The Obama administration is stunned by the angry reaction of liberal Democrats after Kathy Sebelius seemed to be walking away from demands of a public option. Apparently, the administration never intended the "public option" to be a major focus of their reform efforts.

Via the Washington Post:

[At] a time when the president had hoped to be selling middle-class voters on how insurance reforms would benefit them, the White House instead finds itself mired in a Democratic Party feud over an issue it never intended to spotlight.

"I don't understand why the left of the left has decided that this is their Waterloo," said a senior White House adviser, who spoke on the condition of anonymity. "We've gotten to this point where health care on the left is determined by the breadth of the public option. I don't understand how that has become the measure of whether what we achieve is health-care reform."

"It's a mystifying thing," he added. "We're forgetting why we are in this."

As the administration looks to move the debate back to private insurance reform, Obama will reach out to his most loyal supporters in a conference call hosted by Organizing for America Thursday where he is expected to argue against any line in the sands in terms of the public option:

He is likely to repeat what he and his top surrogates have said for months: that he will not "draw a line in the sand" about the inclusion of a public plan and that no one provision is a "deal breaker" as long as the final legislation embraces his broad principles for reform.

The White House appears to have been caught flat footed by the devotion on the left to the public option, an element of the emerging health insurance reform policy the President has been open to negotiation on since early spring.

The president has maneuvered gingerly around the issue of a public plan....He often argues that competition from a government plan -- without high executive salaries and the need to post profits -- could keep big insurance companies "honest."

[Obama] and White House Chief of Staff Rahm Emanuel have also signaled a willingness to consider other avenues. Addressing a joint session of Congress in February, the president made no mention of a public insurance plan.

At a White House summit in March, he said: "If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way."

Strategists were concerned that reform centered on a public option would leave Democrats open to attacks of socialism:

"We were always concerned about leading with our glass jaw," he said. "We felt we probably shouldn't make health-care reform be about this because it falls so easily into the socialized medicine, big-government theme."