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Obama Admin Backs Away From a Public Option

August 17, 2009 - by Donny Shaw

The public option had a bad weekend:

The White House, facing increasing skepticism over President Obama’s call for a public insurance plan to compete with the private sector, signaled Sunday that it was willing to compromise and would consider a proposal for a nonprofit health cooperative being developed in the Senate.

The “public option,” a new government insurance program akin to Medicare, has been a central component of Mr. Obama’s agenda for overhauling the health care system, but it has also emerged as a flashpoint for anger and opposition. Kathleen Sebelius, the health and human services secretary, said the public option was “not the essential element” for reform and raised the idea of the co-op during an interview on CNN.

Mr. Obama himself sought to play down the significance of the public option at a town-hall-style meeting on Saturday in Grand Junction, Colo., when a university student challenged him on how private insurers could compete with the government.

After strongly defending the public plan, the president suggested that he, too, viewed it as only a small piece of a broader initiative intended to control costs, expand coverage, protect consumers and make the delivery of health care more efficient.

“The public option, whether we have it or we don’t have it, is not the entirety of health care reform,” the president said. “This is just one sliver of it, one aspect of it.”

Later on Sunday, the White House Office of Health Reform put out a statement that President Obama still believes that the public option is the best way to bring down costs and increase choice in the health insurance market. That may be the case, but if Obama isn’t going to be out there pushing the public option as the most important part of the bill, it’s hard to imagine that it could go anywhere in the Senate.

As I’ve written on this blog several times, the Administration has never really put their full support behind the public option. It hasn’t been the part of reform they’ve been pushing. But I still think the comments this weekend are significant. We’re right in the middle of the August recess, Democrats have been getting hammered on this at town halls and need some leadership. It’s easier than ever to take the Administration’s tepid support as a sign to surrender.

Obama’s approval job approval ratings are going steadily down, now around 50 percent, as is support for the broad outlines of his health insurance reform plan. He needs to get this bill done, and the public option is the main element causing him to loose support for health reform among Republicans and some conservative Democrats. As Bill Clinton said this weekend at Netroots Nation, “the minute the president signs this bill, his approval will go up. Within a year, when the good things begin to happen, and the bad things they’re saying will happen don’t happen, approval will explode.”

But, also, this just is what the Senate does. On all the biggest bills, they have a tendency to take out the meatiest part. Cram down was stripped from the foreclosure-prevention bill by the Senate, card-check has been taken out of EFCA, cap-and-trade appears ready to be dropped from the energy bill, and now this. All of these things are the elements that represent the biggest challenge to the status quo. They are the mechanisms that actually apply pressure where things need to be changed.

Here’s Health and Human Services Secretary Kathleen Sebelius yesterday on CNN’s “State of the Nation”:

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