The problem with trying to ram home a public option at Stage Two is that it can’t be done unless all 60 Democrats vote for cloture to start debate and to finish debate and vote. With Lieberman promising to filibuster any bill that contains a public option, there’s only downside to debating it for weeks and then losing. Don’t say I didn’t warn you.
Far smarter would have been to let the Senate debate a bill without a public option, defeat the amendment for installing it, and then push for the a watered down House version in the Conference Committee. If the Senate still refused to vote for it then, it would be a whole lot easier to make the case for a public option in budget reconciliation. That was the original plan. If Obama seriously let himself be convinced of Harry Reid’s whip count, he screwed this up.
If the problem is limited to Lieberman (and I don’t think it is) then the solution is simple. He should lose his committee chairs in the next Congress. But that won’t solve anything if the problem isn’t limited to Lieberman.
The only upside I can see is that budget reconciliation just became more likely than a lousy bill in regular order. But, that hardly matters because a lousy bill in budget reconciliation just became infinitely more likely than it would have been had Reid not tried and failed to put the public option in the base bill at Stage Two.