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Public Option Down, Subsidies Up, Insurance Tax Unclear

AP reports likely deal exchanges increased subsidies for loss of public option: "House Democrats will probably have to give up on starting a new government insurance plan to compete with the private market, something that's a nonstarter with Senate moderates. In its place they hope for more generous subsidies for lower-income families to buy health insurance. Obama agreed at Tuesday evening's meeting to help strengthen affordability measures beyond what's in the Senate bill, the aide said."

AP also suggests some version of tax on high-premium insurance plans could remain: "The House may end up accepting the insurance tax if it hits fewer people than the Senate's design now calls for. There also could be common ground in a Senate proposal to raise Medicare payroll taxes on individuals making more than $200,000 and married couples over $250,000."

Bloomberg suggests compromise could involve elements of various tax plans: "... the [Senate bill's] Medicare payroll tax would raise $88 billion from 2013 to 2019, according to an estimate by the Congressional Budget Office. The House’s so-called millionaire tax on adjusted gross income, including capital gains, would raise about $461 billion, and the Senate’s excise tax on high- end Cadillac insurance plans would generate $149 billion. [Rep. Charlie] Rangel said he didn’t know whether a compromise might embrace all three methods of taxation. House Democrats may accept some form of excise tax on Cadillac plans, he said."

Speaker Pelosi throws an elbow at the President as possible negotiating tack, according to Politico: "A reporter reminded the San Francisco Democrat that in 2008, then-candidate Obama opined that all such negotiations be open to C-SPAN cameras. 'There are a number of things he was for on the campaign trail,' quipped Pelosi ... People familiar with Pelosi's thinking wasted little time in explaining precisely what she meant by a 'number of things' ... Senior House Democratic leadership aides say Pelosi was pointedly referring to Obama’s ’08 pledge not to raise taxes on the middle class, which she interprets to include a tax on so-called 'Cadillac' health care plans that offer lavish [sic] benefit packages to many union members. The House aides, speaking on condition of anonymity, said Pelosi has been miffed with Obama’s tilt toward the Senate plan and his expectation the House will simply go along with the Senate bill out of political necessity ... 'She’s setting up for the conference,' said a leadership staffer. 'It’s strategic. She’s staking out her territory.'"

More talks today. The Hill: "After huddling among themselves at 10 a.m. Wednesday morning, House leaders will return to the White House for a 2:30 p.m. meeting with the president and Senate Democratic leader"

House Minority Whip targeting 37 Dems as possible "No" votes on the final bill.

W. Post Concedes Lack of Disclosure in Fiscal Times Scandal

NYT reports W. Post ombudsman looking into paper's relationship to austerity ideologue Pete Peterson: "Facing criticism for publishing the work of a start-up news organization, The Washington Post said Tuesday that it should have disclosed more about the group’s financier and his connections, and the paper’s ombudsman said he was looking into the relationship. The start-up, The Fiscal Times, covers economic issues, with a particular focus on the federal budget, the growing deficit and efforts to rein in health care and Social Security spending. Its financing was provided by Peter G. Peterson, the billionaire investment banker who advocates deficit reduction and restrictions on entitlement programs ... Critics of The Fiscal Times said that first article [published by the W. Post] was not evenhanded and failed to acknowledge criticism of the [Conrad-Gregg deficit] commission proposal."

Media Matters' Jamison Foser asks the question the media isn't asking Peterson: "Do Peterson and his allies have a track record of being right? The guy didn't just appear out of nowhere; he's been trying to influence public policy for decades. Shouldn't newspapers give some consideration to his track record? Here's a starting point: In 1993, Peterson opposed health care reform, saying we couldn't afford it. How did that turn out? Does Peterson stand by that statement? If so, what evidence does he have that health care costs would have risen more quickly over the past 16 years had the Clintons' reform efforts succeeded?"

NYT reviews Obama's limited options for meeting his deficit goals in his February budget:

A deeper recession and slower recovery than the administration initially forecast have increased the tab for economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers.

The savings Mr. Obama once projected from winding down the war in Iraq are being eroded by a bigger buildup in Afghanistan than he had initially contemplated. Congress has rejected or ignored his proposals to raise revenues by changing tax rules for multinational corporations and capping deductions by wealthy individuals; for Mr. Obama to reprise those proposals could raise questions about the credibility of the numbers in his budget.

Meanwhile, the biggest tool usually employed to chisel away at projected deficits — shaving Medicare payments to health care providers — is already being used to offset the costs of overhauling the health care system.

At the same time, the persistently high unemployment rate has intensified the pressure on the White House and Congress to not emphasize deficit reduction so much that they risk undercutting the already sluggish recovery or even tipping the economy back into recession. In February, Mr. Obama must submit his budget for the fiscal year that starts Oct. 1.

Will Senate Retirements Impact Financial Reform and Carbon Cap?

Politico speculates on impact of Sen. Dodd retirement on financial reform: "Some on K Street think Dodd's decision increases the chances for a strong Dodd-Shelby product, since Dodd won't have to worry about how the bill affects his standing back home as a candidate with an image problem. This, in particular, could ease the way for the death of a stand-alone Consumer Financial Protection Agency ... Of course, it could also mean that Dodd puts it all on the line to get what he wants, bipartisanship be damned."

Climate Progress argues Sen. Dorgan retirement could improve chances of passing climate bill: "What’s bad news for the Dems in the longer term could be good news for the climate bill in the short term. Nate Silver had given Dorgan a 'Probability of Yes' vote of 22%. He was certainly going to be among the 5 toughest Dem votes to get. But now he doesn’t face a tough reelection, and the Senator from the state he himself calls 'the Saudi Arabia of wind' is free to vote his conscience ... the sole objections he raises to the bill — the potential for Wall Street to engage in questionable derivatives tradings and speculative bubbles that might drive the price of CO2 soaring — are actually addressed in Waxman-Markey by multiple provisions..."

Has the Fed Learned Anything?

NYT's David Leonhardt questions if Bernanke has shown enough repentance and understanding after missing the housing bubble: "What’s missing from the debate over financial re-regulation is a serious discussion of how to reduce the odds that the Fed — however much authority it has — will listen to the echo chamber when the next bubble comes along. A simple first step would be for Mr. Bernanke to discuss the Fed’s recent failures, in detail. If he doesn’t volunteer such an accounting, Congress could request one ... Whether we like it or not, the Fed really does seem to be the best agency to regulate financial firms ... At some point, though, it sure would be nice to hear those experts explain how they missed the biggest bubble of our time."

Wonk Room's Pat Garofalo reports that KC Fed Prez open to reinstating Glass-Steagall: "'We do need to consider some activities that are in these largest institutions that probably should not be trading for their account, gambling,' he said. 'That portion probably does need to be separated out.' ... Thus far, Treasury has not been receptive to a reexamining of Glass-Steagall, with one official saying that it would be akin to 'going back to the Walkman.' But how much longer can it continue to poo-poo an idea that many smart people are taking quite seriously?"

Wanted, A Movement

W. Post's Harold Meyerson laments the lack of a strong independent progressive movement: "In America, major liberal reforms require not just liberal governments, but autonomous, vibrant mass movements, usually led by activists who stand at or beyond liberalism's left fringe. No such movements were around during Carter and Clinton's presidencies. For his part, Obama won election with something new under the political sun: a list of 13 million people who had supported his campaign. But he has consistently declined to activate his activists to help him win legislative battles by pressuring, for instance, those Democratic members of Congress who have weakened or blocked his major bills. To be sure, loosing the activists would have brought problems of its own: Unlike Roosevelt or Johnson, who benefited from autonomous movements, Obama would be answerable for every loopy tactic his followers employed. But in the absence of both a free-standing movement and a legion of loyalists, Congress isn't feeling much pressure from the left to move Obama's agenda."

LA Times chronicles how some business lobbies are breaking away from Republicans and working with Democrats: "'The restaurant association was a really, really important player in the past,' said one prominent Republican lobbyist ... 'They have changed their approach and that has reduced dramatically the firepower of the business community in Washington.' The new strategy embraced by the restaurateurs and others such as the Business Roundtable and the Pharmaceutical Research and Manufacturers of America has given them access to Democratic decision makers and a chance to influence proposed policy changes ... Some of the compromises Obama has worked out with corporate interests -- notably the agreement to limit the effect of the healthcare overhaul on big pharmaceutical companies in return for their support -- has upset liberal activists and even some congressional moderates. But the initiatives represent the emergence of a post-partisan lobbying strategy that is challenging the dominance of conventional business associations on K Street, where many lobbying firms have offices."

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