(For a TAKE A LOOK on healthcare, click on [nN07323916])
* Delay a setback for Obama’s drive for healthcare reform
* House Speaker Pelosi still confident on passage
(Updates with Ross, adds details)
By Donna Smith and Kim Dixon
WASHINGTON, July 23 (Reuters) - President Barack Obama’s healthcare reform drive suffered a setback on Thursday when Senate leaders said they would not pass it before a month-long August recess, but Obama urged lawmakers to keep working toward approval by the end of the year.
The day after Obama held a prime-time news conference to sell his top domestic priority, congressional leaders struggled to ease doubts about the healthcare plan and Senate Democratic Leader Harry Reid said the full chamber would not take it up until September.
"I think that it’s better to have a product that is one that’s based on quality and thoughtfulness rather than trying to jam something through," Reid told reporters.
Obama conceded the bills would be delayed but said he still wanted to see the Democratic-controlled Congress make some progress.
"I want the bill to get out of the committees," he told a town hall meeting in Shaker Heights, Ohio. "I have no problem if people are really working through these difficult issues in making sure we get it right."
The reform package under construction in both chambers of Congress has been besieged from all sides by criticism of its more than $1 trillion price tag and its scope, with debates behind closed doors over how to pay for the program and rein in healthcare costs.
Obama had asked the Senate and House of Representatives to pass initial versions before leaving for the summer recess to help keep opposition from building over the break.
But his ultimate goal is to sign a final bill by the end of the year, and House Speaker Nancy Pelosi said she was "more confident than ever" that Congress would meet that timetable.
She scoffed at the worries about waiting until after August.
"I am not afraid of August. It is a month," she told reporters. "We will take the bill to the floor when it is ready, and when it is ready we will have the votes to pass it."
Two committees in the House and one in the Senate have passed versions of the bill, but another House panel and a Senate panel have bogged down in talks over how to pay for the plan and how broadly it will reshape the $2.5 trillion healthcare industry.
The final bills are expected to include some form of public insurance plan to compete with private insurers and help cover most of the 46 million Americans without insurance.
CRITICS ON BOTH SIDES
Conservative House Democrats have criticized the bill for not reining in costs enough and raising taxes on the wealthy. Republicans, sensing a shot at a huge political victory over Obama, have criticized the proposed tax hikes, price tag and heavy government involvement.
Obama had left the writing of the bill to Congress but stepped up his lobbying in the past week, meeting with recalcitrant lawmakers and making public appearances to plug the effort.
He traveled on Thursday to Ohio, which has been a must-win state in presidential elections, and said middle-class families would benefit from a healthcare overhaul.
"If you already have health insurance, the reform we’re proposing will give you more security," he said. "It will keep the government out of your healthcare decisions, giving you the option to keep your coverage if you’re happy with it."
For an analysis of Obama’s struggle to convince Americans that healthcare reform is needed, click on [ID:nN23421146].
Republican Senator Orrin Hatch, who dropped out of Senate Finance Committee talks on Wednesday and said he could not support the bill as it currently stands, said Obama needed to become more involved.
"He’s got to roll up his sleeves," Hatch told Fox News. "Without his personal involvement I don’t think we can get a healthcare bill done of any magnitude."
Pelosi said there was still some discussion of delaying the House’s July 31 recess by a day or two to reach a final deal.
The House Energy and Commerce Committee canceled a meeting to consider the bill for the third consecutive day to continue negotiations with the conservative Democratic group known as "Blue Dogs." The panel is awaiting cost estimates on the bill from the Congressional Budget Office before proceeding.
Leaders of the group met for nearly three hours in Pelosi’s office with White House Chief of Staff Rahm Emanuel and Nancy-Ann DeParle, Obama’s healthcare adviser, but came to no agreement on the bill.
"I think we’re making progress and that is a good thing," said Representative Mike Ross, chairman of the Blue Dog group.
In the Senate, a bipartisan group of Finance Committee members continued their closed-door meetings to work through policy options on the bill.
Reid said he expected the panel to pass its bill before the Senate leaves for the August recess, and his office will use the break to combine it with a measure passed by the Senate Health Committee.
He said he had conversations with several Republican senators, including Olympia Snowe, Charles Grassley and Mike Enzi, and assured them their views would be considered.
Nine freshman senators sent Finance Committee Chairman Max Baucus a letter on Thursday urging him to continue his bipartisan negotiations, declaring "the current situation is unsustainable in the long term." (Additional reporting by Jackie Frank, David Alexander, Thomas Ferraro; Writing by John Whitesides, editing by Eric Beech)