I'm happy to see that despite what must be enormous pressure, the House progressive caucus is standing firm on the public option. Not only that, they're pushing Nancy Pelosi to dump the Blue Dogs. Via The PlumLine:

The latest: The two top House progressives have just fired off a letter to Pelosi that, in effect, urges her to stick with them and to ditch the Blue Dogs when the public option rubber hits the road. Progressives have reiterated not just their support for a robust public option, but their opposition to the Blue Dog's weakened version of it passed out of Energy and Commerce.

The letter, which was sent over by a source, makes this point by noting that the version of the public option in the House health care proposal negotiated by Blue Dogs — the version that emerged from Henry Waxman’s Energy and Commerce committee — pales beside the ones created by two other key House committees, which have a more robust public option.

The two progressives — Dem Reps. Lynn Woolsey and Raul Grijalva — ask Pelosi for a meeting to discuss these pertinent facts. They write flat out that the version negotiated by Blue Dogs is “unacceptable” to them, because it results in far less savings than the two other versions.

You should read the letter yourself. But suffice it to say that it’s another sign that when it comes to the public option, House liberals are preparing for a showdown with Blue Dogs — and showing no intention to budge.

The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
H-232, The Capitol
Washington, DC 20515

Dear Madam Speaker:

We write to see how we can best work with you to ensure that a robust public plan with Medicare rates plus 5% is included in the final health reform bill.

In July, 60 Members signed a letter saying they could not support an agreement made in the Committee on Energy and Commerce that would require the public plan to use negotiated rates rather than Medicare plus 5% rates, which could delay the start of the public plan, reduce its savings, and reduce its ability to drive down costs. As you stated last week, the Congressional Budget Office scored the Committees on Education and Labor and Ways and Means bill with the Medicare plus 5% rates at $110 billion in savings compared to the Committee on Energy and Commerce at $25 billion in savings. The loss in savings the Committee on Energy and Commerce brought by this change was offset by reducing subsidies to low-and middle-income families, requiring them to pay a larger portion of their income for insurance premiums, is something we find unacceptable.

As we’re sure you agree, these numbers demonstrate the importance of a robust public plan tied to Medicare. We look forward to meeting with you to discuss how we can work together to include a robust public plan that will increase competition, bring down costs, and provide the necessary savings to ensure robust subsidies to those who need help paying for health insurance.

Sincerely,
Lynn Woolsey
Raul Grijalva

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Rep. Lynn Woolsey, chair of the largest caucus in Congress -- the Congressional Progressive Caucus -- refuted Fox's daylong talking point, that President Obama somehow took the public option off the table in his speech last night health-care reform, earlier today on Fox with Jon Scott:

Woolsey: I applauded, because ... public option is on the table. There's no question about it.

Scott: It's on the table, but it didn't seem to have his -- you know, it wasn't his ... He didn't say it's got to be there.

Woolsey: Well, he knows that 84 members of the Progressive Caucus, and many, many members besides ourselves are absolutely intent on the public option being part of the House health-care reform bill.

Scott: What's your chief argument for why you think it's got to be there?

Woolsey: Because it's the best way to cut costs and bring competition into the program, and actually to bring security for those who are already covered by health care, and might lose their jobs or want to change jobs, and want to have a choice. And one of those choices could be the public option.

Scott: You don't think that the free market would be the more efficient way to deliver that?

Woolsey: Well, has it been? Fifty years, private health-care insurance companies have not been able to do the job. Why would we think they could do it now?

Scott: What about Medicare and Medicaid? Are they examples of well-run, you know, government programs for dispensing medical care?

Woolsey: They're very popular programs, sir, as is the Veterans Administration and the military health care. Those are government programs that run well, they run at an overhead of less than 5 to 7 percent, versus 30 percent for the private health care insurance companies.

Funny that Scott should bring up precisely the programs that prove that "government run health care" can be a good thing. Woolsey hit that meaty pitch right out of the park.

Hopefully, she's right about the public option, too.

UPDATE: Harry Reid has kissed and made up with the Finance Committee Republicans. So much for that momentary attack of leadership!

I think it's pretty clear that Rahm's original statements were some kind of trial balloon. I know some of you would like to think Rahm was acting as a loose cannon, but that's just not the way political operations are run, especially at the White House level.

It's just as clear that the pushback from every direction has sent a very strong message to the White House. That's why Rahm rushed to meet with members of the Democratic caucus last night: to quell the firestorm. Nice work, everyone! Don't let up on the pressure, because Obama may yet compromise on the public option:

Liberal groups on Tuesday made it clear that they are not happy with news reports that the White House may be considering alternatives to a public plan in health care reform.

Rep. Raúl Grijalva (D-Ariz.), co-chairman of the 77-member Congressional Progressive Caucus, fired off a letter to President Barack Obama warning him against dropping a public insurance option from health care reform plans.

Grijalva described the “alarm and dismay” he felt after reading a Wall Street Journal story that cites White House Chief of Staff Rahm Emanuel offering support for a “trigger” mechanism, under which a public plan option is only part of health care if the marketplace fails to provide sufficient competition on its own.

“I want to be crystal clear that any such trigger for a strong public plan option is a non-starter with a majority of the Members of the Progressive Caucus,” Grijalva said.

“Moreover, I consider it unacceptable for any of the cost savings that you are negotiating with hospitals and other sectors of the health care industry to be made contingent upon a robust public plan option not being included in the final legislation,” Grijalva continued.

Obama sought to ease liberals’ concerns by issuing a statement that reaffirms his support for a public option. But many House liberals remain concerned that Emanuel is still pushing a deal for hospitals.

And in a meeting last night with House Democrats, Rahm Emanuel reassured rebellious members the president strongly backs a government-run public plan:

Progressive Caucus Co-Chairwoman Lynn Woolsey (D-Calif.) warned Emanuel that he would lose the caucus’ votes if the White House compromised on the issue and included a “trigger” that could delay a public insurance plan indefinitely. The trigger idea is backed by conservative Democrats but is anathema to liberals.

“We have compromised enough, and we are not going to compromise on any kind of trigger game,” Woolsey said she told Emanuel. “People clapped all over the place. We mean it, and not just progressives.”

Now, let's parse what Rahm continues to say. Obama "strongly backs" a government-run public plan - but is not willing to draw a line in the sand? What, then, does "strongly back" mean to Obama? He simply shrugs and says, "Whatever"?

Emanuel met with House Dems yesterday to reassure them that the President remains firmly behind the public option. But it’s still not quite clear what Rahm said or how strongly the White House remains committed to it.

Here’s how Rep. Henry Waxman, who says he was reassured by the meeting, characterized what Rahm said:

“He doesn’t stand by that trigger,” Waxman said. “He said the president and his administration and he are for a public plan as one of the options.”

The claim that Rahm “doesn’t stand by” the trigger is a bit opaque. If it means that Rahm took back his claim that the White House sees the “trigger,” which many see as a back-door way to kill a public plan, as a viable option, that will reassure many Dems.

However, if Rahm said that the President backs the public plan as “one of the options,” that doesn’t really go much further than what the President said yesterday, which left the White House plenty of wiggle room on this question.

In other words, it looks now like Rahm told House Dems that the President strongly backs the public option, but isn’t willing to draw a line in the sand over it. Which, of course, is what Obama has been saying all along.