Deal on U.S. healthcare overhaul still uncertain

* Senators trim price tag of healthcare overhaul proposals

* Only a few Republicans needed, but will they come?

* U.S. Chamber of Commerce mobilizes against plan

(Adds White House adviser David Axelrod, Republican Senate leader Mitch McConnell)

By Donna Smith

WASHINGTON, June 28 (Reuters) - President Barack Obama's drive to overhaul the U.S. healthcare system may be back on track thanks to Senate efforts to cut the price tag to $1 trillion, but a bipartisan deal on the sweeping proposal still is far from certain.

Obama wants changes that rein in the escalating costs of healthcare in the United States and bring insurance to most of the 46 million Americans who currently lack it.

He also wants a bill that the Democrats who control Congress and the Republican minority can support to give a bipartisan stamp of approval to his top legislative priority.

Senate Finance Committee Chairman Max Baucus was upbeat last week after announcing that panel members had found ways to bring the price tag to about $1 trillion over 10 years, down from an earlier estimate of a staggering $1.6 trillion.

The new estimates helped move lawmakers closer to an agreement, Baucus said. But he was unable to close the deal with Republicans before senators left for a weeklong July 4 Independence Day holiday recess.

Instead, the core group of negotiators -- three Democrats and four Republicans -- issued a tepid statement on Thursday merely affirming their commitment to continue negotiations.

"As we have been for the last several weeks, we are committed to continuing our work toward a bipartisan bill that will lower costs and ensure quality, affordable care for every American," said the group, which includes Baucus and Senator Charles Grassley, the top Republican on the panel.

Soaring healthcare costs undermine the competitiveness of U.S. businesses, strain state and federal budgets and drive many Americans into bankruptcy.

The United States has the world's most expensive healthcare system. Americans get coverage either through private insurance provided by employers or bought by individuals, or through government-run programs for the elderly, poor and others.

But millions remain uninsured and the United States lags many other industrialized nations in important health measures such as life expectancy and infant mortality.


The Finance Committee is one of five in the Senate and House of Representatives working on healthcare legislation, and may represent the best chance of obtaining a bipartisan bill.

"It is a very delicate process that Senator Baucus is trying to engineer," said Ron Pollack, executive director of the influential Families USA advocacy group.

A deal that includes Grassley would go a long way toward bringing other Republicans on board, he said.

But any compromises could end up alienating Democrats.

A group of liberal House Democrats put out a statement last week saying they would oppose any healthcare overhaul that did not include a "strong" new government-run insurance program to compete with private insurers. Proponents argue it is the only way to ensure affordable coverage.

Grassley and other Republicans oppose this "public option," saying it would drive private insurers out of business and lead to a government-run health system. Grassley also has raised questions about a proposed compromise to create nonprofit insurance cooperatives to compete with private insurers.

Senior White House adviser David Axelrod said on Sunday that Obama believed strongly in the merits of a public option, but would not make it a deal-breaker.

"We've not gotten as far as we've gotten by drawing bright lines in the sand. He's going to fight hard for that," Axelrod told NBC Television's Meet the Press program. "The president believes strongly in a public choice."

Meanwhile several Senate Republicans, including Minority Leader Mitch McConnell, have been speaking out daily in opposition to Obama's healthcare ideas. They are expected to continue the effort in July when Democratic leaders hope a bill will be ready for Senate consideration.

"We have some problems with access and with cost which can be addressed without wrecking the best healthcare system in the world," McConnell said on "FOX News Sunday."


Although not as costly as earlier estimates, Republicans say the $1 trillion cost is still too high at a time of huge federal budget deficits that could hit $1.8 trillion this year. They argue that the 10-year cost after the program is fully phased in is closer to $2.3 trillion.

The package likely will include some tax increases, also strongly opposed by Republicans.

The U.S. Chamber of Commerce, which represents 3 million businesses, has started a grass-roots campaign opposing major elements of Obama's plan with thousands of business owners writing lawmakers to say they are against it.

At best, the healthcare measure may get a few Republican votes. Senator Richard Durbin, the Democrat in charge of vote counting in the Senate, said he needs at least three.

In theory, Democrats are just one vote shy of the 60 needed in the 100-member chamber to overcome procedural hurdles on controversial bills.

But Democrats are hampered by the fact that two of their oldest members, Senators Edward Kennedy and Robert Byrd, are gravely ill and have missed most of the votes this year. Also, the Minnesota Senate election, in which Democrat Al Franken has been declared the winner, remains unresolved in the courts.