The word I'm hearing is that Rep. Henry Waxman kicked the Blue Dogs around over their health care obstructionism and the earlier reports of a deal being dead in the HOUSE is not the case. The Hill is reporting along those lines:

Chairman Henry Waxman (D-Calif.) says there is "no alternative" but to have healthcare legislation bypass his Energy and Commerce Committee if Blue Dog Democrats don't accept a deal worked out Friday.Waxman is now playing a game of legislative chicken with the Blue Dogs. He's hoping the inclusion of a study on Medicare reimbursement rates in the healthcare overhaul will be enough to placate the centrist Democrats, who say the government program short-changes hospitals and physicians in their rural districts.

If that’s not, the seven Blue Dogs could join with the committee's Republicans to "eviscerate" healthcare reform, and that’s something Waxman will not tolerate.

"I won't allow them to hand over control of our committee to Republicans," Waxman told reporters.

"I don’t see what other alternative we have, because we're not going to let them empower Republicans on the committee."

Is there anyone wondering why Waxman took over the EC&C Committee from Dingle? If he hadn't then the Blue Dogs would be running the show. Waxman is an excellent at legislature and obviously knew he needed to get things done.

Hullabaloo has much more:

The truth is that the Blue Dogs are slaves to entrenched power, serving the interests of powerful lobbies rather than the middle-income voters in their districts. Cutting subsidies to 300% of poverty level from 400% would make health care less affordable to working people - and it's only being considered in the House because Blue Dogs want to protect those making half a million a year from a surtax.

Which is why Waxman is absolutely in the right to do this. The Blue Dogs, cheered on by Republicans, are simply standing in the way of progress. You can tell because their arguments lack logic and coherence. They apparently got the President's MedPAC proposal in the bill, as part of a larger deal over reducing regional disparities in Medicare reimbursements, but other measures that reduce costs they resist. And measures that increase costs they favor. They exist at this point to be nothing more than sand in the gears.

At some point, I think you do have to pull the trigger. Matt Yglesias makes the moral case, that good legislation matters more than good process.