Establishment Coalescing

Here are a couple headlines that I didn't think I'd see. One, Tom Daschle saying that budget reconciliation may be the only way for health care reform to pass. Two, and this one is really a stretch, Terry McAuliffe saying health care reform is a failure without a public option:

Former Democratic National Committee Chair Terry McAuliffe is demanding his party take a stand on health care legislation that the president and many others aren't willing to take: Pass a bill with a public option for insurance coverage or don't pass anything at all.

The long-time adviser to the Clintons, striking an atypically progressive tone, urged the White House to get more assertive in its handling of health care reform and described a bill without a public plan as a "failure."

"If we don't have the public option, we are wasting our time," McAuliffe told the Huffington Post. "To chalk something up and get something that is not the right thing to do is morally wrong... To pass something just so you can go home and go into election saying we passed something is not why lawmakers are sent to Washington."

After a bit of silence following his loss in the Virginia Democratic gubernatorial primary, the former DNC chair has come out swinging on the year's most important legislative issue. On Thursday, McAuliffe agreed to host a fundraiser with the first Virginia pol who insisted that a public option be in the bill. The offer, he said, extends to Sens. Jim Webb and Mark Warner -- both of whom have been sour on the idea of a government-administered option for insurance coverage. He's also involved in whipping support in Congress for the public option.

McAuliffe is the first business-friendly Democrat making the business case for competition in health care, saying that the status quo is bankrupting individuals and companies. But more important, he's a figure with ties to the donor class and the Third Way wing of the party. That he's arguing so strongly for a public option suggests that he's placed a bet that the party would benefit from going that route, and more important, would suffer from failing to do so.

Now it's basically up to the leadership to decide which way to go. Nancy Pelosi has said that her chamber cannot pass a bill without a public option. Steny Hoyer cut her off at the knees yesterday, saying "I'm for a public option but I'm also for passing a bill." Of course, in the House, those two statements are not mutually exclusive, but Hoyer clearly counts on progressives caving. $361,614 says they won't.

As for the Senate, Harry Reid has a choice to make. He can include the public option in the elements of the bill to pass through the reconciliation process, or turn the screws on ConservaDems to invoke cloture on the bill, or he can continue to allow the Baucus caucus to hijack the process. Reid has the ability to bypass the Finance Committee completely, if he chooses, and bring a bill to the floor. And he can use reconciliation for the elements about which Baucus and his cronies feel squishy.

Reid can't do it alone, of course. The President would have to get involved behind the scenes. But Democrats who are losing their base had better think of something to get this through.