Morning Must Reads — What comes after a “boot on the neck?”

Seemingly unwilling to take charge of the situation for fear of fully owning the blame for the biggest oil spill in American history and simultaneously hoping that BP can find a way to cap the gusher a mile below the surface.

But the blame and hope strategy is coming up short in the second month of the spill. Today, the “boot on the neck” approach is getting kicked up a notch as local lawmakers cry bloody murder about an uncertain White House strategy (Bobby Jindal wants the right to dredge in sensitive areas in order to create bigger sand barriers and has so far been refused).

The administration is now threatening to take over the whole operation and get some results. But Lord knows the last thing they want is to take charge of an impossible situation. So the public blame and private pleading two-step will likely continue for a bit longer.

Writer Ian Urbina adds a little heat today with his discovery that the president’s “moratorium” on new oil exploration did not stop exploration, but instead reaches out into an imaginary future in which new drilling leases might be approved. That will confirm to environmentalists that the administration so far has not taken the situation too seriously. Remember that the Euro crash has helped reduce U.S. gas prices, but a real moratorium would send prices skyrocketing as the Gulf provides more than a quarter of U.S. oil.

“The records also indicate that since the April 20 explosion on the rig, federal regulators have granted at least 19 environmental waivers for gulf drilling projects and at least 17 drilling permits, most of which were for types of work like that on the Deepwater Horizon shortly before it exploded, pouring a ceaseless current of oil into the Gulf of Mexico.”

New York Times — Rules Grow, Banks Stay Same Size

Wall Street is still skittish about some signs of a faltering recovery here and the incipient second wave of the European recession. But once the final Dodd bank bill passed the Senate and headed to the House conference, we’ve heard a great sigh of relief from traders and the rest of the investment class.

There are several stories today that deal with Wall Street having dodged a bullet, but writer Binyamin Appelbaum does the best job of explaining exactly which bullet that the financial sector dodged.

Liberals and conservatives could have agreed to shrink the size of the biggest institutions either by government fiat or by removing government subsidies and guarantees that allow financiers to skirt risk and amass capital.

In the end, the two sides could not agree on the means to the same end and the White House and Sen. Chris Dodd got their way.

“It remains to be seen whether that approach will curb the excesses of an industry adept at navigating through regulation in the pursuit of profit. Already, some Wall Street executives are expressing relief, convinced that the bill won’t fundamentally alter the way they operate.

Prominent liberals outside Congress, including Joseph E. Stiglitz, the Nobel-winning economist, warned that it made more sense to limit what companies could do than to keep building taller fences.”

New York Times — Study Points to Health Law’s Penalties

Having moved the legislation authorizing President Obama’s national health program through Congress with a series of hidden ball tricks, Democrats themselves know little about what is in the legislation.

It’s likely that there are more Republicans who studied the legislation they were trying to kill than there were Democrats who read up in trying to pas it. The latter was hoping that passage would be speedy and confusing to voters — as Madam Speaker said “we have to pass the bill so that you can find out what is in it.”

Writer Robert Pear highlights what could be one of the most damaging assumptions that went into the crafting the legislation: the belief that very few employers would be penalized for not offering insurance that is affordable relative to the salaries of their employees.

And as premiums go up and wages stagnate, that percentage will increase and more employers will find that it may be better to offer no insurance than expensive insurance.

“About one-third of employers subject to major requirements of the new health care law may face tax penalties because they offer health insurance that could be considered unaffordable to some employees, a new study says.

The study, by Mercer, one of the nation’s largest employee benefit consulting concerns, is based on a survey of nearly 3,000 employers.”

Wall Street Journal — U.S., Seoul Ratchet Up Pressure on North Korea

The Secretary of State is very cross with the North Koreans, but we can’t give Kim Jong Il a spanking (which he might fancy) for sinking a South Korean vessel. The Chinese would not approve and the Obama administration is not keen to take on the nuclear-powered humanitarian crisis that is Kim’s country.

Writers Jay Solomon and Evan Ramstad tell us about the American hope that the South Korean people can be placed with promises of trade sanctions and stern words from President Lee Myung-bak.

We’re down now to saying that if Pyongyang will simply take responsibility and say they were sorry, then we could move on.

It didn’t work with Goldman Sachs, so I can’t see how Kim will knuckle under.

“‘The United States fully supports President Lee’s responsible handling of the Cheonan incident, and the objective investigation that followed, which we and other international observers joined,’ Mrs. Clinton said. ‘We endorse President Lee’s call on North Korea to come forward with the facts regarding this act of aggression and, above all, stop its belligerence and threatening behavior.’”

Washington Post — Lawmakers divided on ‘don’t ask, don’t tell’ as votes near

The White House seems to be for gay rights, up to a point.

As we saw with the outraged response to questions about Elena Kagan’s sexuality, the administration is not hip with the lifestyle in the way that Hillary Clinton and others have. Her campaign had a strong Elton John vibe by the spring of 2008.

So it was a big step forward when the administration moved forcefully toward allowing openly gay people to serve in the military.

But as a key vote on changing Pentagon policy draws near, there’s growing concern in the gay activist community that the controversial measure will get swamped by other concerns.

Writer Craig Whitlock explains that even if the measure is attached to a defense appropriations bill, it could be in trouble.

“‘They’re not pushing now,’ said J. Alexander Nicholson III, executive director of Servicemembers United, an association of gay active-duty troops and veterans. ‘Every shred of evidence we have about what the White House wants is that they are going to wait until next year.’

Supporters of ending ‘don’t ask, don’t tell’ say they are lining up behind a measure that would repeal the law but not take effect until late next year, after the military finishes its integration study. Some lawmakers had called for a moratorium on the expulsion of gay service members until then, but that effort has fizzled, Nicholson said.”

–My column on the Rand Paul Civil Rights Act flap (spurred by the thoughtful question of a Must Reads subscriber) is here.

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