U.S. Senate Democrats reached a compromise on Saturday with a holdout senator that secured the 60 votes they need to pass a broad healthcare overhaul sought by President Barack Obama.

A marathon negotiating session of nearly 13 hours on Friday clinched an agreement with Senator Ben Nelson ensuring federal funds would not be used to pay for abortions and providing extra Medicaid funds for his home state of Nebraska.

Nelson, a strong abortion rights opponent, had been the elusive 60th vote for Democrats on the sweeping revamp, Obama's top legislative priority and the subject of intense political brawling for months.

Today is a major step forward for the American people, Obama told reporters at the White House. After a nearly century-long struggle we are on the cusp of making healthcare reform a reality in the United States of America.

Nelson's backing should secure victory for Democrats in the first of a series of crucial procedural votes scheduled to begin at 1 a.m. (6 a.m. British time) on Monday and possibly conclude with final passage on Christmas Eve.

It seems that way, Senate Democratic leader Harry Reid said when asked if Democrats had the 60 votes they need to muscle the bill through the Senate against unified Republican opposition.

If the Senate approves the bill, it must be melded with a version passed on November 7 by the House of Representatives and both chambers must approve the new measure again before sending it to Obama for his signature.

Reid introduced a 383-page amendment on Saturday making changes aimed at securing the last votes, including the abortion compromise and the dropping of a government-run public insurance option to appease moderates like independent Joe Lieberman.

The non-partisan Congressional Budget Office gave the revised bill a rosy review, saying it would cost $871 billion (539 billion pounds) over 10 years and cut the federal deficit by $132 billion in the same period -- meeting Obama's cost target and goal of deficit reduction.
Senate Republican leader Mitch McConnell, who has vowed to use every tool possible to delay the bill, forced the public reading of Reid's amendment. That took much of the day on Saturday.

The moves came during a rare Saturday session of the Senate as a huge snowstorm slammed the U.S. capital, shutting down traffic.

'MIDDLE OF THE NIGHT'

If they were proud of the bill they wouldn't be doing it this way, McConnell told reporters. They wouldn't be jamming it through in the middle of the night on the last weekend before Christmas.

Obama has asked the Senate to finish by year's end to prevent the issue from spilling into the campaign for November 2010 congressional elections. Opinion polls show the bill losing public support, with majorities now opposed to it.

The Senate bill would extend coverage to 30 million uninsured Americans, provide subsidies to help them pay for the coverage and halt industry practices like refusing insurance to people with pre-existing medical conditions.

Reid's amendment incorporates a variety of changes, from dropping the government-run public insurance option to adding non-profit health plans offered by private insurers and administered by a federal agency.

Other revisions take aim at insurance industry margins and taxes, including a cap on profits. Still, insurers would see a delay to the bulk of new taxes and now they would be phased-in over time.

The amendment dropped the bill's controversial tax on elective cosmetic surgery but added a 10 percent tax on indoor tanning, a potential cause of cancer.
Also included is an increase in the Medicare payroll tax from 0.5 percent to 0.9 percent on income over $200,000 for individuals and $250,000 for couples.

But much of Reid's focus had been on winning Nelson's support. He and other abortion rights opponents feared the federal subsidies could be spent on plans covering abortion.

Nelson said the agreement would allow states to prohibit abortion coverage in the new insurance exchanges created under the bill and mandate that every state exchange include an insurance plan that does not cover abortion.

It would require payments for abortion coverage be made separately with private funds.

The plan that we've put together here, that we have agreement on, in fact walls off that money in an effective manner, Nelson told reporters. I would not have voted for this bill without these provisions.

Reid said the additional funds for Nebraska to pay for the expansion of the Medicaid health program for the poor under the bill were a minor part of the negotiations with Nelson.

That's what legislation is all about, he said. It's compromise.

Democratic Senator Barbara Boxer, a strong supporter of abortion rights, told reporters she believed the compromise would adequately separate public and private funds for abortion coverage under the bill.

But the National Right to Life Committee condemned the compromise. The new abortion language solves none of the fundamental abortion-related problems with the Senate bill, said Douglas Johnson, the group's legislative director.
A version of the healthcare bill passed by the House includes stricter anti-abortion language. The Senate rejected an amendment incorporating the language last week.

(Additional reporting by Susan Heavey, editing by Eric Beech)

Healthcare Barack obama