Are Democrats in the Midst of a Family Feud over the Public Plan for Healthcare?

For those of us who are trying to read the health reform tea leaves, things got a bit more interesting this week with signs of a rift in the Democratic Party over the “public plan.”

First we had the chairmen of two Senate committees with jurisdiction over health care reform legislation (Baucus and Kennedy) say that their committees will mark up the two healthcare bills in early June and, following committee action, quickly merge them into a single bill for consideration by the full Senate.

Not so fast, said liberal advocacy groups such as Consumer Watchdog which accused the Obama administration and congressional Democrats of negotiating a deal with industry lobbyists at the expense of average Americans.

Next, two top administration officials suggested that President Obama is open to compromise on the public plan, comments that set off alarm bells in some corners of his party.

This, according to a story in today’s Washington Post has prompted more than 70 House Democrats to warn party leaders that they will not support a broad health reform bill that does not offer consumers a government-sponsored policy, and two unions withdrew from a high-profile health coalition because it would not endorse a public plan.

“That’s what got the left nervous. I took that as a signal to Senator Grassley” that Obama is willing to negotiate around an issue Grassley has vehemently opposed, Len Nichols, health policy director at the New America Foundation, a nonprofit think tank, told the Post, referring to  Sen. Charles E. Grassley (R-Iowa). “It was the first time the president indicated he could live without it.”

Nichols, who has proposed creating a semi-public option that would have publicly appointed managers but no rate-setting authority, told the Post the disagreement signals a new phase in the overall debate. As he put it: “We’ve gotten past the kumbaya phase.”

This is starting to get interesting.

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