WASHINGTON -- The liberals' longtime dream of a government-run health care system for all died Wednesday in the Senate, but Sen. Bernie Sanders of Vermont vowed it will return when the realization dawns that private insurance companies "are no longer needed."
The proposal's demise came as Senate Democratic leaders and the White House sought agreement with Sen. Ben Nelson, D-Neb., to become the 60th supporter of President Barack Obama's health care overhaul -- the number needed to overcome a Republican filibuster.
Nelson has met three times in the past nine days with Obama. While he is seeking stricter curbs on abortions in the insurance system the bill would establish, he also has raised issues in his home state that are unrelated to the health care legislation, according to an official with close ties to the senator. The official spoke on grounds of anonymity to discuss private conversations.
Sanders, an independent and socialist, said his approach is the only one "which eliminates the hundreds of billions of dollars in waste, administrative costs, bureaucracy and profiteering that is engendered by the private insurance companies." His remarks drew handshakes and even a hug or two from Democrats who had filed into the Senate to hear him.
Sanders acknowledged conditions and slow the rate of growth for medical spending nationally.
Republicans are unanimously opposed, and accuse Democrats of seeking deep cuts in Medicare and higher taxes to create a new benefit program that they argue gives government too large a role in the health care system.
Obama repeated his demand for action, telling ABC News "the federal government will go bankrupt" if the health care bill fails. He said Medicare and Medicaid are on an "unsustainable" path if no action is taken.
The debate over the proper role for the government has bedeviled the issue from the outset.
At the behest of liberal Democrats, the House bill establishes a nationwide government-run insurance option in hopes of creating competition for private insurers.
But to satisfy the moderates, the Senate bill does not. Instead, it envisions nonprofit nationwide plans to be set up by private companies and overseen by the federal agency that oversees the system used by federal employees and members of Congress.
The compromises to the Senate bill have union leaders reassessing whether they should continue to offer public support for the measure.
The politically powerful Service Employees International Union backed out of a Wednesday news conference at which it and other groups -- including the AARP -- planned to promote the bill. "We're looking at what we need for the reform bill to be something that we can probably support," SEIU spokeswoman Lori Lodes said.
The House already has approved its version of the health care bill, and Speaker Nancy Pelosi, D-Calif., said Wednesday she was confident a final compromise would be signed into law before Obama's 2010 State of the Union address.
She signaled a willingness to look at the proposal in the Senate bill that takes the place of government-run insurance in the House bill.
Asked whether she could support a final bill without a so-called public option, she said, "it depends what else is in the bill."