Joe Lieberman poses Senate healthcare hurdle

Senator Joe Lieberman speaks at the 2008 Republican National Convention in St. Paul, Minnesota, September 2, 2008.

WASHINGTON (Reuters) - Democratic leaders in the U.S. Senate struggled on Monday to move forward on a sweeping healthcare overhaul sought by President Barack Obama in the face of opposition from a frequent irritant -- Joe Lieberman.

As the Senate opened a make-or-break week for healthcare, Senator Lieberman's threat to join Republicans in blocking the bill complicated Democratic efforts to gather the 60 votes needed to overcome Republican opposition.

Obama invited all 60 members of the Senate Democratic caucus to the White House on Tuesday to discuss a way to reach agreement, party sources said.

Democrats have no margin for error. They control exactly 60 of the 100 votes and cannot afford to lose Lieberman, an independent who caucuses with Democrats, or any other member on a bill that is Obama's top domestic priority.

Many other Senate Democrats, including potential defector Ben Nelson, are waiting for cost estimates on a potential compromise before making their final decisions.

"If Senator Lieberman is the 60th vote, I guess we will have to do what Mister Lieberman wants," Democratic Senator Tom Harkin told reporters.

The cost estimates were expected as soon as Tuesday, and Democrats planned a late-afternoon meeting on Monday to discuss their options.

"We knew this was going to be tough. The Senate is working hard trying to resolve these differences and I'm confident they will," White House adviser David Axelrod said on ABC's "Good Morning America" on Monday.

"You don't get your grade until the final exam," he said. "The president said many times that healthcare would be pronounced dead five times before he signed the bill."

The Senate has spent two weeks debating the measure, which would extend coverage to 30 million uninsured Americans and halt industry practices like refusing coverage to people with pre-existing medical conditions.

Senate Democrats hoped they had resolved a big stumbling block last week with a compromise designed to ease the concerns of moderates about a government-run "public" health insurance plan.

It would replace the public option with a non-profit approach featuring private insurers and run by the agency that administers the healthcare program for federal employees.

But Lieberman balked at another element of the compromise, which would allow those as young as age 55 to purchase coverage under the Medicare health program for the elderly. It now begins at age 65.

"STOP ADDING, START SUBTRACTING"

"We've got to stop adding to the bill. We've got to start subtracting some controversial things," he told CBS's "Face the Nation" on Sunday.

"You've got to take out the Medicare buy-in. You've got to forget about the public option," said Lieberman, a former Democrat who won re-election as an independent in 2006 after losing the Democratic primary over his support for the Iraq war.

Lieberman has not been a reliable vote for Democrats since, and he angered the party even more when he supported Republican John McCain in the 2008 White House race.

Republican Senator Olympia Snowe, who has backed some reform efforts and could replace Lieberman as the 60th vote if he defects, also has voiced doubts about the Medicare plan.

Nelson has said he wants stricter limits on the use of federal funds to pay for abortions in the bill. He has been working on the issue with Democratic Senator Bob Casey, who will meet at the White House with Obama on Monday.

Obama has pushed the Senate to complete work on the bill this year to avoid the issue slipping into next year's congressional election campaigns.

The Senate bill would then have to be reconciled in early January with a version approved by the House of Representatives on November 7.

To finish in the Senate by Christmas, Reid must file a series of procedural motions this week to cut off debate and move to a final series of votes.

In a report that could help healthcare advocates, Christina Romer, chairwoman of the Council of Economic Advisers, said an updated analysis showed the bill would slow the growth of health spending by about 1 percentage point per year.

A report last week estimated the rate of spending under the bill would increase slightly. Many of the main components of the overhaul would not go into effect until 2013 or later, although the Senate bill would institute some of the insurance reforms immediately.

(Additional reporting by Susan Heavey; Editing by Cynthia Osterman)