with a roughly flat broader market. Shares of Coventry Health Care were down 1.4 percent and Humana was off 1.0 percent.

Obama used an unusually large number of pens -- about 20 -- to sign the measure. They will be distributed as souvenirs, many to legislators instrumental in pushing it through.

He continued his victory tour at a second ceremony as he launched a publicity blitz that Democrats hope will overcome widespread public doubt about the overhaul.

Obama urged Americans wary of reform and those he said had been confused by "all the noise" to check the facts. "I'm confident you'll like what you see," he said.

His audiences included people whose stories he told while promoting the overhaul, including the sister of an Ohio woman who feared she would lose her house because she had cancer and an 11-year-old whose mother died without health insurance.

A USA Today/Gallup Poll said Americans by 9 percentage points have a favorable view of the new law. By 49 to 40 percent, they say it was "a good thing" Congress passed the bill, USA Today said.

Obama put his reputation on the line and poured his energy into passing his plan, drawing criticism from some Democrats who worried healthcare was becoming a distraction from the need to fix the economy and boost jobs.

The bill's passage will free him to devote time to that and other priorities, including pushing for congressional approval of a plan to reform and tighten financial regulations.

Republicans say their anger over healthcare may make them less likely to work with Democrats on other items such as climate change legislation and immigration reform.

With a major accomplishment in hand, Obama will be able to counter critics who said he had little to show for his 14 months in office.