Rupert Cornwell: The Mormon who could save Obama's skin

The searchlight is on the man from Searchlight, Nevada. Or to put it another way, the struggle to reform the US healthcare system is Harry Reid's show. President Obama can explain and cajole. In the House of Representatives, the Speaker, Nancy Pelosi, should be able to keep her Democratic flock in line. But almost certainly, the measure's ultimate fate will be decided in the Senate. And there, no one will have a greater impact on what happens than the man in charge of the body still fond of describing itself as the greatest deliberative chamber on earth - one Harry Mason Reid.

Reid doesn't fit the conventional image of a Senate majority leader. He is not a wily deal-maker and master of procedure like Bob Dole. Nor is he an irresistible political force of nature like Lyndon Johnson, the majority leader by whom all others are judged. But in his own quiet way, Reid is no less remarkable a figure.

He really does come from a place called Searchlight, a dirt-poor one-time gold rush town in the scorching desert, 50 miles south of Las Vegas, with a population presently listed at 576. Reid's father was a miner. When his son was growing up, however, the main local industry was prostitution: "a place with 13 brothels and not a single church," as Reid remembers it. His mother did the laundry for one of the bordellos. His father committed suicide.

The boy proved a diligent student (and also a decent amateur boxer). When he first came to Washington DC to attend law school, he worked nights as a police officer on Capitol Hill to support himself. After graduating, he went back to Nevada and climbed the political ladder, serving as head of the state's Gaming Commission for a spell, during which he was regularly threatened by the mob. Then he returned to Washington, first as a Congressman, then Senator. Reid also happens to be a Mormon – the highest-ranking Mormon elected to political office in American history.

There are, colleagues say, two Harry Reids. The public one is as you'd expect of a man from such a background: combative and tough as nails, a political bruiser who rarely seems to smile, gritty and dry as the sand of the south-western desert. But there's another Reid that is less obvious – the deft party manager, a master conciliator who, thus far at least in the healthcare debate, has managed to keep his deeply divided party united.

Last week was a big one for Reid. The Senate Finance Committee became the last (and probably the most important) of the committees directly involved with healthcare legislation to produce a bill. That alone means that this latest attempt to overhaul a sector which devours a sixth of the entire US economy while failing to provide a similar proportion of the population with insurance, has gone further than any reform since 1965, when LBJ, by then president, signed Medicare and Medicaid into law.The headlines proclaimed that the finance committee measure had finally attracted the support of one Republican, Maine's Olympia Snowe, raising hopes that the hitherto monolithic rejection of reform by Republicans may start to crumble. At least as important, however (and largely thanks to Reid), was the fact that the Democratic majority on the committee had held firm. For the time being, conservative and liberal Democrats have swallowed their misgivings over proposals seen by the former as a dangerous extension of government, but which the latter view as a cave-in to the lobbies – the hospitals, the drug companies and, above all, the private insurance companies.

Indeed, the other big news last week was a broadside from that same insurance industry, warning that the finance committee bill as it stood would merely drive up the cost of insurance even faster than now, defeating the very goal of reform. The move was widely seen as a blunder, a crude power play intended to sway the committee vote, and which would only make the insurance companies, if possible, even more unpopular than they already are. But it could be a very smart ploy indeed.

Yes, as the private insurers surely expected, they are indeed now more unloved than ever. As they must equally have realised, their move has revived demands for the so-called "public option", of a government-run insurance scheme that would provide real competition. Right now, the private companies are exempt from federal anti-trust laws, and regulated only on an ineffective state-by-state basis. The only other national business, incidentally, that enjoys this privilege is major league baseball.

But the renewed clamour could suit the insurers perfectly. A public option (which the Senate Finance Committee bill does not contain) is the most contentious element in the entire health reform debate, seen by the left as a stepping stone to a government-run single-payer system, and hated by the right for the very same reason, as "socialised medicine" and another nail in the coffin of righteous American capitalism.

Originally, President Obama backed the public option, in his own words "to keep the insurers honest". Of late, though, even he has sounded as if he wanted the whole idea to go away. And until the warning from the insurance lobby, that seemed to be happening. The public option, everyone assumed, was, in practice, dead. Now, however, the issue has been resurrected, as the biggest deal-breaker of all. Many liberal Democrats now say they will vote for no bill that does not contain it. Conservative Democrats (not to mention the likes of Olympia Snowe) vow to oppose any measure that does. In which case, no bill at all. Just what the insurance companies want.

The assumption remains that health reform of some kind will be enacted. But don't be too sure. The threat of gridlock, in the Senate especially, remains, and some predict the Christmas target date for passage may not now be met – sending the issue unresolved into the perilous waters of election year 2010. Which is why so much depends on Harry Reid, Searchlight's great conciliator.