By Deborah Charles
CHICAGO, Dec 11 (Reuters) - President-elect Barack Obama nominated former Senate leader Tom Daschle on Thursday to lead his health reform effort as secretary of the Department of Health and Human Services and chief of a new White House office on health reform.
Obama's choice of Daschle to lead the administration's health reform drive puts an experienced and well-liked congressional operator in charge of a political issue the president-elect has identified as one of his top legislative priorities.
Daschle's nomination was widely welcomed by health care organizations, with Karen Ignagni of America's Health Insurance Plans calling it a signal "that the incoming administration intends to prioritize comprehensive health care reform."
Obama made the announcement at a news conference that was overshadowed by questions about Illinois Gov. Rod Blagojevich's arrest on charges of trying to sell the U.S. Senate seat vacated by Obama after his election in November.
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.
Obama, who beat Republican John McCain in the Nov. 4 presidential election in part because of his promises to provide affordable healthcare to all Americans, said the country had to move ahead with healthcare reform despite the current financial crisis.
"Right now small businesses across America are laying off or shutting their doors for good because of rising healthcare costs," he said. "Some of the largest corporations in America including major American car makers are struggling to compete with foreign companies unburdened by these costs."
The healthcare reform effort is expected to cost $50 billion to $65 billion. Obama has said he would 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, there are questions about whether he would be able to carry out that plan.
This month, Obama's transition team is kick-starting the process of healthcare reform with a series of meetings across the country to discuss what ordinary Americans thought were the biggest problems with the system.
Daschle has said he would like to involve the states in the changes in healthcare and has warned against getting bogged down in details.
Nearly 46 million Americans have no health insurance, and Americans are more likely to die of common diseases than people living in many other developed countries.
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. (Editing by Eric Walsh and Kristin Roberts)