By Ceci Connolly
Washington Post Staff Writer
Tuesday, April 21, 2009

washingtonpost.com/ ... /2009/04/20/pf.html

As Congress returns to begin an intense debate over reshaping the nation's $2.2 trillion health-care system, prominent left-leaning organizations and liberal House members are issuing a warning to their Democratic allies: Don't cave on us.

The early skirmishing -- essentially amounting to friendly fire -- is perhaps the clearest indication yet of the uphill battle President Obama faces in delivering on his promise to make affordable, high-quality care available to every American.

Disputes over whether to create a new government-sponsored insurance program to compete with private companies shine a light on the intraparty fissures that may prove more problematic than any partisan brawl.

More than 70 House Democrats recently warned 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.

"It's way too early" to abandon what it considers a central plank in health reform, said Andy Stern, president of the Service Employees International Union. He said the organization pulled out of the bipartisan Health Reform Dialogue because it feared its friends in the coalition were sacrificing core principles too soon. "You don't make compromises with your allies."

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

"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, said Len Nichols, health policy director at the New America Foundation, a nonprofit think tank, referring to Sen. Charles E. Grassley (R-Iowa). "It was the first time the president indicated he could live without it."

During last year's campaign, Obama proposed offering a government-sponsored plan as a low-cost alternative for Americans who are having trouble purchasing insurance in the private market. Proponents say it would reduce costs because it would not need to make a profit or pay large executive salaries.

Many Republicans and industry executives say that any program modeled after Medicare -- with its power to set prices -- would have an unfair advantage over private-sector competitors and eventually force some companies out of business.

"The sacred cow on the left and the right is the public plan," said former senator Thomas A. Daschle, who was Obama's first choice to oversee the reform effort.

In comments last week, Nancy-Ann DeParle, head of the White House Office of Health Reform, said the ultimate solution may rest in how a public plan is defined.

"There are different breeds of public plans that could be part of this," she said, explaining that the Medicare model is not the only approach.

Yesterday, a spokeswoman clarified that Obama has not taken the idea off the table but is willing to consider any proposal that meets his broad goals. "The administration is open to all ideas for achieving those goals," Linda Douglass said.

To date, the health reform debate has been cordial, with a wide spectrum of interests talking up a willingness to compromise. The amiable tone stands in marked contrast to the vitriol of 1993 that quickly buried a reform effort by the Clintons.

But that amiable tone is precisely what troubles liberal advocacy groups such as Consumer Watchdog.

The California-based nonprofit, in unusually harsh rhetoric, is accusing the Obama administration and congressional Democrats of negotiating a deal with industry lobbyists at the expense of average Americans.

"This process has gotten away from the public because it is being carried out behind closed doors with lobbyists in the room but no consumer advocates," said Jamie Court, the group's president. "We've got to make our views known before we are presented with a fait accompli."

Court complained about efforts by top Senate Democrats to negotiate in private the broad outlines of what could become a comprehensive agreement. Over many months, Sens. Edward M. Kennedy (D-Mass.) and Max Baucus (D-Mont.) have convened brainstorming sessions with lobbyists representing doctors, hospitals, insurers, drug makers, the American Cancer Society, the seniors lobby AARP and others. The two chairmen reiterated yesterday that they plan to develop a single bill.

The formal legislative process will start today, when Baucus convenes the first meeting of the Senate Finance Committee.

But in a letter to Kennedy, Court chastised the longtime lawmaker for compromising on health legislation in the past and warned Kennedy against succumbing again to the "for-profit, waste-enhancing" private insurance industry.

"Don't let the institution of the United States Senate use your name and credibility for something that goes against the principles you fought for your entire life," it said.

Kennedy spokesman Anthony Coley said the senator "believes that Americans should have the option of buying a public insurance plan if they believe that's the best choice for their families."

Families USA has also been involved in the private talks.

"The meetings taking place on the Hill involve numerous consumer organizations," said Ron Pollack, vice president of the pro-reform liberal group. "We've had meetings that involved over 100 consumer organizations, providing them with a briefing and enabling their input."

Douglass disputed suggestions of a rift in the party. "The Democrats are extraordinarily unified this time around," she said.

Yet even administration allies acknowledged tensions over the public plan option.

"This issue has become so vituperative, a serious conversation about how to structure a public plan has gotten secondary attention," Nichols said.

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