Blue Dog Democrats announced Tuesday that they had reached a “significant breakthrough— with Energy and Commerce Chairman Henry Waxman (D-Calif.) and President Barack Obama to cut health care costs, but they added that they still have many issues to resolve before they can back the overhaul.

Blue Dogs said Waxman agreed to support an independent commission with the power to control Medicare spending, an idea proposed by Obama but rejected by House chairmen while writing the bill.

Rep. Mike Ross (D-Ark.), the chairman of the Blue Dog health task force, called the verbal agreement on an independent commission a “significant breakthrough— but said the details still have to be worked out and many other issues remain unresolved.

“We’re making progress, but we’ve got a long way to go,— Ross said.

The Blue Dogs are scheduled to meet with Waxman again Wednesday for further negotiations. Waxman canceled the markups that had been scheduled for Tuesday and Wednesday so more negotiations could take place, but he told Roll Call that he is optimistic he can get a bill through his committee this week.

Ross said seven Blue Dogs on the Energy and Commerce Committee who are opposed to the current House bill met with Congressional Budget Office Director Douglas Elmendorf on Friday and that Elmendorf said an independent commission with the power to control Medicare costs was the single most effective thing that could be done to cut costs.

Elmendorf had ripped the House bill last week for failing to cut the unsustainable growth rate of federal health care spending, prompting criticism from Speaker Nancy Pelosi (D-Calif.) and a separate summons to the White House to meet with Obama.

Ross said such a commission would help take some of the politics out of running Medicare. “We’re still waiting to see a score— on what such a commission could save as well as for legislative language, Ross said.

The Blue Dogs spent more than three hours at the White House and met with Obama himself for more than an hour, as the president sought to rescue his top legislative priority.

Ross said Blue Dogs entered the White House sessions with a list of 10 concerns. And while he touted the breakthrough on the independent office to cut Medicare costs, he said his group “absolutely— needs to see progress on its outstanding issues before returning to an Energy and Commerce markup.

Ross said that among the 10 outstanding issues that must be resolved are concerns about a government-run health insurance option, which Blue Dogs don’t want tied to Medicare rates because they contend those rates have unfair regional disparities.

“We’re still not close to an agreement on those issues,— Ross said.

Blue Dogs also are still pushing to keep the government-backed insurance option shelved unless private competition fails to bring insurance costs down — an approach House Majority Leader Steny Hoyer (D-Md.) called unlikely. And they want to exempt more small businesses from any “pay or play— scheme charging businesses an 8 percent tax if they don’t offer health insurance.

Blue Dogs also pushed back against Obama’s call for passing a bill before the August recess. Ross said that if a deal comes together in two weeks, that would be fine, but “we don’t need to box ourselves in with an artificial deadline— and the important thing is that the bill will be signed this year.

“The president is committed to getting health care reform this year and so are we,— Ross said.

But White House officials continue to believe health care overhaul legislation can be passed in the House and the Senate before recess.

Sources say the length and intensity of the meeting between Obama and Energy and Commerce members is emblematic of the president’s desire to help move the process forward and at least extract legislation from the House.

White House strategists have calculated that it will help keep momentum behind health reform if the House is able to pass a bill, and they are more concerned with keeping the ball rolling forward than they are about the possibility that producing a bill will create a target for Republicans to assail through Labor Day.

Obama aides believe Republicans will spend the recess attempting to beat up on the president’s health care agenda whether a bill is completed or not.

The calculus is different for House Members, many of whom are already feeling burned by the cap-and-trade energy vote earlier this year without any Senate action and are concerned they will be exposed again with a bill that will be vastly different from legislation that will make it through the Senate.

With talks on the bill still highly fluid, there was a complete lack of certainty among House Democratic leaders about the timing of a possible vote. Speaking to Democrats huddled in the Capitol basement, Pelosi projected confidence that they were still on track to pass the measure before breaking for the August recess. “We’re on schedule,— Rep. Lois Capps (D-Calif.) said afterward.

But while Hoyer said he still intends to pass the bill next week, he also signaled he might not favor keeping lawmakers in town if a deal remains elusive. “I don’t think staying in session is necessarily necessary to continue to work on getting consensus,— he told reporters at his weekly roundtable, adding that he would make a decision on the matter next week.

Some freshmen, meanwhile, have proposed staying in session for the first week of August if it would help the chamber track more closely with the Senate.

House Majority Whip James Clyburn (D-S.C.) was one leader who offered support for that approach. “Whatever it takes for us to reach consensus, we ought to do it,— he said. “If we can do this bill next week without consensus or wait a week and do it with consensus, I’d rather wait a week.—

But House Rules Chairwoman Louise Slaughter (D-N.Y.) said she expects to send the bill to the floor next week.

“I don’t see any reason for the delay,— she said. “We’re doing fine with it.— Passing the bills in both chambers would be important so the legislation could be merged by a conference committee in September, she said.

Keith Koffler contributed to this report.