The interesting thing about the recent cap and trade vote that passed by a margin of a swing of four votes, is that the Progressive wing of the Democratic Party largely won that internal battle, even though more than 40 Democratic Members of Congress voted against the legislation.

More internal battles are ahead on health care, according to today’s Wall Street Journal:

…intraparty tensions are frustrating some Democratic leaders and activists, who believe they have an opportunity to enact a broad liberal agenda. MoveOn.org announced Friday that it is running ads criticizing Sen. Kay Hagan, a newly elected Democrat from North Carolina, for opposition to a publicly run plan as part of a health overhaul.

“Our 115,000 members in North Carolina, many of whom volunteered for or donated to her campaign last year, believe the public option is the heart of true health-care reform,” said Justin Ruben, the group’s executive director.

Some Democratic lawmakers say they are trying to keep the party from moving too far left and alienating voters. “I’ve always thought a divided government works best,” said Rep. Allen Boyd, a Democrat from Florida’s conservative panhandle. “It’s incumbent on us, now that we’re in the majority, to use that leverage however we can.”

With that in mind, it is reasonable to divine where the Progressives are on the biggest debate about the Democratic health plan: should there be a government-public plan option?

Here is an interesting piece titled “Will the Left Kill Health Care Reform?” It state, in part:

“I will not vote for any health care that does not include a public option,” Democratic Rep. Keith Ellison declared this week. “I will not do it, that’s a guaranteed no vote and I will not be dissuaded from that.”

Ellison is not alone. He’s a part of the House Progressive Caucus, whose co-chair, Rep. Lynn Woosley, has said repeatedly that a majority of the 80-member bloc would not vote for any bill that did not include a “robust” government-run plan, which typically means one modeled after Medicare. This is the formulation that is opposed most vigorously by the American Medical Association because it would drive down reimbursement rates for doctors, and by insurers who do not believe they would be able to compete with a government plan that had access to tax dollars and would benefit from the fact that government would be writing the rules of the game.

If Woosley is serious about liberal House members voting against a compromise bill, that means scaled-back legislation could die in the House even if some Republicans defect and vote for it. And on the flip side, should the House go ahead and pass a bill with a strong government-run plan, it would have a tough time getting the necessary votes in the Senate.

Now, things are usually very different at the time of the floor vote, in terms of Member’s threats about voting or not, but my sense is the Progressives are “pot committed” to a public plan.

This is really a power test for the Progressive Caucus, the Black Caucus and the Asian Pacific Caucus of Democratic Party House Members of Congress (who have said they will not vote for a health reform plan without a public plan option) vs. the American Medical Association, the U.S. Chamber of Commerce and the Association of Health Insurance Plans, and the Blue Cross Blue Shield Association (who said they will oppose a public plan option.)

Given the implications for the entire reform effort, this is the key fault line, along with who gets taxed to pay for it.

Neither of these fault lines have been put to the test in the real test: a vote by the U.S. Senate or U.S. House.

Now the left is alternatively calling for President Obama to step in and mediate, or pressuring him on the public plan option or both.

Given the trillions of dollars on the table, being too cute with some compromise will probably die an ambush death from fire from the left and right (the compromise being caught in the middle).

Industry may not be used to listening to the Progressives, but their time is now, and they sense this is a once in a generation opportunity to get what they really want.

They are not being shy about their public plan support.  The Sunday Washington Post reported on liberal groups pounding Democratic Senators, its lead was:

In the high-stakes battle over health care, a growing cadre of liberal activists is aiming its sharpest firepower against Democratic senators who they accuse of being insufficiently committed to the cause.

Here are some of the details of the attacks:

In recent days — and during this week’s congressional recess — left-leaning bloggers and grass-roots organizations such as MoveOn.org, Health Care for America Now and the Service Employees International Union have singled out Democratic  Sens. Ben Nelson (Neb.),  Mary Landrieu (La.),  Ron Wyden (Ore.),  Arlen Specter (Pa.) and  Dianne Feinstein (Calif.) for the criticism more often reserved for opposition party members.

“Will Mary Landrieu sell out Louisiana for $1.6 million?” says one Internet ad that suggests a link between contributions she has received from the medical industry and her reluctance to back the creation of a government-sponsored insurance option.

Given that President Obama, Speaker Pelosi, Chairman Waxman, Chairman Kennedy/Dodd and Chairman Baucus all want a public option — along with their Progressive base — how (exactly) is a public option going to kept out of the final House or Senate plan, unless Democratic Members who are equally opposed dig in their heels on the subject of financing and a public plan?

This is what is really unclear, where are the Democratic House rank and file on the question of public plan, or the taxes to pay for it?

Will the more conservative Democratic Members of Congress draw their own line in the sand, or will they attempt to influence the process, but be shut out, and ultimately vote against the bill, or vote for it?

Good questions, but right now the most visible pressure is coming from the Progressives.

Even though the uber-Progressive magazine The Nation said in a recent editorial “Time to End False Bipartisanship” that “for now, the calculus of political viability has taken single-payer off the table. That doesn’t mean we cease fighting to get it back on –but it probably means we need to balance our short and longterm goals,” which seems like a clear message to the Progressives not to throw the baby out with the bath water.  But the same editorial also says:

“Joe Conason put it in his invaluable New York Observer column, “If Congress fails to enact healthcare reform this year—or it enacts a sham reform designed to bail out corporate medicine while excluding the ‘public option’—then the public will rightly blame Democrats, who have no excuse for failure except their own cowardice and corruption.” Blame could well be registered in ugly midterm election results in 2010.”

And The Nation closes with a call to go for the full-boat public plan:

“Congress is, of course, usually pretty skittish about reform, but with a President with high approval ratings and an historically unpopular GOP–if this isn’t a time to pass sweeping reform with a strong public plan, then when is”

For the Democrats, the easy part — general agitation and propaganda about health care reform is over — now comes the internal fights within their own party about the taxes to pay for it and which members of their party get happiness.

It will be an interesting dance of legislation, and the July 4th recess will likely clarify how many members view the subject, but, ultimately, the choices the Democratic Party makes, and the Progressive wing makes will determine the final course and passage of this legislation.

The stakes could not be higher on both the public/government plan option and the which taxes will be levied to finance the plan.

The Baucus plan to tax health benefits could easily pay for the reform, but some unions will defect to no, even though the tax may not apply to most of their member’s plans.

Ultimately, this is a big test of the Progressive’s power, its biggest after the Cap and Trade victory in the U.S. House.

Industry may have been taken aback by the number of Democratic defections on their own bill, and that it still passed.

It is a real lesson for the world of health care, and the final disposition of the public plan option and its financing.

Until (or more likely, if and when) the 180 million Americans with their own health care either provided by their employer or bought on their own weigh into this debate, my sense is the Progressives will push all their chips in, and are pot committed on the public plan.  And their hand looks pretty strong.