* Disputes over price tag, strategies loom
* Democrats scramble to cap cost of new proposal
* New drug deal may help -- but how much?
(Adds Sen. Feinstein’s comment)
By Donna Smith
WASHINGTON, June 21 (Reuters) - Growing worries over budget deficits and government intervention could jeopardize President Barack Obama’s proposed healthcare overhaul in Congress as lawmakers bicker over costs and strategies for covering the uninsured.
Obama and his fellow Democrats, who control Congress, have enormous political capital invested in succeeding at providing affordable medical coverage to the millions of uninsured Americans, after decades of failed efforts by others, including the previous Democratic president, Bill Clinton.
But opposition is building even as a group of senators tries this week to negotiate a proposal they hope will quiet critics and win support in both parties.
Senate Finance Committee Chairman Max Baucus said he was confident he could craft such a bill.
"We’re working together and we’re getting closer and closer to a deal every day," Baucus said in a statement. "I‘m as confident as ever we’ll deliver a bipartisan health care reform bill to the President this year."
But Baucus is working with few Republicans and there are no guarantees he will succeed.
"I‘m certainly willing to try to do something and do it right, but we’re a long way from that," Republican Senator Orrin Hatch told reporters.
Democratic Senator Dianne Feinstein said it was not clear if Obama currently had enough support to get bill through in the time frame he wants. "I don’t know that he has the votes right now," she said on CNN’s "State of the Union" program.
Public drafting sessions by the Senate Health, Education, Labor and Pensions committee have been marked by partisan bickering over costs and the role of the government.
Democrats want a new government plan to compete with insurance companies and "keep them honest." Republicans say that would drive insurers out of business and lead to a government-run healthcare system.
Republican Senator Lamar Alexander, a member of the health committee, said in a Senate speech last week the bill was "so flawed and expensive it cannot be fixed."
HEALTHCARE REFORM VS. BUDGET DEFICITS
Americans strongly support fundamental healthcare changes and a move to create a government-run insurance plan to compete with private insurers, according to a New York Times/CBS News poll published on Saturday.
The U.S. healthcare system is the world’s costliest, but 46 million Americans lack insurance coverage to pay for medical care. The United States also lags other nations on important health measures, such as life expectancy and infant mortality.
But other recent polls show that eye-popping budget deficits, an estimated $1.8 trillion this year and $1.4 trillion next year, are giving Americans pause about Obama’s $787 billion economic stimulus plan and government intervention in business following the banking and auto industry bailouts.
"I think the American people have really woke up to the fact that there is runaway spending going on," Representative Dave Camp, the top Republican on the tax writing House Ways and Means Committee, said in an interview.
As Republicans stepped up attacks on Obama’s ambitious healthcare plan, members of both parties were staggered by early cost estimates of $1 trillion or more for proposals that still left millions of people without health insurance.
Republican Senator John McCain, who sits on the health committee, described the cost forecast as "a body blow" to the Democrats’ plans.
"Whether they recover from it or not, we will probably know in the next few days," McCain, who lost to Obama in last year’s presidential election, told Reuters in a recent interview. "I think that they should start over."
Democrats are not starting over, but they are trying to figure out how to scale back proposed subsidies and other provisions that pushed up the price tag.
After an initial estimate of $1.6 trillion, Baucus told reporters the final cost of his panel’s bill would be less than $1 trillion, closer to what Obama has proposed in budget cuts and savings to pay for the changes. The more savings lawmakers can achieve, the less money they will have to raise in taxes.
The drive to cut costs got a weekend boost on news that drug manufacturers had agreed to offer some $80 billion in prescription drug discounts for recipients of Medicare, the health insurance program for the elderly and disabled.
Health reform advocates are undaunted by the partisan squabbling and believe Obama will one day sign a bill.
"There are going to be some tougher moments and some very positive moments. But I think we are very much on track," said Ron Pollack, executive director of the influential Families USA advocacy group.