WHITE HOUSE BACKS AWAY FROM VA PROPOSAL…. Following up on an item from last week, the Obama administration was reportedly weighing a change in how military veterans’ healthcare would be paid for. Under existing policy, private insurance companies help pay for veterans’ care that is not service related. Administration officials considered the possibility of charging insurance companies for service-related injuries, too, at a savings to the VA of a half-billion dollars annually.

To put it mildly, the idea, which the White House never fully embraced, was not well received. Democratic lawmakers balked at the very suggestion. Veterans’ groups issued strong denunciations. Even Jon Stewart expressed outrage at the mere possibility.

Today, the administration reportedly abandoned the idea altogether.

The White House on Wednesday backed off a controversial plan that would have dramatically altered the way the Department of Veterans Affairs (VA) handles insurance claims, after veterans groups staged an all-out fight against such a proposal.

President Obama will not pursue a proposal that would have allowed the VA to charge private insurance companies for the treatment of veterans with service- and war-related injuries. The proposal raised the ire of prominent Democrats on the House and Senate Veterans Affairs panels. House Speaker Nancy Pelosi (D-Calif.) was the first to publicly announce Wednesday afternoon that the president won’t pursue such proposal.

The announcement came shortly after the second White House meeting between presidential aides and prominent veterans’ organization leaders.

At yesterday’s White House press briefing, Robert Gibbs kept emphasizing Obama’s 11% increase in discretionary spending in the VA budget, which invariably led to “yes, but” questions regarding the possible shift in insurance.

It appears Obama’s team has resolved the problem. Good move.

Steve Benen

Follow Steve on Twitter @stevebenen. Steve Benen is a producer at MSNBC's The Rachel Maddow Show. He was the principal contributor to the Washington Monthly's Political Animal blog from August 2008 until January 2012.