Did Obama Kill the Public Option in July?

We know the White House cut a deal with hospitals and insurance companies last July on prescription drugs -- but as areporter said this week, they also killed the public option.
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Congress will pass health care reform any day now, and it probably won't have a public option to hold private insurance accountable. Even though a version passed the House last November, and 51 Senators are on record saying they would vote for it. And while Democrats are at this point "damned if they do" and "damned if they don't" on passing a very unpopular bill, the public option consistently has strong support. But Majority Whip Dick Durbin said the Senate won't even vote on a public option unless the House puts it in the final legislation, and a few hours later Speaker Nancy Pelosi said that could not happen. President Obama has been justifiably slammed for not pushing hard enough for a public option, but the truth may be even worse than that. We know the White House cut a deal with hospitals and insurance companies last July on prescription drugs -- but as a New York Times reporter said this week, they also killed the public option. And given the public option's inexplicable fate, I have to believe the story.

On August 13th, David Kirkpatrick reported in the New York Times that contrary to public perception, President Obama was playing a much bigger role in shaping the health care bill. In meetings with Senator Max Baucus and lobbyists from Pharma, the White House was able to get their support for reform -- using Baucus' Finance Committee as a framework for the ultimate legislation.

"Several hospital lobbyists involved in the White House deals," he wrote, "said it was understood as a condition of their support that the final legislation would not include a government-run health plan [my emphasis]." Kirkpatrick went on to quote one of the industry lobbyists, Chip Kahn, who said: "We have an agreement with the White House that I'm very confident will be seen all the way through conference."

I don't remember that New York Times article, which no traditional media ever picked up on. Like most liberal bloggers, I was in Pittsburgh on August 13th for Netroots Nation. As happens at those four-day conferences, we were too overwhelmed to be reading the news -- but White House adviser Valerie Jarrett was there to assure us the president is on our side.

On March 15th, Ed Shultz of MSNBC had the Times' David Kirkpatrick on his show - who confirmed that Obama's backroom deal with the hospital and pharmaceutical industries last July included an agreement to kill the public option.

Others have written that Obama knew the public option is popular with his base, so he didn't want to be the one to kill it. He tried to make Senate Majority Leader Harry Reid the fall guy, but Reid wouldn't budge. Ultimately, the honor went to Joe Lieberman - who progressives despise already, and would proudly take the blame.

In other words, while Obama was still saying in September that he supports the public option (which kept us hopeful) - the President knew all along that it would never make it in the final bill. He never said he'd fight to include the public option, and repeatedly said he was "open" to other ways to achieve the same goal. But little did we know, the fix was in.

When the White House in December pressured Harry Reid to cave to Joe Lieberman's extortion - which I dubbed the "Day the Democrats Died" - my faith in Barack Obama was irreparably shattered. At this point, it became crystal clear to me this President would not push the change we can believe in -- that progressives would have to just do it themselves.

Which is why I've felt the work that the Progressive Change Campaign Committee and Howard Dean's Democracy for America has been so important. Democrats claim we "don't have the votes" for passing a public option, so the netroots had to prove them wrong - by organizing a "whip count" at www.whipcongress.com: get 51 Senators on record supporting a public option through reconciliation. It was the only pro-active thing to do.

And these efforts - with no active support from the Democratic Party leadership - helped everyday activists get involved in a meaningful way. But while the whip count was successful, two progressive Senators who have always championed the public option - Tom Harkin and Jay Rockefeller - would not commit to voting for it under reconciliation, when I assumed they'd be low-hanging fruit.

I can only come up with one reason -- the president didn't want the public option, and they wouldn't stand up to him. And now that we hear that Obama killed the public option in a back-room deal last July, it all makes sense. The netroots effort has now identified the votes in the Senate to pass a public option - but it doesn't matter. It won't happen.

Why is the public option such a big deal? Isn't it true that only about 5% of Americans would even be covered? But the issue was never about how many people would actually use it. Its mere existence would give teeth to all the parts of the bill that deal with private insurance -- such as a ban on pre-existing conditions. If these companies (which have proven they can't be trusted) have to deal with competition, it keeps them honest.

And we always knew the public option itself was not very exciting -- most of us wanted single payer, just like in all other Western industrialized nations. But single-payer was never considered -- it was dropped from the very start, leaving us with the public option as a compromise. If the Democrats had at least fought for single payer, I could be okay with not having a public option in the final bill. But instead, progressives were duped -- and the public option took on a great importance because it was our final concession.

At Daily Kos, a diarist argued yesterday that -- assuming all of this is true -- we don't know what Obama's motivations were in killing the public option. He could have made what was viewed as a pragmatic decision -- a "chess move" that turned out to be an abject failure. But it was precisely because they cut a deal behind closed doors that we'll never know. It's these kind of backroom deals that disempower progressive activists who deserve transparency.

In late December, I lamented on Beyond Chron that 2009 was the year change fell prey to backroom deals -- where the rich and powerful have undue influence. Never in my wildest dreams did I think my theory was so true. That Barack Obama - the community organizer from Chicago, the man who used to live three doors down from me in Hyde Park, the politician who endorsed single payer when he first ran for public office -- would go behind closed doors and kill the public option before we proved that we had the votes.

And the fact that none of us would know about it until nine months later is infuriating.

Paul Hogarth is the Managing Editor of Beyond Chron, San Francisco's Alternative Online Daily, where this piece was first published.

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