Healthcare debate nears an endgame

President Obama and his congressional allies are entering the next phase of their push to overhaul healthcare with lower expectations of what can be accomplished -- but with far greater certainty that significant legislation will be enacted by the end of the year.

After a long summer of raucous protests, discouraging poll numbers and unplanned tactical shifts, administration officials and Democratic leaders now are focusing on their two greatest challenges: scaling back the overall cost, and developing alternatives to the government-run insurance option that liberals have championed.

Difficult as those tasks may be, the political stakes are so high that analysts and lawmakers on both sides of the aisle say it is almost unthinkable that Congress would emerge from the battle empty-handed.

Obama’s decision to address Congress and the nation Wednesday night has only increased the pressure.

Democrats -- liberals and moderates alike -- are haunted by the memory of the 1993-94 healthcare debacle, when the party lost control of the House and Senate after President Clinton’s far-reaching plan collapsed ahead of a congressional vote. In the years since, the problems of the healthcare system have worsened.

“August, no question, was a tough month for Democrats,” said Sen. Robert Menendez (D-N.J.), chairman of the Democratic Senatorial Campaign Committee. “But the president is putting a lot of political capital here. We will expend whatever the necessary capital is to make [healthcare] happen. In my view, you don’t let the perfect be the enemy of the good.”

Obama has been making calls to Democratic lawmakers across the country to lay the groundwork for his speech and prepare the party for what could be a rough road. Some of his top aides continued Sunday to signal that Democratic liberals may have to accept a bill that does not include the robust public insurance option they sorely want.

David Axelrod, Obama’s chief strategist, said Sunday on NBC’s “Meet the Press” that Obama “believes the public option is a good tool” for ensuring the availability of affordable insurance. But, Axelrod added, “it shouldn’t define the whole healthcare debate.”

White House spokesman Robert Gibbs, appearing on ABC’s “This Week,” declined to say whether Obama would veto a bill that did not have a public option.

Paradoxically, the tumult of the summer may actually make it easier for the president and Democratic leaders to proceed with a newly sharpened focus. After months of talking about seeking bipartisan support and wooing Republicans, Obama has essentially acknowledged that the GOP has united in opposition. Now he can concentrate on the daunting but more manageable task of crafting a legislative formula to unite his party’s moderate and liberal wings.

In his address to the joint session of Congress, Obama is expected to give a more detailed account of what he wants in the legislation -- going beyond the principles of expanded access and improved choice that he has emphasized so far.

“Rest assured, there won’t be a lot of questions when it’s all said and done,” said Dan Pfeiffer, Obama’s deputy communications director. “We’re at the moment now for the president to take a more hands-on [approach], to step up his leadership role both publicly and with the Congress.”

That’s welcome news for Democrats, who need Obama to take the lead on any significant compromises.

“This is the moment where the president needs to be absolutely clear and needs to take the initiative,” said Rep. Chris Van Hollen (D-Md.). “Part of his message has been and will continue to be that, while every member has things they think are most important, the object has to be getting a healthcare bill passed.”

The first challenge is to move some kind of bill through the Senate, where a public insurance option is a major stumbling block.

Some House liberals have threatened to oppose any bill that does not include the public option, but last week a more pragmatic approach seemed to be taking hold.

“I believe we need to get a bill out of the Senate, whether the public option is in there or not, then work out a compromise” when a conference committee writes the final bill, said Rep. Henry A. Waxman (D-Beverly Hills), chairman of the House Energy and Commerce Committee.

With compromises all but certain, the final bill would not remake the U.S. healthcare system in one stroke. It might not even directly address some of the most important, and toughest, elements of the problem. But major changes appear likely, including a significant expansion of insurance coverage. And in a host of other provisions -- including new rules for private insurers on issues including benefits caps and preexisting conditions -- it would open the door to more direct government involvement in the system down the road.

“We should do what can be done immediately and use the time between now and 2013 to figure out how to do the rest,” House Majority Whip James E. Clyburn (D-S.C.) said recently.

In no small part, Democrats’ openness to compromise springs from their experiences back home during the August recess.

One clear lesson was that people on all sides of the issue feel passionately about it. Long after cable news coverage waned, lawmakers drew huge, often rowdy audiences.

Rep. Fred Upton (R-Mich.) held a conference call on healthcare for constituents and an hour into it, 2,000 people were still listening. Rep. Baron P. Hill (D-Ind.) was engulfed in thunderous cheers and boos at a basketball arena. A fistfight broke out at an event held by Rep. James P. Moran (D-Va.).

On Tuesday, lawmakers will get down to business in the Capitol: Party leaders will be meeting with the rank and file behind closed doors to decide on strategy. A bipartisan group of six Senate Finance Committee members who have been seeking a compromise will hold another meeting in advance of their self-imposed Sept. 15 deadline for reaching a deal.

And Obama will meet with House Speaker Nancy Pelosi (D-San Francisco) and Senate Majority Leader Harry Reid (D-Nev.).

Even with the economy in trouble and Afghanistan rising as a source of public concern, healthcare will dominate the Washington agenda for weeks and months to come.

But the pivot point could be Obama’s speech Wednesday -- a politically risky use of his bully pulpit to prod Congress and change his role in the debate. It will probably dictate the timetable and trajectory of legislative action on Capitol Hill, where House Democratic leaders are hoping to bring the legislation to the floor in a month and the Senate awaits action by the powerful finance committee.

“This speech represents his last best chance to grab hold of the debate,” said William A. Galston, a political analyst who was a domestic policy advisor to Clinton. “A speech that fails to provide a specific blueprint for the legislative endgame would be political malpractice of a high order.”

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janet.hook@latimes.com

Tom Hamburger and Peter Nicholas in the Washington bureau contributed to this report.