July 12 (Bloomberg) -- A government health insurance overhaul plan must focus on cutting costs and on raising taxes, two U.S. Senate Democrats said.

“The No. 1 thing we have to do is cut costs,” Senator Charles E. Schumer of New York, a member of the Senate Finance Committee, said on NBC’s “Meet the Press” program. Schumer also said “we do have to find revenues to pay for the rest.”

The Finance Committee will assemble the Senate’s health insurance legislation, and Democrats are planning to present a proposal by the start of the monthlong congressional recess in August.

Senator Richard J. Durbin of Illinois said on ABC’s “This Week” program that the health insurance industry -- which is “making a fortune in profits today” -- is the primary source of opposition to changes in the health care system.

Durbin also said legislation must “combine cuts in actual spending on health care, savings from hospitals, from doctors, from health insurance companies, along with some new revenue.”

Republican Senator Jon Kyl of Arizona, a member of the Finance Committee, who also appeared on the ABC program, objected to taxes to fund the plan, saying “It would be a job killer. It would be exactly the wrong thing to do any time, but especially when we’re in the middle of a recession.”

Kyl said there is “no chance” legislation will be agreed on by the August recess, adding that “Republicans very much want reform, but not on the backs of the American people with the kind of taxes and potential rationing of care that would result.”

To contact the reporter on this story: Vincent Del Giudice in Washington at vdelgiudice@bloomberg.net

Last Updated: July 12, 2009 12:16 EDT