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Busch: You Know Obama's In Trouble On Healthcare Reform When...

Obama: You Know You're In Trouble On Healthcare When...

1. Former Clintonite Robert Reich calls for a march on Washington, DC to protest pulling back the public option.

2. MSNBC's Rachel Madow says " Why is the public option dying now? It's dying because a collapse of political ambition ."

3. WaPo's Eugene Robison writes on health care under the headline of " Where's Mr. Transformer? "

4. Even Jon Stewart of the Daily Show says , “Remember the Bush team? Little bit of discipline, little bit of repetition. They sold us a WAR nobody wanted and nobody needed. … Salesmanship! Those guys could sell ice cubes to Eskimos. The Democrats, I don’t even think could sell Eskimos (BEEP) they need — insulation, heating apparatus. … Yes, we can! [pause] Unless you don’t think we should!”



As WaPo reports today, Democratic in-fighting over the White House's apparent shift away from the public option is a move that has riled progressives and threatened to derail the broader debate. "I don't understand why the left of the left has decided that this is their Waterloo," sighed one senior White House adviser. "It's a mystifying thing." The key to a deal remains some compromise with Republicans to get them to go along with a "reform" package and provide cover to Democrats that gained seats from Republicans in the last election. The place to look where this may happen: The Senate Finance Committee. Key players: Baucus and Grassley. Baucus has to give Grassley something that Republicans Hatch, Kyl, Enzi, or Cornyn can agree to sign.

As I said on CNBC yesterday, the public option removal is a key positive for the bill. If it's included in the health care reform bill, it would be a major negative for insurance companies and for US fiscal deficits. The fact that the CBO continues to score the cost of the "reform" in the $1 trillion region tells you everything you need to know about what it will do. And the CBO doesn't even get into what happens 10 years down the road when costs truly explode.

Does America need health care reform? Yes, without question as the costs of Medicare, Medicaid, and the prescription drug benefit are set to explode. It's more than ironic that the one thing that the CBO scores significantly for reducing the cost of health care in the United States is the one thing that the Obama administration can't do: Officially support John McCain's presidential campaign's proposal to cap individual deductibility for health care benefits. Should the White House position change on this key area, then we'll know that President Obama is serious about reform.

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Andrew Busch
Andrew Busch

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Andrew B. Busch is Global FX Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece andreach him here and you can follow him on Twitter athttp://twitter.com/abusch .