WASHINGTON -- The drive to remake the nation's health care system suffered yet another setback in Congress on Thursday when a pivotal group of House Democrats demanded numerous changes in legislation the leadership was drafting on a fast track.
The emerging bill "lacks a number of elements essential to preserving what works and fixing what is broken," 40 members of the Blue Dog Coalition of moderate to conservative Democrats wrote in a letter to party leaders.
To win their support, they said, any legislation would need to be much more aggressive in reining in the growth of health care.
The letter addressed to House Speaker Nancy Pelosi and Majority Leader Steny Hoyer also called for greater protections for small businesses and rural health care providers. It did not specify how much additional time the group wanted, but Rep. Mike Ross, D-Ark., said he believes no vote should take place until September.
That is well past a midsummer informal deadline set by Pelosi, D-Calif. "I promised the president that we would have legislation out of the House before we went on an August break," Pelosi said earlier in the day. "That is still my goal."
The group issued its letter as Democrats on the House Ways and Means Committee were laboring to put the final pieces in place on a bill that the White House has praised. The party's leadership had hoped to unveil it Friday and push it through committee next week, a timetable that fell apart later in the day. Making the bill public was put off until Monday.
The developments came as a similar timetable appeared in danger of slipping away in the Senate.
There, the Democratic leadership is intent on scuttling a proposed tax on health care benefits that has long been key to attempts at a bipartisan compromise. At the same time, Senate Majority Leader Harry Reid and others went out of their way to emphasize their interest in gaining Republican support for legislation.
As an alternative, Democrats are considering raising taxes on wealthy investors to help pay for health care legislation, along with numerous other options, according to officials who spoke on condition of anonymity. The proposal to extend the current 1.45 percent Medicare payroll tax to capital gains earned by high-income taxpayers would bring in an estimated $100 billion over 10 years.
Obama has made health care legislation his top domestic priority, and Democrats in Congress vowed to make it their own, as well, when they returned from their July 4 vacation.
Despite some success -- the nation's hospitals agreed to a cut of $155 billion in projected Medicare and Medicaid payments -- progress has been scant and internal differences magnified.
In general, any bill that emerges from Congress is expected to follow Obama's blueprint for reining in health care costs overall while extending coverage to 50 million who lack it.
Another objective is to make sure that insurance companies can no longer deny coverage or raise premiums to unaffordable levels to individuals with pre-existing medical conditions.
But literally hundreds of details are involved in drafting legislation, and gaining a consensus even among Democrats is proving to be remarkably -- if predictably -- difficult, despite their large majorities in both houses.
As an example, some Democrats are demanding legislation that permits the government to sell insurance in competition with private companies. Republicans overwhelmingly oppose such a plan, deeming it a stalking horse for universal government-run insurance, and many Democrats have concerns, as well.
Some Democrats prefer a plan for a nonprofit cooperative to take the place of government in competing with private companies. Others favor a government role only in cases in which consumers lack a choice in coverage.
Similarly, Democrats are divided on paying for the bill, some preferring more tax increases than others, some favoring more cuts in Medicare and Medicaid.
"We've just got a lot of question and the top of the list would be how to pay for it," said Rep. Marion Berry, D-Ark., one of the Blue Dogs.
"I don't think we have significant cost-containment mechanisms in the proposal yet," said Rep. Adam Schiff, D-Calif. He said he favors provisions aimed at preventing overtreatment of patients and overpayments to doctors, hospitals and other providers.
A dispute over tax increases was at the core of upheaval in the Senate earlier in the week.
Sen. Max Baucus, D-Mont., and chairman of the Finance Committee, has been working for months with Republicans in hopes of gaining support for a bipartisan bill that can command 60 votes.
Efforts to raise money to pay for subsidizing the cost of insurance had focused on a tax on health care benefits for workers with high-cost coverage provided by their employers.
Baucus and Republican supporters argued it would also have tended to reduce the cost of health care overall, as well as offset the cost of the bill. But the Democratic leadership stepped in forcefully, citing poor public polling, opposition of organized labor and concerns about taxing middle-income workers.
As a result, Baucus and other members of the Finance Committee have broadened their search for alternative taxes to replace the $320 billion the benefits tax would have raised over a decade.
In addition to the tax on capital gains, officials said other options include a fee on insurance companies or drug manufacturers, a plan to allow states to issue health care bonds, and possibly a tax on sugary drinks.
An income tax surcharge on the wealthy was also on a list in circulation, as was Obama's proposal from last winter to limit the value of itemized deductions for those with the highest income.
Neither seemed likely to gain Republican support.