This reflects the sense that the right compromise on the public option is a compromised public option. That's true to an extent, but you can define the public option so far downward -- a state-based, opt-in, trigger-dependent, nonprofit option, for instance, is seriously under consideration right now -- that you'd be better off trading it away for something that's more meaningful.
What Klein does not realize is that this is not about compromise; this is about power. If the Democratic holdouts wanted to achieve the same goals as those that could be gained through a public option (keeping insurance companies honest, bringing down cost, insuring value for your premiums, focusing on people not profits, ending immoral practices, etc.), but were against the idea of a government-run public option, there could be a "compromise." Some combination of very strong regulations might have been acceptable. It would have needed to include things like a robust risk adjuster, a high medical loss ratio, a requirement that all insurance plans be non-profit, a special claim reimbursement appeals court, narrow rating bands, repeal of the insurance anti-trust exemption, precisely defined benefits packages and cost-sharing structures, a single reimbursement negotiator for all exchange plans, etc.
The first problem is that Joe Lieberman, Ben Nelson, Blanche Lincoln, and Mary Landrieu don't want to keep the insurance companies honest. They don't want reform to accomplish the goals of a public option. They are defenders of the insurance industry, and not the greater American population.
The other problem is that unless Harry Reid is ready to play hardball with reconciliation, chairmanship stripping, or the nuclear option, this handful of conservative Democrats have all the power. They have no reason to compromise because their is no downside to holding firm. Without leverage, there can't be compromise. These conservative Democrats want to show everyone in Washington that they are in charge. What they want from progressives is capitulation.
The progressives have said a public option is a must-have. A majority of both the House and Senate would vote for bill with a public option. If progressives are forced to surrender the public option, to try to “trade” it for something better, then they must officially admit that Ben Nelson, Blanche Lincoln, Mary Landrieu, and Joe Lieberman are the infinitely more powerful bloc. If progressives give up on the public option, they will cede power and influence in Washington for a very long time. Even bigger than health care, if the entire Democratic party exists only to give Joe Lieberman, Ben Nelson, Blanche Lincoln, and Mary Landrieu sole power to design every peice of legislation, the progressive grassroots needs to reevaluate why they even vote for Democrats.