Shrugging off twin defeats Tuesday in the Senate Finance Committee, key Democrats said they were exactly where they wanted to be in pressing for a public insurance option in the final version of a health care reform bill.

Offering a possible preview of the floor fights to come, Democrats challenged fellow Democrats — and Republicans fought with Democrats — over two separate public insurance option amendments filed against Finance Chairman Max Baucus’ (D-Mont.) $900 billion health care package. As expected, Baucus and Democratic Sens. Kent Conrad (N.D.) and Blanche Lincoln (Ark.) opposed both amendments.

But pointing to centrist Democratic Sen. Tom Carper’s (Del.) decision to vote in favor of the amendment by Sen. Charles Schumer (D-N.Y.) — after Carper opposed a similar proposal by Sen. Jay Rockefeller (D-W.Va.) — public insurance option proponents insisted they are making headway with the skeptical moderate Democrats they’ll need to win over on the Senate floor.

“Today was a very good day for the public option. It was given up for dead a few weeks ago,— Schumer said Tuesday, just after his amendment failed in committee 13-10. “But, what we find is, every time we debate it, whether it’s back home or here in the Senate Finance Committee, we pick up more support.—

Schumer’s enthusiasm belied the fact that Conrad, a long-standing opponent of the public insurance option from a conservative-leaning state, wasn’t swayed. Nor was Lincoln, who may face a difficult fight for re-election in a state won by the GOP White House candidate in the past three presidential contests. Baucus also opposed both public insurance amendments.

Baucus maintained that any bill that includes the measure cannot garner 60 votes on the Senate floor, saying that’s why his bill includes a proposal to create nonprofit medical cooperatives instead. But other Democrats took issue with the Finance chairman.

[IMGCAP(1)]“The public option is on the march; it’s on the move,— said Rockefeller, chairman of the Finance Subcommittee on Health Care. “I think with the time that we have before we get this to the floor, we have a very good chance of getting it passed.—

As the Finance Committee opened its fifth day of working through the hundreds of amendments filed against the panel’s health care reform bill, Baucus noted that it was already the panel’s longest markup in 15 years. Absent the public insurance option proposals, the committee continued to decide most amendments along party lines.

Some GOP Senators appeared to put little stock in the Finance panel’s ultimate vote on the bill, noting that the Democrats have several opportunities to modify whatever emerges from the committee.

Republicans cite the merger of the Finance bill with legislation adopted by the Health, Education, Labor and Pensions Committee, the floor debate, and the conference with the House as opportunities Democrats may use to slip a public option into the final package.

“Will there be enough votes on the Senate floor to pass [a public insurance option]? I don’t know, but I’m scared that there might be,— Finance ranking member Chuck Grassley (R-Iowa) said.

For some Republicans, the significant Democratic opposition to the Rockefeller and Schumer amendments offered a ray of hope.

These Republicans also see the Finance markup as an effective public platform for making their case against President Barack Obama’s health care reform agenda — particularly his support for the public insurance option.

“One of the interesting things has been that you have seen a lot of division on the other side — on the Democratic side — with regard to the issue itself. And so we’re starting to see those divisions show very clearly,— Sen. Mike Crapo (R-Idaho) said. “I’m hopeful that there will be enough votes on both sides of the aisle to keep a government-run health care system from being adopted.—

The Democrats control a 60-seat majority, and the Democratic liberals who tend to support the public insurance option concede that much work lies ahead if they are to secure the support of their Conference behind the proposal. Sen. Olympia Snowe (Maine) is considered the only Republican open to backing a public option — and even then only if her idea of a trigger is included.

Perhaps cognizant of the intraparty divisions that must be overcome if a public option is to be included in any final Senate bill, Schumer declined to address how he would rally the full Democratic Conference behind the measure. Among the skeptics Schumer must win over are several Democratic Senators from red states, some of whom are up for re-election in 2010.

Schumer said public option supporters are being “respectful— of the political and geographical differences among their fellow Democrats, with the goal of persuading them through the soft-sell approach.

“We realize — I think every one of the 60 Democrats realizes — that we have to pass a bill,— Schumer said. “We may have some differences. But the overwhelming spirit and feeling among every one of the 60 — whether they be the more moderate wing, the more liberal wing or in the middle — is we have to work together to get a bill done.—