INTERVIEW - McCain sees trouble for health, climate bills

By Richard Cowan and Simon Denyer

WASHINGTON (Reuters) - Two of President Barack Obama's top priorities -- healthcare reform and reducing global warming -- are in disarray on Capitol Hill, with no sign of bipartisan consensus, Senator John McCain said on Friday.

The Arizona Republican, who was defeated by Obama for the presidency last November, said in an interview with Reuters that climate change legislation "is just dead in the water. It's not got momentum."

Efforts to overhaul America's costly healthcare system need to begin anew after the non-partisan Congressional Budget Office said a draft bill would cost $1 trillion and insure only 16 million of the 46 million uninsured people, McCain said.

"They just took a body blow," he said of Obama's Democrats. "Whether they recover from it or not, we will probably know in the next few days."

McCain had some stark advice to Democrats writing the legislation: "I think that they should start over."

Obama has staked huge political capital on revamping the healthcare system, with ballooning costs straining government finances, the economy and U.S. competitiveness.

He would like Congress to pass both initiatives this year before lawmakers become enmeshed in the 2010 mid-term elections.

McCain said he believed both issues needed to be tackled, but that the administration and Democratic lawmakers were going about them the wrong way, with proposals that could burden taxpayers, business and the economy.