Obama ally briefly claims White House traded away public option to insurers, hospitals

A close ally of President Barack Obama admitted Tuesday – before retracting the claim – that the White House negotiated away the public option to win over the support of insurers and hospitals early in last year’s health care debate.

"It was taken off the table as a result of the understanding that people had with the hospital association, with the insurance (AHIP), and others," former Senate Majority Leader Tom Daschle (D-SD) told Igor Volsky of Think Progress.

Daschle, who nearly became the Obama administration's Secretary of Health and Human Services, first alluded to the assertion in his new book "Getting It Done." He wrote that the White House gave up the public option in July of 2009 out of a believed necessity to placate health industry groups and thus neutralize its opposition.

"Lessons learned in past efforts is that without the stakeholders’ active support rather than active opposition, it’s almost impossible to get this job done," Daschle told Volsky. "They wanted to keep those stakeholders in the room and this was the price some thought they had to pay."

Liberals quickly pounced on the remarks as evidence that the White House was never committed to the public option, even as Obama pledged his support for it. New York Times reporter David Kirkpatrick last year made a similar assertion to Daschle's, telling MSNBC host Ed Schultz that the provision was traded for industry support.

Daschle, for his part, soon contacted Volsky to retract the claim.

"The President fought for the public option just as he did for affordable health care for all Americans," he said. "The public option was dropped only when it was no longer viable in Congress, not as a result of any deal cut by the White House."

The provision would have created a government-run health insurance option to compete with private insurance plans. Congressional Budget Office estimates consistently projected that it would drive down costs for consumers.

It was also a progressive priority and highly popular among the general public, and became a topic of deep contention months into the health care debate before Democratic leaders jettisoned it in December, arguing that they lacked the votes needed for its passage.

While a large majority of Democrats continued to support passage of the Affordable Care And Patient Protection Act – which was signed into law in March – the removal of the public option irritated many liberals. Some activists, such as Jane Hamsher of Firedoglake, deemed it the final straw that made the bill more destructive than helpful.

The law remains somewhat unpopular among the general public, but a recent Associated Press poll found that 40 percent believe it doesn't do enough to fix the system; only 20 percent griped that it was an act of government overreach.