House Democratic leaders Wednesday cut a deal with rebellious moderates to advance a stalled health care reform bill, only to meet fresh roadblocks from more liberal members in the bid to pass President Obama's top legislative priority.
The deal, designed to pacify fiscally conservative Blue Dog Democrats, promised Mr. Obama a major political victory heading into the monthlong August recess. By the end of the day, however, liberals said they were reluctant to support the deal, which they said would weaken the option for a government health insurance program to compete with private insurers.
The back-and-forth over the deal Wednesday highlighted the deep divisions among House Democrats and the perilous political landscape facing the White House. It also signals that Mr. Obama likely would have to settle for considerably less than the sweeping universal health care plan he wants.
Four Democratic Blue Dogs on the House Energy and Commerce Committee reached an agreement with Chairman Henry A. Waxman, California Democrat, to vote for the compromise, ending a lengthy deadlock and clearing the path for the bill to go to the House floor for a vote.
The key House changes would reduce the federal subsidies for lower-income families, exempt additional businesses from a requirement to offer insurance to their workers and support state-based health cooperatives in addition to the taxpayer-funded "public" insurance plan Mr. Obama favors, a Capitol Hill aide said.
Blue Dog lawmakers said the deal would also slice $100 billion off the 10-year, $1 trillion price tag for Obama plan.
Mr. Waxman has scheduled a markup session for Thursday morning, although part of the deal called for a House vote on the bill to be delayed until September at the earliest.
"I think people back home felt like we were moving way too quick on this, and they were right," said Rep. Baron P. Hill of Indiana, one of the four Blue Dogs who agreed to the compromise. "We were able to slow this process down so we that we can get our arms around this piece of legislation."
But liberals on the committee halted the bill's movement late Wednesday. Many said the public option had been weakened by the Blue Dog proposal, and warned they weren't automatic "yes" votes.
"All of us feel we have been held hostage," said Rep. Eliot L. Engel, New York Democrat. "I think each member has to grapple with his or her conscience" on the revised bill.
"There are a lot of moving parts," said Rep. Rosa DeLauro, Connecticut Democrat, who added it was too soon to tell whether the party's liberal wing would accept the deal.
Still, Mr. Obama and leading congressional Democrats hailed the Blue Dog agreement as much-needed progress after days of drift.
"Congress is closer than ever before in history to passing comprehensive health insurance reform," House Speaker Nancy Pelosi, California Democrat, and Majority Leader Steny H. Hoyer, Maryland Democrat, said in a statement.
Mr. Obama, who held events in North Carolina and Virginia to rally popular support for his health care push, insisted he was not disappointed that Congress would not meet his earlier deadline to pass bills before the summer recess.
"We did give them a deadline and we sort of missed that deadline, but that's OK," Mr. Obama said. "We won't even vote on it probably until the end of September or the middle of October."
Republicans immediately attacked the deal and accused fiscally conservative Democrats of compromising their principles in the face of political pressure.
"It is a raw deal for the American people, and, sadly, it proves once again that the so-called 'Blue Dogs' have no bite when they're forced to choose between their constituents and the radical leadership of their party," said House Minority Leader John A. Boehner, Ohio Republican.
Mr. Waxman and the 52-member Blue Dog caucus were at loggerheads over key parts of the bill, including its impact on the federal deficit and its burden on small businesses and rural areas.
The four Blue Dogs who signed on to the deal were part of a bloc of seven on the energy panel who had been balking at the bill. They stressed that the deal did not guarantee that the entire caucus would vote for the final House bill.
With few House Republicans expected to support the bill, House Democratic leaders could not afford too many defections in their own ranks.
Two other House committees have completed work on portions of the massive draft, while work also continues in the Senate.
Rep. Charlie Melancon, a Louisiana Blue Dog who is not part of the deal, said he still has reservations.
"We need to do some additional reform" in the bill, he said, including new regulations on health insurance companies.
He said that the decision by the four Blue Dogs to vote for the bill did not signal a division in the group.
"We all have to deal with our own politics and our own constituency," he said.
There were also signs of progress in the Senate as a bipartisan group of lawmakers trying to negotiate a health care reform plan revealed that the Congressional Budget Office estimates their proposal would cost $900 billion over 10 years - less than the White House mandate for a $1 trillion plan.
The draft bill, which is based on tentative agreements, would be fully paid for and reduce the federal deficit in the 10th year, said Senate Finance Committee Chairman Max Baucus, Montana Democrat. Negotiators reported progress but were not ready to announce a formal deal Wednesday.
"The current draft does not include resolution of several key issues," Mr. Baucus said. "Nevertheless, the report is encouraging."
But the progress overall was difficult to gauge, with the Senate Finance Committee warning earlier in the day that there an imminent accord on all issues was unlikely.
Sens. Kent Conrad, North Dakota Democrat, and Olympia J. Snowe, Maine Republican, said the CBO "scoring" is based on tentative agreements that are likely to change.
But a Senate version of the bill is starting to take shape. The CBO analysis found that the draft bill would increase employer-sponsored coverage and extend health insurance coverage to 95 percent of Americans, Mr. Baucus said.
The bill also is expected to include the cooperative system instead of a straight public insurance plan and would not require employers to provide health insurance. The mandate, which is in the House draft of the health care bill, was dropped in the Finance Committee to account for employers who provide low-quality insurance.
Instead, the plan is expected to require employers to pay for the cost of their employees' subsidy on the public plan, if the employee qualifies for a subsidy.
Mr. Baucus has led the group of six senators on the Finance Committee in search of a bipartisan compromise plan that would pass the full Senate. The group includes Mr. Conrad and Sen. Jeff Bingaman, New Mexico Democrat, as well as Republicans Sens. Charles E. Grassley of Iowa, Sen. Michael B. Enzi of Wyoming and Mrs. Snowe.