Sen. John McCain believes that President Barack Obama must drop his support for a public insurance option before Republicans will consider supporting reform. "I believe that one of the fundamentals for any agreement would be that the president abandon the government option," McCain told ABC's George Stephanopoulos.

McCain defended Sarah Palin for claiming that Obama's health care goals include "death panels." McCain argued that "the way that [that clause] was written made it a little ambiguous."

"There was a provision in the bill that talks about a board that would decide what are the most effective measures to provide health care for people, okay?" McCain explained. "So what does that lead to? Doesn't that lead to a possibility of rationing?"

McCain went on to say that Sen. Edward Kennedy's absence from the Senate is damaging prospects for health care reform. McCain said that the Senate would be a "very different place today" if Kennedy were participating.