Behind Harry Reid's Bid for a Public Option

What prompted the Senate Majority leader's drive to push for an "opt-out" public option plan? Labor unions want at least that much

By Jane Sasseen

As the battle to shape the health-care reform bill comes down to the wire, maneuvering in Washington is intensifying enormously. Politicians are strategizing to get the votes they need, while lobbyists and other interest groups are scrambling either to maximize what they can get—or minimize the costs and the damage—as push comes to shove over what each bill will contain before the Senate and House move into final conference negotiations.

Now comes a surprise announcement from Senate Majority Leader Harry Reid (D-Nev.) that the Senate health-care reform bill he'll put forward will include language to create a government-run insurance option—with an provision to allow states that don't want to sign up for the public plan to "opt-out" of it.

"While the public option is not a silver bullet, I believe it's an important way to ensure competition and to level the playing field for patients with the insurance industry," Reid said on Oct. 26. He said that the bill would be sent to the Congressional Budget Office for a required assessment of its fiscal impact before being debated on the floor. Reid stopped short of saying he had the 60 votes needed to thwart a Republican filibuster, and it's not clear that he will have them by the time the bill reaches the floor.

However Reid's math works, his support marks a surprisingly strong return for the public option and is a much more significant move than many were expecting as recently as a week ago. Most had anticipated that Reid would propose the far weaker "trigger" option that Senator Olympia Snowe (R-Me.), the only Republican to vote for any of the five bills pending in Congress, has been pushing.

Snowe: "I am deeply disappointed"

It's a high-risk, high-reward strategy. There are several schools of thought in Washington as to what Reid is up to—and what will come next. In a note to clients today, Rick Weissenstein, health-care analyst with Concept Capital's Washington Research Group, said: "It appears that Reid's plan is several votes short of 60 at the current time."

Reid may now have lost the backing of Snowe, "I am deeply disappointed with the Majority Leader's decision to include a public option as the focus of the legislation," she said in a statement.

One prominent theory is that while Reid doesn't have all the votes he needs among the Democrats, he is trying with this maneuver to increase the pressure on recalcitrant party members to go along. Liberal Democrats have been very vocal in the last week or so that the public option has the support of all but a handful of the 58 Democrats and two Independents in the caucus, so why should a vast majority back down and accede to the wishes of the much smaller group? Reid's move, in this sense, is a dare to those who aren't yet with him on the public option; Will they be willing to buck their party over this issue—when he's giving those who don't agree with it an out that can be taken up by states that oppose it? Enormous pressure is being applied behind closed doors to cut a deal, but no one really knows yet whether that can successfully recruit conservative Democrats who have been worried about the public plan.

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