Morning Must Reads

The president favors decreasing the tax deduction for charitable giving, but aside from punishing non-profits and charities, the plan would probably not cover the massive costs expected to be associated with either of the main Democratic plans working their way through the Senate.

That leaves taxing health benefits above a certain level. Republicans proposed it before, so Democrats hope that it will be harder for them to oppose now. The difference is that Republicans favored the tax because they wanted to force people into the health insurance market while Democrats are just looking for cash to pay for a federal insurance program.

“Senate Democrats have been considering two options. The first would be to tax premiums above a certain level, such as the value of the standard family plan offered to federal employees, which will be about $15,000 in 2013, Senate aides said. That would raise about $420 billion over 10 years. The other option would be to apply the cap only to families earning more than $200,000 a year ($100,000 for individuals), which would raise about $160 billion over 10 years.

A senior Baucus aide said the committee is leaning toward the former option, which would do more to “bend the curve” of soaring health costs.

In either case, workers would see any insurance premiums in excess of the cap added to their wages and taxed as income. That could increase their tax bills by hundreds or thousands of dollars a year, said Paul Fronstin, director of health research at the nonprofit Employee Benefit Research Institute.”
 
New York Times — Obama Open to Reining in Medical Suits
 
Today President Obama will try to get skeptical doctors at the American Medical Association on board with his plan to have the government compete against private health insurance companies as part of a plan to cover the 15 percent of Americans who are uninsured.

Writers Sheryl Gay Stolberg and Robert Pear say that one offering will be malpractice tort reform, kind of.

Obama and other Democrats backed a plan in 2005 called “Sorry Works” which encouraged hospitals and doctors to apologize for medical mistakes in an effort to have more out-of-court settlements. Doctors, though, thought it sounded like an invitation to confirm liability in exchange for uncertain protections.

Hillary Clinton made a similar offer in 1993 in which she proposed tort reform in exchange for doctor’s support of her health care plan. That flopped because her plan was already disintegrating and her promise to doctors sounded like a last ditch effort.

To get doctors interested this time, Obama would have to do much more – especially on the front of capping injury awards. But trial lawyers are a key source of Democratic support, making it unlikely that an already anxious Senate would welcome the inclusion of another complex, controversial component of the president’s plan.

“Senator Harry Reid of Nevada, the Democratic leader, resisted medical malpractice legislation when it was pushed by Republicans in the past. “The whole premise of a medical malpractice ‘crisis’ is unfounded,” Mr. Reid said on the Senate floor in 2006, in a speech that quoted extensively from a book titled “The Medical Malpractice Myth.”

And any effort to restrict patients’ legal rights to sue will face tough opposition from the American Association for Justice, which represents trial lawyers and has met with Nancy-Ann DeParle, Mr. Obama’s point person for health reform, to express its concerns. Linda Lipsen, the association’s chief lobbyist, said practice guidelines were established by unregulated medical societies and “should not be conclusive” in a court of law.

The association may have an ally in Mr. Obama’s health secretary, Kathleen Sebelius, who is a former director of the Kansas Trial Lawyers Association.”
 
Washington Post – Muted Response Reflects U.S. Diplomatic Dilemma
 
Whoever won the Iranian election, the crackdown by the mullahs on protests in the contest’s wake has cast shadows on the regime in Tehran.

But because the Obama administration is looking to preserve its strategy of “engagement” with the soon-to-be nuclear power, diplomatic hard lines or even tough talk could complicate things and diminish the credibility of the new, softer approach the president brought to foreign policy.
Writer Scott Wilson provides useful analysis of maybe the biggest test so far of the Obama approach.

“But the Obama administration’s subdued response also reflects the peculiar nature of Iran’s democracy, and what — if any — difference the winner of this presidential election signifies to U.S. policy interests in the region.

Iran’s decisive political authority lies with Ayatollah Ali Khamenei, a Shiite cleric who holds the title of supreme leader. Such internationally pressing issues as Iran’s nuclear program, which its leaders claim is for civilian power purposes only, fall under his purview.

But even within Iran’s constrained democracy — which Obama hailed last week for its robust debate — Ahmadinejad held some political legitimacy for winning the 2005 presidential election. That vote was viewed at the time as fair, even though the list of candidates was culled by Iran’s unelected religious leadership, as it was this time as well.
 
Geithner and Summers — A New Financial Foundation
 
It’s almost time for the long-awaited announcement of the president’s plan for overhauling financial regulations, and Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers floated one last trial balloon in a Washington Post Op-Ed today calling for tougher banking regulations, rules for trading exotic instruments, new mortgage requirements, an international approach to regulation, and new government powers to take over, shut down and sell off investment firms whose failure would hurt the economy.

The Wall Street Journal is reporting that the big, complex proposal will be rolled out on Wednesday.

Much will be done by executive fiat, but some, like the controversial move to expand the SEC’s powers, will have to go through Congress. Aware of the current legislative overload and the growing fatigue with big, complicated plans, Geithner and Summers use a preferred argument from the administration – it’s the right thing to do because it seems like the wrong time to do it.

“Some people will say that this is not the time to debate the future of financial regulation, that this debate should wait until the crisis is fully behind us. Such critics misunderstand the nature of the challenges we face. Like all financial crises, the current crisis is a crisis of confidence and trust. Reassuring the American people that our financial system will be better controlled is critical to our economic recovery.”
 
Wall Street Journal — FBI Seeks to Target Lone Extremists
 
Writers Gary Fields and Evan Perez found that the recent shooting of a security guard at the National Holocaust Museum and of one of the last providers of late-term abortions has vindicated the belief among some in the Obama administration that “right-wing extremism” is on the rise with the troubled economy and the election of the first black president.

The focus now is on “lone wolf” terrorists, like the ones in the Holocaust and George Tiller murders and in the killing of a soldier outside an Arkansas recruiting office, allegedly by a radical Muslim convert.

The FBIs is stepping up the alert level again and trying to find new psychological profiles and weed out potential lone wolves before they strike.

But the wolves may be the sharks of this summer’s news cycle since they don’t seem to fit any real ideological pattern.

“The FBI memo also noted the scant academic study to date of violent individual extremists, and said the agency had recently stepped up efforts to analyze their actions. A study launched in partnership with Harvard University, the memo said, would seek to define characteristics and behavior that signal a potential lone-wolf offender…

Meantime, the bureau has been working with the U.S. military and with prison authorities to identify people who may raise concerns, hoping that ‘anyone who would be inclined to act out, we’d have a sporting chance to take any kind of preventative measures we can,’ [Michael Ward, the bureau’s deputy assistant director for counterterrorism] said.”