a) A little early, no? Quite apart from whether it reeks a bit of panic-- Politico notes that the public option was a useful threat to hold over the insurance industry when negotiating the rules insurers will have to abide by;

b) Moving toward compromise on this issue already seems to be helping the administration with the inside game--i.e., getting enough moderates on board to, in theory, pass a bill. But the inside game is not the administration's biggest problem. The problem is the outside game --public support for the bill out in the country--where it has been losing fairly decisively. If the public ends up 60-40 against a bill, it's probably not going to happen even if Sen. Conrad is on board.

Will dropping the public option help with the outside game too? Maybe a bit: it reduces fear of a government takeover. But it does little to reduce legitimate fears of rationing in the existing, huge govenrment program--Medicare. To calm those fears, the provision to drop is Peter Orszag's precious IMAC commission , which Obama himself has seemingly promoted  as nudging the system in the direction of denying care toward the end of life. ...

P.S.: Pulling Back from the Public Option? This is a Job for The Dreidl ! Atlantic 's Marc Ambinder declares "the President never insisted that a health care bill contain a public plan." Huh? Is Ambinder being spun so fast he can't read? The Obama address he links to says this:

That's why any plan I sign must include an insurance exchange : a one-stop shopping marketplace where you can compare the benefits, cost and track records of a variety of plans - including a public option to increase competition and keep insurance companies honest - and choose what's best for your family. [E.A.]

That annoying word, "must." Sure reads to me like the President insisting that a health care bill contain a public plan. ... 10:47 P.M.

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Mike Murphy is not a fan of Sarah Palin . ... 11:07 P.M.

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