WASHINGTON_President Barack Obama's weekend concession on a health care "government option" drew complaints from liberals and scarce interest from Republicans and other critics on Monday, a fresh sign of the daunting challenge in finding middle ground in an increasingly partisan U.S. political struggle.

The White House insisted there had been no shift in position, adding the president still favors a federal option for the sale of health insurance. "The bottom line is this: Nothing has changed," said a memo containing suggested answers for administration allies to use if asked about the issue.

But some supporters of health care overhaul sounded less than reassured.

"You really can't do health reform" without allowing the government to compete with private insurers, said Howard Dean, a former Democratic Party chairman. "Let's not say we're doing health reform without a public option," he added in a slap at the administration's latest move.

His remarks were echoed by lawmakers as well as a top labor union official, John Sweeney, who said the option was the only way to force "real competition" on the insurance industry.

The United States is the only developed nation that does not have a comprehensive national health care plan for all its citizens. About 47 million of America's 300 million population are without health insurance.


Obama and his top aides signaled retreat over the weekend on proposals for a provision under which consumers could choose from health insurance policies sold by the federal government as well as those marketed by private companies. "All I'm saying is, though, that the public option, whether we have it or we don't have it, is not the entirety of health care reform," the president told a town hall-style audience in Grand Junction, Colo., on Saturday. "This is just one sliver of it, one aspect of it."

The government option has emerged as one of the most contentious elements of legislation taking shape in Congress, with critics saying it is a step toward a federal takeover of health care and supporters arguing it is essential to create competition with private firms.

Proposals for creation of nonprofit co-operative ventures have emerged as an alternative, but so far, neither liberals nor conservatives have shown great interest.

Obama made his remarks as he struggled to regain momentum for a health care overhaul that has generated controversy among Democrats and near unanimous opposition among Republicans. Recent polls show a lessening of support, and the administration and its allies were thrown on the defensive earlier this month when angry protesters turned up at widely publicized town hall events held by Democratic lawmakers.

Republicans ratcheted up the attacks during the day. Rep. John Boehner of Ohio, the House Republican leader, likened the administration to a school yard bully intent on stealing lunch money, and accused the nation's drug makers of "cutting a deal with the bully."

In a letter to Billy Tauzin, the head of the Pharmaceutical Research and Manufacturers of America, Boehner said the industry had agreed to a deal with the White House "in hopes of securing favorable treatment and future profits."

PhRMA, a lobbying group for the pharmaceutical industry, agreed to pick up no more than $80 billion in costs for health care overhaul over the next decade, under a deal with the White House. It also will spend as much as $150 million in the next few months on television ads to promote health care legislation.

Ken Johnson, senior vice president at PhRMA, said in response to Boehner's letter: "We have been working diligently for more than a year to advance bipartisan health care reform. We're proud of those efforts, and they are completely consistent with our core principals."

The bill faces numerous obstacles when lawmakers return to the Capitol after Labor Day.

In the House, where Democrats hold a 256-178 majority, passage of legislation will hinge on the ability of the administration and Democratic leaders to satisfy liberals who favor a robust government option and centrists who prefer the co-op approach.

Because they cannot realistically count on any Republican votes, the margin for error is reduced. At the same time, House leaders want to protect their rank-and-file centrists, who tend to come from swing districts, and whose victories in 2006 and 2008 helped give the party its large majority.

In a statement, the leader of the House, Speaker Nancy Pelosi, said, "There is strong support in the House for a public option," adding it is the best way "to lower costs, improve the quality of health care, ensure choice and expand coverage."


ut the statement did not rule out legislation that lacks a government option.

There are similar Democratic divisions in the Senate, where the party controls 60 seats to 40 for the Republicans. A bipartisan group of six senators has been meeting for weeks on a possible compromise that would not include a government option. It is not clear whether they will be successful in reaching a final agreement.

While the president says he favors a bipartisan approach, he has also said it may ultimately be necessary for Democrats to produce a bill more to their own liking.

Jim Manley, spokesman for Senate Majority Leader Harry Reid, said the Nevada lawmaker "supports a public option" because it could keep insurance companies in check. "But he also knows that 60 votes will be needed to get anything done. Senator Reid recognizes there are different proposals on the table that could accomplish this goal," the spokesman said, a clear reference to the co-op alternative.

The cooperatives envisioned by some backers would be nonprofit, member-owned groups that would assemble networks of health care providers and negotiate payment rates with them. The government would provide up to $6 billion to get them started.

The history of health care co-ops in the U.S. is uneven. Many have failed because they were unable to compete effectively, or because tensions between doctors and consumer-oriented governing boards could not be resolved. But some, including one in Washington state, have operated successfully.