July 23 (Bloomberg) -- Senate Majority Leader Harry Reid said lawmakers will postpone until September a vote on health- care legislation, dealing a setback to President Barack Obama’s timetable for a measure to overhaul the system.

The move increases the likelihood that the House of Representatives will also wait until after Congress’s monthlong August recess to decide on its version of the bill.

Reid said he agreed to the delay because Republicans sought more time to craft a bipartisan measure.

“It’s better to have a product” that’s “based on quality and thoughtfulness rather than to go jamming something through,” Reid, a Nevada Democrat, said today in Washington.

Obama had pressed the Senate and House to pass their separate versions of the legislation before Congress left Washington. That would give lawmakers time to reconcile the measures and send a bill to his desk by October. Republicans and even some Democrats have balked at both the cost and the financing of the legislation.

The president said he was informed that Senate Democratic leaders won’t meet his early August deadline for a vote and said, “that’s OK.” Obama added that he still wants the finished legislation to his desk before the end of the year.

“So as long as I see folks working diligently and consistently, then I am comfortable with moving a process forward that builds as much consensus as possible,” he said. “I don’t want a delay just because of politics.”

Decision Last Night

Reid said he made a “a decision last night not to do this legislation” before September because Republicans such as Senator Olympia Snowe of Maine sought additional time. “I don’t think it’s unreasonable” given the issue’s complexity.

House Democratic leaders are still trying to reach agreement. At least 60 members of their own party have raised objections to the $1.1 trillion plan to cover 47 million uninsured Americans and set up a public health insurance plan to compete with private companies.

Speaker Nancy Pelosi has left open the possibility that the House also wouldn’t vote on legislation unless the Senate acted. Today she said a month’s delay by Congress wouldn’t diminish the plan’s growing political momentum.

“I am not afraid of August, it’s a month,” Pelosi said at her weekly news conference. “What I am interested in is the sooner the better to pass health care for the American people.”

Defending Deadlines

The president last night defended his setting of deadlines, saying he was trying to get Congress to move on the legislation.

“If you don’t set deadlines in this town, things don’t happen,” he said at a news conference at the White House. “The default position is inertia.”

Lawmakers have faced an escalating Republican effort to stymie the president’s top domestic agenda as well as a rebellion by a group of Democrats over the cost of his plan.

House Republican Leader John Boehner told reporters today “it’s time to throw this bill away” and begin work on a new plan.

Pelosi said she’s “more confident than ever” that the House will have the votes to pass a bill even if the measure isn’t ready for a vote until September.

“When we have worked out some of the differences that we have it will be very apparent to everyone else the momentum is there,” she told reporters. “We will take the bill to the floor when it is ready and when it is ready we will have the votes to pass it.”

‘Just Right’

Senator Charles Schumer of New York, a member of the Finance Committee that is still drafting legislation, defended the decision to hold off on the vote.

“No one wants delay, but I think the president has done it just right” Schumer said. “He keeps pushing us forward, but not to the extent that you don’t have the best product possible. We are moving along in just the right way.”

Senate Finance Committee Chairman Max Baucus of Montana, asked by reporters whether his panel would take up a bill before the recess, said, “I hope so.” Baucus, whose committee is taking the lead on the legislation in the Senate, has struggled to reach a compromise with Republicans.

Baucus suffered a reversal yesterday, when Republican Senator Orrin Hatch of Utah quit bipartisan negotiations on a compromise.

‘Lots of Considerations’

Senator Kent Conrad, a North Dakota Democrat who sits on the finance panel, said he was unsure whether the committee could produce a measure before the August break because “there’s lots of considerations.”

Conrad said there was a risk that the momentum will falter, and “clearly that’s a concern people have.”

In the House, Energy and Commerce Committee Chairman Henry Waxman is negotiating with 40 members of the so-called Blue Dog Coalition of self-proclaimed fiscal conservatives to address their objections. The talks were getting closer to an agreement, he told reporters yesterday.

Asked if the House would be able to vote on legislation before its break, Waxman said “it’s something I would like to see happen” but that is beyond his control. “Members want to know where the Senate is” and get a “comfort” level with the legislation before voting, he said.

Waxman has postponed committee debate on the measure while he seeks an accord with the Blue Dogs.

One member of the Blue Dogs, Indiana Democrat Baron Hill, said yesterday House leaders didn’t have the votes to pass the legislation unless changes were made to cut costs.

Independent Commission

Obama has proposed an independent medical-review commission to set Medicare-reimbursement rates, an idea that Waxman agreed to at the start of the talks. Reid said “some version” of that commission would be included in the Senate measure.

Obama and his aides are putting pressure on congressional Democrats from several directions. A White House official, speaking on the condition of anonymity, said the administration is telling lawmakers they will fare better in next year’s mid- term elections if they stand by Obama in the health-care debate, rather than oppose him.

To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

Last Updated: July 23, 2009 15:26 EDT