Politics Today: Senate Health Plan Meets New Resistance

Politics Today is CBSNews.com's inside look at the key stories driving the day in politics, written by CBS News Political Director Steve Chaggaris:

** Is the Senate health care agreement unraveling?...

** Dividing bank bailout funds to small businesses...

** Obama's Oslo speech wins some Republican praise...

HEALTH CARE: About that "broad agreement" characterized as a "compromise" in the Senate health care negotiations earlier this week: not so fast. Two of its proposals are creating major speed bumps: a proposal to expand access to cheaper prescription drugs and the Medicare "buy-in" plan.

LA Times' Janet Hook and Tom Hamburger, "Expanding access to low-cost prescription drugs from overseas might look like a sure winner in the effort to make healthcare more affordable. President Obama supports the idea, as do many Democrats and several Republicans.

"But the seemingly popular proposal brought the Senate healthcare debate to a standstill Thursday, as Democrats divided over whether they should bow to the drug industry's fierce opposition.

"Majority Leader Harry Reid (D-Nev.) temporarily halted consideration of the healthcare bill after three days of inconclusive debate on an amendment by Sens. Byron L. Dorgan (D-N.D.) and John McCain (R-Ariz.). The provision would allow pharmacies and wholesalers to import drugs from countries with safety standards comparable to America's.

"Despite Obama's support for importation, the White House fears that if the amendment is approved, the drug industry will oppose the bill.

"Industry support is considered a key to passage. That is why the White House negotiated a controversial deal to limit the financial effect of the overhaul on the industry in exchange for its support."

Meantime, the Senate proposal "that would allow people in late middle age to buy insurance through Medicare, helping to sustain an idea that sprang unexpectedly from the Senate this week," is hitting a snag, reports the Washington Post's Amy Goldstein.

"The idea has met with a wall of opposition to the idea from hospitals and physicians, whose lobbyists contend that Medicare pays them too little for treating patients. Sen. Olympia J. Snowe (Maine), a crucial vote as one of the chamber's few Republican moderates, sided firmly with those constituencies, telling reporters that the buy-in 'is the wrong direction to take. . . . I am talking to a lot of my [health-care] providers . . . and I know they are mighty unhappy.'"

"[T]hree moderates — Sens. Joe Lieberman (I-Conn.), Ben Nelson (D-Neb.) and Olympia Snowe (R-Maine), whose votes could make or break health reform this year — expressed varying degrees of resistance to the Medicare idea," adds Politico's Carrie Budoff Brown.

"Snowe said the Medicare expansion exacerbates an 'already-serious problem,' with the low government reimbursement rates for doctors and hospitals that serve Medicare patients. It could force her to vote no, she said.

"Lieberman indicated that he was growing 'increasingly concerned' about the proposal.

"And Nelson said allowing people between ages 55 and 64 to purchase Medicare coverage could simply be an intermediate step on the way to an entirely government-run health care system — 'which I do not like.'"

The Post's Goldstein continues, "At the same time, leading advocates for patients and for older Americans, who have in the past favored letting younger people buy insurance through Medicare, predict that the current version of the idea could prove relatively unattractive to the people it is meant to help.

"'I just don't see it being that popular,' said John Rother, executive vice president for policy and strategy for AARP, an enormous lobby for people 50 and older.

"He and others said it remains unclear whether the program would be designed with the same health benefits, co-payments by patients, or access to private health plans and supplemental coverage as the rest of Medicare. Depending on such details, Rother said, 'it's not even Medicare, but that's a brand name everyone likes.'

"Still, he said, AARP always has favored the creation of a buy-in, as long as it would not worsen the Medicare system's already shaky finances."

On the House side, "House Speaker Nancy Pelosi expressed support Thursday for a Senate Democratic proposal to expand Medicare, raising prospects that the two chambers of Congress can work out differences on health-care legislation," reports the Wall Street Journal's Greg Hitt.

"The proposal would open Medicare to some people ages 55 to 64, and is a key feature of a deal among senior Senate Democrats that would abandon efforts to enact a big government-run health-insurance program. The deal would also empower the government's Office of Personnel Management to contract with private insurers to offer new low-cost insurance plans…

"Ms. Pelosi (D., Calif.) stopped short of endorsing the full Senate compromise, saying she needed to see 'something in writing.' But she said 'there is certainly a great deal of appeal' in expanding Medicare.

"Other House Democrats were more cautious. Jim Cooper of Tennessee, a member of the fiscally conservative Blue Dog coalition, said he was 'watchful and hopeful' about the idea, but couldn't commit to supporting it."

The New York Times' David M. Herszenhorn and Robert Pear add, "Senate Democrats have provided few details about their latest health care proposal, but this much seems clear: Anyone who wants to buy the same health benefits as members of Congress, or to buy coverage through Medicare, should be prepared to fork over a large chunk of cash.

"According to the Congressional Budget Office, a family of four earning $54,000 in 2016, when the health legislation is fully in effect, would be eligible for a subsidy of $10,100 to help defray the cost of insurance under the health legislation being debated by the Senate. By then, one of the most popular federal plans, a nationwide Blue Cross and Blue Shield policy, is projected to cost more than $20,000.

"That could leave the family earning $54,000, slightly more than the current median household income, with monthly premium costs of more than $825.

"The Democrats' proposal would also allow some people ages 55 to 64 to 'buy in' to Medicare, starting in 2011. That could cost about $7,600 a year per person or $15,200 for a couple, according to a budget office analysis of an earlier version of the concept. No subsidies would be available until 2014."

Associated Press' Ricardo Alonso-Zaldivar, "Health care loophole would allow coverage limits": "A loophole in the Senate health care bill would let insurers place annual dollar limits on medical care for people struggling with costly illnesses such as cancer, prompting a rebuke from patient advocates.

"The legislation that originally passed the Senate health committee last summer would have banned such limits, but a tweak to that provision weakened it in the bill now moving toward a Senate vote.

"As currently written, the Senate Democratic health care bill would permit insurance companies to place annual limits on the dollar value of medical care, as long as those limits are not 'unreasonable.' The bill does not define what level of limits would be allowable, delegating that task to administration officials."

USA Today's Mimi Hall, "Health care debate: Hope and skepticism on the front lines"

ECONOMY: "The oversight panel for the government's 14-month-old bailout program generally supported a decision by the Treasury secretary, Timothy F. Geithner, to keep it alive nine more months, but challenged him on Thursday about some aspects of his management of the program," reports the NY Times' Jackie Calmes.

"In a quarterly appearance before the panel, Mr. Geithner was called upon to defend decisions to fully pay financial giants for their claims against the American International Group, to account for continuing troubles at small banks and businesses and to answer criticisms that the Treasury Department might be letting some big banks exit the program too soon.

"Meanwhile, based on the Treasury's determination that the government will soon breach a $12.1 trillion limit for borrowing to cover expenses, Congress prepared to raise the debt limit by more than $1.8 trillion — enough to avoid a similar vote in the 2010 election year."

Washington Post's David Cho, "The Obama administration plans to channel money from the government's massive financial bailout program to small businesses as part of an effort to limit the political and economic damage of high unemployment.

"One plan under consideration involves spinning off a new entity from the Troubled Assets Relief Program that would give banks access to federal funds without restrictions, including limits on executive pay, as long as the money was used to support loans to small businesses. But officials are not yet certain whether carving the program out of TARP would be the best way to encourage banks to boost small-business lending, according to sources familiar with the matter who spoke on the condition of anonymity because the plans are not final.

"As an alternative, officials are prepared to ask Congress to modify TARP itself, easing the pay limits and other restrictions that would be imposed on small-business lenders taking the money, the sources said."

Washington Post's Lori Montgomery and Ben Pershing, "Pelosi to propose measure on raising federal debt ceiling"

NY Times' Catherine Rampell, "May See the VAT Option as a Cure for Runaway Deficits"

PRESIDENT OBAMA: "By using his Nobel Peace Prize acceptance speech Thursday to justify expanding the U.S.-led war in Afghanistan, President Barack Obama won over some Republican critics at home, even as he preached messages of multilateralism, diplomacy and civil disobedience that resonate in anti-war circles around the world," reports McClatchy Newspapers' Margaret Talev.

"In a 36-minute speech in Oslo, Obama defended last week's announcement that he'll send 30,000 to 35,000 more troops to Afghanistan. He discouraged other nations' 'reflexive suspicion of America,' recalling how Europe survived thanks to U.S. intervention in World War II. He spoke of 'just war.'..

" Newt Gingrich, the Republican former speaker of the House of Representatives and an ever-possible presidential candidate, said on WNYC radio that Obama's speech was 'actually very good.'

"House Minority Leader John Boehner, R-Ohio, offered similar praise through his spokeswoman Antonia Ferrier: 'As President Reagan said, Republicans believe in peace through strength, and we were pleased that today President Obama addressed and defended our mission in Afghanistan, where success is the only option.'"

In a wide-ranging interview with USA Today, Sarah Palin "praised President Obama for the speech he gave Thursday to accept the Nobel Peace Prize. She said the president's defense of war to combat evil could have been taken from the pages of her memoirs.

"'I liked what he said,' Palin told [USA Today] in a phone interview. 'I talked too in my book about the fallen nature of man and why war is necessary at times.' For Palin, that view strikes close to home: Her eldest son, 20-year-old Track, is an Army infantry member who recently returned from a tour of duty in Iraq.

"'I'm on my knees more than ever praying for his safety along with all of his fellow troops,' Palin said. 'Of course, war is the last thing any American, I believe, wants to have to engage in, but it's necessary. We have to stop these terrorists over there.'"

Full write-up of Palin interview

Politico's Eamon Javers, "Conservative praise for Nobel speech"

More analysis of Mr. Obama's Nobel speech:

Washington Post's Dan Balz, "In Oslo, Obama tries to reconcile early antiwar rhetoric with prevailing realities"

NY Times' Jeff Zeleny, "Accepting Peace Prize, Obama Offers 'Hard Truth'"

Associated Press' Steven R. Hurst, "Analysis: Obama's case for war in support of peace"

5869074AFGHANISTAN: AP: "Defense Secretary Robert Gates told American troops Friday in this oil-rich northern city that their mission in Iraq remains critical despite the nation's focus on Afghanistan and that plans are on track to reduce forces starting in March.

"In a town hall meeting, Gates spoke with about 300 soldiers and airmen gathered outside on a sunny day at an airbase.

"Gates also said plans to drawdown forces there after Iraq's March elections remain intact. When asked whether political turmoil might threaten that timeline, Gates said he didn't think so because all indications were that Iraqi leaders were tired of war and wanted a unified Iraq.

"On Afghanistan, he predicted a 'tough fight' but that the security situation would improve as more troops arrive.

"The secretary also predicted significant international sanctions would be levied if Iran continued with its current nuclear program, and he reiterated that all options, including military action, must stay on the table."

"The U.S. is turning to local militias in Afghanistan and expanding support of provincial authorities to overcome weaknesses in President Hamid Karzai's government in Kabul, officials said at hearings on the war that ended yesterday in Washington," reports Bloomberg News' Viola Gienger…

"The U.S. and its allies are paying increasing attention to the potential of local authorities as Karzai struggles to restore credibility eroded by fraud allegations in his re- election and corruption in his government. The local empowerment push under President Barack Obama's new war plan is also a nod to traditional Afghan social patterns, officials said.

"U.S. special forces units are working with independently organized volunteer militias protecting their own areas to support projects such as schools that will build local backing for the groups. The Pentagon calls the effort the 'community defense initiative,' according to Army General David Petraeus, the American commander for the Middle East and Central Asia."

CLIMATE CHANGE: "Negotiations between representatives of the world's largest economies appeared stalled Thursday on a particularly touchy aspect of attacking global warming: how to make sure countries actually do what they pledge to do to combat climate change," reports the LA Times' Jim Tankersley.

"The challenge of ensuring that promises come true looms even larger than such issues as reducing greenhouse gas emissions and providing financial aid for developing countries, diplomats and environmentalists said.

"'Among the major emitters, this seems to be the biggest issue,' said Melinda Kimble, a former U.S. climate negotiator who is a senior vice president at the United Nations Foundation and closely engaged in the talks.

"The roadblock became apparent four days into the two weeks of climate talks, as key negotiators were approaching consensus on nation-by-nation reductions in the emissions that scientists say cause global warming. They have made progress on how much aid wealthy nations will supply over the short term to help developing countries adopt low-emitting sources of energy, with the figure likely to average about $10 billion a year."

Meantime, "A trio of senators seeking to break a congressional deadlock on climate legislation unveiled a proposal Thursday that combines caps on greenhouse-gas levels with new offshore oil-and-gas exploration and nuclear power plant incentives," reports the Wall Street Journal's Ian Talley.

"The outline offered by Sens. John Kerry (D., Mass.), Lindsey Graham (R., S.C.), and Joe Lieberman (I., Conn.) won praise from President Barack Obama who called it a "positive development." Mr. Obama is scheduled to attend the United Nations climate summit in Copenhagen next week along with other world leaders, and the U.S. is under pressure to offer commitments to make significant cuts in its consumption of fossil fuels.

"But it's unclear whether the Kerry-Graham-Lieberman proposal will win over Democrats from heartland states and Republicans opposed to adopting caps on U.S. carbon emissions. Senate Majority Leader Harry Reid has put off consideration of a climate bill until spring and is focusing attention on health care and jobs."

McClatchy Newspapers' Renee Schoof, "Real debate or just hot air? A primer on 'climategate'": "People who argue that global warming is bogus say that the controversy over leaked e-mails by climate scientists proves that they're right. Their argument boils down to a claim that the 2007 international review of climate science is a fraud. Scientists involved in the dispute and others say that nothing in the e-mails undermines the work of thousands of scientists over the past 30 years who've concluded that the Earth is warming."

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