Harry Reid held a press conference earlier today and said he's including a "public option" in the Senate bill that will have a states "opt out" provision, which means that all the states will have to stay in the bill until 2014 and then have the opportunity to opt out of it.

Frankly I'm shocked that he stood up to the White House on the public option and said no to President Olympia Snowe. Remember when all the Chuck Todds of the pundit class said that the public option was dead and liberals supported it because conservatives didn't? Wrong again.

Obviously, Reid talked to the Democratic senators and feels like he has the votes, or I didn't think he would have said what he did.

Senate Majority Leader Reid confirmed this afternoon he would include a public option in the overhaul bill that allows states to opt out if they choose. Reid said he plans to send an overhaul proposal to CBO today.

He said he is not asking CBO to score a trigger alternative, one supported by Sen. Olympia Snowe, R-Maine, but added that the bill will include a version of a co-op.

Robert Gibbs from the White House applauds Reid via email:

"The President congratulates Senator Reid and Chairmen Baucus and Dodd for their hard work on health insurance reform. Thanks to their efforts, we’re closer than we’ve ever been to solving this decades-old problem. And while much work remains, the President is pleased that at the progress that Congress has made. He’s also pleased that the Senate has decided to include a public option for health coverage, in this case with an allowance for states to opt out. As he said to Congress and the nation in September, he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition."

I agree with mcjoan at Daily Kos when she says:

Everyone is on the same page moving forward, meaning that we're that much closer to having meaningful, comprehensive healthcare reform pass this year.

There is much to still discuss and learn about the merging bills, but I think it's a positive step.

Steve Benen has a nice roundup, and found a statement from Max Baucus:

Perhaps more interesting was the reaction from Senate Finance Committee Chairman Max Baucus (D-Mont.), who has been a public option detractor.

"It is time to make our system work better for patients and providers, for small business owners and for our economy. It is time for health care reform. For more than a year, we've been working to meet the goals of reducing the growth of health care costs, improving quality and efficiency and expanding coverage. There are a tremendous number of complicated issues that go into reform and the public option is certainly one of them. I included a public option in the health reform blueprint I released nearly one year ago, and continue to support any provision, including a public option, that will ensure choice and competition and get the 60 votes needed to pass the Senate. Success should be our threshold and I am going to fight hard for the 60 votes we need to meet that goal this year."

What's fascinating about this is that Baucus was reportedly fighting tooth and nail to keep the public option out of the merged bill. This statement suggests he's on board with Reid's bill, and almost seems to be trying to take some credit for it.

I know there are a lot of questions about the bill and we haven't seen it yet, but the fact the Reid put some form of the public option without a trigger is huge and I didn't expect it from him.

Americans United wrote this about Harry Reid:

Senator Reid's announcement that the Senate health care bill will include a public health insurance option, shows that he has refused to buckle in the face of withering pressure from the big insurance companies and sided instead with everyday health care consumers.

HCAN released their statement.

Today, you stood up and delivered the kind of leadership America needs in the health care fight. You put a public health insurance option in the Senate bill, something the vast majority of Americans support.1

For your leadership, you deserve our thanks.

The Republicans' response is pure comedy gold. They called Harry a "partisan bully." '

A primary reason Harry Reid is one of the most endangered incumbents facing re-election in either party next year is due to the fact that he is viewed by many of his constituents as a partisan bully," said Brian Walsh, NRSC Communications Director.

The idiot known as Michael Steele says he's "the cow on the tracks."

Josh Marshall has a good take on the news. So What Is the 'Opt-Out' Compromise?

Howard Fineman sounded like a blogger when he wrote this about President Obama's obsession with Mount Snowe:

But the pursuit of Snowe is pretty close to obsessive, which is not a good thing either for Democrats or for the prospects of health-care reform worthy of the name. First, Snowe's exaggerated prominence is both the result and symbol of Obama's quixotic and ultimately time-wasting pursuit of "bipartisanship." In case the White House hasn't noticed, Republicans in Congress are engaged in what amounts to a sitdown strike. They don't like anything about Obama or his policies; they have no interest in seeing him succeed. Despite the occasional protestation to the contrary, the GOP has no intention of helping him pass any legislation. Snowe may very well end up voting for whatever she and Democrats craft, but that won't make the outcome bipartisan any more than dancing shoes made Tom DeLay Fred Astaire.

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Worse, the pursuit of Snowe isn't uniting Democrats; it is dividing them. Democrats who haven't been in the room with her as she bargains with the leadership bristle at her role, even as they personally like and admire her. She remains deeply skeptical of a publicly financed alternative to private insurance, in good part because of what she sees as the failure of Maine's version of the idea—and yet some form of a public option is favored not only by most Democrats in Congress but by most of the American people. If Obama and the Democrats really want such a plan, they may as well try to get tough. For inspiration, the president might consider a Longfellow aphorism. "In this world," the poet wrote, "a man must either be an anvil or a hammer."

More coming....