8 a.m. ET: So far in August, coverage of the health-care fight has focused mostly on process and politics over policy, and tactics over strategy. But the headline news from this weekend wasn't about a town hall meeting. It wasn't about protesters, astroturf or ad campaigns. It was about a substantive change in the debate over reform, one that may help President Obama on one ideological flank just as much as it hurts him on the other.
Obama and Kathleen Sebelius both signaled this weekend that the White House would be willing to live with a compromised package that does not include a public insurance option. Obama on Saturday called the public option "just one sliver" of the debate, while Sebelius said Sunday it was not an "essential element" of reform. David Axelrod said later Sunday that Obama believed the public option was still "the best way to go," and Linda Douglass claimed that "nothing has changed" in the White House's position. Marc Ambinder has one administration official saying Sebelius "misspoke," and another saying she didn't, but "the media misplayed it."
Whatever the case, liberals are worried. Jay Rockefeller insisted Sunday that including a public option was "a must," and Nancy Pelosi has previously vowed that whatever bill passes the House will include a "robust" public plan. Liberal activists at the Netroots Nation conference said they feared the Democratic party is tilting toward moderates. A blogger at Firedoglake asks sarcastically, "Hooray! Now all the Teabaggers will go home and tons of Republicans will get on board with health care reform, right?"
Despite unhappiness on the left, Kent Conrad said Sunday that there aren't the votes in the Senate for the public option to pass, and Nate Silver does the math and agrees. Silver also sees some logic in the administration's apparent shift: "There's likely going to have to be some sort of 'regrouping' moment in September for health care to pass -- some sense of momentum that the White House can sustain for two, three, four weeks. If you'd waited until then to table the public option, such a moment would be less likely." Mickey Kaus thinks Obama is dropping the public option "a little early," removing a piece of useful leverage in the negotiations without necessarily moving public opinion in his favor.
So, what now? Perhaps the administration's willingness to compromise on this front gives it more leverage to pressure Senate moderates on timing. Conrad also said that the Gang of Six wouldn't be beholden to a Sept. 15 deadline, but it's hard to imagine the White House letting the negotiations drag on much past that point. Whatever the Finance Committee does, Ezra Klein writes, Max Baucus "bears uncommon responsibility for the product. If his process fails, then he will have failed. For a man whose career has been defined by an aversion to risk, Baucus is running the most dangerous and unexpected legislative play in recent memory."
The loss of the public option would mean that the idea of health-insurage co-ops gains, and no one is quite sure yet what that means. The Wall Street Journal calls establishing new co-ops "a daunting task that could involve setting up the equivalent of new insurers on a state or regional basis." It's similarly unclear how passage of a watered-down bill would affect the political fortunes of Republicans. Politico says that the health-care debate has given the GOP "a little spring in their step." The Los Angeles Times writes that "the conservative mobilization has also created an unusual dilemma for Republican leaders, who want to turn the enthusiasm into election victories next year but find themselves the target of ire from many of the same activists."
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