Breaking news this morning provides some cheer for Democrats on health reform. The Congressional Budget Office reportedly will release this afternoon a preliminary analysis of the Senate-passed health reform bill as modified by a separate “reconciliation” measure, and the numbers look favorable for Democrats.

According to reports, CBO estimates that the combined package will cost $940 billion over the first 10 years and reduce the deficit by $130 billion during that period. In the second 10 years, 2020 to 2029, it will reduce the deficit by $1.2 trillion. The legislation will cover 32 million Americans, or 95 percent of the legal population.

“To put this in context, that’s more deficit reduction than either the House or Senate bill, and more coverage than the Senate bill,” Ezra Klein writes over at the Washington Post. The CBO has determined that the bill would reduce the annual growth in Medicare spending by 1.4 percent annually, and extend Medicare’s solvency by at least nine years, Politico reports, citing House Democratic aides.

We’ll have more on these developments, including a full discussion of the reconcilation measure after the bill and the CBO report become available. The CBO report clears the way for a likely House vote on Sunday, but another key number – the number of Democrats that will vote yes, and whether that number will hit the 216 votes needed for passage — is not yet certain.

Update: The CBO report is now out.

Update: The reconciliation language is available.