I’ve been consistently worried that Barack Obama would not set an ambitious domestic policy agenda if elected president. His post-partisan rhetoric has given me the impression that he would move toward compromising with the Republican position on various issues before negotiations with Congress have begun. Specifically on health care, I agreed with Paul Krugman of the New York Times that Obama’s proposal was not as good as the plans John Edwards and Hillary Clinton advocated during the primaries.

Obama hasn’t been sworn in yet, and the new Congress won’t meet for more than a month, but already there are signs of growing momentum for truly universal health care reform (and not just incremental progress toward that goal).

On Wednesday Senator Max Baucus of Montana, who chairs the Finance Committee, released a “white paper” on health reform. You can get the gist by reading this diary by TomP or this one by DemFromCT. Ezra “Momma said wonk you out” Klein dived into the details in a series of posts this week.

The key point is that Baucus embraced the concept of mandatory health insurance, but with a public plan any American could choose to join. So, if private insurers kept jacking up premiums while covering less and less medical care, people could “vote with their feet” by paying into a public plan that would work like Medicare (the patient chooses the doctor).

This story explains Baucus’ line of thinking:

Baucus, of Montana, chairman of the Senate Finance Committee, said in a health-care blueprint released today that only a mandate could ensure people didn’t wait until they were ill to buy health insurance, forcing up the price for everyone.

The 89-page proposal revives a debate from the Democratic presidential primaries about how to overhaul the U.S. health- care system. Obama supported requiring coverage only for children, saying adults would buy coverage voluntarily if it were affordable. Senator Hillary Clinton of New York said insurance must be mandated for everyone.

“Requiring all Americans to have health coverage will help end the shifting of costs of the uninsured to the insured,” Baucus said today in his plan. The requirement “would be enforced possibly through the U.S. tax system or some other point of contact between individuals and the government,” he said, without spelling out possible penalties. […]

Because of the urgency of health-care reform, Congress should move on legislation in the first half of next year, Baucus said at a press conference today in Washington.

“There is no way to solve America’s economic problems without solving health care,” he said. The $2.2 trillion health-care system “sucks up 16 percent of our economy and is still growing,” Baucus said.

It’s hard to exaggerate the significance of this development. First, as many others have noted, if Baucus runs health care reform through the Finance Committee there is a good chance it will be the kind of bill not subject to a filibuster. That means the Democrats would need only 50 votes (not 60) to pass it in the Senate.

Second, Baucus is among the more conservative members of the Senate Democratic caucus (check out his Progressive Punch ratings here). If he is ready for big, bold health care reform, the ground has shifted.

Third, this development could be very discouraging for Iowa’s own Senator Chuck Grassley, the ranking Republican on the Finance Committee. Traditionally, Grassley and Baucus have had a close working relationship. But this past summer Grassley was annoyed when Democrats rejected a deal he thought he had cut with Baucus on a Medicare bill, and Baucus denied having reached any prior agreement with Grassley.

This report from Wednesday quotes Grassley expressing skepticism about finding the money to pay for a big health care initiative.

If Baucus moves away from the habit of compromising with Grassley now that the Democrats will have a solid Senate majority, could Iowa’s senior senator decide to step down in 2010? We all know that Grassley’s seat is safe for Republicans unless he retires. He seems to like his job, but perhaps facing defeat after defeat in a Democratic-controlled Congress would diminish his desire to hang around for another six years.