WASHINGTON - Shrugging off delays in a divided Congress, President Barack Obama's administration on Friday said a sweeping healthcare overhaul would still be approved by year end to control costs and expand coverage.

White House Chief of Staff Rahm Emanuel said the Senate's failure to hold to an August deadline to pass an initial version of healthcare legislation would not derail Obama's central domestic policy objective.

I think we will have a bill by the end of the year for the president to sign on healthcare reform that controls costs, expands coverage and provides choice, Emanuel told National Public Radio.

The reform package under construction in both chambers of the Democratic-controlled Congress has been hit by criticism of its more than $1 trillion price tag and its scope, with debates over how to pay for the program and rein in costs.

Obama has described healthcare reform as essential to longterm U.S. economic viability and had asked the Senate and House of Representatives to pass first versions before leaving for the summer recess to help keep opposition from building.

But Senate Majority leader Harry Reid said on Thursday the Senate was only likely to be debate its version of the legislation in September -- throwing open the question of when and what kind of final legislation may emerge.

Obama has staked significant political capital on the passage of a healthcare bill this year before lawmakers turn their focus to next year's midterm elections.


Emanuel said the White House still believed things were broadly on track.

The key thing is ... we are now debating how to control costs, Emanuel told NPR. We are down to the final details.

Those details matter. But we...I think are making progress.

Speaking of ways to control costs, which has become a central sticking point on the plan, Emanuel said the White House is urging Congress to include a proposal for an outside commission on health care costs cutting.

If you want to control costs, one of the things the president talked about is to have a group of health experts to ensure that, in fact, the changes that are necessary to the system so the system is more efficient, more cost effective, are done, he said.

Two committees in the House and one in the Senate have already 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.

But Republicans have zeroed in on proposed tax hikes and heavy government involvement in healthcare to criticize the plan, while conservatives in Obama's own Democratic Party have also balked at the plan's size and expense.
Leaders of a group of fiscally conservative Democrats met for nearly three hours with Emanuel and Nancy-Ann DeParle, Obama's healthcare adviser, on Thursday but came to no agreement on the bill.

In the Senate, a bipartisan group of Finance Committee members continued their closed-door meetings to work through policy options on the bill.

(Writing by Andrew Quinn; Editing by Doina Chiacu)