Washington (CNN) – President Barack Obama huddled with top Capitol Hill Democrats at the White House on Wednesday as congressional leaders sought to find enough middle ground to pass a sweeping health care reform bill.
The meeting was part of a series of feverish negotiations among House and Senate Democrats trying to close ranks on a series of controversial issues.
Liberals in the House of Representatives are particularly upset with a provision in the Senate bill that would impose an excise tax on high-end insurance plans.
The ongoing deliberations are necessary to craft a final bill from the $1 trillion measure approved by the House in November and an $871 billion plan cleared by the Senate in December.
House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid would like to pass a compromise bill before the president's upcoming State of the Union address, though some Democrats have indicated that timetable could slip.
House Democrats are trying to forge a new consensus within their divided caucus during a three-day legislative retreat in Washington this week. Obama is scheduled to address the caucus on Thursday; former President Bill Clinton will speak on Friday.
One of the most divisive issues for Democrats is the Senate bill's inclusion of a 40 percent tax on insurance companies that provide plans valued at more than $8,500 for individuals and $23,000 for families.
Proponents of the tax on such "Cadillac" plans argue it's one of the most effective ways to curb medical inflation. Many Democrats, however, oppose taxing expensive policies because it would hurt union members who traded higher salaries for more generous health benefits.
AFL-CIO President Richard Trumka warned Monday that Democrats risk losing critical union support in November's midterm elections if they don't drop the tax.
Labor leaders have urged Congress and the White House to instead adopt the House health care financing plan, which includes a 5.4 percent income tax surcharge on individuals earning over $500,000 and families earning more than $1 million.
One possible compromise idea now being considered by Democrats is to raise the income threshold for the excise tax in an attempt to hit fewer workers, several Democratic leadership sources have told CNN.
The sources said Democratic leaders are considering a range of thresholds as high as $28,000. In order to make up for the difference in lost revenue, an additional boost in Medicare taxes for wealthy Americans is being considered, according to multiple Democratic congressional sources.
The expanded Medicare tax would be extended to cover earnings on investments, which currently are exempt, the sources noted.
The current Senate bill would hike Medicare payroll taxes on families making over $250,000; the House bill does not.
Even if House and Senate Democrats reach a compromise on funding, they still have to tackle a range of other controversial issues. Among other things, Democrats have to reach a decision on whether to include a government-run public insurance option, as well as on language relating to abortion coverage and illegal immigration.
House Democrats are also urging the Senate and the White House to agree to set up a national insurance exchange in the final bill, instead of the state-based exchanges in the Senate bill.
The exchanges are designed to make it easier for small businesses, the self-employed and the unemployed to pool resources and purchase less expensive coverage.
House Republicans, meanwhile, reiterated their contention on Wednesday that any bill emerging from Democratic negotiations will be fundamentally flawed in part because it will fail to rein in spiraling health care costs.
GOP leaders said at a Capitol Hill news conference that they would try to defeat a final bill by persuading enough moderate and conservative Democrats to vote against it.
"We're looking at 37 Democrats who are in districts ... that are particularly upset and vulnerable to the provisions of this health care bill," said Rep. Eric Cantor, R-Virginia.
"The choice is very clear for the Democratic members on the other side who sit in these seats that reflect a much more center-right America. And the choice for them is - are they going to be with the people or are they going to be with Pelosi?"