President Obama rediscovered his inner centrist Wednesday night, forced by the arithmetic of congressional politics and the federal budget to trim his healthcare proposals to a new, more modest size.
On the surface, Obama's speech to Congress was aimed at shoring up sagging public support for healthcare reform by promising worried citizens that he won't bust the budget, won't force people to give up insurance they like and won't set up "death panels" to ration care for the elderly.
But the most important audience wasn't really the folks at home; it was the divided Democrats in Congress, plus one or two stray Republicans, whose help Obama needs to get a law passed.
For them, the president's message was double-edged. Liberals who had hoped for a big, government-run plan got a cold shower -- a warning from the president that if they hold out for everything they want, they may get nothing at all.
But for centrist "Blue Dogs" who want to keep federal spending down -- and who want to get reelected next year from conservative districts -- the president's message was a rousing "I'm on your side."
To make the plan attractive to the Blue Dogs, Obama promised that the cost of the bill would come in around $900 billion over 10 years, down from the $1.2 trillion most Democrats started with. He also promised spending cuts that would automatically kick in if costs turn out higher than expected. To help pay for his plan, he proposed a backdoor tax on high-end health insurance policies that will be hard for some labor unions to swallow (although it makes good economic sense). And he promised that 95% of small businesses wouldn't be required to pay for their employees' health insurance, a deep bow to the power of small business (or at least, the gauzy image of "small business") in the nation's heartland.
And what did liberals get? A stirring tribute to the importance of a "public option," the government-run insurance plan beloved by the left -- followed immediately by an offer to do without, if that's what's needed to pass a bill. Obama also promised that the plan would go most but not all the way toward providing insurance to the uninsured, and that it would include consumer protections, so that people would no longer lose coverage after getting sick or go bankrupt because their costs exceeded their insurance.
In the end, the speech won't spare Obama from the charge from the Republican right that he is a closet socialist who wants the government to take over healthcare; that has become an article of faith among many conservatives, and a few fiscal compromises won't shake it. But it does set up a test for Obama's liberal supporters, in Congress and across the nation: Will they take their president's advice and settle for half a loaf?
Obama said he wouldn't "waste time" debating healthcare with most Republicans anymore because they wanted only to kill his plan. Nevertheless, pieces of the plan appeared tailored to the tastes of the last two GOP senators who might vote for an Obama-sponsored bill, Olympia Snowe and Susan Collins, both from Maine. Snowe has proposed a "trigger" that would allow the government to set up a public-option plan down the road if private insurance companies didn't meet expectations. Collins has said she's mostly just worried about the overall price tag.
But the real debate has been among Democrats all along. They have giant majorities in both houses, but they are also deeply divided. Liberals who have fought for healthcare reform for decades are disappointed that they can't get Canadian-style, government-run healthcare. The Blue Dogs, mostly from conservative constituencies in the South and mountain West, are terrified that a bill that looks too liberal or too expensive will mean they lose their jobs in November 2010.
So now the dance of legislation enters a period of negotiations between liberals and Blue Dogs, House members and senators. The Senate Finance Committee will try to settle on a compromise proposal, shaped mostly by Blue Dogs and those two Maine senators, sometime in mid-September.
The House will vote for a big-government version of healthcare reform, including a public-option plan, that will give liberals the brief pleasure of a chance to vote yes and endangered Blue Dogs an equally welcome chance to vote no. The Senate will vote for a bill with no public option, although it may have Snowe's trigger idea. In late October, members of the two houses will meet behind closed doors to wrestle over the final details.
If all that works, a bill that looks something like the plan Obama described last night will be passed before the end of the year.
Obama hasn't provided complete clarity on the details of the plan, but he has finally provided clarity on how to get there, and that is likely to be enough.
The outcome won't be perfect in anyone's eyes. But if Congress actually passes legislation the president signs into law, it will be the most important piece of healthcare legislation since Medicare was established in 1965 -- and no small achievement for a president who critics still dismiss as a liberal dreamer.