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Groups: DMC sale violates law

Wednesday, March 31st, 2010

Groups: DMC sale violates
law

By PATRICIA ANSTETT
DETROIT FREE PRESS MEDICAL WRITER

The sale of the Detroit Medical Center to a for-
profit Nashville company violates state law and
raises issues about whether poor patients who
depend on the DMC will be assured of care for
years to come, three nonprofit Michigan
organizations said today.

Marjorie Mitchell, executive director of Michigan
Universal Health Care Network, said the
organizations e-mailed today a three-page list
of concerns about the sale to Michigan Attorney
General Mike Cox.
Mitchell testified briefly today at the Detroit
City Council about the issue and distributed the
letter. The two other nonprofit organizations
signing the letter were Metropolitan Organizing
Strategy Enabling Strength, or Moses, an
organization of community and religious leaders
active on health issues, and Michigan Legal
Services, a Detroit legal aid organization. The
three groups called themselves the Coalition to
Protect Detroit Health Care.
The groups objected to the proposed agreement
announced March 19 by the DMC to be
purchased by Vanguard Health Systems, a for-
profit firm with 15 hospitals in Arizona, Texas,
Illinois and Massachusetts.
DMC said the sale will bring $850 million for
needed improvements and pay off past pension
and bond debts, in all a $1.5-billion deal in a city
eager for new investments.
Citing a provision in state law, the letter said
Michigan law is clear that nonprofit companies
should not “permit assets … to be used,
conveyed or distributed for non-charitable
purposes.”
The DMC sale has national significance, at a time
when health care leaders wonder if more
struggling nonprofit hospitals will convert to
for-profit status. In Boston, the Caritas Health
System, the state’s second-largest hospital
group, also announced plans this month to be
bought, by New York private equity firm
Cerberus Capital Management, in an $830-
million deal that hospital officials say will allow
the chain to shed debt and make major
improvements.
The DMC sale must be approved by Cox and
hinges on the DMC getting status as a
Renaissance Zone, which gives state and local tax
breaks to companies and residents in exchange
for developments in blighted communities.
[Page 2 of 2]

The Wayne County Board of Commissioners is
scheduled to discuss the Renaissance Zone plan
for the DMC Wednesday. “The county’s initial
due diligence indicates such a transaction can
occur in Michigan,” said Wayne County
Executive Robert Ficano in a statement. Ficano
said he is “sure the Attorney General will review
this $1.5-billion investment objectively.”
Vanguard officials pledge to honor for 10 years
charity care policies of the DMC — Michigan’s
largest provider of safety net care to poor and

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uninsured people — and to not close DMC’s six
acute-care hospitals without board approval.
Mitchell’s organization is one of the state’s most
active groups backing health reforms. She also
was involved in a 1997 Lansing protest that
blocked the sale of a Lansing hospital system to
another for-profit company, a case cited several
times recently as one relevant to the DMC
purchase.
“The mission of a for-profit is to serve the
stockholders,” the letter to Cox said. The letter
said it is the opinion of the three groups that the
purchase by Vanguard of the DMC “violates
Michigan’s nonprofit corporation statute.”
The three organizations asked Cox to hold
public meetings to answer questions about the
impact of the proposed sale on the health of
Detroiters, particularly uninsured people.
The groups also have questions about how the
DMC’s $140-million charitable assets will be
used as well as concerns that use of state
Renaissance Zone money would benefit a for-
profit company.
Mike Duggan, CEO of the DMC, said they have
studied the 1997 case similar to the DMC’s
proposed sale and concluded that, “we did this in
the proper way.”
Duggan said that although the 1977 sale was
blocked, the judge ruled that conversions of
nonprofit hospitals to for-profit could be legal
as long as the nonprofit got the right market
value from the sale. Duggan said he’s confident
the DMC will be able to answer all the questions
raised by the nonprofit organizations.
In a news statement, Cox’s office said: “Under
Michigan law, the Attorney General has a
statutory obligation to review the sale of
charitable assets. To fulfill that responsibility,
the Attorney General’s office has initiated
preparations for a formal review of the sale of
the non-profit Detroit Medical Center. We plan
to examine the transaction carefully and openly,
in order to assess whether Michigan citizens are
receiving their money’s worth.”
Contact PATRICIA ANSTETT: 313-222-5021 or
panstett@freepress.com.
Staff writer John Wisely contributed to this
report.

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Robert Ehrlich says he’ll make another run for Maryland governor

Wednesday, March 31st, 2010

Robert Ehrlich says he’ll make another run for Maryland governor
By John Wagner
Washington Post Staff Writer
Wednesday, March 31, 2010; A01

Robert L. Ehrlich Jr. said Tuesday that he will try to win his old job back in November, confirming plans for a much-anticipated rematch with Maryland Gov. Martin O’Malley, who defeated him in a bitter contest four years ago.

A formal announcement, planned for next Wednesday in Montgomery County, will set up a rematch between two of the state’s dominant political personalities.

Both are fierce competitors. Their 2006 race was highly negative and at times intensely personal, with Ehrlich (R) repeatedly calling O’Malley “a whiner” and running ads that highlighted the homicide rate and struggling schools in Baltimore, where O’Malley was mayor. O’Malley (D) accused Ehrlich of dirty tricks and portrayed him as cozy with energy lobbyists and an unpopular President George W. Bush.

Ehrlich said Tuesday that he plans to run a forward-looking campaign, disputing characterizations of the race as a grudge match.

“The last thing that people want to see is a schoolyard, middle-school, who-struck-John, bully stuff right now,” he said. “They want to hear your ideas about how you’re going to fix it. They want to hear about your ideas about what you want to do.”

Ehrlich will try to take advantage of what he has called “an anti-incumbent, anti-spending” sentiment among voters. But running as an outsider could be a difficult sell for a man who has spent 20 of the previous 24 years in public office, including a stint in Congress.

Still, Ehrlich’s entry into the race is a testament to how much the national mood has shifted in favor of Republicans since President Obama’s election in 2008. Ehrlich said Tuesday that he concluded back then that he was unlikely to ever win another statewide race in heavily Democratic Maryland but that he has since become emboldened by Republican victories in other states.

“Clearly, the environment did change,” Ehrlich said during a conference call with reporters, during which he confirmed plans for an announcement in Rockville followed by an event that evening in his boyhood home town, Arbutus.

The GOP’s future
Ehrlich’s performance could go a long way toward determining his party’s relevance in Maryland. His 2002 upset of then-Lt. Gov. Kathleen Kennedy Townsend (D) ushered in unfulfilled promises of a GOP resurgence in the state, and a loss this year could further demoralize a party that is outnumbered by Democrats in Maryland by more than two to one.

Both candidates are likely to make the economy the central focus of the campaign. O’Malley argues that Maryland will emerge from the recession stronger than most states because of his financial stewardship, while Ehrlich says tax increases and other O’Malley initiatives have hurt the state’s business climate.

“There’s a real sense of concern about the direction our state is taking,” said Ehrlich, who proposed larger spending increases during his four years as governor than O’Malley has. “Our small businesses are getting hit, and they are closing by the thousands. . . . The middle class is struggling under the weight of taxes — particularly the largest tax increase in Maryland history, imposed on them in 2007.”

In a statement issued by his campaign, O’Malley said, “I look forward to the upcoming campaign and a healthy debate about moving Maryland forward.”

Public polls have shown Ehrlich no closer to O’Malley than in 2006, when he beat Ehrlich by 6.5 percentage points. Democrats have built upon their advantage in voter registration since then.

Ehrlich, who has telegraphed a run for weeks with travels around the state, is among the last serious candidates in the country to declare his intentions for a statewide race on the ballot this fall. His advisers believe his near-universal name recognition and proven fundraising ability will enable him to mount a serious challenge in the seven months until Election Day.

Ehrlich will start the race far behind O’Malley in fundraising. In January, the governor reported $5.7 million in the bank, while Ehrlich reported $151,529 in a campaign account that he has kept open since 2006.

Preparing for a showdown
Maryland Democrats have been gearing up for an O’Malley-Ehrlich contest for months. The state party has released several Web ads that portray the former governor as a big spender who is friendly with special interests.

O’Malley campaign manager Tom Russell said he is glad that Ehrlich is “finally announcing” and said Ehrlich’s record “should provide a good contrast with the tough leadership and real progress achieved by the O’Malley/[Lt. Gov. Anthony G.] Brown administration.”

The animosity between Ehrlich and O’Malley was evident during a pair of debates taped the same day in 2006, in which they traded scathing assessments of each other’s records.

Ehrlich accused O’Malley of neglecting Baltimore’s low-performing schools, of wrongfully arresting thousands of its residents and of practicing a “leadership style of whining and blaming others for your failures.”

O’Malley argued that there were “two Bob Ehrlichs,” one who, during an election year, touts tax cuts, investments in education and a commitment to the environment, and another whose record of governing is starkly different.

“We can do better, but we need a governor who is on the side of working families,” O’Malley said in the first debate.

With 37 governor’s races around the country this fall, Maryland’s contest has yet to become a priority for Republicans nationally.

A PowerPoint presentation given to party donors last month listed 16 “top gubernatorial targets.” Traditionally Democratic states — including Massachusetts, Illinois, Wisconsin, Michigan and Maine — made the list. Maryland did not.

But Doug Heye, a spokesman for the Republican National Committee, said that could change. “The second Bob Ehrlich announces he’s running, it becomes a top race,” Heye said.

O’Malley, meanwhile, is well positioned if he needs help, his aides suggest. He served as finance chairman of the Democratic Governors Association in the 2008 election cycle, and is now vice chairman of the organization, which works to elect Democratic governors.

Since his 2006 loss, Ehrlich has worked to maintain visibility with a weekly radio talk show on Baltimore’s WBAL (1090 AM). He also opened and has led a Baltimore office for the North Carolina-based law firm Womble Carlyle Sandridge & Rice, where several former administration aides hold jobs.

Ehrlich’s tenure in Annapolis was marked by frequent clashes with the Democratic-dominated General Assembly. His efforts to legalize slot-machine gambling were repeatedly thwarted, and several high-profile initiatives were enacted after the legislature overrode his vetoes.

Ehrlich counts among his accomplishments the acceleration of plans for the Intercounty Connector and a major initiative to upgrade the state’s wastewater-treatment plants.

Staff writer Aaron C. Davis contributed to this report.

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Mortgage investors rising

Wednesday, March 31st, 2010

Mortgage investors rising
By Silla Brush – 03/30/10 07:06 PM ET
The Hill

As millions of home foreclosures racked Main Street, a group of big-league financial players turned their eyes to the nation’s capital, looking to protect $100 billion they had invested in the housing market.

Mounting home foreclosures were weighing heavily on their portfolios. So the hedge funds and money managers battled their way onto the scene in classic Washington style.

The companies — including Fortress Investment Group, which has $32 billion under management — spent millions of dollars on the biggest K Street names. They set up their own ad hoc lobbying group: the Mortgage Investors Coalition. They took on big banks. They pressed their case on both ends of Pennsylvania Avenue.
Their message was simple, if surprising: Mortgage investors on Wall Street have the same interests as homeowners on Main Street. Washington needed to do more to push banks to modify loans and write down principal to reduce foreclosures, investors argued.

“We happen to believe the needs of the homeowners are very interestingly aligned with the needs of the investors,” said Micah Green, a lobbyist at Patton Boggs who represents the investors. “Both find that they’re in a mortgage that they shouldn’t be in and don’t need to be in.”

Investors favor loan modifications because they can recoup a greater portion of their investment than if the loans headed to foreclosure.

More than a year of lobbying is starting to pay off — potentially in a major way. The group cheered the Obama administration’s decision last week to provide greater incentives for mortgage modifications and refinancings.

And the investor coalition is no longer a loose group, but has transformed itself into the formal Association of Mortgage Investors, which wants a seat at the table in Washington a good while longer.

The investors hold major stakes in what are called residential mortgage-backed securities. Individual home loans are often bundled into much larger pools, or securities, that can be bought and sold by investors. The coalition’s investors have money in a specific part of that market: securities backed by first liens, commonly just called mortgages.

To help deal with the foreclosure crisis, consumer advocacy groups and many Democrats support giving bankruptcy judges more power to write down mortgages. That policy, which banks often call “cramdown,” has been toxic in much of the financial world and has led to bruising battles on Capitol Hill.

Green said the investor group never reached a formal position on the bankruptcy option. Instead, Green said, the investors are focused on other steps to encourage modifications to loans to help homeowners avoid foreclosure.

The investors spent the end of 2009 and early portion of this year prodding the administration and Congress to deal head-on with a stumbling block in the modification process. While they said they were willing to modify first liens and help homeowners, they argued the process was being held up over an issue with second liens.

Those liens, often called home equity lines of credit, boomed as the housing market took off and homeowners looked to leverage the equity in their homes. The secondary liens have been big business for major commercial banks; four banks hold roughly 45 percent of total outstanding second liens.

The administration first announced a second-lien program last May and unveiled details in August. But the program barely got off the ground. Critics, including Neil Barofsky, special inspector general over the $700 billion financial rescue package, said by early this year it had few results.

Curtis Glovier, managing director at Fortress, testified to the Senate Banking Committee last year that the second liens were posing a problem in loan modifications. Glovier said servicers like banks favor loan modification programs “that defer recognition of losses on the second lien portfolios.”

So long as second liens remained a problem, borrowers would face high debt burdens and the threat of foreclosure.

To make the case, investors spent more than $1.1 million on Patton Boggs, a perennial lobbying powerhouse. Fortress on its own spent more than $300,000 in 2009 with the Podesta Group, another firm with close ties to Democratic leaders.

Financial analysts say the second lien issue is a big concern for investors. Amherst Mortgage Insight, a research firm, estimates half of home loans, bundled into securities without government backing, also have secondary liens.

The Obama administration’s new program attempts to provide much bigger incentives for loan modifications and to deal with the second lien issue.

The program will provide some underwater borrowers with a way to refinance into a loan backed by the government through the Federal Housing Administration (FHA). As an incentive, the administration is putting $14 billion on the table to encourage lenders to participate by writing down the second liens.

Several of those policies are similar to a plan the investor group proposed in late January (which was obtained by The Hill). The investors proposed they would reduce the first liens if they could work alongside second lien holders to put homeowners into a new FHA loan.

The group also got a favorable boost in early March when House Financial Services Committee Chairman Barney Frank (D-Mass.) urged the big four banks to write down the second liens.

“I urge you in the strongest possible terms to take immediate steps to write down these second mortgages and allow principal modifications of the underlying first liens to take place,” Frank wrote to J.P. Morgan Chase & Co., Wells Fargo & Co., Citigroup and Bank of America.

Research analysts on Wall Street say that the new program has the potential to benefit housing markets but that there are numerous obstacles to how it is implemented. The program requires first and second lien holders to coordinate, which could prove a high hurdle, and the program remains voluntary.

Still, the investor group is pleased.

“In my view, the program has a great deal of promise,” Green said. “We believe first lien investors will participate in the program. But it’s also incumbent on other lien holders and other creditors to participate.”

The group of investors has grown since it first began, and now includes 15 major firms.

And Green said the group has between $150 billion and $200 billion in total mortgage investment stakes.

Green did not disclose the member companies. Congressional lobbying records name Fortress alongside Varde Partners, Aurelius Capital, Institutional Credit Partners LLC and HBK Capital Management.

“The voice of an association for mortgage investors needs to be heard,” Green said.

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Advocates: Earmark database needed

Wednesday, March 31st, 2010

Advocates: Earmark database needed
By Walter Alarkon – 03/30/10 07:20 PM ET
The Hill

Congressional appropriators aren’t meeting the White House’s goal of creating a searchable earmark database, according to transparency advocates.

A group of watchdogs called EarmarkData.org is pressing lawmakers to follow through on the administration’s push to make it easy to search for requests and awards of earmarks, which are the provisions members of Congress insert into spending bills to steer federal money to specific projects.

The transparency reforms undertaken since last year by Congress, while significant, have fallen short of the searchable earmark database wanted by the White House, the watchdog group said.

Congress has met one basic standard set by President Barack Obama. The House and Senate Appropriations committees have started sections on their websites that feature links to each lawmaker’s earmark requests. The House website was started this month, while the Senate site went online last year.

Obama called on lawmakers in January to “publish all earmark requests on a single website before there’s a vote, so that the American people can see how their money is being spent.”

The online information comes a year after House Appropriations Chairman David Obey (D-Wis.) and Senate Appropriations Chairman Daniel Inouye (D-Hawaii) required each lawmaker’s official website to post those requests separately.

At the same time, Obama called for an earmark request website. His administration said it was “time for a comprehensive, bipartisan, state-of-the-art disclosure database that allows Americans to examine the details of every proposed earmark before a vote is taken — one that is fully searchable and otherwise user-friendly.”

Jim Harper, a co-founder of EarmarkData.org, said that a searchable database would give the public the ability to use the earmark data in a useful way. Harper said outside experts still need months to sift through requests and the earmarks inserted in the dozen or more appropriations measures passed annually in order to make sense of them, even with appropriators putting earmark data online.

“Their good work has given the public a taste for more, to go all the way for full earmark transparency and satisfy public demand,” said Harper, the director of information policy studies at the Cato Institute.

Making it easier to track earmarks, used in the past to reward political donors, would prevent corruption and help show that Congress could manage a small part of the federal government, he added.

“If they can’t do earmarks right, what can they do?” Harper said.

Earmarks, which totaled about $16 billion in each of the past two years, make up about a half-percent of the federal budget, according to the nonpartisan Taxpayers for Common Sense.

Other groups that have backed the EarmarkData.org effort are the transparency advocacy organization Sunlight Foundation and earmark watchdogs Taxpayers for Common Sense and Citizens Against Government Waste.

The White House Office of Management and Budget (OMB) has updated its website for earmarks awarded in recent years, but it has yet to start a database that includes earmark requests for coming spending bills.

“The administration is on track for later this year to update the functionality of the earmarks database,” said Tom Gavin, an OMB spokesman. “We are going to make it far easier for anyone to search and track earmarks through fields like sponsor, state, recipient and dollar amount.”

Lawmakers are lukewarm to the idea of a new searchable database.

They note that they’ve made the information available online, an unprecedented step, and that groups such as Taxpayers for Common Sense have used it to assemble their own databases.

“We have instituted full reforms of the earmark process, increased transparency and cut back the dollar number of earmarks,” said Ellis Brachman, an Obey spokesman.

Inouye is “very satisfied” with the transparency steps already taken, his spokesman Rob Blumenthal said.

“Since earmarks are also included in many authorization and tax measures, it would be up to others in the Senate to determine whether it would be useful to establish a centralized website to track all members’ requests,” Blumenthal added.

Sen. Tom Coburn (R-Okla.) will soon introduce a bill that would create the searchable earmark database, his office said.

“Many taxpayers are concerned votes continue to be bought and sold with earmarks,” said Coburn spokesman John Hart. “Congress should implement President Obama’s recommendations. Doing less suggests Congress has something to hide.”

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Top 5 hurdles climate bill must clear

Wednesday, March 31st, 2010

Top 5 hurdles climate bill must clear
By Jim Snyder – 03/31/10 06:00 AM ET
The Hill

Sen. John Kerry (D-Mass.) has reached out to businesses in hopes of broadening support for climate legislation he expects to introduce shortly after Congress returns from its two-week recess.

As Kerry and his colleagues in the effort, Sens. Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.), make concessions to industries, they run the risk of losing support on the left, including from environmental groups that have been the longest and strongest backers of climate action.

Within industrial sectors themselves, there will be winners and losers no matter how the legislation is sliced. That will create both supporters and opponents of the legislation known to many as KGL, a reference to the lawmakers who will have to manage both sides to push the bill forward.
KGL appears to have created new momentum for a carbon cap, but the following is a list of hurdles the bill will have to clear to pass.

Allowances

Maybe no issue is more heavily lobbied than how the legislation distributes allowances, or pollution permits, to industry.

KGL has ditched the economy-wide cap-and-trade system. But the legislation would still require utilities and at some point major industrial emitters to hold pollution permits they could then trade on the market as needed. The number of allowances would gradually fall, forcing companies to cut back their emissions to keep pace or face stiff penalties.

The House climate legislation gave equal weight to past emissions and sales to distribute the permits. That gave an advantage to utilities with big nuclear resources, because nuclear power doesn’t release carbon dioxide when operating. (The House bill also prevented companies from holding more allowances than they required, negating a potential windfall.)

Coal-dependent Midwestern utilities want the allowances distributed based on emissions only, which would help lower their costs to comply.

“The House bill was seen as a transfer of wealth from the Midwest to the coastal states,” said Zack Hill, who manages the Midwest Climate Coalition, a group of a dozen utilities. “Whatever bill Congress comes up with, that shouldn’t be the case.”

The other side argues it deserves some benefit for investing in technologies like nuclear power that have a lower carbon footprint.

Pre-emption

Businesses that support climate legislation say they want “certainty” on emissions regulations. For them, a key is that federal greenhouse gas law “pre-empts” action at the Environmental Protection Agency (EPA) to regulate carbon through the Clean Air Act as well as state efforts to rein in CO2 emissions.

It is a particularly sensitive topic in California, which has pushed regulations to lower tailpipe emissions. Sen. Dianne Feinstein (D-Calif.) has warned against pre-empting states from acting on climate regulations. Environmental groups also want EPA to retain its authority as a backstop and because they believe the agency could force older coal plants to close earlier than the legislation will require.

But industries say they require federal pre-emption to block a patchwork of state regulations.

Sierra Club chief Michael Brune told The Hill’s E2 Wire: “We will go to the mat for defending Clean Air Act authority.”

Offshore Drilling

Brune also pointed to another potential stumbling block: offshore drilling. “We will not be able to accept the dramatic giveaway that offshore oil drilling represents,” he said.

But expanding offshore drilling opportunities to lower dependence on foreign oil is one of the main reasons Sen. Graham is helping to craft a bill. The legislation is expected to have an opt-in, opt-out mechanism. State legislatures closer to shores will have to affirm they want drilling off their coasts.

Environmental groups are worried, though, that Democratic leaders are risking too much. Ten coastal-state Democrats wrote KGL last week warning against “unfettered” access to offshore areas.

Another potential hurdle is whether states should get a share of the royalties for oil and gas operations in federal waters off their coastlines. Sen. Jeff Bingaman (D-N.M.), the chairman of the Senate Energy and Natural Resources Committee, has said the royalties should go to federal coffers. But legislative fence-sitters, such as Sen. Mary Landrieu (D-La.), have pushed for states to take a greater share.

Natural gas v. coal

Because natural gas has a lower carbon footprint than coal, the fuel could stand to gain under climate legislation. The natural gas industry worries that subsidies for coal and renewable energy sources like wind and solar power will block the industry from growing. The industry is lobbying for new incentives to encourage utilities to switch from coal to natural gas.

New findings have raised natural-gas supply estimates, which the industry says should assuage concerns about cost and price volatility. Coal lobbyists argue coal is still the cheaper option and that climate legislation needs to support development of carbon capture and sequestration technologies.

Other industries like agriculture and manufacturing will lobby on this issue. Chemical companies and farmers are sensitive to natural-gas price swings.

Link fee

Under House legislation, oil companies would have to hold pollution allowances to cover the emissions of their product, gasoline, from tailpipes, as well as emissions from their refining facilities.

In KGL, oil companies would face a fee on their products set to the carbon price in the market. The change is the main reason why American Petroleum Institute President and CEO Jack Gerard described himself as “encouraged” by the direction KGL seemed to be taking.

At least three oil companies are pushing the fee, but as is the case with all things climate, the devil is in the details. Some oil lobbyists said they were worried KGL will force the companies to purchase allowances if the fee fails to drive down tailpipe emissions sufficiently.

The unknown

Joshua Freed, director of the Clean Energy Initiative at The Third Way, a Democratic think tank, said the biggest issues will be those that are important to the 57th, 58th, 59th and 60th votes in the Senate needed to clear a filibuster.

Kerry, Graham and Lieberman have reached out to businesses and other groups, but everyone is waiting on the actual bill.

“We don’t have a breathing body yet, let alone a corpse to send over to CSI,” Freed said.

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Obama to open Southeast coast to oil and gas drilling

Wednesday, March 31st, 2010

Obama to open Southeast coast to oil and gas drilling
By Ian Swanson – 03/31/10 08:51 AM ET
The Hill

President Barack Obama on Wednesday is set to announce that his administration will open oil and gas drilling off the East Coast.

Obama is expected to announce the U.S. will open leasing for oil and gas drilling of the coast of Southeastern states. Drilling would not be allowed off the coast of New Jersey and farther north.

Longstanding bans on offshore drilling along the Atlantic and Pacific coasts expired in 2008, but Wednesday’s announcement will mark the first time the Obama administration has laid out where it will allow new leasing.

Alaska’s Bristol Bay is expected to be protected under the plan. Part of Bristol Bay had been eyed for development during the George W. Bush administration.

The move also would not open up the Pacific Coast to drilling, according to a report in The New York Times.
Obama will give his remarks on oil and drilling on Wednesday morning at Andrews Naval Air Facility in an address focused on energy security.

The moves comes as the Senate considers taking up climate change legislation. Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) are working on legislation they are expected to unveil in April.

Wider drilling is a part of the bill being crafted by the three senators.

Obama has signaled support for broader offshore drilling as he woos backing from Republicans and centrist Democrats for a wider energy and climate policy shift that includes measures to limit greenhouse gas emissions.


Update: The plan also proposes to allow wider drilling in the eastern Gulf of Mexico – if Congress allows it.

Much of the eastern Gulf remains off-limits under a 2006 law that expanded drilling in other parts of the Gulf. The plan to be announced later today would allow drilling greater than 125 miles from Florida’s Gulf shores, and administration officials say military training in the region would be protected.

The plan would also cancel four currently planned lease sales off Alaska’s northern coast. Instead those areas will be studied to determine whether they are suitable for leasing, according to an administration official.

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Sharp momentum shift back to the Democrats after passing health bill

Friday, March 26th, 2010

Sharp momentum shift back to the Democrats after passing health bill
By Alexander Bolton – 03/25/10 08:31 PM ET
The Hill

Political momentum has shifted so fast over the last week that it has given Republicans whiplash.

Democrats are heading into the two-week Easter recess in high spirits after passing the most sweeping domestic policy reform since Medicare was enacted four decades ago.

President Barack Obama on Thursday dared Republicans to make healthcare reform a campaign issue.
“They’re actually going to run on a platform of repeal in November,” Obama said. “Well, I say go for it.”

But even as some Republicans talk of using healthcare as a cudgel, others are questioning the hard-line opposition strategy that limited their input on the substance of healthcare reform and may deny them any chance of shaping financial regulatory reform later this year.

Cracks emerged in the unified front Republicans held throughout most of the healthcare debate. At one point, they had threatened to drag out the final battle over changes to the bill with an endless stream of amendments and budget points of order. But by mid-week, Republicans seemed to lose their appetite for an extended and acrimonious fight. They backed off those threats and allowed the chamber to hold a final vote on Thursday.

“Our constituents expect us to stand up and fight the good fight, but there’s always a reasonableness factor that needs to come into place,” said Sen. Lisa Murkowski (Alaska), vice chairwoman of the Senate Republican Conference. “Sometimes there’s a fine line between what is being an advocate for your cause and when you become obstreperous.

“We need to make sure that we’re always cognizant of that and we push appropriately so but recognize where that line is.”

Senators such as Jim DeMint (R-S.C.) had initially planned to offer scores of amendments to stall the healthcare reform fixes and stop Democrats from putting the finishing touches on the legislation.

By Wednesday, however, the political tone had changed.

“The leadership has asked us to focus on substantive amendments,” said DeMint on Wednesday. “I had 50 amendments, I still have them in my back pocket, but I’ll probably only offer two or three.”

The Senate eventually voted on only one DeMint amendment.

Doubts also spread to financial regulatory reform after Senate Banking Committee Chairman Chris Dodd (D-Conn.) called off negotiations with Republicans. GOP lawmakers then pulled their amendments from the markup and the legislation passed out of his committee on a party-line vote.

“I just think we should have been engaged since October in trying to seek a compromise bill,” said Sen. Bob Corker (R-Tenn.), a member of the Banking panel, in reference to financial regulatory reform. “Once something comes out of committee, you lose a little leverage. It’s one more step along the way.”

For many, the healthcare fight may come to symbolize the tipping point. House passage of broad healthcare reform, which Obama signed on Tuesday, has raised doubts within Republican circles over whether the GOP leadership made a mistake by trying to kill the bill instead of shaping it more to their liking.

Sen. Claire McCaskill (D-Mo.) said GOP colleagues privately expressed weariness with the hardball political tactics that have heightened partisan tensions.

“There have been a couple of [Republican] senators who have said sometimes, like last night, that ‘this is pointless, I don’t know why we’re doing this,’ ” McCaskill said in reference to a voting session that lasted until the early morning hours Thursday to consider GOP amendments to healthcare reform.

Democrats have repeatedly blasted the GOP as the “Party of No” for blocking business in the Senate. At one point earlier this year, Democratic aides said the Senate was sitting on 290 House-passed bills.

Murkowski acknowledged the danger of being labeled by Democrats, because it’s difficult for voters outside the Beltway to follow the intricacies of Senate procedure.

Even so, Republicans are still willing to take a stand on legislation that Democrats believe is broadly popular.

On Thursday afternoon, Sen. Tom Coburn (R-Okla.) blocked legislation to extend traditionally non-controversial provisions, such as unemployment insurance and a freeze in scheduled cuts to doctors’ Medicare payments.

Coburn stopped the package because its cost was not offset and would have added to the federal deficit.

Coburn’s stand is similar to a protest Sen. Jim Bunning (R-Ky.) waged on the Senate floor last month to block an extension of unemployment benefits and other “must-pass” provisions such as the doctors “fix.”

Democrats blasted Bunning and his GOP colleagues for obstruction and claimed a message victory after Republicans backed down and agreed to a short-term extension.

But Republicans also felt they won something from the confrontation, specifically credit among conservative voters for taking a strong position against additional deficit spending.

Even after passage of healthcare reform, which is considered a major victory for Democrats, Republicans haven’t abandoned tough tactics. But some members of their ranks are beginning to show second thoughts.

“Barack Obama badly wanted Republican votes for his plan. Could we have leveraged his desire to align the plan more closely with conservative views?” wondered David Frum, a former speechwriter for President George W. Bush, in an essay published Sunday.

“Too late now. They are all law.”

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Obama signs healthcare into law

Tuesday, March 23rd, 2010

Obama signs healthcare into law
By Eric Zimmermann – 03/23/10 11:55 AM ET
The Hill

President Barack Obama signed healthcare reform into law on Tuesday, capping a legislative victory Democrats have sought for decades.

“Today, after almost a century of trying; today, after over a year of debate; today, after all the votes have been tallied, health insurance reform becomes law in the United States of America,” Obama said minutes before signing the legislation.

“Here in this country we shape our own destiny,” Obama said. “We have now just enshrined, as soon as I sign this bill, the core principle that everyone should have some basic security when it comes to their healthcare.”

He later added that he was signing the bill for his mother, who he said had battled with insurance companies.

Obama was surrounded by House and Senate leaders and key committee chairmen who had worked on healthcare reform as he signed the legislation. Vice President Joe Biden, Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) were the closest to Obama.
Others in the picture included Senate Majority Whip Dick Durbin (D-Ill.), House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.), Senate Finance Committee Chairman Max Baucus (D-Mont.), Rep. John Dingell (D-Mich.), Acting Ways and Means Committee Chairman Sandy Levin (D-Mich.) and Rep. Charles Rangel (D-N.Y.), who stepped down from that committee.

The late Sen. Edward Kennedy’s (D-Mass.) widow Vicki was nearby, as was Health and Human Services Secretary Kathleen Sebelius and White House Office of Health Reform Director Nancy-Ann DeParle.

Scores more House and Senate Democrats were bused to the White House to view the ceremony. Many took pictures to document the moment; before Obama came out for the ceremony, members posed in front of his podium.

When Obama arrived, the audience of Democrats started a “fired up, ready to go” chant that was used during Obama’s presidential campaign.

Obama praised Pelosi and Reid, who hugged one another.

Obama thanked Congress for grinding through the process, acknowledging lawmakers for “taking its lumps” on the issue.

“Yes we did!” an unidentified lawmaker shouted, prompting laughter.

Senate Democrats are still working on a package of adjustments to the legislation Obama signed into law on Tuesday. The Senate hopes to vote on that package by the end of the week, when it would then be sent to Obama for his signature.

Once those changes are made, the law would expand healthcare access to an estimated 31 million Americans at a cost of $940 billion over 10 years. Those costs are to be offset by a series of reforms and taxes, and congressional budget examiners estimate it will cut $138 billion from deficit over the next decade.

Republicans have scoffed at those projections, and outside observers have raised questions over whether future Congresses will go along with reforms intended to reduce the budget deficit.

The House demanded the package of changes as a condition for passing the Senate bill. The legislation is to be considered under budget reconciliation rules that prevent a GOP filibuster.

Obama and his congressional allies chose to highlight the passage of the Senate bill with a ceremonial bill-signing after a grueling year of legislating.

Though liberals in his party have criticized the president for not pushing stronger reform, Democrats largely reacted with a mixture of relief and exuberance to the passage of a bill that was pronounced dead on more than one occasion.

At points in the debate, it seemed possible Obama would repeat the failure of President Bill Clinton, whose ambitious plans for healthcare reform collapsed in Congress. Democrats went on to be crushed in the following midterms.

Democrats hope that the controversy surrounding the current legislation will subside by November, alleviating what they fear could be substantial losses in both chambers.

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Some Dems walk plank with ‘yes’ vote

Monday, March 22nd, 2010

Some Dems walk plank with ‘yes’ vote
By: Alex Isenstadt
March 21, 2010 07:37 PM EDT
POLITICO

The polarizing health care votes cast late Sunday will have a profound effect on reelection campaigns across the nation, leaving a host of House Democrats—and a few Republicans—to explain or defend a politically treacherous vote that could determine control of the House come November.

Some members of Congress will end up with primary challenges as a result. Others may have signed their own political death warrant.

Here is POLITICO’s rundown of lawmakers whose reelection prospects have been significantly imperiled by their announced support of—or opposition to—health care reform.

The tough-district Democrats

The most immediate blowback from the votes will be felt by Democrats in marginal and conservative-minded districts. They are now assured of being attacked as accomplices to House Speaker Nancy Pelosi, who is not especially popular in many of those districts.

Of these members, many are in their first or second terms, and their path to Washington was greased by strong Democratic years in 2006 and 2008. Now, however, their support for the health care bill will put them in an unfamiliar defensive posture in an already tough year, without a popular Democratic presidential nominee leading the ticket or a GOP majority to campaign against.

Members in this category include Reps. Harry Mitchell of Arizona, Chris Carney of Pennsylvania and Baron Hill of Indiana, each of whom was elected in the 2006 Democratic wave and represents a seat that George W. Bush carried twice.

And virtually every freshman Democrat who won a marginal district in 2008 will need to mount a vigorous explanation of the benefits of a “yes” vote – especially members like Reps. Mark Schauer of Michigan and Dina Titus of Nevada, who won Republican-held seats.

Some veterans – among them nine-term Rep. Earl Pomeroy, who hails from solidly Republican North Dakota, and West Virginia Reps. Alan Mollohan and Nick Rahall – will also feel the heat.

By the time the clock ticked down on the health care vote late Sunday evening, a handful of junior Democrats holding marginal seats had also cast ‘yes’ votes that will be the staple of GOP attacks, including Arizona Rep. Gabrielle Giffords, Wisconsin Rep. Steve Kagen, Florida Rep. Ron Klein, and Illinois Reps. Bill Foster and Debbie Halvorson.

Two first-term women, however, stand out for being in extreme jeopardy: Florida Rep. Suzanne Kosmas and Colorado Rep. Betsy Markey, both of whom went from no on the November health care vote to yes in March and both of whom represent GOP-leaning seats that voted for presidential nominee John McCain in 2008.

After Markey announced her support for the bill last week, the National Republican Congressional Committee immediately blasted out an e-mail labeling her “Betsy Margolies-Mezvinsky” – a reference to former Pennsylvania Democratic Rep. Marjorie Margolies-Mezvinsky, who lost her seat in 1994 after taking a bullet for the party and casting a tough vote for President Bill Clinton’s budget.

Republicans are convinced a handful of vulnerable junior Democrats who have backed the economic stimulus, cap and trade and both health care bills – a roster that includes Ohio Reps. Mary Jo Kilroy and Steve Driehaus, New Hampshire Rep. Carol Shea-Porter and Virginia Rep. Thomas Perriello – are imperiled by tripling down on an ambitious Democratic agenda that hasn’t been completely embraced by their competitive House districts.

“The biggest question for a Democrat in a swing district is, ‘Are you independent of your party and your president?’” said Brad Todd, a GOP media consultant. “And anyone who votes for this legislation is not seen as independent.”

Vic Fazio, a former California congressman who chaired the Democratic Congressional Campaign Committee, said the key for vulnerable Democrats who backed Sunday’s bill was to highlight the benefits of the legislation – and vigorously respond to attacks.

“You have to be very aggressive. You don’t sit back and allow the attack,” said Fazio. “You have to make it the first thing and last thing to talk about.”

“Not everyone will have the intestinal fortitude to do it,” added Fazio. “But every one of these members – including those who voted against [the bill] – will have to explain it to somebody.”

The switchers

Several Democrats in competitive seats will face tough questions about why they supported the bill after opposing it during the House’s first vote in November – a list that includes Kosmas, Markey and freshman Ohio Rep. John Boccieri, who explained his vote in a news conference in front of the Capitol that was televised live on CNN.

On Saturday evening, the NRCC blasted out an e-mail to reporters with the header: “Dems Clap for Boccieri’s Flip-Flop.”

“Members who switched from no to yes will really have the difficulty,” predicted Tom Davis, the former Virginia congressman who chaired the NRCC. “I just think switching from no to yes makes you look like you were strong-armed.”

Larry Sabato, a University of Virginia political scientist, said those Democrats who went the other way – switching from yes in last fall’s health care vote to no on Sunday – will not be able to escape the heat, either.

Members in this category include Reps. Zack Space of Ohio and Michael Arcuri of New York, both of whom represent districts that voted for Bush twice.

“I’ve listened to some of the flippers, and they have very good explanations for their change of heart. Problem is, [Sen.] John Kerry had a good explanation for his: ‘I voted for it before I voted against it.’ Few voters are going to listen to their paragraph-length explanation,” said Sabato.

The upwardly mobile

For those Democrats running statewide in swing or conservative states, there is also risk of political fallout from the health care bill.

In Indiana, Rep. Brad Ellsworth, who is running for the Senate seat left open by the retirement of Sen. Evan Bayh, is already coming under withering attack for his support for the health care bill.

Also bound to face sharp scrutiny for their votes in favor of the bill – though perhaps not as much as Ellsworth – are Reps. Paul Hodes, running for the Senate in New Hampshire, and Kendrick Meek, running for the Senate in Florida.

According to a Public Policy Polling survey conducted this month, 42 percent of Florida voters said they supported the health care reform push, while 50 percent said they opposed it.

Republicans will have a harder time boxing in two House Democrats running for statewide office in conservative states who voted against the bill Sunday: Louisiana Rep. Charlie Melancon, who is running for the Senate, and Alabama Rep. Artur Davis, a gubernatorial candidate who was an outspoken backer of Barack Obama’s in 2008.

The ‘no’ votes

Lost in the focus on the political risk attached to supporting the health bill is the very real downside to voting no.

Arcuri, for one, lost the support of New York’s influential Working Families Party, which vowed not to allow him to run on its ballot line and said it would recruit an opponent to run against him in November.

Freshman Rep. Mike McMahon, another “no” vote who holds a Staten Island, N.Y.-based district that McCain won, is also facing the threat of losing the Working Families Party line. The Service Employees International Union, meanwhile, has signaled that it is open to finding a primary challenger to McMahon; and it’s running a tough ad in the Staten Island Advance targeting the congressman’s vote.

Michigan Rep. Bart Stupak emerged as a “yes” vote after reaching a deal with the White House on Sunday afternoon. But Stupak’s opposition to the bill’s treatment of abortion funding has already earned him a Democratic primary challenge from Charlevoix County Commissioner Connie Saltonstall, who last week won the backing of the National Organization for Women.

Democrats, for their part, are pledging to target a handful of potentially vulnerable Republicans from competitive seats over their opposition to the bill.

Last week, as the votes neared, the DCCC sent out a wave of press releases blasting GOP members including Washington Rep. Dave Reichert and California Reps. Mary Bono Mack and Dan Lungren.

The likelihood of success is much higher for another Republican who ranks high on the DCCC target list: Louisiana Rep. Anh “Joseph” Cao, who voted against the bill despite holding a heavily Democratic, New Orleans-area seat that gave Obama 75 percent of the vote.

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House sends Senate healthcare bill to Obama’s desk in 219-212 vote

Monday, March 22nd, 2010

House sends Senate healthcare bill to Obama’s desk in 219-212 vote
By Jared Allen and Jeffrey Young – 03/21/10 10:47 PM ET
The Hill

The House made history with the passage of comprehensive national healthcare reform Sunday, giving President Barack Obama a major legislative victory after more than a year of intense debate.

The Senate healthcare bill passed the House a vote of 219-212. Thirty-four Democrats voted against their party, and against the legislation. As expected, the Republican opposition was unanimous.

Less than one hour later, the House approved a package of changes to that legislation that will now be considered by the Senate under budget reconciliation rules that will prevent Republican senators from blocking the bill with a filibuster.

Democrats prevailed on that measure in a 220-211 vote, with 33 Democrats voting no.

Democrats also defeated a GOP motion to recommit the Senate bill, which would have killed the legislation, in a 199-232 vote.

Though the outcome seemed in doubt even as the House convened Sunday morning, as it had at numerous points throughout the past year, House Speaker Nancy Pelosi (D-Calif.) ultimately was able to deliver the votes and further cement her reputation as one of the strongest leaders of the House in decades.

“Imagine a society where someone could change jobs without losing health insurance,” Pelosi said in her floor speech, urging members to support the legislation. “Imagine an economy where people could follow their passions and their talents without having to worry that their children would not have health insurance.”
Pelosi also offered a tribute to the late Sen. Edward Kennedy (D-Mass.): “It wouldn’t be possible to talk about healthcare without acknowledging Senator Ted Kennedy, who made healthcare his life’s work,” she said.

In a 15-minute speech, GOP Leader John Boehner (Ohio) told members they should be ashamed to be approving a bill he said is not supported by their constituents.

President Barack Obama is expected to sign the Senate healthcare bill into law without delay. His signature will allow the Senate to consider the reconciliation bill.
Obama can now lay claim to an accomplishment none of his predecessors were able to achieve. Presidents from Bill Clinton to Richard Nixon to Theodore Roosevelt tried and failed what Obama was able to achieve on healthcare reform.
The Senate, which needs only a simple majority to pass the reconciliation bill, is expected to take up the legislation early this week and pass it only after overcoming Republican procedural delays.

The 34 Democrats to vote against the Senate bill were: Reps. John Adler (N.J.), Jason Altmire (Pa.), Michael Arcuri (N.Y.), John Barrow (Ga.), Marion Berry (Ark.), Dan Boren (Okla.), Rick Boucher (Va.), Bobby Bright (Ala.), Ben Chandler (Ky.), Artur Davis (Ala.), Lincoln Davis (Tenn.), Chet Edwards (Texas), Stephanie Herseth Sandlin (S.D.), Tim Holden (Pa.), Larry Kissell (N.C.), Frank Kratovil (Md.), Dan Lipinski (Ill.), Stephen Lynch (Mass.), Jim Marshall (Ga.), Jim Matheson (Utah), Mike McIntyre (N.C.), Michael McMahon (N.Y.), Charlie Melancon (La.), Walt Minnick (Idaho), Glenn Nye (Va.), Collin Peterson (Minn.), Mike Ross (Ark.), Heath Shuler (N.C.), Ike Skelton (Mo.), Zack Space (Ohio), John Tanner (Tenn.), Gene Taylor (Miss.) and Harry Teague (N.M.)

Sunday’s vote capped of a tumultuous weekend of drama, theatrics, arm-twisting and deal-making, all of which came on top of 20 months worth of legislative debate and maneuvering on the president’s signature domestic policy issue.

The vote in the House did not come easy for Obama and Pelosi, who face the prospect of servere loses in the upcoming mid-term elections.

House Republicans, who bitterly opposed the Democrats’ healthcare reform efforts at every turn, made clear they intend to hammer home their messages against the legislation – and make vulnerable Democrats who backed Pelosi pay at the polls.

The GOP could find some solace in the scene surrounding the Capitol throughout the weekend, as masses of conservative Tea Party protestors convened to demonstrate their intense opposition to Obama and his plans for healthcare. Republicans have also pledged to repeal healthcare reform if they are able to seize control of Congress.
They finally secured the 216 votes they needed late Sunday afternoon when the White House struck a deal with Rep. Bart Stupak (D-Mich.). Eight anti-abortion rights Democrats came on board after the White House issued an executive order clarifying the legislation’s ban on federal funded abortions.

Momentum built for Democrats throughout last week and into the weekend, as more and more members of the caucus announced they would support the bill.

As early as Saturday afternoon, leaders began hinting that they either had 216 votes in hand, or knew that they would secure them by Sunday night.

Democrats immediately basked in their victory, a legislative accomplishment that some of them have waited decades for, and many others came to Congress promising to deliver.

While Obama’s emotional Saturday speech and his administration’s efforts to broker a last-minute deals on abortion and Medicare reimbursement rates brought a critical mass of members into the yes column, Democratic leaders made it clear they believed Pelosi was the driving force behind the bill’s passage in the House.

“This was obviously a huge effort, but it was assisted by the fact that we were hearing stories from constituents,” Rep. Chris Van Hollen (D-Md.) said shortly before the vote of the effort Pelosi put forward. “Doing nothing was not an option.”

“The Speaker had to channel the momentum,” Van Hollen added. “It was either moving forward on this (healthcare) or doing nothing,” he said.

Roxana Tiron contributed to this story.

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