The most surprising part of the news that the White House was surprised that liberals had grown so attached to the public plan was that they were surprised. Ever since it became clear that, of the ways to reform health care, moving to a "single payer" system was untenable, liberals fell back to the next best thing -- single-payer-by-proxy, or a "public plan," which would, if properly written and subsidized, force insurance companies to either reform or get out of business. The public plan became the new Maginot line, as Pearlstein says, for the same liberals who used to say, "Single Payer, or the highway."
The public plan was a recent invention, the product of issue entrepreneurs and the contingencies of presidential politics. As Ezra Klein notes, the idea was economist Jacob Hacker's, who did the original math. Then Roger Hickey of the Campaign for America's Future "took the lead in selling it to advocacy groups and the presidential campaigns. John Edwards picked it up and made it central to his proposal, and the other candidates followed suit to protect their left flanks."
It quickly became the stand-in for "single payer," which was totally untenable. It acquired magic powers: by its heft, it would use its bargaining power to lower costs, and lure millions of Americans to abandon their private insurance, if they could, and it would force insurers out of business. A single-payer system would be built incrementally. The GOP and the insurance industry realized this almost immediately, which is why they equated even a weak public option with a government takeover of private insurance.
The White House, too, isn't blameless. Senior officials used the "public option" to persuade liberals that cooperation with industry would turn out OK in the end. At least initially, Barack Obama and his chief of staff, Rahm Emanuel, became private proselytizers. But both backed off when they realized that the idea had fewer advocates in the health policy community, that there was intense skepticism about the idea in Congress, and that by insisting on a public option, vital reform goals, like providing insurance to more people and ending insurance company discrimination, might have to be sacrificed.
The public plan represents much more than a simple alternative to the insurance industry. The idea now contains the hopes and aspirations of liberal activists who supported Obama's transformative policy vision. By giving up on a "public option," the White House is essentially telling these activists that Obama has given up on them; that's the perception, at least.
The White House response to this has been threefold. Predictably, they're blaming the media for sins unspecified. (The media is the most convenient target when an idea fails to sell.) It may well be that had the White House embraced more details, including a specific version of a public plan, the single element might not have been used to define Obama's health care plan, or to become a stand-in on the right for everything that's bad with Obama.