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* Aim to produce a comprehensive legislation next month
* Senators optimistic about legal status for undocumented
* Faces challenging path in Congress
By Thomas Ferraro
WASHINGTON, March 21 (Reuters) - In a U.S. Congress riven by partisan conflict on deficits and guns, a circle of eight senators from both parties meeting several times a week might be on the cusp of a major legislative breakthrough.
The so-called Gang of Eight - four Democrats and four Republicans - is completing a plan for the biggest overhaul of immigration laws since 1986. The group is not only holding together after four months of intense discussions - an accomplishment in itself in Washington's brutally partisan atmosphere - it is down to the last sticking points, according to the senators and aides.
The centerpiece, they say, will be a 10- to 15-year path to U.S. citizenship - perhaps under a different formulation - for 11 million illegal immigrants. The issue has gained new urgency for both parties after strong Hispanic support for President Barack Obama and fellow Democrats in last year's election.
In an effort to improve the plan's chances with Republicans, the path to citizenship may wind up being called a road to a green card - the permit issued by the government that allows foreigners to work in the United States and ultimately apply for citizenship.
If so, that would reflect the influence of Republican Senator Marco Rubio of Florida, one of the group's members.
"There is no such thing as a path toward citizenship," Rubio said in an interview. "There is a path toward a green card."
"We want to be generous and we want to be fair, but we also have to be fair to the people trying to do it legally," Rubio said. "To become a citizen, you first have to get a green card. I made that clear" to the others, Rubio said.
Senate aides said they were not worried about what one called "semantics. ... We all agree you need to get a green card before getting citizenship. He is just reflecting concerns in his own party."
The goal is a Senate bill sometime next month, with a Senate vote by June or July. Considering the battles in line ahead of immigration - on deficit reduction and gun violence - that schedule could be optimistic.
There are also plenty of challenges ahead.
The group envisions a commission that would help control the future flow of low-skilled guest workers into the United States in a way that satisfies businesses' need for employees as well as unions' desires to protect their members and U.S. wages.
But satisfying both the U.S. Chamber of Commerce and the AFL-CIO labor organization on how that would work has become a problem.
"It is a tightrope to bring in the workers that are necessary but not at the expense of American workers," Democratic Senator Dick Durbin of Illinois, one of the eight, said in an interview. "We need to find a reasonable way to thread the needle."
BORDER COMMISSION DEBATED
The group has promised that before there is a pathway to anything, U.S. borders must be declared "secure."
It has been considering a commission composed of elected officials from border states to help the U.S. government make that determination, a prospect that has raised concerns from some Democrats, who fear giving border-state Republicans - they point to Arizona Governor Jan Brewer - an outsized role.
Brewer has clashed with the Obama administration over an Arizona law she signed in 2010 clamping down on illegal immigration.
"The idea is to have local input about the progress we are making on the borders," said Durbin. "But critics fear any one governor could say it is inadequate, denying citizenship to millions."
"We need a way to have local input, but not local veto," Durbin said.
The senators appear to have public opinion on their side.
According to a Public Religion Research Institute poll released on Thursday, 63 percent of Americans said they supported a path to citizenship for undocumented foreigners.
But the path through Congress will not be easy.
Republican Senator Mike Lee of Utah, a favorite of the conservative Tea Party movement, was invited to join the group, but declined, for reasons that reflect broader concerns within the Republican Party.
"There were a few things I couldn't agree to," Lee said of the framework the group of eight developed and released in January, which included the pathway to citizenship.
"In trying to address the problem, we shouldn't create another one by giving a special set of legal advantages to illegal aliens," Lee said.
Lee warned that the group may be trying to do too much with one bill. "I'm not convinced that comprehensive" legislation - as opposed to a piecemeal approach - "won't be a problem itself," Lee said.
Lee and five other Republican members of the Senate Judiciary Committee are trying to slow down the immigration bill. In a letter to Democratic Judiciary Chairman Patrick Leahy of Vermont on Wednesday, they warned "against rushing a massive bill with far-reaching implications," suggesting a "step-by-step" approach was needed.
It takes 60 votes to get a bill through the Senate, which is composed of 53 Democrats, two independents who vote with Democrats and 45 Republicans.
A BAND AND A BOND
But for some in the group of eight, getting this far in the era of gridlock is hope for the hopeless.
"It is the most productive series of conversations that I have had in four years in the Senate," said Democratic Senator Michael Bennet of Colorado, one of the eight lawmakers participating in the discussions. "This is the best opportunity in a generation to pass immigration reform."
"I think comprehensive reform is doable," Arizona Republican Senator Jeff Flake said, another member of the group. "We wouldn't be in this if we didn't think we could do it."
Some have been down this road before. New York Democrat Chuck Schumer and South Carolina Republican Lindsey Graham, agreed on a comprehensive plan in 2010 only to see it unravel. Senator John McCain of Arizona, working with the late Massachusetts Democratic Senator Edward Kennedy, tried unsuccessfully in 2005 and 2006.
But after the 2012 election in which Democrats won the Hispanic vote nationally by 70 percent, Graham said he sensed a new imperative.
The morning after the election, Graham called Schumer and said, "I want to get the band back together and McCain wants in."
Graham explained in an interview what prompted his call.
Democrats, including Obama, had long promised Hispanics some action on immigration.
"The reality from the Republican point of view is that we had to get this issue resolved," Graham said. "So we Republicans had a need and Democrats had a need," which equaled an "an opportunity to get it done."
Until late last year, Schumer and McCain, who have been in Congress together for three decades, had rarely spoken to each other. The chill between them eased a bit in January when they ended up as a part of a group of lawmakers who reached a deal on new Senate rules to ease gridlock.
"We bonded," said Schumer, "and then moved to immigration."
McCain brought in Durbin, with whom he grew close in 1983 when both were newly elected members of the House of Representatives.
Durbin had made friends with freshman Republican Rubio in predawn workouts in the Senate gym. Durbin invited Rubio.
"I told Marco: 'I think you should be part of this. What do you think?" Durbin recalled. "He said: 'I think I can work with you. At least I'm willing to try.'"
TALKING TO THE HOUSE
The senators have been meeting two to four times a week since December, each session focusing on a mutually agreed-upon agenda. They sit in a circle with 20 staffers behind them, aides said.
"Everyone in there wants to get it done," said Flake. "No one is looking for scoring political points. That makes all the difference."
"There have been hard and tough negotiations, but it has been done all in the spirit of achieving the goal, in which compromise has been made on both sides," said New Jersey's Democratic senator, Robert Menendez, another group member.
A group of eight House members - also four Democrats and four Republicans - began working on its own plan years ago, long before the Senate group even formed.
The emerging and comprehensive House plan, like the one in the Senate, has a proposed path toward citizenship.
Republicans Flake, McCain and Graham recently meet with a number of House Republicans to explain their efforts.
"I don't want to say what their positions were, but they were cordial," said Flake, elected to the Senate in November after 12 years in the House. "They listened."
Flake said he expected the Senate to pass a comprehensive bill while the House approved a limited one. But differences between the two measures could then be worked out, he said.
McCain said he believed "we can convince our House Republican friends - if we can make sure that they are convinced that we have an effective control of the border and it is not amnesty."
McCain said that while he recognized the political and economic advantages of immigration reform, there was a humanitarian need as well, which he said he knew well as an Arizonan.
"Young people have been brought across the border by a coyote (smuggler) and told, 'Tucson is over there,' and have died in the desert," McCain said.
All the members see their immigration effort as a test of whether Congress, when it is divided, can get anything of significance done.
"It could help get Democrats and Republicans to work together," McCain said. "That is what the American people want."
If members as far apart as Schumer and McCain can come together, it will send a message, said Graham.
"If these two guys can deal with an issue as complicated as immigration and wind up with a product good for the country, who knows, good government may break out."
"But," Graham added with a sigh, "I doubt it." (Editing by Fred Barbash, Mary Milliken and Peter Cooney)