UPDATE: Sen. Kent Conrad (D-N.D.) denied the Bloomberg story, saying Rahm Emanuel never said President Obama was open to giving up the public option. A spokesman said:
Conrad says Emanuel was speaking in reference to the need to overhaul the health care system as a whole -- to forge compromise and get a bill to the president's desk. It was in no way a comment on the president's willingness to do away with a public option.
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According to a report in Bloomberg, President Obama is open to compromising on health care reform by eliminating the public option from his plan.
White House Chief of Staff Rahm Emanuel met last night at the U.S. Capitol with Senate Democrats and told them Obama is "open to alternatives" to a new government insurance program in order to get legislation overhauling the health-care system to his desk, said Senator Kent Conrad of North Dakota.
"His message was, it's critical that you do this," Conrad said.
Senate Finance Committee Chairman Max Baucus of Montana said Emanuel urged the senators to seek Republican support and didn't discourage them from pursuing the use of non-profit cooperatives, an idea Conrad has proposed.
Obama has been vocal in his support for a public option, but has declined to commit to opposing a bill that doesn't include it. Sen. Chuck Schumer (D-N.Y.) has said that the co-op compromise "doesn't come close to satisfying anyone who wants a public plan." Conrad negotiated with Schumer to bring the compromise closer to a public plan, but later said that it was still not a "pure public option."
On Wednesday, Paul Krugman wrote that Obama "messes up on health care, big time" in his news conference a day earlier by "signaling, right at this crucial moment, that he's willing to give away the public plan."