I don't think that health care reform is in peril. If Harry Reid decided to submit to Lieberman's demands, the health care bill would basically revert to what the Senate Finance Committee produced. That's still a major piece of legislation. Expectations among liberals have risen since then, so the come-down is understandable. But this isn't the end of reform.Excellent point. Countering that are the threats of the House liberals, as reported here by Greg Sargent. But given that they're still threatening to walk without a strong public option, even after having not walked on the House bill, I think it's safe to say that their threats are not too serious. Not because they're wimps; because, as Steve Benin has been discussing, the logic of their position is that ultimately, a weak bill is better than no bill.
My suggestion? If liberals really believe that the public option is popular, then just go ahead and pass the bill without it and then campaign on it. There's no reason that a public option couldn't be added in 2011, or 2013. Or, in exchange for enthusiastic support for a bill now without public option, liberals could secure a commitment from Pelosi, Reed, Obama, and Kent Conrad that they'll try again, through reconciliation, in 2011 (I'm fairly sure it could be done that way, and moving one piece through reconciliation is a lot less dicey than moving the entire bill, with lots of moving parts, that way). Or get a commitment from Obama that he'll campaign on a public option in 2012, including a very public, unequivocal statement of support (and regret for failing on it this time) right now. Make that once the bill gets to him...best not to rile up Holy Joe just yet. Some combination of those commitments should be a perfectly good trade-off for liberals, assuming that what they really want is a substantive and not a symbolic victory.
Put it together -- give moderates what they want now, and liberals a shot at what they want in the future -- and you have a deal.
Oh, and for what it's worth, I think Chait's characterization of Lieberman is excellent.