The White House and congressional Democrats have struck a deal with unions over taxation of high-end insurance plans, a major step toward agreement on a final health care package.

The announcement came as congressional leaders returned to the White House this afternoon to negotiating other differences between the bills passed by the House and Senate last year.

"We are hopeful that by day's end they will have worked through -- House, Senate and the president -- worked through any number of issues that remain outstanding," said White House spokesman Robert Gibbs.

Obama told House Democrats this afternoon that the new legislation will cover more Americans and reduce health care costs. He dismissed claims by Republicans it will do the opposite, and urged Democrats to hang tough in the face of political problems over the legislation.

"Believe me, I know how big a lift this has been," Obama said. "I see the polls ... The worst fears will prove groundless."

If Republicans want to campaign against the health care bill, Obama said, "that's a fight I want."

Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell, R-Ky., cited polls showing that a growing number of Americans oppose the health care plan. "Union lobbyists might like it now, but constituents don't," Stewart said.

Union members had balked at the Senate plan for taxes on so-called "Cadillac" health care plans, saying it would hit too many of their members. They preferred the House plan, which put higher taxes on wealthy Americans to pay for changes to the health care system.

(Posted by David Jackson)