Morning Must Reads

Facing pressure from Republicans and some quiet grumbling in his administration from Hillary Clinton to strike a more aggressive tone with the theocrats in Iran, President Obama today will contend with a dare from Ayatollah Khamenei who told the hundreds of thousands protesters in his country to go home and accept the results of the election now widely seen as fraudulent around the world.

Obama has tried to be respectful of the democratic process in Iran, having lately praised the “dialogue” there, in an effort to preserve his chance to negotiate in with the nation’s leaders about acquiring only peaceful nuclear power.

But today, the president will be under intense pressure to speak out.

“Ayatollah Khamenei urged dissenters to pursue their complaints about the June 12 election only through legal channels, insisting that the turnout — officially put at 85 percent — showed the ballot to be a reflection of the national will.

Speaking in front of an audience of thousands that included President Mahmoud Ahmadinejad, he endorsed the president’s policies and insisted that the margin of victory — 11 million votes — accorded to Mr. Ahmadinejad in the official tally was so big that it could not have been falsified. ‘How can 11 million votes be replaced or changed?’ he said.”

 

Wall Street Journal — Twin Threat: Jobless Rate, Deficit

 

Writer Jonathan Weisman looks at President Obama’s dilemma – mounting unemployment and concerns about the exploding national debt and deficits. If the president does what he believes will lower unemployment – the biggest political danger zone – and borrows and spends even more money, he will antagonize independent voters who are coming to be deathly afraid of the size of the debt and deficit who know that today’s profligacy is tomorrow’s inflation and tax increase.

“The real dilemma could come late this year or early next, if it becomes clear a recovery is stalled but rising long-term interest rates make another stimulus plan a gamble, said Martin Baily, a former chairman of President Bill Clinton’s Council of Economic Advisers.

‘I’d say go ahead and do it, probably as a tax cut and not more of this infrastructure spending,’ he added, ‘but I’d be worried as hell about it.’”

 

New York Times — Democrats Scramble to Cut Costs From Health Plan

 

As Democrats acknowledge that they may have already spent too much, too quickly, the debate on healthcare is increasingly focused on cutting care and raising taxes – not a politically advantageous position in which to be.

Writer Robert Pear got access to some of the plans being tossed around the Senate Finance Committee this week, and found that the options were less than appealing.

The reason big business likes a government health plan is to be able to quit insuring people and let the taxpayers share the burden, but huge costs associated with companies dumping their employees on the federal plan make that untenable, deficits piling up as they are. So Democrats are looking at ways to lessen the cost. Employer mandates are unappealing because they’re onerous to small businesses and offer no benefit to big ones.

Also being considered is a plan for taking Medicare cuts out of the hands of congress and giving an unelected board the power to slash. A hint for lawmakers – if your plan includes cutting subsidies to the elderly you may have a political problem. 

“Under new cost-saving ideas being considered by the Senate Finance Committee, there would be a goal for Medicare spending that “ensures continued sustainability and bends the Medicare cost curve.” If the goal was not met, “an automatic mechanism would be triggered to achieve those spending reductions.”

An existing federal panel, the Medicare Payment Advisory Commission, would make recommendations to Congress on how to achieve the savings, and Congress would take an up-or-down vote on the recommendations, which could cut payments to hospitals, managed care plans and other health care providers.”

 

Washington Post — Senate’s Health-Care Draft Calls for Most to Buy Insurance, Nixes Obama’s ‘Public Option’

 

The more realistic of the two health plans in the Senate has a mutual insurance plan set up by the government but then owed and operated as a co-operative by its members.

The co-op has appeal because unlike a subsidized plan, it would have to set premiums based on the risk of its members, not the ability of the U.S. Treasury to borrow money.

Writers Lori Montgomery and Shailagh Murray got access to the partially written bill that was originally supposed to be put into play Tuesday but will now wait until sometime after the Independence Day break after some bad news on costs.

It’s not what the president asked for, but the co-op plan is likely the best chance for the moderate votes needed to pass an intact plan. If there isn’t a trap door that turns the co-op into a public plan after it goes bust, some Republicans might even support it.

But even without a pure public option, the issue of paying for the plan is still wholly unanswered. The draft bill make no mention of paying for the at least $1 trillion cost.

But over in the House, Nancy Pelosi’s team has some ideas.

“Meanwhile, in the House, Democrats are exploring a range of funding options, including a surtax on the rich and an increase in the payroll tax imposed on all U.S. workers. The list also includes new taxes on sugary drinks and alcohol, along with broader levies, such as a national value-added tax of up to 3 percent.

The Senate’s preferred option — taxing the health benefits that millions of Americans receive through their employers — is also on the House list. So is Obama’s favorite idea: limiting the value of itemized deductions for the nation’s wealthiest 3 million taxpayers.”

 

Wall Street Journal — U.S. Fortifies Hawaii to Meet Threat From Korea

 

North Koreans must marvel at the ability of their leadership to make the rest of the world jump.

Writer Yochi Dreazen explains that the military is shifting resources to Hawaii on word that the Norks plan a missile launch aimed toward the state where president Obama grew up.

But the real test will be whether U.S. forces follow through with a promise to intercept ships they believe to be carrying nuclear parts or other bad stuff. They’ve got their sights on one now.

“The senior defense official said the U.S. would seek to have the North Korean ship suspected of carrying banned arms searched before it reaches its final destination, believed to be Singapore. The ship left North Korea on Wednesday. The official said U.S. or allied personnel wouldn’t board the ship by force and would search the ship only with the permission of its crew.

North Korea has said it would view any efforts at interdiction as an act of war, and some U.S. officials worry North Korean vessels would use force to prevent U.S., Japanese or South Korean personnel from searching their ships, potentially sparking an armed confrontation.”