Conservative Democrats break ranks on health care

WASHINGTON — President Barack Obama on Friday acknowledged the tough going for his health care overhaul in Congress but rejected the notion the legislation is doomed if lawmakers fail to act by August. "I never believe anything is do or die," Obama said.

"We're closer to that significant reform than at any time in recent history," Obama told reporters at a news conference in Italy. "That doesn't make it easy. It's hard. And we are having a whole series of constant negotiations."

Conservative Democrats are demanding significant changes before they will support a sweeping health care overhaul, forcing the House to join the Senate in stalling Obama's top domestic priority.

The "Blue Dog Democrats" group released a list of demands on the eve of House Democratic leaders' planned unveiling of their final bill Friday. The bill release was pushed back to Monday at the earliest and Democratic leaders agreed to devote Friday to meetings with the fiscally conservative Blue Dogs to work through their concerns.

These include the need for more cost containment measures, protections for small businesses and a focus on rural health care.

"We cannot support a final product that fails to" address these issues, members of the group wrote to House Speaker Nancy Pelosi and Majority Leader Steny Hoyer. Opposition from the 52-member group could imperil House passage of a bill.

Before Thursday, delays and internal Democratic disputes over taxes and the role of government had seemed mostly confined to the Senate. A bipartisan deal emerging in the Senate Finance Committee was threatened this week when Senate Majority Leader Harry Reid indicated displeasure with the likely payment method, a new tax on health care benefits.

That has left Finance Committee members scrambling for alternative taxes to replace the $320 billion the benefits tax would have raised over a decade. Democrats are considering raising taxes on wealthy investors instead, along with other options, according to officials who spoke on condition of anonymity to discuss private negotiations. 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.