Obama says healthcare may be 2010 election issue

President Barack Obama delivers his first State of the Union address as U.S. Vice President Joe Biden (above L) and U.S. Speaker of the House Nancy Pelosi applaud on Capitol Hill in Washington January 27, 2010.

WASHINGTON (Reuters) - President Barack Obama vowed on Thursday not to quit in his quest for a healthcare overhaul and said if the effort fails this year, Americans will render a judgment about it in November congressional elections.

"The key is to not let the moment slip away," he said.

He spoke at a Democratic National Committee fund-raising reception at which he sought to boost the morale of party loyalists in the wake of the Democrats' loss of a 60-vote supermajority in the Senate when Republican Scott Brown won in Massachusetts last week.

Speaking at the first of two events that together raised between $2 million and $3 million for the party, Obama said he did not want Democrats to "feel discouraged" but rather keep up the fight against "the forces of the status quo."

"We're going to finish what we started because we do not back down. We don't quit. I don't quit. I'm still fired up, I'm still ready to go, and it's because of you," Obama said.

Obama has seen healthcare, his top legislative priority, become subject of a prolonged stalemate in the U.S. Congress. Legislation passed separately by the House of Representatives and the Senate have yet to be reconciled and Brown's election meant Republicans would be able to engage in procedural blocking tactics to keep it from passing.

Meantime, Obama and his Democrats have been put on the defensive by Americans angry and frustrated at the 10 percent jobless rate, bank bailouts and high deficit spending.

Obama said he wanted to see congressional passage of a multibillion-dollar jobs bill and would like to use $30 billion in repaid bank bailout funds for small business loans.

But he said America's healthcare system is in need of a revamp and he wants to see the process through. He said he wanted Republicans and Democrats to bring their best ideas forward over the next several weeks to determine whether the deadlock can be broken.

His remarks amounted to a challenge to Republicans to suggest areas of a healthcare overhaul that they could support rather than simply opposing legislation. A bipartisan meeting is planned for next week.

"Let's just go through these bills, their ideas, our ideas, let's walk through them in a methodical way so that the American people can see and compare, what makes the most sense. And then I think we have to go ahead and move forward on a vote," he said.

And Obama clearly suggested that he would use a failure to approve healthcare reform against Republicans in the November elections if the overhaul falters.

"If Congress decides we're not going to do it even after all the facts are laid out, all the options are clear, then the American people can make a judgment as to whether this Congress has done the right thing for them or not," he said.

"And that's how democracy works and there'll be elections coming up and they will be able to make a determination and register their concerns one way or the other during election time," Obama said.

(Editing by Eric Beech)