July 30 (Bloomberg) -- Senate Finance Committee Chairman Max Baucus said his panel won’t consider health-care legislation next week, dealing another setback to President Barack Obama’s timetable for his top domestic policy goal.

“It’s clear there won’t be a markup next week,” Baucus, a Democrat like Obama, told reporters after meeting with a group of lawmakers at the Capitol. “We are committed to finding a bipartisan solution.”

Earlier today, Senator Mike Enzi of Wyoming, one of three Republican lawmakers working with Baucus on the measure, said he wouldn’t agree to a plan before the Senate adjourns next week, saying, “the bill is not ready for prime time.”

“There’s a train wreck that’s going to happen” if Democrats keep pushing for faster results, Enzi said.

The finance committee is important because it’s the only panel trying to fashion a plan that both parties can embrace to cover millions of uninsured Americans and curb health-care costs. Two House committees and the Senate health panel have passed versions of the bill on party-line votes.

Lawmakers in the Democratic-controlled Congress are grappling over issues such as whether to create a government- run health-care plan to compete with private insurers, whether to require employers to provide health insurance to workers and how to pay for a plan that may cost $900 billion over 10 years.

Democratic leaders in both the Senate and House already decided to hold off floor votes on the legislation until after a monthlong August break. They’d then have to reconcile the different versions of the bill before sending it to Obama.

Missed Deadline

Baucus, of Montana, originally intended to get an agreement in June to meet Obama’s goal of getting legislation through the Senate by the Aug. 7 recess.

Senator Charles Grassley, the panel’s top-ranking Republican, said they haven’t given up on marking up a health- care bill.

“We’ve been committed to getting a job done,” Grassley said, standing next to Baucus.

Senate Majority Leader Harry Reid earlier in the day accused Republican leaders of blocking progress.

“Senator Grassley and Senator Enzi have been under great pressure,” he said.

Senator Kent Conrad, a North Dakota Democrat and member of the finance committee, said the bipartisan group of lawmakers will work throughout next week to try to hammer out a deal.

House Bill Advances

The legislation continued to progress in the House of Representatives after Democratic leaders yesterday quelled a rebellion over the cost, striking a deal with dissident party members who had blocked the bill for weeks. The House Energy and Commerce Committee began drafting the measure today, a day before the House is scheduled to take its own monthlong recess.

House Speaker Nancy Pelosi today defended one of the main provisions in that agreement -- the establishment of a government-run entity to compete with private insurers -- while holding out the possibility it might eventually be changed.

The agreement calls for the new government insurance program to negotiate rates with health-care providers the way private insurers do, instead of pegging them to the lower rates of Medicare, the federal program for the elderly.

The language in the agreement is the same as in a measure proposed by Massachusetts Senator Edward Kennedy’s health committee, said Pelosi, a California Democrat. While some Democrats have said the requirement to negotiate defeats the purpose of the plan since it will do little to lower costs for the government, Pelosi said she can live with it.

‘Meets the Test’

Kennedy’s plan “meets the test of having an effective public option,” Pelosi told reporters. “It’s not my preference. My preference is a stronger bill.” The speaker left open the possibility that once parts of the provision debated by three different committees are merged, the public option could be strengthened.

“We have two other committees that have a stronger public option” in legislation, she said. “As our members go home and listen to the public and the public makes its voice known, heard, then we’ll see where we go from there.”

To get the measure through the Energy and Commerce Committee, Pelosi needs to court the votes of seven Democrats who objected to the cost of the legislation. Once the measure gets to the floor, Democratic leaders have a 256-178 majority and could afford to lose more than 30 votes and still win passage.

Unrest in Party

Some Democrats were angered by the House deal.

The legislation that leaders put on the House floor must have “a robust public option,” or “we will vote against this,” Representative Lynn Woolsey, a California Democrat who heads the 83-member House Progressive Caucus, said at a news conference today. “We can compromise no more.”

Members of her group today circulated a letter protesting the agreement, saying it reduces subsidies for low and middle- income families and would weaken the ability of the public insurance plan to compete with private companies. So far, 53 House members have signed the letter.

“We are going to fight this with every bit of our strength now until we come together” and vote on the House legislation, California Democrat Barbara Lee, who runs the 42- member Congressional Black Caucus, said at the news conference.

As part of the agreement, House leaders put off a vote by the full chamber until September, giving members time to digest the plan and consult with constituents. If both the House and Senate pass their own versions, another battle looms when they try to reconcile their plans for another round of votes.

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net;

Last Updated: July 30, 2009 20:05 EDT