The Public Option, With a Whimper

The rather surprising news that Harry Reid may now be ready to include a public option in the health care reform bill he will bring to the Senate floor next week has potentially huge short- and long-term political implications.

First, it would resolve the issue of whether Senate Democrats, who have exactly the 60 votes they need to (at least in theory) kill a Republican filibuster, are willing to proceed without G.O.P. support.

Before this afternoon, it didn’t seem Democrats would go this route. Reid gave Finance Committee Chairman Max Baucus wide latitude this spring and summer to try to negotiate a compromise with three Republicans on his committee, Olympia Snowe, Charles Grassley and Mike Enzi—negotiations that dragged on pointlessly as Grassley and Enzi essentially admitted they weren’t acting in good faith.

Even after that, Baucus insisted on pushing a bill without a public option through his committee, a concession that did win over—sort of—Snowe, who (at least initially) was then invited by Reid to play a prominent role in merging the Finance bill with one passed earlier by the Health, Education, Labor and Pensions Committee that did include a public option.

The left howled at this, believing that Reid was giving up too much for the sake of keeping Snowe on board, and thus being able to call the bill “bipartisan.” The suspicion was that Reid, facing a grim situation as he seeks reelection in swing state Nevada next year, was ready to water down the Senate bill in an effort to fend off charges of excessive partisanship. A progressive group even began airing ads challenging his toughness this week.

Thursday’s news—if it proves to be more than a trial balloon—could kill those suspicions.

Earlier in the day, Snowe reiterated her opposition to a public option in any form—even the “opt-out” compromise that now may be part of the Senate bill—and her willingness to join in a G.O.P. filibuster against any bill that contains one. For Reid to move ahead with a public option now would signal the end of Snowe’s cooperation—and with it the possibility of a final Senate bill enjoying any Republican support. 

Instead, Reid would have to rely on his 60 Democratic votes, which would be just enough to kill a filibuster. That would mean that the handful of conservative Senate Democrats who oppose the public option (like Ben Nelson and Mary Landrieu) would have to vote with their party to stop the filibuster; then, when the bill itself comes up for a vote, they’d be free to vote no, since it would only need 50 votes for passage (with Vice President Biden breaking any ties).

How these conservative Democrats react to Thursday’s news will probably dictate Reid’s final decision. If even one of them insists that he or she will vote with the G.O.P. on the filibuster, Reid will presumably keep the public option out of the final bill.

But if Reid is confident he will have 60 votes, it will relieve Nancy Pelosi and the more liberal House of its role as the public option’s last line of defense.

During the past few weeks, when it seemed likely that Reid would keep the public option out of his final bill, Pelosi ratcheted up her rhetoric in favor of the government-run insurance program, insisting that the House would pass a “robust” one—meaning that reimbursement rates for doctors would be pegged to Medicare’s low rates, a step that even the Senate HELP Committee wasn’t willing to take. 

The reason for the speaker’s posture was simple: She wanted to head into the House-Senate conference committee with the strongest version of the public option she could possibly get through the House, making it tougher for the program to be removed entirely in negotiations.

But that calculation could change now. The bottom line for Pelosi and most House liberals, even if they won’t necessarily say it publicly, is that a public option in some form be included in the bill sent to President Obama’s desk. If the Senate comes around, that bottom line will be realized, and it won’t be on the House’s shoulders to save the public option.

Pelosi still would push for a strong version of one in the House—stronger than what will emerge from the Senate. But that would only be due to internal House politics—a few dozen members of the Congressional Progressive Caucus are adamant about the public option being pegged to Medicare. With the Senate on board with the basic concept, she’d probably have room to be more pragmatic if securing 218 votes for the progressives’ vision proves elusive.

If all of this happens, health care reform will be on track to pass and be signed into law without a single Republican vote in the House or Senate.

Of course, it’s worth noting that the public option, in whatever form, that ends up in the final plan (if one does) won’t really be a public option: It will only be open to those who aren’t eligible to receive insurance through their employers, a small share of the population. This would deprive the new program of the strength-in-numbers bargaining power that makes the public option concept so appealing; the new program just wouldn’t be big enough to force significant change from private insurers.

But it could be a start. Realistically, the opt-out compromise—in which states could ban the new public plan from being offered on their insurance exchanges—is the most expansive public option variation that has a chance of clearing Congress now. Skeletal though it is, that program could then be expanded and strengthened in the years ahead, ultimately becoming a true public option.

In that sense, Thursday’s news is a huge but very, very tentative victory for progressives. But it could be blown up at any moment by Landrieu or Nelson and their ilk. And even if it isn’t, there won’t be many tangible results to celebrate for years to come.

  The Public Option, With a Whimper