Pulling the Plug on the Public Option

Breitbart reports the White House is signaling a willingness to drop the controversial "public option" and looking to move toward a compromise with Republicans:

Facing mounting opposition to the overhaul, administration officials left open the chance for a compromise with Republicans that would include health insurance cooperatives. Such a concession is likely to enrage his liberal supporters but could deliver Obama a much-needed win on a top domestic priority opposed by GOP lawmakers.

Hot Air has the latest from Conrad who confirms the public option will not have votes to pass in the Senate:

“Look, the fact of the matter is there are not the votes in the U.S. Senate for the public option, there never have been,” Conrad said in an interview on “Fox News Sunday with Chris Wallace.”

“So to continue to chase that rabbit is, I think, a wasted effort,” Conrad said.

Hot Air also has video of Sebelius retreating from the public option.

The likely compromise would involve the cooperatives proposed by Kent Conrad I mentioned last Sunday. The cooperative plan outlined in Time Magazine called for:

"the creation of 50 separate cooperatives, one for each state. Each cooperative would be nonprofit, run by a board of directors elected from within the ranks of co-op members. They would essentially act as self-insurers, meaning premiums paid in by members would cover the cost of claims. The theory is that co-ops would be able to offer health insurance at lower costs for individuals and small businesses — who now must pay some of the highest rates for commercial insurance — because they would create larger risk pools. States with smaller populations could join with nearby ones to form regional alliances with larger pools of members.

Republican Richard Shelby is quoted as being open to looking at these cooperatives:

Sen. Richard Shelby, R-Ala., said Obama's team is making a political calculation and embracing the co-op alternative as "a step away from the government takeover of the health care system" that the GOP has pummeled.

"I don't know if it will do everything people want, but we ought to look at it. I think it's a far cry from the original proposals," he said.

Kent Conrad is a key member of the Senate Finance Committee and seated at the grown up table, where the President's plan appears to be taking shape.

While the retreat from the public option may appear a victory, the mere fact the Administration spent much of August promoting it despite evidence it would have always been difficult to pass in the Senate, is an indication the President always preferred a large government plan. Much of the outrage expressed in town halls and reflected in polls made it clear the public was not inclined to see another massive government program created in the process of health care reform. This may be retreat but we can't call it surrender. It is far too early to call this victory and this is no time to become complacent.
UPDATE: American Power declares this win a "skirmish" in the longer battle to victory see warning here.

What's Hot at HuffPo

Senator Dick Durbin's appearance on CNN's "State of the Nation" is creating a mini melt-down among the faithful at HuffPo. Durbin signaled he would be open to alternatives to a government run public option hoping to stave off the filibustered failure any bill with a public option would almost certainly create.

Durbin's statement bears a striking resemblance to statements from the White House indicating an openness to Health Cooperatives over the more contentious public option. Health Co-ops came at the suggestion of Kent Conrad according to Time just prior to the August recess. Conrad's plan calls for:

"the creation of 50 separate cooperatives, one for each state. Each cooperative would be nonprofit, run by a board of directors elected from within the ranks of co-op members. They would essentially act as self-insurers, meaning premiums paid in by members would cover the cost of claims. The theory is that co-ops would be able to offer health insurance at lower costs for individuals and small businesses — who now must pay some of the highest rates for commercial insurance — because they would create larger risk pools. States with smaller populations could join with nearby ones to form regional alliances with larger pools of members.

Conrad's original suggestion of a single national co-op was essentially the equivalent of the public option and would have been far more a "Freddie Med" than his current proposal. While it is widely believed anything remotely resembling a government run public plan or Freddie Med would fail in the senate requiring 60 votes, Senator Schumer and former DNC Chair Howard Dean have suggested a bill with a public option or something like it could be passed through Budget Reconciliation though he admits in the following clip reconciliation won't be that easy:



I've been following discussions on the feasibility of using reconciliation at Keith Hennessey's blog. Over a series of posts on the topic, Keith is more convinced than ever that reconciliation would result in a "Swiss Cheese" bill that would be virtually meaningless. In the same interview shown in the clip above, Kent Conrad used the same words "Swiss Cheese" to describe the resulting bill as well. Reconciliation is looking more and more like a non-option for Democrats who can't cobble 60 votes for a public option in the Senate.

It is significant that a Progressive like Durbin is at least signaling an openness to a Health Care Co-op and perhaps more so that the White House seems to be making similar statements. Without reconciliation any legislation will have to bring Progressives aboard a more moderate program, which co-ops have the potential to be. This will not be an easy sell particularly in the House. Comments at HuffPo give an idea of how such a compromise will be received by the constituents of Progressive members of the House. Hmmm, I wonder if protests of health care reform by Progressives will be characterized as "manufactured."

It's tough to read the tea leaves here but it is looking more and more as though progressives could be the more serious threat to health care legislation as long as cooperatives are not Mini Freddie Meds in disguise. Will progressives move closer to the center in order to keep their President from failing? That is a tough one to predict. Meanwhile the Democrats are busy antagonizing large blocks of citizens further to the right of the political spectrum, for their opposition to a public option not likely to see legislative light of day. What will they claim when they suddenly come out in full support of a plan that looks notably different than the one causing all the ruckus? My prediction will be something along the lines "we've heard your concerns (after we called you Nazi "teabaggers") but nevermind all that now. . . Stay tuned folks, it's going to be an interesting fall.

NOTE: A major reason anything with the grotesque public option we see in HR3200 is looking far less likely to make it's ugly way into law, is the public outrage over more government in health care rather than less. Legislators know the difference between a rent-a-mob protest and real grassroots protests. Despite what some of them say, they all know this is real. Therefore, there can be no backing down until the public option and Freddie Med is safely dead.