President Barack Obama is actively discouraging Senate Democrats in their effort to include a public insurance option with a state opt-out clause as part of health care reform. In its place, say multiple Democratic sources, Obama has indicated a preference for an alternative policy, favored by the insurance industry, which would see a public plan "triggered" into effect in the future by a failure of the industry to meet certain benchmarks.

The administration retreat runs counter to the letter and the spirit of Obama's presidential campaign. The man who ran on the "Audacity of Hope" has now taken a more conservative stand than Senate Majority Leader Harry Reid (D-Nev.), leaving progressives with a mix of confusion and outrage. Democratic leaders on Capitol Hill have battled conservatives in their own party in an effort to get the 60 votes needed to overcome a filibuster. Now tantalizingly close, they are calling for Obama to step up.

"The leadership understands that pushing for a public option is a somewhat risky strategy, but we may be within striking distance. A signal from the president could be enough to put us over the top," said one Senate Democratic leadership aide. Such pleading is exceedingly rare on Capitol Hill and comes only after Senate leaders exhausted every effort to encourage Obama to engage.

"Everybody knows we're close enough that these guys could be rolled. They just don't want to do it because it makes the politics harder," said a senior Democratic source, saying that Obama is worried about the political fate of Blue Dogs and conservative Senate Democrats if the bill isn't seen as bipartisan. "These last couple folks, they could get them if Obama leaned on them."

[The first term Blue Dogs are] toast if there's no health care reform anyway, because Dems are going to suffer big losses with Obama's failure and they will be the ones who lose their seats. It's not like the Republicans are going to go easy on Blue Dogs in swing districts out of the goodness of their hearts.

They are tied to Obama's coat tails, not the liberals who are in safe seats. And according to Charlie Cook, there are about 20 of them who stand to lose, which still leaves the Dems comfortably in the majority. The liberals have the power to do this.

I don't expect the villagers to be able to see that the game has changed, because they live in an alternate universe where time stood still somewhere around 1997. But one would hope that Obama understands that he needs liberals to stick on this one. If he pushes them too far, he loses it all.

Jack Cafferty, of all people, put it rather starkly today, when he wondered if Obama was "tough enough":

Americans are going to see how Obama governs when it comes to a divisive issue like health care reform. Even though there are many critics, will he push through on the public option, which is probably the best way to compete with the insurance industry and bring costs down.

And it's not just about health care either. Some suggest the President's beginning to appear weak and wishy washy on a range of issues, whether it's gays in the military or immigration reform or going around apologizing to other countries. At times the president appears to be ineffective at even leading his own party as the Democrats continue to wander around like a gaggle of unruly children. Mr Obama ought to call a meeting of the Democratic leadership and say "I'm the boss and if you don't like it, there are ways of making your life miserable, especially when it comes time for your re-election."

I don't often agree with Cafferty, and the president is not a dictator. But he is the leader of his party and in a situation where the issue boils down to whether or not the Democrats can hold 60 votes for cloture, there is no excuse for bargaining away the store and telling the progressives in the House that they have to cave rather than the minority Blue Dogs.

Unless, of course, that's what he wants to do, in which case we have much bigger problems. We'll know soon enough.