It's not a full-on public option for the whole country, but liberals say they're happy with Senate Majority Leader Harry Reid's announcement that he'll seek to bring a health reform bill to the floor with a public option that lets states opt out of the government-run insurance plan.

"We applaud Majority Leader Reid's leadership in making sure the Senate bill includes a public health insurance option to lower costs and inject much-needed competition into the health insurance marketplace," said Richard Kirsch, national campaign manager for the massive liberal coalition Health Care for America Now!, which encompasses most major liberal interest groups and labor unions.

"We now call on all Senators to stand with leadership and vote to begin debate on the floor. We are closer now than ever before to achieving a true guarantee of good, affordable health care for all," Kitsch said in his official statement.

MoveOn.org sounded equally excited.

"With this announcement and Speaker Pelosi's efforts to pass a healthcare bill with a robust public option, there's now real momentum towards meaningful health care reform," said Justin Rueben, executive director of MoveOn.org Political Action.

But..."Still, a handful Conservative Democrats are threatening to join with Republicans to block an up-or-down vote on a healthcare bill," he warned.

Progressives have been steadfastly uncompromising when it comes to the public option: they've pressed hard for it all along, and haven't shied away from blasting moderate Democrats who don't support it. They've vehemently criticized the two main compromise proposals--the "trigger" mechanism advocated by Sen. Olympia Snowe (R-ME) and the co-op plan developed by Sen. Kent Conrad (D-ND).

Now Reid appears to have found a middle ground to their liking.

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