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Democrats may drop Medicare buy-in

WASHINGTON — Senate Democrats said Monday they are prepared to drop a proposal to let people under 65 buy into the Medicare program if that's what it takes to pass President Obama's health care initiative.

Emerging from an evening meeting of Democrats who are increasingly at odds over key provisions, Senate Finance Committee Chairman Max Baucus, D-Mont., said it is "looking like" the new Medicare proposal will be removed from the bill.

Talk of dropping the Medicare idea — which would have let people between 55 and 64 buy into the program — underscores the lengths Democratic leaders are going in their quest to hold their 60-member caucus together to pass some form of legislation by the end of the year.

Originally proposed as an alternative to a new government-run insurance program, the idea met with resistance from centrists, including Sen. Joe Lieberman, I-Conn., who has argued it could harm the underlying Medicare program. He told CBS' Face the Nationon Sunday that he would have a "hard time" voting for the Medicare idea.

"Put me down ... as encouraged about the direction" of the talks, Lieberman said after Monday's meeting.

Democratic leaders are trying to reach consensus in their caucus to rustle up the 60 votes to bring the bill to the floor for a vote by Christmas. Obama is set to meet Tuesday with Democrats at the White House — the second such meeting this month.

Senate Majority Leader Harry Reid of Nevada declined to answer questions about the details of the behind-the-scenes talks on the bill but said he is confident the Senate would soon pass the bill, which the Congressional Budget Office says would cost $848 billion in the first 10 years.

"Democrats aren't going to let the American people down," Reid said.

Concrete details of the Medicare buy-in idea were never revealed, but the outlines emerged last week as part of an agreement struck by liberal and moderate Democrats wrestling with a controversial proposal to create a government-run insurance plan.

Overall, supporters say the legislation would provide coverage to 31 million Americans who wouldn't otherwise have it in 2019. The bill would require all Americans to have health insurance and would provide subsidies to help low-income families pay for premiums.

Although Democrats have largely agreed on those provisions, they have faced internal divisions over the idea of a government-run insurance program. They have also wrestled with how far the bill should go in prohibiting coverage of abortions for those who receive federal subsidies to help pay for insurance.

The House passed its version of the health care bill last month.

Debate over the Senate legislation, meanwhile, stalled over an amendment offered by Sen. Byron Dorgan, D-N.D., that would allow for the importation of less expensive prescription drugs from Canada and elsewhere. Obama supported the idea as a senator, but the pharmaceutical industry is opposed.

Republicans such as Sen. John McCain of Arizona, who supports the amendment, say the White House and Senate Democrats don't want the measure to pass because it could disrupt an earlier agreement that importation would not be allowed as long as the industry didn't lobby against the underlying bill.

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Democrats Furious at Lieberman as They Huddle on Health Care

The entire Democratic Senate caucus is headed to the White House on Tuesday afternoon to talk health care with President Obama, just as the administration urges Majority Leader Harry Reid to cut a deal with Sen. Joe Lieberman, who is emerging as the skunk at the party for supporters of the massive package to create a new entitlement.

Lieberman opposes a proposal that would expand Medicare for people between the age of 55-64. Lieberman has also said he would oppose a government-run insurance option and on Sunday said that Senate leaders need to scale back the bill, removing both provisions from the final product, in order to get his vote.

Congressional staff familiar with negotiations said the White House is strongly urging Reid to work with Lieberman to eliminate the Medicare provision.

But Reid and other Democratic lawmakers are said to be furious that Lieberman publicly called for the elimination of the proposal before members received an analysis by the nonpartisan Congressional Budget Office on the cost of such a plan.

Clearly inundated by calls to his office and a general backlash against his boss, a Lieberman aide told Fox News, "I want to emphasize, he would like to vote for a bill. He's not opposed to health care reform."


Democratic senators are meeting Monday night on the health care bill, and many are expected to voice their annoyance at Lieberman, the self-styled "independent Democrat."

"There are some people who are going to really want to get some frustration at Joe off their chest," one senior Senate Democratic aide told Fox News.

Some leadership aides said they thought Lieberman might not show up at the Monday night caucus meeting, but a Lieberman spokesman told Fox News the senator is likely to attend. Lieberman has said in the past that he will not attend purely political meetings.

The senator's senior aide said Lieberman's views are no surprise to Reid, who knew of the concerns as early as Thursday. According to the Lieberman aide, the senator's staff told negotiators last week, when the Medicare buy-in was developed, that he had problems with it. Lieberman sent a letter to Reid on Thursday and restated his concerns on Friday.

"It should not come as any surprise to the leadership what the senator's concerns were. Any contrary suggestions by Democrats under the cloak of anonymity are false and self-serving," the aide said.

The aide added that the senator does want to vote for a health care reform bill and sees "much good" in the existing bill, including insurance market reforms.

Lieberman, the aide said, sees the expansion of Medicare as "unnecessary" and "redundant" since Reid's original bill "already addresses the issues of access (with federal subsidies) and cost control."

White House Communications Director Dan Pfeiffer said the president is not involved in the internal squabble between Lieberman and the majority leader.

"The White House is not pushing Senator Reid in any direction. We are working hand in hand with the Senate leadership to work through the various issues and pass health reform as soon as possible," Pfeiffer said.

But White House Press Secretary Robert Gibbs, who would not characterize the nature of Obama's involvement, said he's closely involved in the talks.

"The president is not agnostic to continuing to making progress on health care reform and trying to get it through the Senate," Gibbs told reporters Monday. "The president's been involved.
We wouldn't be sitting here the 14th of December, when you'd much rather be Christmas shopping, discussing the Senate being in on the weekends if the president wasn't involved. The president's been involved the whole time."

And congressional aides said the White House absolutely is urging Reid to make a deal though to say so is bad form in the minds of the Senate leadership.

After his Sunday show appearance, Lieberman met privately in Reid's office with White House Chief of Staff Rahm Emanuel, a fixture on Capitol Hill these days as health care reform gets hammered out, along with other key White House aides.

Even with anger directed at Lieberman -- echoed with far less diplomacy in the liberal blogosphere -- the caucus is fractured on a number of topics within the overall reform effort, and Obama must pull his former colleagues together around his top priority else risk the failure of the effort.

Some members have expressed varying degrees of skepticism about the bill in its current form, including the newest form of the so-called public option that's currently awaiting the CBO analysis.

The CBO could report as early as Tuesday on the cost of the Medicare proposal. A negative report could cost Reid the vote of Missouri Sen. Claire McCaskill.

Gibbs said he doesn't want to get ahead of the reporting since "CBO had told you all before that legislation bends the cost curve, the legislation would slow the growth rate in health care spending, that the health care legislation wouldn't add to the deficit but it would in fact help our fiscal situation. ...

"In terms of the specific policy, again, that's what the CBO is evaluating. And I think many on Capitol Hill await what they have to say," he said.

Lawmakers are also at an impasse over an amendment by Sen. Byron Dorgan, D-N.D., that would allow for the importation of cheaper drugs from an approved list of countries like Canada.

The Food and Drug Administration has taken a stand against the measure, and as a result, a handful of Democratic senators are blocking the Dorgan amendment. Dorgan in turn has said he will hold up all other action on the bill until he gets a vote.

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Australia 'trying to kill Kyoto'

Developing nations have staged a two-hour walkout at the Copenhagen climate talks, accusing the developed world, led by the European Union, Australia and Japan, of pushing to "kill the Kyoto Protocol".

The walkout was organised by the G77 group, which represents 130 small, mostly African nations.

G77 chief Lumumba Di-Aping has accused the Danish president of the Copenhagen process, Connie Hedegaard, of siding with the United States and the rest of the developed world in trying to kill off Kyoto.

The Kyoto Protocol is the only legally-binding agreement the world has on climate change at the moment. It legally binds rich countries to cut their carbon emissions but does not compel developing countries to do the same.

"It has become clear that the Danish presidency, in the most undemocratic fashion, is advancing the interests of the developed countries at the expense of their balance of the obligations between developing and developed countries," Mr Di-Aping said.

Negotiating between two tracks


Ms Hedegaard says the small African nations should focus on the big picture and not get bogged down in the process.

"I'm trying to unite all kinds of different views here. ... But we are respecting the mandate, we are pursuing the two tracks," she said, referring to both sides of the negotiations.

Most of the 192 nations represented at the talks are not members of Kyoto; the only countries that are bound to cut emissions under the terms of Kyoto are the Annex 1 countries, which number about 37.

The developing world wants to extend the Kyoto deal rather than create a whole new framework, which they feel will represent a watering-down of commitments from the developed world.

The poor and smaller states say it is the developed world that wreaked climate havoc on the developing world.

Developing nations want rich countries to pay their climate debt in cash and also by reducing carbon emissions.

They fear the rich countries will attempt to draft a new treaty that will not place strict and legally binding commitments on the developed world to cut their emissions.

More than Kyoto extension

That is a big stumbling block in the negotiations in Copenhagen, because the United States has said in no uncertain terms that it will not, under any circumstances, sign up to Kyoto.

The US wants an entirely new agreement that signs all nations up to some form of action on climate change, rather than leaving all the heavy lifting to the rich world.

Australia is considered one of the bad guys by the small countries because while it is not saying it wants to get rid of Kyoto, it is saying an extension to Kyoto is not enough.

Federal Climate Change Minister Penny Wong says simply extending Kyoto will not deliver the outcomes the world needs to meet the challenges of climate change.

About 120 heads of state will be in Copenhagen for the summit's climax on Friday and it is looking increasingly possible that the final agreement out of Copenhagen might actually be several agreements.

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Summers Predicts U.S. Hiring Will Start to Grow in Spring 2010

Dec. 14 (Bloomberg) -- White House chief economic adviser Lawrence Summers said U.S. employers will start to increase payrolls this spring, ending a decline that’s led to the loss of 7.2 million jobs since the recession began two years ago.

“I believe, as do most professional forecasters, that by spring, employment growth will start to be turning positive,” Summers, director of the National Economic Council, said in an interview yesterday on ABC’s “This Week.”

Summers pointed to the loss of 11,000 jobs in November, the fewest in 23 months, as a sign the labor market is healing. He said the unemployment rate, which fell to 10 percent last month from a 26-year high of 10.2 percent in October, may rise again as the economic recovery encourages more people to enter the workforce.

President Barack Obama will have a “serious talk” with executives from 12 major banks to press for expanded lending when he meets with them today, Summers said. Administration officials want to see an expansion of credit to companies as a way to stimulate job creation.

“We were there for them and the banks need to do everything they can to be sure they’re there for customers across this country,” Summers said.

Obama said he is frustrated that “fat-cat bankers” are continuing to take large bonuses and fighting his effort to revamp financial regulation.

“I did not run for office to be helping out a bunch of fat- cat bankers on Wall Street,” Obama said in an interview with CBS’s “60 Minutes” program that aired yesterday and was taped last week.

Greenspan’s Outlook

Former Federal Reserve Chairman Alan Greenspan said yesterday he expects a quick rebound in payrolls because companies are stretched to expand production after workforce cuts made during the recession.

Greenspan said on NBC’s “Meet the Press” that businesses were “very frightened” by the financial crisis and deterioration of the economy early this year and cut their payrolls so deeply that they will have to begin hiring soon.

“We have a level of employment at this stage, which is barely adequate to staff the level of the output,” Greenspan said. “It seems to me virtually inevitable, if nothing else were to happen, that employment would start to come back fairly quickly.”

Greenspan said the rate of unemployment may not decline quickly in part because it takes the addition of 100,000 jobs a month “just to stay even.”

Unemployment Forecasts

Some economist says the unemployment rate will continue to climb. Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, forecasts that the jobless rate will rise to 10.75 percent by the middle of 2011 from 10 percent now.

Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York, projects the rate will average 9.9 percent in 2010, compared with the 20-year average of 5.6 percent. Kasman’s forecast of 3.4 percent economic growth next year is higher than the 2.6 percent median of 83 economists surveyed by Bloomberg News.

Obama announced a package of initiatives on Dec. 8 to promote job growth, including a boost in spending on roads and bridges, assistance to small businesses, and tax breaks to homeowners for who weatherize their homes or make other energy conservation improvements.

At today’s meeting, Obama will ask bankers to “support enhanced lending” to bolster the economy in return for the support the financial industry received in the $700 billion bank bailout, Summers said.

Meeting With Executives

Obama is to meet with executives representing banks including Citigroup Inc., Goldman Sachs Group Inc. and JP Morgan Chase & Co., White House officials said late last week. Also represented will be Bank of America Corp., Wells Fargo & Co., Capital One Financial Corp. and American Express Co.

“Absolutely we know that some of the practices that happened on Wall Street did set us up for what was a very severe financial crisis, and we are all still paying the price,” the head of Obama’s Council of Economic Advisers, Christina Romer, said on NBC’s “Meet the Press.”

A White House official said Dec. 11 that Obama would focus in the meeting on efforts to boost small business lending and on the financial regulatory overhaul proposal Congress is considering.

In an appearance on CNN, Summers said job creation is the administration’s top priority, followed by deficit reduction in the “medium run.”

Summers wouldn’t say whether Obama would get behind a possible bipartisan deficit-cutting commission to identify government spending reductions.

‘Any Approach’

“The president is open to any approach that offers the prospect of controlling the budget deficit,” Summers said.

Senator Mark Warner, a Virginia Democrat and former governor, said on CNN he backs the commission idea.

“We need to start down a path that gets us to an up or down vote” on budget priorities, Warner said.

A group of Senate Democrats threatened to oppose a boost in the U.S. debt limit by up to $1.9 trillion unless lawmakers agree to create a special commission to address the government debt. That is opposed by fellow Democrats such as Finance Committee Chairman Max Baucus, a Montana Democrat whose panel handles tax and spending matters.

Baucus called the idea “truly dangerous” last week because “if we were to cede all of our responsibilities to this commission” without allowing its recommendations to be amended, “we would risk setting in motion some truly terrible policy.”

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Obama: 'Fat-cat' bankers owe help to U.S. taxpayers

WASHINGTON — President Obama, already at odds with bankers over big bonuses and new regulations, plans to urge executives at a White House meeting today to provide more loans to small-business owners.

Top White House economic adviser Lawrence Summers said Sunday that Obama will remind the bankers of the taxpayer help they received during last year's financial crisis.

"We were there for them," Summers said on ABCsThis Week With George Stephanopoulos. "And the banks need to do everything they can to be sure they're there for customers across this country."

During a taped interview broadcast Sunday night on CBS' 60 Minutes, Obama blasted banking executives for opposing tighter regulations on Wall Street and for awarding themselves multimillion-dollar bonuses after they had repaid federal bailout money.

"I did not run for office to be helping out a bunch of, you know, fat-cat bankers on Wall Street," Obama said.

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The 10% unemployment rate is a major focus of the Obama administration. Last week, the president unveiled a jobs package that includes more infrastructure projects and more loans for small-business owners.

Obama's leverage is limited, however; nine of the 12 banks invited have repaid money they received under the Troubled Asset Relief Program.

The meeting is nothing more than "political theater," said Virginia-based banking consultant Bert Ely. He said "reckless lending" also contributed to last year's financial crisis, and banks across the country are already under pressure from local examiners about making too many "risky loans."

High unemployment is creating a political problem for Obama's team and "they're trying to make political points whenever they can," Ely said.

Scott Talbott, senior vice president of government affairs with the Financial Services Roundtable, said its members are looking forward to a constructive meeting with the president. "Our banks are looking to make good loans," he said.

Republican lawmakers such as Sen. John Thune, R-S.D., said banks and other businesses are being cautious because of "policy uncertainty" in Washington.

"They see more borrowing, more taxing, more debt, more spending and, in the health care bill, they see their premiums going up," Thune said on CNN's State of the Union.

Summers, director of the president's National Economic Council, said on ABC that Obama wants to have "a serious talk" with bankers, some of whom might not be around today were it not for taxpayer assistance.

In his 60 Minutes interview, Obama criticized the banking industry for opposing new regulations on Wall Street proposed in the wake of the financial crisis. The House approved a package on Friday, and the issue now moves to the Senate.

Obama also said he suspects some banks repaid the government in order to hand out lavish bonuses.

Firms that have not repaid the money are subject to pay restrictions by the government.

"People on Wall Street still don't get it," Obama said, adding that bankers should not be surprised at anger over big bonuses. "Why do you think people might be a little frustrated?"
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