Harry Reid still has the ability to pass health care reform using reconciliation. Bills passed using reconciliation can't be filibustered, so they only require a simple majority to pass the Senate. The biggest problem with using reconciliation is the Byrd rule.(brief summary and full CRS report) The Byrd rule requires that only provisions related to budget (those that spend, save, or take in money) can be passed using reconciliation. If the Senate Parliamentarian rules that a provision is an “extraneous matter,” it can be removed from the bill by a point of order. Through my research on the matter, I've come to two important conclusions: I'm 90% confident a properly designed public option could pass using reconciliation, and I'm 95% confident that the Stupak anti-abortion amendment could not.
There are several reasons a properly designed public option could survive the Byrd rule. First, the bill saves money. Even the weaker, negotiated rates public option would still reduce the cost of reform to the federal government by roughly $25 billion, according to the CBO. Second, the public option would bring in and pay out large quantities of money in the form of premiums and provider reimbursements. This would all be done in a deficit neutral way, but it would still be related to the budget. If the first two reasons are not good enough to protect the public option from the Byrd rule, other changes could be made. The bill could require the public option to pay the federal government a small profit (i.e. run a surplus) in the first few years. The overall bill could also be slightly rewritten to base tax credits on the cost of premiums for the public option. The important thing is there are ways to get a public option passed using reconciliation.
By the same token, the Stupak amendment would definitely run afoul of the Byrd rule. This rule dealing with abortion is clearly an “extraneous matter” and the Parliamentarian would rule is as such. It violates the first part of the Byrd rule because it does “not produce a change in outlays or revenues.” I see almost no way the Stupak amendment could remain in a bill passed using reconciliation.
There was already good reason for progressives to demand that reconciliation be used. It would protect the public option from the threats of filibuster by Joe Lieberman. It would also not require the public option to be watered down with opt-outs, opt-ins, or other stupid provisions. Thanks to Bart Stupak (D-Mich.) the Democratic base just gained another reasons to push for reconciliation. Remember, if a bill is passed under regular order that does not contain a real public option but contains the Stupak amendment, it is because Harry Reid refused to use reconciliation.