The public option appears to be dead. In a caucus meeting last night, Senate Majority Leader Harry Reid (D-NV) alerted his members that he did not have enough votes to pass a partial expansion of Medicare, which members had hoped would serve as a public option compromise.  Reid also informed the caucus that would not be including any type of government-run insurance plan in his final bill.

Many progressive activists are directing their anger at White House Chief of Staff Rahm Emanuel. According to press reports, Emanuel visited with Reid this weekend and urged him to cut a deal with Sen. Joe Lieberman (I-CT), who in recent weeks has opposed all public option compromises and thereby threatened to derail the entire bill. Today, the Progressive Change Campaign Committee -- anticipating that former Chicago congressman will try to run for office again in the near future -- released an ad in the Chicago market blasting Emanuel for "undermining" the public option. Watch it:

Emanuel, and the White House by extension, certainly could have exerted more pressure on Lieberman or other recalcitrant Dems earlier in the process. But the fact of the matter is that 60 votes are needed for any major action in the Senate. One possibility was to craft a deal on a triggered public option with Sen. Olympia Snowe (R-ME); but she was adamant that the legislative process would need to grind to a halt if Dems wanted her vote. That was a risk that the congressional leadership and the White House -- who are aiming to pass a bill this year -- weren't willing to take. That left Lieberman, whose main prerogative seems to be enacting revenge on grassroots Dems who had the gall to run a primary challenge against him in 2006 (two years after he campaigned on behalf of a Republican presidential candidate).

The conversation is now turning to what effect the bill will have without any public option. In Illinois, for example, 1.8 million residents who do not currently have insurance and 612,000 residents who have nongroup insurance could get affordable coverage through the health insurance exchange. That's certainly an achievement.

Even though they came up short, progressive activists who organized around the public option this past year were still hugely influential. The New Republic's Jonathan Cohn offers his take:

Disappointed progressives may be wondering whether their efforts were a waste. They most decidedly were not. The campaign for the public option pushed the entire debate to the left--and, to use a military metaphor, it diverted enemy fire away from the rest of the bill. If Lieberman and his allies didn't have the public option to attack, they would have tried to gut the subsidies, the exchanges, or some other key element. They would have hacked away at the bill, until it left more people uninsured and more people under-insured. The public option is the reason that didn't happen.

Meanwhile, local blogger and single payer advocate Ellen Beth Gill argues that progressives have to get a whole lot tougher if they're going to ultimately achieve real reform:

One possibility ... is to start holding the insurance companies to their policies through customer complaints, attorney general complaints and in the courts. They only understand hardball. No amount of crying and begging is going to get the job done. No amount of unwaivering party support is going to do it. The progressive grassroots has to toughen up and demand they do the job and be very clear what their downside is going to be.

Following the caucus meeting last night, Sen. Roland Burris made a speech on the Senate floor insisting that his final vote is still up in the air. "Until the bill addresses cost, competition and accountability in a meaningful way," he said, "it will not win my vote." But he prefaced that proclamation by making clear that he is "committed to voting for a bill that achieves the goals of a public option." Whether the final Senate bill will qualify is still unclear.

UPDATE: Here's Digby's take: 

What this huge electoral mandate and congressional majority have gotten us, then, is basically a deal with the insurance industry to accept 30 million coerced customers in exchange for ending their practice of failing to cover their customers when they get sick --- unless they go beyond a "reasonable cap," of course. (And profits go up!) If that's the best we can expect of progressivism for the next generation then I'm afraid we are in deep trouble.

Also, Howard Dean is urging congressional Democrats to "kill the bill."