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The healthcare reform battle heats up, as the House and Senate each grapple with their plans — and both grapple with the inclusion of a public plan option.CNN Politics:

In the Senate, key negotiators broke up a session Monday still stuck on whether to create a government-run health-insurance plan to compete with private insurers -- something Obama and most Democrats want, and most Republicans strongly oppose.

In the House, Democratic leaders are preparing to outline their plans for reform on Tuesday, according to a senior Democratic congressional source familiar with a "discussion draft" that is circulating.

Their plan does include creating a public government-run insurance plan to compete with private insurers, along with a new mandate on all individuals to carry health insurance, the source said. Most Republicans argue the government-run option would destroy the private system.

"This is going to be a long, hot summer when it comes to the debate on health care, because, as you know, there are so many proposals floating on Capitol Hill, some that include the mandate, some that [have] a public option, of course, and many Democrats would like to have the single-payer option," Democratic strategist Donna Brazile said Sunday on CNN's "State of the Union."

Moderates are feeling the heat on both sides of the aisle, says USAToday. But foursome Blue Dog Democrats, that long, hot summer has already started, and promises to be even hotter and longer. The Huffington Post's Ryan Gimm report's that Blue Dog Democrats are already "backsliding" on health care reform, issuing statement that their coalition would only support a public plan option as a fallback to be "triggered" if private insurers don't keep their promises:

The Blue Dog Coalition issued a statement that said it would only support the public health care option as a fallback measure that would be triggered sometime down the road if private insurers don't meet a particular set of goals.

The backsliding took advocates of reform by surprise because 20 members of the coalition had previously signed a pledge expressing their support for a public option without a trigger. The statement was written and organized by the reform coalition Health Care for America Now (HCAN), which strongly opposes a trigger and sees it as an industry plot to strangle a public option in the crib.

Blue Dogs, by their charter, need two-thirds of their 51-member caucus to approve a position before it can be officially adopted. With 20 Blue Dogs backing a public option, they would be short several votes if everyone stuck to their pledge in the closed-door meeting.

Health care disparities are likely to be part of the discussion. The New York Times writes that regional disparities have stirred debate as members of Congress consider proposals to reign in health spending by rerouting Medicare money away from high-cost areas to cover the uninsured and treat patients in low-cost regions. Meanwhile,the Associated Press says that minority lawmakers are highlighting racial disparities in health care access and health outcomes:

Members of the Congressional Black Caucus sent Obama a letter last week calling for more attention to minority health problems. They are expected to join lawmakers from Hispanic and Asian caucuses Tuesday at a news conference on Capitol Hill to call attention to the issue.

The lawmakers are planning to introduce an alternative health care proposal soon that would improve services in low-income areas, eliminate language barriers and improve data collection to help detect gaps in care for various racial and ethnic groups.

Writing at HuffPo, Sen. Bernie Sanders declares health care "a right, not a privilege":

As the health care debate heats up in Washington, we as a nation have to answer two very fundamental questions. First, should all Americans be entitled to health care as a right and not a privilege - which is the way every other major country treats health care and the way we respond to such other basic needs as education, police and fire protection? Second, if we are to provide quality health care to all, how do we accomplish that in the most cost-effective way possible?

I think the answer to the first question is pretty clear, and one of the reasons that Barack Obama was elected president. Most Americans do believe that all of us should have health care coverage, and that nobody should be left out of the system. The real debate is how we accomplish that goal in an affordable and sustainable way. In that regard, I think the evidence is overwhelming that we must end the private insurance company domination of health care in our country and move toward a publicly-funded, single-payer Medicare for All approach.

Robert Reich says pay attention to the details and watch how hard the White House pushes for them:

The question to my mind is whether the Obama White House has over-learned that lesson. Without strong White House leadership, individual members of Congress are particularly susceptible to the threats and promises of powerful lobbies. A statement of White House goals that leaves the details to Congress will likely result in legislation that superficially meets those goals but whose details undermine them. That's the biggest danger now with the inchoate healthcare legislation.

Fortunately, the White House now intends to get more involved in the emerging healthcare bill. Following are the three biggest issues where powerful lobbies on the other side are working the details to their advantage. The question is how hard the Obama White House will push back.

The Nation's William Greider says that on a host of issues — from health care reform to the economy — the question facing Democrat is (or should be), "If not now,when?":

If not now, when? That question ought to haunt the Democratic Party and President Obama, who has been missing in action himself on key issues. Congressional Democrats are responding to this epic conflagration with the same risk-avoidance tactics they learned during many years in minority status. In those days, they could always blame right-wing Republicans for blocking their good intentions. But whom do the Dems blame now that they have the White House and fifty-nine votes in the Senate and a seventy-eight-seat majority in the House? Their standard explanation for not doing more is, "We didn't have the votes." So when might we expect Democrats to achieve more? When they have eighty votes in the Senate?

The party's ideological intentions are being defined with greater clarity in these new circumstances, and so are the President's. It's still early, but the implications are ominous for other issues. If Democrats are reluctant to disturb the power of other major interests, it seems improbable that fundamental change will occur on healthcare, energy conversion or the restoration of work and wages. The problem now is the Democrats, not the Republicans. The party aids and protects its free-roaming entrepreneurial politicians and does not punish those who undermine the party's larger promises. When Republicans were in charge, they enforced party loyalty with Stalinist discipline. Democrats are the party of safe incumbents, weak convictions.

Progressive Breakfast

Putting On the Brakes

The Supreme Court put the brakes on Chrysler's sale to Fiat — a key factor in Chrysler being able to emerge from bankruptcy. BBC:

Three Indiana state pension and construction funds filed papers at the court on Sunday calling for the sale to be halted so they can pursue an appeal.

The Obama administration, which strongly backed the sale, had called on the court to reject the request.

The court said Chrysler's sale was "stayed pending further order".

Chrysler entered bankruptcy protection in April following a massive slump in sales brought on by the financial crisis.

The US government had strongly supported its sale to the Fiat-led consortium, which would allow it to emerge from bankruptcy.

This, according to the Obama administration, set sin motion "grave consequences" for ... well ... all parties.

Michigan
Sen. Carl Levin
echoed the administration's concerns, predicting economic
catastrophe for his state if the Chrysler sale ends up getting stalled by in
judicial review. Forbes:

"The negative economic consequences of permitting an unlawful sale to
proceed may well, over time, dramatically outweigh Chrysler's short-term
harm," the funds said in arguing for a delay.

Michigan Sen. Carl Levin quickly criticized the Indiana pension funds for
short-sighted thinking that he warned will lead to economic catastrophe.
"Make no mistake: If these pension funds can't see past their own pain, they
threaten to create a kind of agony for their state and the nation that is
difficult for most people to imagine or condone."

It wasn't immediately clear what would happen next. Ginsburg's
one-sentence order did not indicate whether the court intended to review the
case's merits. Bankruptcy experts expect the court to issue another, more
definitive order this week.

The hold could turn into a much longer process if the court decides that the bankruptcy has to be "opened up."

If the Supreme Court is putting the brakes on the Chrysler bailout,conservatives hope to put the breaks on any hope of a new, successful GM emerging from bankruptcy. Choosing failure once again, Politico says the GOP wants to make GM "Obama's Katrina":

The GOP sees President Barack Obama’s decision to help the unpopular car maker as an easy opportunity to paint him as a bailout-happy, deficit-drunk spendthrift eager to impose a heavy government hand on a swath of industries.

The Republicans are linking the decision to pour about $50 billion into “Government Motors” to the new administration’s energy, health care and housing plans — all of which, they argue, will result in higher costs for consumers and bigger national deficits. Even the war spending bill now pending in Congress, they say, amounts to a “global bailout” for the International Monetary Fund.

“The pattern here is pretty clear,” House Minority leader John Boehner (R-Ohio) said Thursday. “Every time the president makes a so-called tough decision, it’s the American middle class that gets hit the hardest.”

... The strategy is not without risk: If the economy rebounds, Obama gets credit, and Republicans look like they were rooting for failure.

Could that be because they are? Does that mean their in favor of the consequences the economy and the country will face? Well at least they're in favor of manufacturing something, even it is failure.

Failure is something conservatives are apparently ready to roll up their sleeves and work for. Steve Benen, of Political Animal, on the conservative proposal to boycott GM until "denationalization."

There's no shortage of reasons to find these efforts bizarre, but the one that stands out is how backwards it is. The Obama administration intervened to prevent the collapse of a major American company, but its goal is to see GM get back on its feet and divest as quickly as possible. A boycott, organized by far-right activists, would work against Americans' interests -- it would undermine GM, exacerbate the company's problems, and undercut taxpayers who obviously have a lot invested in this arrangement.

This isn't complicated. If GM's finances improve, the government can divest, American jobs will be saved, and taxpayers can get a return on their money. That would be a good thing.

There's been debate in conservative circles over the last several months about whether, in the midst of multiple crises, it's appropriate to root for failure. But it's even more striking to see some conservatives trying to actively ensure failure, regardless of the consequences for the country.

Wall Street: The Big Payback

With the FDIC breathing down its neck to get rid of CEO Vikram Pandit (among others) Citigroup announces that it's launching an effort to raise $33 billion in capital, Financial Times:

Citigroup on Monday confirmed it would launch a long-awaited $33bn capital raising this week in a move aimed at allaying investors’ fears over the offering and concerns over mounting regulatory pressure.

The announcement came as the Federal Deposit Insurance Corporation, one of Citi’s regulators, continued to press the bank to replace Vikram Pandit, Citi’s chief executive, and his closest lieutenants, according to people close to the situation.

Citi isn't the only bank with capital-raising plans ready to go and approved by the Federal Reserve, in response to the Treasury Department's stress tests.Bank of America and Wells Fargo drew up plans detailing how they will raise billions of dollars in private funds in the next five months. For some, it also means shake-ups in management. MarketWatch:

"Supervisors also continue to work with all regulated financial institutions to review the quality of their corporate governance, risk-management and capital planning processes," the Fed said in the statement.

That statement follows up on a May 7 release by the Fed seeking to have the group of financial institutions take steps to "review their existing management and board in order to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment."

Some financial institutions have taken steps to shake up management or their boards. Government officials, including Federal Deposit Insurance Corp. Chairwoman Sheila Bair, have pressed some lenders to bring more individuals with commercial banking experience onto their boards.

The decision to allow banks to pay back TARP funds early may mean that taxpayer swill "take a bath" on the bailout. CNN Money:

The big banks are back on their feet. How much credit should taxpayers get for their remarkable recovery?

That question looms over institutions such as Goldman Sachs (GS, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Morgan Stanley (MS, Fortune 500) as they seek to repay their obligations under the Troubled Asset Relief Program. Regulators on Tuesday gave 10 big banks clearance to repay $68 billion in TARP loans.

The flow of funds back into Treasury coffers from Wall Street will be a welcome sight amid worries about soaring government spending. JPMorgan Chase got $25 billion in October, when TARP was first rolled out, and Goldman and Morgan Stanley each received $10 billion.

...But while repaying TARP loans is a no-brainer, dealing with the stock purchase warrants that the firms issued to compensate taxpayers could be messy.

Bill Scher is away.

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