WASHINGTON (AP) - Setting up a historic year-end health care
debate, Senate Majority Leader Harry Reid unveiled long-awaited
legislation Wednesday night to extend coverage to all but 6 percent
of eligible Americans and bar private industry from denying
insurance because of pre-existing medical conditions.

The Democrat's $849 billion measure is designed to remake the
nation's health care system, relying on cuts in future Medicare
spending to cover costs - as well as on higher payroll taxes for
the well-to-do and a new levy on patients undergoing elective
cosmetic surgery.

Aides said the mammoth, 2,074-page bill would reduce deficits by
$127 billion over a decade and by as much as $650 billion in the 10
years that follow, citing as-yet-unreleased estimates by the
Congressional Budget Office.

"Tonight begins the last leg of this journey," said Nevada
Sen. Reid, less than two weeks after the House approved its version
of a sweeping remake of the health care system- and nearly 10
months after President Barack Obama's Inauguration Day summons to
action.

Obama welcomed Reid's action, saying, "Today, thanks to the
Senate's hard work, we're closer than ever to enacting solutions to
these problems. I look forward to working with the Senate and House
to get a finished bill to my desk as soon as possible." There was
no mention of Obama's longtime goal of signing legislation by
year's end.

Republicans vowed a protracted struggle to block the legislation
and deny the president a victory that would cap a tumultuous first
year in office.

"This bill has been behind closed doors for weeks," said Sen.
Mitch McConnell of Kentucky, the Republican leader. "Now, it's
America's turn, and this will not be a short debate. Higher
premiums, tax increases and Medicare cuts to pay for more
government. The American people know that is not reform."

An early showdown on the Senate floor is expected by week's end.

Reid's Senate measure would require most Americans to carry
health insurance and would provide hundreds of billions of dollars
in subsidies to help those at lower incomes afford it. It also
would mandate that large companies to provide coverage to their
workers.

Beginning in 2014, it would set up new insurance marketplaces -
called exchanges - primarily for those who now have a hard time
getting or keeping coverage. Consumers would have the choice of
purchasing government sold insurance, an attempt to hold down
prices charged by private insurers.

After weeks of secretive drafting, Reid outlined the legislation
to rank-and-file Democratic senators at a closed-door meeting.
"Everyone was positive," said Sen. Amy Klobuchar, D-Minn.

That didn't mean there weren't problems - far from it. At his
news conference, Reid pointedly refrained from saying he had the 60
votes necessary to propel the bill over its first hurdle.

Reid met privately earlier in the day with Sens. Ben Nelson of
Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of
Arkansas, moderate Democrats who have expressed concerns about the measure.

Nelson later issued a statement strongly suggesting he would
vote with fellow Democrats on an initial showdown expected within
days. Aides have said privately that Reid decided to retain an
existing antitrust exemption for the insurance industry as a way of
satisfying the Nebraskan's concerns.

Landrieu said, "I'm not going to be for anything that doesn't
drive down costs over time."

Lincoln, the only one of the three who faces re-election next
year, told reporters, "We'll wait and see."

With the support of two independents, Democrats have 60 seats,
the precise number needed to choke off any delaying tactics by the
40 Republicans who appear united in opposition to the bill in its
current form.

In general, Reid proposed an outline that is similar to the
House-passed bill, but there were important differences.

He called for an increase of a half percentage point in the
Medicare payroll tax for individuals with income over $200,000 a
year, $250,000 for couples.

He also included a tax on high-value insurance policies, meant
to curb the appetite for expensive care.

The House bill contains neither of those two provisions, relying
on an income tax surcharge on the wealthy to finance an expansion
of coverage.

Reid's measure also calls for hundreds of billions of dollars in
cuts in future Medicare spending, an attempt to satisfy Obama's
call to curtail the growth of health care spending that is fiercely
opposed by Republicans.

On another controversial issue, Sen. John Kerry, D-Mass., told
reporters Reid had decided to require the side-by-side sale of
insurance policies that cover abortion services and do not, an
attempt to satisfy both sides. That is far less restrictive than a
House-passed provision that left liberal Democrats angry.

Ahead lie weeks - if not more - of unpredictable maneuvering on
the Senate floor, where Reid and his allies will seek to
incorporate changes sought by Democrats and repel attempts by
Republicans to defeat the legislation and inflict a significant
political defeat on the president.

Reid released his legislation more than a week after the House
approved its version of the health care bill on a near party-line
vote of 220-215.

According to estimates from the Congressional Budget Office,
that House bill, with a price tag of about $1.2 trillion, would
result in coverage for tens of millions of uninsured, and provide
96 percent of the eligible population with insurance.

Two Senate committees approved different versions earlier in the
year, and while Reid has said he would produce a blend of the two
proposals, in fact he had a virtual free hand to come up with a
plan that could command the 60 votes needed to pass.

Anticipating a major struggle, the White House deputized
Interior Secretary Ken Salazar and former Senate Majority Leader
Tom Daschle to join Vice President Joe Biden in trying to clear the
way for the bill's approval over the next several weeks.

Salazar, a former Colorado senator, is viewed as a bridge to
moderate Democrats who are far outnumbered by liberals inside the
Democratic caucus.

Daschle was Obama's first choice for secretary of health and
human services, a position from which he was to try and oversee the
administration's drive to enact health care legislation. He
withdrew his nomination when it was disclosed he had not paid more
than $120,000 in federal taxes over several years.