From a new FT column:
Recent setbacks are real, but it must be emphasised, first of all, that some kind of health reform is still likely to pass. For the Democratic party to come up with nothing under these circumstances would be an act of self-harm remarkable even by its own standards. The Democrats would be seen as incapable of governing. Essays describing the long-term leftward realignment of US politics in 2008 would have to be trashed, less than a year after that supposed electoral earthquake.
Precisely because it would be such a catastrophe, the Democrats - surely - cannot let it happen. At worst, a scaled-down reform can be put together. So long as it provides a substantial widening of insurance coverage, along with the taxes and/or savings to balance the books, the party can claim victory and retreat. Perhaps this is where Senate Democrats may soon be heading and, with little alternative, House Democrats might be willing to follow. In this limited sense, Mr Obama is right when he says, "Don't bet against reform."
But the question remains, why under these uniquely favourable circumstances has the process run into such trouble? In my view it is not because the US rejects the case for comprehensive health reform. The fault lies with the president, and his strange failure to lead.