I would take this news with a grain of salt, just as I would with a grain of salt the other rumors and speculation we've been hearing all day.
According to tomorrow's NYT, while Obama will scale back elements of the current proposals, the public plan is not being dropped.
[White House officials] insisted that Mr. Obama had not given up on the provision that has attracted the most fire from the right, a proposal for a government-run competitor to private insurers, although many Democrats say the proposal may eventually be jettisoned.
The article goes on to detail some of the things that may be scaled back.
By signaling that they would seek to revise existing versions of legislation moving through the House and Senate, administration officials and Democratic leaders in Congress — many of whom had said earlier in the summer that they saw no need to scale back their ambitions — made clear that their political calculations had changed. With Congressional Republicans standing almost unanimously in opposition to the Democratic approach, the target now for Mr. Obama is primarily a handful of moderate Democrats and the one Republican who seems open to a deal, Senator Olympia J. Snowe of Maine.
...
Timed to coincide with Congress’s return from its summer recess, the president’s address would follow a tumultuous month in which opponents of sweeping health legislation disrupted lawmakers’ town-hall-style meetings and the White House struggled to regain control of the debate. Mr. Obama is also scheduled to travel to Cincinnati on Monday to speak at a large Labor Day picnic organized by the A.F.L.-C.I.O. He will have a receptive audience, as labor unions have been among the strongest supporters of his effort to expand coverage and rein in health costs.
So far, the administration’s ideas of concessions are likely to fall far short of the fundamental changes that Congressional Republicans seek.
...
To avoid some of the most heated criticism voiced in recent weeks, White House officials said they would have no objection if Congress scrapped proposals to have Medicare pay for counseling on end-of-life care.
Critics said such counseling could lead to pressure on patients to forgo expensive treatments for terminal illnesses. Mr. Obama has said it is ludicrous to suggest that “we want to set up death panels to pull the plug on Grandma.”
White House officials said Congress could also drop proposals requiring the government to create school-based health clinics and collect nationwide data on health and health care by race, sex, sexual orientation and “gender identity.”
Supporters of the House bill said such data would help reduce “health disparities,” but critics said they feared the government could assemble a database that posed a threat to personal privacy.
If Mr. Obama does not gain traction by making these concessions, his allies on Capitol Hill said, they may have to consider bigger changes. For example, they said, rather than requiring all Americans to carry health insurance, Congress might start by requiring coverage of children, or families with children.
While such a change would deeply disappoint many of Mr. Obama’s supporters, it could have two potential political benefits, reducing the initial cost of any bill and reducing the size of cuts needed in the future growth of Medicare.
I'm not thrilled about any of these proposed changes. Additionally, my sense is that the public option remains where it was before: the White House will continue to advocate it, but will not draw a line in the sand over it.
At this point, the bill rests largely in the hands of a handful of Senate Democratic centrists and Olympia Snowe. Hence the leaks today about possibly putting the public option behind a trigger.
My own sense is that this would be silly. If we can get Snowe on board by expanding the exchanges and making payment reforms, great. Both would be good on the substance. The public plan, however, has already been watered-down such that it is already a fairly limited thing. The House bill envisions an option that is stronger than the Senate HELP Committee's bill, but the House bill would still only have the public option use Medicare rates at the outset and would still be limited to people on the exchange. The CBO estimated that the House bill's public option would only have 10-12 million members by 2019.
You could make the argument that it would not be a major sacrifice to get rid of it. But you could also make the argument that if it's already that limited, why limit it even further by requiring a trigger?
On Edit: Oh wow, first time on the Rec list. Thanks guys. But I'm just the messenger. We'll see what happens during the next week. And though I'm usually a defender of the White House, they need to find a position on this issue and stick with it, instead of these whiplash-inducing trial balloons.