After spending most of my day wondering how the Democratic Party managed to pull off the stunning achievement of losing Ted Kennedy’s Senate seat to a far right wing former centerfold model, I am feeling reassured. The dust is settling and the panorama does not look so bad. In fact, the future looks far brighter to me than it has for weeks.

Obama has acknowledged that White House bears more than a little responsibility for the loss. The Wall Street Journal is reporting that he has scheduled a press conference tomorrow to announce his adoption of Paul Volcker’s strategy to break up and regulate “too big to fail banks.” (No this is not a hoax!)

President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country’s biggest banks, marking the administration’s latest assault on Wall Street in what could mark a return, at least in spirit, to some of the curbs on finance put in place during the Great Depression, according to congressional sources and administration officials.

A push to break up and regulate the banks will be extremely popular with both progressives and independents. It will also place the party of “no” in the position of blocking reforms that their tea-party base are clamoring after. Plus, it will fix the economy.

While the White House and Harry Reid have announced they will not push through health care reform prior to seating Brown, this does not appear to be the act of capitulation that was initially reported. Barney Frank, who called on the Senate to drop health care reform efforts in the wake of the Massachusetts debacle, has retracted his remarks. He now says he will consider voting in favor of the Senate bill if Congress commits to amending the bill rapidly through reconciliation or other parliamentary procedures.

This is the first time Reid and the White House have publicly stated a willingness to pass legislation through reconciliation, a parliamentary procedure in which the House and Senate are able to reconcile budget bills without threat of filibuster. While only 51 votes are needed, certain items in the reform bill such as insurance regulation are not subject to reconciliation. Congressional leaders are considering several options.

One option on the table involves passage of insurance reforms without the highly unpopular mandate on individual Americans to purchase it. The Public Option can then be pushed through using reconciliation along with Medicare and Medicaid expansion. The insurance industry is adamantly opposed to this possibility as it removes their captive market. On the other hand, voters love it. The downside is that without cost controls, insurers are likely to raise premiums even more than they have.

Another possibility under consideration is passage of a scaled down bill that might be supported by Olympia Snowe.

The loss of a supermajority in the Senate is a game-changer that appears to favor progressives. Senator Liebermenace has become instantaneously irrelevant, thus making it possible for the rest of the Democratic Party and most of the American Public to agree on a bill. Some helpful polling in Massachusetts indicates that voters there did not reject Obama or health care. Obama’s approval ratings held steady while Coakley’s plummeted. Rather, voters in communities that supported Coakley did not show up.

The firm Research 2000 conducted the post-election survey Tuesday night on behalf of three progressive organizations — the Progressive Change Campaign Committee, Democracy for America and MoveOn.org.

Taken from interviews of 500 Obama backers who voted in the Senate election and 500 Obama backers who sat out the election, the firm discovered that 18 percent of Obama backers who voted in the Senate race ended up casting ballots for Brown.

Of that group, 82 percent said they favored a public option for insurance coverage, with 14 percent opposed. Of those who sat out the election, 86 percent favored the public option, while only seven percent opposed it. The findings suggests that progressive arguments that disappointed Obama supporters deserted have serious merit.

The poll was conducted by Research 2000 for Democracy for America (Dean’s Organization), Move On and the Progressive Change Campaign Committee after the polls closed Tuesday Night. Which begs the question: how come Tim Kaine, the DNC chairman Obama appointed upon removing Dean, failed to conduct his own polls both in the weeks leading up to the election and after the polls closed? Perhaps, if the Democrats want to hold onto their majority, they should reinstate Mr. Dean.

If all these possibilities bear fruit, a great deal of credit must go to Howard Dean and, notwithstanding her brief but odious canoodling of Grover Norquist, Jane Hamsher. The voters of New Hampshire stood their ground, denied Democrats a supposedly guaranteed seat, and made their voices heard.

I suggest Tikkunistas toodle on over to the Huffington Post and read all the salacious news that’s fit to print. I, for one, intend look out tomorrow for the big banking announcement.


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