"A key Senate panel twice beat back efforts Tuesday to create a government-run insurance plan, dealing a crippling blow to the hopes of liberals seeking to expand the federal role in health coverage as a cornerstone of reform," the Washington Post reports. "In a signal moment in the increasingly fractious debate over reforming the nation's sprawling health-care system, Senate Finance Committee members rejected two amendments to create a public option on votes of 15 to 8 and 13 to 10."
Video: Newsweek's Howard Fineman explains why several Democrats and all Republicans on the Senate Finance Committee coted against the public option.
More: "Despite the setback for advocates of a public option, debate over such a plan is certain to continue. Sens. John D. Rockefeller IV (D-W.Va.) and Charles E. Schumer (D-N.Y.), who offered the amendments that were voted down Tuesday, have vowed to keep the issue at the forefront as the debate unfolds. And Senate Majority Leader Harry M. Reid (D-Nev.) could include a government plan when he combines the Finance Committee's bill with Senate health committee legislation, approved in July, that includes a public option. Aides said Tuesday that Reid has not decided how to proceed."
The New York Times adds, "The votes … underscored divisions among Democrats and were a setback for President Obama, who has endorsed the public plan as a way to 'keep insurance companies honest.'"
Politico says that the Obama will be the ultimate referee on the public option."'Expect the president and his staff to be key participants in the tough decisions we have to make, on such issues as the level of subsidies and the public plan versus the co-ops," said a senior Democratic Senate aide. "The only way we are going to get this done is with active involvement of the president.'"
By the way, here's a reminder of how Republican ideas do get incorporated into the final bill. "[T]he committee agreed late Tuesday to a measure that would require lawmakers to shop for insurance within new state purchasing exchanges the bill would set up. The measure's author, Sen. Charles Grassley, R-Iowa, said it was only fair that if their constituents had to enter the exchanges, lawmakers should too. The committee defeated an amendment, also by Grassley, that would have allowed states to opt out of a new requirement for every individual to purchase insurance coverage or pay a fine."
A Republican aide emails First Read that the GOP plans to make a big deal over Rep. Alan Grayson's (D-FL) comment yesterday: "If you get sick, America, the Republican health care plan is this: Die quickly."
Sens. Kerry and Boxer introduce their climate/energy bill today.