The push for health care reform continued Wednesday, with President Barack Obama making his biggest stand yet in favor of a public plan as battle lines continued to sharpen between Democrats and Republicans on both sides of Capitol Hill.

In a letter to Senate Finance Chairman Max Baucus (D-Mont.) and Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.) sent late Tuesday following a series of meetings on health care at the White House, Obama made clear he expects to see a reform bill on his desk this year and stepped up his demand that a government-run, public plan option be included in the legislation.

The president’s move to prioritize the public plan could sink any chance of achieving reform that garners bipartisan support in the House and Senate. Republican leaders have made opposing the public plan option a key talking point in distinguishing their brand of reform from Democrats’, with top GOP Senators suggesting that a bipartisan outcome is unlikely to materialize.

“There are two things, that, how they turn out, are going to be the factor— in determining whether the final bill will be bipartisan, said Sen. Chuck Grassley (R-Iowa), the ranking member on Finance who has been working closely with Baucus to fashion a centrist health care bill. “Anything to do with rationing,— and the public plan.

With large majorities in the House and Senate, Democrats do not necessarily need Republican votes to pass health care reform.

In Obama’s letter to Baucus and Kennedy, he — as explicitly as he has to date — outlined his policy priorities for reform. Although there are several items of concern among Democrats and Republicans, the public plan option is the most controversial.

“I strongly believe that Americans should have the choice of a public health insurance option operating along side private plans,— Obama wrote to Baucus and Kennedy in his Tuesday letter. “This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest.—

Many Democrats believe implementing the public plan option is necessary to ensure that all Americans have access to affordable coverage, regardless of where they live or what prior health conditions they have. Most Republicans regard the policy as a first step toward universal, single-payer coverage that will destroy the quality of care and result in a federal government bureaucracy that will delay and deny care.

Since Congress returned from Memorial Day recess, Republicans have elevated their attacks against the public plan option, while Democrats — who are generally supportive — have joined Obama in promoting it. Although Republicans have been the most vocal in their opposition to the public plan and their concern about the overall cost of reform, many moderate Democrats also are skittish.

In the House, the conservative Blue Dog Democrats sent a shot across the bow of House leaders Wednesday, warning they will not support a public plan option for health care except as a fallback that would be “triggered— if private insurance companies fail to meet benchmarks for cutting costs and covering the uninsured.

Speaker Nancy Pelosi (D-Calif.) and the chairmen of the committees with jurisdiction over health care reform insist on a robust public plan, which would give all Americans the option of signing up with government insurance instead of with a private company. The “trigger— idea is strongly opposed by liberal Democrats, much of House leadership and the chairmen.

Blue Dogs voted to adopt principles restricting their support of any public option Wednesday, and they have the votes, along with Republicans, to sink health care. But Energy and Commerce Chairman Henry Waxman (D-Calif.) dismissed the trigger as “a very bad idea,— saying health care reform would not pass the House without a substantial public plan.

“We had a trigger with Medicare Part D,— Waxman said. “That just means it won’t happen.—

In the Senate, after several months of optimism that Baucus’ inclusive Finance Committee process might yield a bipartisan reform bill, Republicans this week have grown pessimistic.

Because the Baucus bill, which is expected to be somewhat moderate and fall just to the left of center on the political spectrum, must be merged with a Kennedy bill predicted to be quite liberal, Senate Republicans now expect the final vehicle to be a non-starter within their conference.

Sen. Orrin Hatch (R-Utah), who sits on both Finance and HELP, said the process appears stacked against a bipartisan outcome because of the need to meld those two bills. In fact, Hatch predicted that the costs of enacting the Kennedy bill on its own to be so great that even most Democrats would have trouble supporting it.

“Kennedy [HELP] staffers are writing the most liberal bill they can. They expect Baucus to work off of that bill,— Hatch said Wednesday. “Therefore Baucus … is going to have to work off of a very, very liberal HELP Committee bill. … I doubt you’ll get many, if any, Republicans to vote for that kind of a dog.—

Democratic Members of HELP were meeting with their colleagues in the Democratic Conference on Wednesday evening to walk them through the components of the Kennedy bill. The HELP Committee is scheduled to mark up a bill in about two weeks; Finance is tentatively scheduled to mark up its bill before Congress adjourns for the Fourth of July recess.

Despite Republicans’ growing uneasiness with the legislation taking shape, Sen. Barbara Mikulski (D-Md.), speaking on behalf of HELP, maintained that Democrats are interested in garnering significant Republican support for health care reform. Although there have been signs that merging the Finance and HELP bills will be difficult, Mikulski insisted that the process should go smoothly.

“I think that we will have a bill in which we can interlock,— Mikulski said.

In the House, there are political fissures to address among Democrats as well, including what taxes to raise or benefits to cut in order to pay for health care reform — not to mention the debate over the public plan.

Meanwhile, House Republican leaders have also pounded on the public plan, vowing to oppose en masse any bill that includes one. But they are largely irrelevant. The question is more whether Democrats want to work with Senate Republicans, for whom a trigger may be needed to garner support — or not.

Liberals clearly want to push hard for a public plan and want to use the budget reconciliation process to force it through, if needed, without Republican support in the Senate. But with the Blue Dog missive Wednesday, they now have a two-chamber battle to deal with.