That would have allowed negotiators to work through August and into the Fall on the bill, with a target date of mid October for final legislation.
No matter how Democrats try to sugar coat this, it is definitely a setback for them and for the White House.
Could it still be turned around? Absolutely. But it's probably going to take some significant concessions that a lot of Obama supporters won't like.
So far, the Blue Dogs have done something that they have long talked about - they have actually stood up to their party's leaders and walked the walk on a major issue.
While the House tries to figure out what's next, Senate negotiations continue, with the Democratic Leader Harry Reid saying he wants a bill out of the Finance Committee by August 7.
I think the chances of that happening are slim as well.
What it means is that both the House and Senate may go home with a serious amount of unfinished business on health care reform.
And if that happens, it will not be easy to jump start the process in September.
The month of July has not been a great one for Democrats on health care reform.