More delays for Obama's healthcare overhaul

WASHINGTON Fri Jul 24, 2009 6:57pm EDT

President Barack Obama pauses while speaking during a town hall meeting on health care at Shaker Heights High School near Cleveland, Ohio, July 23, 2009. REUTERS/Jason Reed

President Barack Obama pauses while speaking during a town hall meeting on health care at Shaker Heights High School near Cleveland, Ohio, July 23, 2009.

Credit: Reuters/Jason Reed

WASHINGTON (Reuters) - The leader of a group of Democratic fiscal conservatives in the House of Representatives said talks on a U.S. healthcare overhaul bill fell apart on Friday and that he saw no possibility of a deal now.

Representative Mike Ross said that "after over a week of very intense and what I believe to be good faith negotiations ... it pretty much fell apart this afternoon."

The development leaves House Democratic leaders with a decision on whether to take the politically risky step of bringing to the full House for a vote next week a $1 trillion healthcare overhaul plan that lacks the support of an important voting block.

Despite personal appeals this week from President Barack Obama and hours of negotiations with Democratic leaders and White House staff, the conservatives known as "Blue Dogs" said their concerns about containing medical costs had not been resolved.

Earlier Friday, Obama's chief of staff, Rahm Emanuel, shrugged off the delays in the House and Senate and said a sweeping healthcare plan to control costs and expand coverage would still be approved by year's end.

House Democratic leaders had made what Energy and Commerce Committee chairman Henry Waxman called a significant offer to help hold down spending growth in the massive Medicare program for the elderly.

Waxman had said he would let the full House bypass his panel if it could not reach a deal. But the question for House leaders was whether they would still have the votes to pass the legislation next week without conservatives on board.

The reform package under construction in both chambers of the Democratic-controlled Congress has been hit by criticism of its more than $1 trillion price tag and its scope, with debates over how to pay for the program and rein in costs.

Obama has described healthcare reform as essential to longterm U.S. economic viability and had asked the Senate and House to pass first versions before leaving for the summer recess to help keep opposition from building.

Representative John Larson, the fourth-ranking House Democrat, said Democrats would discuss the legislation in depth on Monday and then decide whether to skip the committee vote.

But Senate Majority leader Harry Reid said on Thursday the Senate was only likely to debate its version of the legislation in September -- throwing open the question of when and what kind of final legislation may emerge.

Obama has staked significant political capital on the passage of a healthcare bill this year before lawmakers turn their focus to 2010 midterm elections.

(Additional reporting by Donna Smith, writing by Jackie Frank; Editing by Doina Chiacu)