WASHINGTON (Reuters) - President Barack Obama’s push to revamp the costly and inefficient U.S. healthcare system was facing delay even before Tom Daschle, who was chosen to head the initiative, withdrew his nomination as health secretary.

With the administration and Congress preoccupied with righting the foundering economy, work on Obama’s promise to make affordable care available for all Americans has been limited in Obama’s first weeks in power.

Health care reform advocates are pushing for quick action and want Congress to act by the end of the year, well before lawmakers start political maneuvering for congressional elections next year.

But the Democratic-led Congress is taking longer than expected to approve Obama’s economic stimulus plan, which has topped $900 billion in the Senate, and Obama has to cope with a budget deficit some estimate could top $1 trillion this year.

Creating a comprehensive plan to control soaring healthcare costs and cover 46 million uninsured Americans has eluded previous administrations and is an ambitious goal for lawmakers with so much on their plates.

Daschle’s decision to withdraw from consideration as Health and Human Services Secretary on Tuesday, citing a political backlash over his late income tax payments, dealt Obama’s health care overhaul a serious blow.

Daschle, a former Senate majority leader who was also named to a White House post in which he would lead the overhaul of the $2.3 trillion industry, was seen as an inspired choice.

“Senator Daschle’s withdrawal could make the process harder, but it doesn’t change the urgency of reform,” said Nancy LeaMond, executive vice president of AARP, an influential advocacy group for people over age 50.

ACROSS THE RIVER

Any health care overhaul would require an all-out effort by Obama and administration officials to bring business, unions and other interest groups in line behind legislation and to build public support.

Advocates of change note the impact the current system has across the economy, especially at a time of severe budget deficits.

Michigan Democratic Senator Debbie Stabenow, for example, pointed out that U.S. automobile manufacturing plants have been moving from Detroit across the river to Canada because Canada’s national healthcare system means companies do not have to provide expensive health insurance to workers.

Daschle’s decision to bow out caught many lawmakers by surprise. The White House scrambled to find a replacement but the vetting and confirmation process for the new choice could take weeks.

Congressional Democrats put on a brave face. House Speaker Nancy Pelosi said on Wednesday there was “no question” Daschle would have been a “great leader” in the effort. “But the effort is one that will happen.”

Senate Finance Committee Chairman Max Baucus said congressional committees were continuing work on developing legislation and did not see Daschle’s withdrawal having a major effect on the timetable.

“Maybe a little blip, but I don’t think it’s much,” said Baucus, who as head of the Finance Committee will play a major role in writing the legislation.

Obama plans to hold a “fiscal responsibility summit” with members of Congress to address major budget issues involving the Social Security retirement program and Medicare health care program for the elderly, key elements in any major changes.