House Democrats have come pretty close to drawing a line in the sand over the public option, as well as supporting the employer mandate and opposing the tax on benefits. Rep. Raúl Grijalva, D-Ariz., the co-chairman of the House Progressive Caucus, calls those provisions items that "cannot be dismissed." But key conservatives in the Senate, like Lieberman and Nebraska Democrat Ben Nelson, say they won't vote for a final bill that strays too much from the version the Senate passed Thursday. And since the legislation will, once again, need 60 votes to get past procedural obstacles in the Senate, that's a serious threat.

So the negotiations may focus on making insurance more affordable for the millions of people who will still need help buying the coverage they're required to get. The Congressional Budget Office says the Senate bill would save $132 billion over the next 10 years, and some of that money could be used to expand access to community health clinics and beef up subsidies and other affordability improvements. "You have some money to spare, because you're so deep in the black," one senior Senate Democratic aide says. "You figure out where you can spend some money to help" — both help people get insurance and help keep progressives on board with the bill.

Also, look for the final bill to include as many provisions that take effect sooner, rather than later, as possible. Democrats worry about polls showing the legislation isn't popular with voters, and there is, after all, another election only 11 months away. Being able to point to some concrete examples of how the bill helped people now would ease those worries dramatically. (The Senate Finance Committee has already posted a list of immediate changes the bill would provide, including a ban on dropping coverage for patients who get sick.)

Very tentative informal talks will take place next week, aides say, and staffers from the House and Senate will begin meeting the first week in January. Once the House returns from its winter break, lawmakers will start meeting. Chances are the bill could be ready for passage by late January or early February.

Finally, in a nod to the fact that a final bill -- which still has to be worked out by the House and Senate, and then passed again -- will not, as he and his fellow Democrats had hoped, be hitting his desk before the end of this year, Obama said, "For the sake of our citizens, our economy, and our future, let's make 2010 the year we finally reform health care in the United States of America."

Obama's full statement:

In a historic vote that took place this morning, members of the Senate joined their colleagues in the House of Representatives to pass a landmark health-insurance reform package; legislation that brings us toward the end of a nearly century-long struggle to reform America's health-care system.

Every since Teddy Roosevelt first called for reform in 1912, seven presidents -- Democrats and Republicans alike -- have taken up the cause of reform. Time and time again, such efforts have been blocked by special-interest lobbyists who perpetuated a status quo that works better for the insurance industry than it does for the American people.

But with passage of reform bills in both the House and the Senate, we are now finally poised to deliver on the promise of real, meaningful health-insurance reform that will bring additional security and stability to the American people.

The reform bill that passed the Senate this morning, like the House bill, includes the toughest measures ever taken to hold the insurance industry accountable. Insurance companies will no longer be able to deny you coverage on the basis of a pre-existing condition. They will no long be able to drop your coverage when you get sick.

No longer will you have to pay unlimited amounts out of your own pocket for the treatments you need. And you'll be able to appeal unfair decisions by insurance companies to an independent party.

If this legislation becomes law, workers won't have to worry about losing coverage if they lose or change jobs. Families will save on their premiums. Businesses that would see their costs rise if we do not act will save money now and they will save money in the future.

This bill will strengthen Medicare and extend the life of the program. It will make coverage affordable for over 30 million Americans who do not have it -- 30 million Americans.

And because it is paid for and curbs the waste and inefficiency in our health care system, this bill will help reduce our deficit by as much as $1.3 trillion in the coming decades, making it the largest deficit-reduction plan in over a decade.

As I've said before, these are not small reforms; these are big reforms. If passed, this will be the most important piece of social legislation since the Social Security Act passed in the 1930s and the most important reform of our health care system since Medicare passed in the 1960s.

What makes it so important is not just its cost savings or its deficit reductions. It's the impact reform will have on Americans who no longer have to go without a checkup or prescriptions that they need because they can't afford them, on families who no longer have to worry that a single illness will send them into financial ruin, and on businesses that will no longer face exorbitant insurance rates that hamper their competitiveness. It's the difference reform will make in the lives of the American people.

I want to commend Senator Harry Reid, extraordinary work that he did, Speaker Pelosi, for her extraordinary leadership and dedication. Having passed reform bills in both the House and the Senate, we now have to take up the last and most important step and reach an agreement on a final reform bill that I can sign into law.

And I look forward to working with members of Congress in both chambers over the coming weeks to do exactly that. With today's vote, we are now incredibly close to making health insurance reform a reality in this country. Our challenge then is to finish the job.

We can't doom another generation of Americans to soaring costs and eroding coverage and exploding deficits. Instead, we need to do what we were sent here to do and improve the lives of the people we serve.

For the sake of our citizens, our economy, and our future, let's make 2010 the year we finally reform health care in the United States of America.

Senate Majority Leader Harry Reid: Never before has the Senate found the resolve to make health insurance more affordable and health insurance companies more accountable until today. This is a victory for the American people. Those fortunate enough to have health insurance will be able to keep theirs, and those who do not will be able to have health insurance.

This is a victory because we've affirmed that the ability to live a healthy life in our great country is a right and not merely a privilege for the select few. This morning's vote brings us one step closer to making Ted Kennedy's dream a reality; the dream of Americans also are part of that dream of Ted Kennedy's, and that's also become a reality.

House Speaker Nancy Pelosi: Today’s vote in the United States Senate brings us closer to providing quality, affordable health insurance to every American. I commend Senator Reid for his strong leadership in passing this bill, which takes a critical step on behalf of the health and security of all Americans.

We are proud of the House bill, which provides more affordable coverage for the middle class, covers 36 million currently uninsured Americans, begins health insurance reform in 2013, fully closes the prescription drug donut hole for seniors, mandates strong reforms of the insurance industry, and is fiscally responsible, cutting the deficit by $138 billion over 10 years.

As we move forward through the legislative process, we will soon produce a final bill that is founded on the core principles of health insurance reform: affordability for the middle class, security for our seniors, responsibility to our children by reducing the deficit, and accountability for the insurance industry.

I look forward to working with Members of the House, the Senate, and President Obama to reconcile our bills and send the final legislation to the President’s desk as soon as possible.

House Minority Leader John Boehner: Not even Ebenezer Scrooge himself could devise a scheme as cruel and greedy as Democrats’ government takeover of health care.

Senator Reid’s health care bill increases premiums for families and small businesses, raises taxes during a recession, cuts seniors’ Medicare benefits, adds to our skyrocketing debt, and puts bureaucrats in charge of decisions that should be made by patients and doctors. The bill also authorizes taxpayer-funded abortions, violating long-standing federal policy. It’s no coincidence that the more the American people learn about this monstrosity, the more they oppose it.

This legislation is so toxic that Senator Reid needed to pull off a series of outrageous payoffs, kickbacks and sweetheart deals just to get the votes of members of his own party. The way in which Senate Democrats turned their backs on American families and put their votes on the auction block is a disgrace to our country.

President Obama, Speaker Pelosi, and Senator Reid will now hammer out a final bill in secret, despite campaign promises and pledges of the most "open and honest" Congress in history. The American people don’t want the future of their health care being decided behind closed doors by three liberal Washington Democrats. That's why they need to fight harder than ever, speaking loudly and with one voice, saying "stop." ...

Republicans are focused on offering better solutions to help put people back to work, reduce the deficit, and get government out of the bailout business once and for all. We have also proposed the only health care bill that would reduce premiums by up to 10 percent and consistently reduce federal spending on health care over the next two decades.

Democratic National Committee chairman and Virginia Gov. Tim Kaine: Years from now, when historians look back on 2009, they will recall a Christmas Eve vote in the Senate that took us one giant step closer to finally delivering health reform to the American people ....

This bill will help more than 30 million Americans access quality affordable insurance. It will outlaw the insurance industry's worst practices, prohibiting insurance companies from denying coverage because of a pre-existing condition or retroactively canceling coverage when someone gets sick. It will lower premiums for individuals, families and businesses. And it will actually reduce our deficit by more than $130 billion over the next 10 years.

This bill accomplishes the goals President Obama articulated at the beginning of this debate: more stable and secure coverage for the insured, more quality affordable choices for the uninsured, and reducing the skyrocketing costs of care for everyone, including our government....

This victory for the American people comes despite the incessant and virulent obstructionism of Senate Republicans. Not one voted in a favor of reform - a crippling commentary on their failure to fulfill the responsibilities of leadership. As we move forward, the onus is on the GOP to explain why they sided with their insurance industry friends instead of American families - why they turned their backs on workers and small businesses who are struggling to stay afloat under the status quo.

Republican National Committee Chairman Michael Steele: This morning, as millions of Americans prepared to gather with their families in celebration of Christmas, President Obama and Harry Reid gathered with their liberal allies in celebration of government. Mr. Reid and company honored President Obama’s Christmas wish for increased federal control and passed their government-run health care experiment out of the Senate. Immediately following this vote, in a telling and strangely ironic legislative move, the Democrats voted to increase America’s credit card limit because even they know their deficit reduction claims are false. If they were truly proud of this so-called "historic" legislation then they should have stood by their pledge and allowed Senators and the American people 72 hours to read the full legislative text prior to voting instead of secretly rushing it through on Christmas Eve. In fact, most Democrats aren’t proud of this legislation and only voted for it after months of closed door meetings, back room deal making, and political compromise with Harry Reid and the White House. The Democrats have put a $2.5 trillion lump of coal in the stocking of every American knowing that their risky health care experiment still increases premiums, still cuts Medicare, and still enacts hundreds of billions of new taxes to pay for it. Scrooge would be proud. I know a majority of Americans are not. As we move forward, America can look forward to watching Nancy Pelosi conduct the arm-twisting needed to convince her most liberal colleagues that the Senate version is the best Trojan horse possible to hide a true single payer system, which is what this debate has always been about. This Christmas, the Democrats and President Obama have given America the one gift that keeps on taking.

Sen. Max Baucus, D-Mont.: It has been nearly two years since we began our work on health care reform here in the Senate. And all of that work has lead us to this moment -- to this historic vote.

As we stand at the finish line here in the Senate, we are not alone. We stand with those who have blazed the trail ahead of us -- tireless champions of reform, such as our good friend Ted Kennedy.

We stand with the millions of American families who have been forced into bankruptcy to cover the cost of caring for a loved one who is sick. We stand on behalf of the 45,000 Americans who die each year simply because they do not have health insurance and the millions more who live in fear ....

This is a bill we can all be proud of. This is a bill that will finally provide the reforms American families, businesses and workers have been waiting on for decades. But there is more to be done before we can put these reforms to work for the American people.

I look forward to working quickly with my colleagues to bring the Senate and House bills together and deliver meaningful health care reform legislation to President Obama’s desk so the American people can begin to see the benefits of these historic reforms as soon as possible.

Sen. Russ Feingold, D-Wisc.: The Senate health care bill is far from perfect. I am deeply disappointed it does not include a public option to help keep down costs and I also don’t like the deal making that secured votes with unjustifiable provisions. I will work to improve the bill, including restoring the public option, when the final version is drafted.

But, while this bill could and should have been much stronger, it includes very important provisions for Wisconsin that I worked to include... The bill also ends discrimination by insurance companies against people with preexisting conditions, expands coverage to 30 million more Americans and reduces the deficit by an estimated $132 billion. Despite the bill's flaws, it does meet the test of real reform, and the cost of inaction was much too high.

Bruce Josten, executive vice president for government affairs, U.S. Chamber of Commerce: Despite numerous polls showing the majority of Americans are opposed to the Senate health care bill, sixty senators chose to ignore their objections. The business community has been consistent in calling for health care reform, but the bill that was passed by the Senate today is counterproductive, does little to lower the cost of health care, and it is not reform. It implements crippling new taxes, and hurts our ability to create jobs at the worst possible time for the economy.

At every stage of the legislative process the business community has stood ready to work to improve health care legislation, but at almost every stage our concerns have been ignored.

We recognize that the health care debate is not over yet. We are hopeful that a conference between the Senate and House can bring all stakeholders back to the table. Since employers are the ones who will be responsible for putting this reform into practice, their concerns must be addressed. It is not too late for Congress to stop this bill from becoming law and start over with the goal of truly reforming our health care system.

Tom McMahon, acting executive director, Americans United for Change: Today we are one another step closer to guaranteeing quality, affordable health care for all Americans. There is still a great deal of work to be done to ensure the best possible bill reaches President Obama’s desk. But when historians look back on this moment – and they will – it will mark a turning point in our long struggle to build a health care system Americans deserve. It may also leave a remarkable and indelible imprint on the Republican Party, whose decision to put political posturing before the needs of millions of Americans will tarnish the reputation of the GOP for years to come.

Under the Senate bill, more than 30 million people will gain health coverage. The Medicare program will be stronger and the federal deficit smaller. People with pre-existing health conditions won’t be rejected or charged higher premiums by insurers, and women will no longer have to pay more than men for the same coverage. Seniors will have expanded prescription drug coverage and young adults will have easy access to health insurance. Americans from every corner of the country will have a reason to be thankful for the Senate’s action today.

Richard Kirsch, national campaign manager, Health Care for America Now: With passage by the Senate, the nation has moved one big step closer to comprehensive health care reform. Health Care for America Now will work to get the strongest bill to the President’s desk, one that provides good, affordable coverage to all and holds insurance companies accountable. To realize the promise of reform, we need to be sure that employers are required to help pay for good coverage for their workers, that premiums are affordable to families, that we do not tax benefits, that we enact tough insurance regulations, and that we offer the choice of a public health insurance option. We will urge President Obama to work with leaders in both houses of Congress to agree on legislation that meets these goals, guaranteeing good health coverage we can count on.

Karen Ignagni, president and CEO, America's Health Insurance Plans: Providing all Americans with health care coverage is crucial for the country. Health plans support legislative changes that would provide guaranteed access to all Americans, with no pre-existing condition limitations and no health-status-based premiums. These reforms are essential to giving all Americans greater peace of mind and health security.

At the same time, specific provisions in this legislation will increase, rather than decrease, health care costs; reduce coverage options; and disrupt existing coverage for families, seniors and small businesses – particularly between now and when the legislation is fully implemented in 2014.

These issues can and should be addressed if health care reform is going to fulfill the promise of providing all Americans with guaranteed access to affordable, portable health care coverage.

Ken Johnson, senior vice president, Pharmaceutical Research and Manufacturers of America (PhRMA): We applaud the Senate for taking an important and historic step toward expanding high-quality, affordable health care coverage and services to tens of millions of Americans, many of whom are struggling today financially. While considerable work remains to be done in reconciling differences between the Senate and House bills, we remain convinced that comprehensive health care reform, if done in a smart way, will benefit patients, our economy and the future of our nation.

Most importantly, the Senate bill recognizes the importance of medical progress in America. Innovative, cutting-edge medicines have dramatically increased life expectancy rates in the United States and have allowed patients with cancer, heart disease, diabetes and other devastating chronic diseases to live longer, healthier and more productive lives. We strongly believe that everyone in America should benefit from promising new advances in medical care.

By expanding coverage to more than 30 million uninsured Americans, the Senate is moving decisively in that direction. We embrace reform efforts which put an end to practices such as denying coverage because of pre-existing conditions or charging higher premiums because of gender. We also support expanding Medicaid eligibility to 133 percent of federal poverty – something we first proposed along with Families USA.

Our commitment to comprehensive health care reform is evident by our $80 billion pledge to reduce health care costs over 10 years. To that end, our companies agreed back in June to help most eligible seniors and disabled Americans who hit the so-called "donut hole" in Medicare Part D cut their out-of-pocket expenses on brand-name medications in half as part of the Senate’s health care reform legislation. The remainder of our commitment will help the government expand health care coverage to millions of Americans.

In the final analysis, we believe the Senate bill provides the best blueprint for reform. It offers the kind of change that will benefit patients today without putting medical progress at risk in the future. Today, we believe the Senate voted with America’s best interests and future in mind.