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2010 was probably not going to be more than modest gains for Republicans, but that was assuming a modicum of political skill by the President to stem the tide of a gathering wave of anti-Democratic sentiment.
Last night Obama had the perfect chance for a compromise that could have entailed the reduction of government regulations to promote interstate competition amongst private carriers and included the offering of the public option to compete with all of those insurance companies.
Because if the main argument for the public option is to compete with private insurers, then that argument is going to get killed by Republicans all over the media when they rebut that interstate competition will do a much better job of that and not cost the taxpayers anything.
The major bottleneck that is stalling health care reform was the creation of a government health care plan. Obama had the chance to still keep that option while maintaining the intellectually honest argument that it was all in an effort to make health coverage as competitive and affordable as possible.
He failed to do that and public opinion on this issue will continue to turn against him.