**Health care debate continues on Capitol Hill...
**Sarah Palin steps down as Alaska governor...
**President Obama talks China this morning...
**Gates, Cambridge police officer to White House soon?
"White House senior adviser David Axelrod insisted most of the work is already done, with just 20 percent left to go. Pelosi said again Sunday that she has the votes to get a bill passed on the House floor. 'This will happen,' she said firmly.
"But things look a lot different for some members and senators — some of whom said Sunday they don't think a quick resolution in either chamber is guaranteed right now, no matter how much President Barack Obama wants it."
"So-called Blue Dog Democrats continued to resist key aspects of their party's health-care overhaul Sunday, despite pressure from party leaders who fear they will endanger President Barack Obama's most ambitious legislative effort," reports the Wall Street Journal's Naftali Bendavid.
"House Speaker Nancy Pelosi disputed any suggestion that the Blue Dogs' protests threatened the bill's passage. 'Absolutely, positively not,' she said Sunday on CNN's 'State of the Union.' 'When I take this bill to the floor, it will win...We will move forward. This will happen.'
"Blue Dogs have emerged as pivotal players in the national health-care debate, a swing group that the White House is wooing more intensely to keep its initiative on track. The group, which accounts for about one-fifth of House Democrats, wants to make sure the health-care plan isn't too expensive for small businesses and hopes to keep the government's costs down. They don't want private health insurers to compete with a federally funded plan, and seek to reduce the share of lower-income Americans who would receive health-care subsidies."
"The speaker, who has struggled to overcome a series of recent setbacks, raised the stakes by planning to restart talks Monday among bickering Democrats on the Energy and Commerce Committee, one of three House panels with jurisdiction over health care and where the bill stalled last week," write the Washington Post's Shailagh Murray and Paul Kane.
"Democratic leaders are newly confident that these differences can be resolved, possibly in time to bring a House bill to the floor before lawmakers depart Friday for the August recess, although Pelosi did not commit to a timetable.
"The chaos underscores the difficulty of transforming a major sector of the U.S. economy in a single piece of legislation, and also the perils of rushing Obama's first-term priorities through Congress before concerns about the 2010 midterm elections take hold. …
"Regardless of the outcome, rank-and-file Democrats are bracing for an intense August at home as their constituents are hit with a wave of advertising from business groups opposed to the legislation and liberal interest groups supporting it."
The Associated Press' Alan Fram details some of those ads:. "Health Care for America Now, a coalition of labor and progressive groups supporting Obama, will at least match the $2 million in TV ads it's run this month and send members to lawmakers' town hall meetings, said Richard Kirsch, its national campaign manager.
"The U.S. Chamber of Commerce, a foe, will run print ads in Arkansas, Colorado, Louisiana, Maine and North Carolina criticizing Obama's proposal for optional government-run insurance coverage, place newspaper op-eds and stage events around the country.
"The states are home to moderate Democrats and Republicans crucial to passage of any health care bill in the Senate.
"The conservative Americans for Prosperity, which considers Democrats' plans a federal takeover of health care, is sending two buses to 13 states to rouse opposition. The American Federation of State, County and Municipal Employees has a touring recreational vehicle of its own. The drug and health insurance industries, which both oppose optional government coverage, plan to continue their ad campaigns endorsing the broad concept of reshaping the medical system."
Republicans, for their part, are ramping up their stalling tactics with some heated rhetoric, as Huffington Post's Sam Stein points out.
"Senator Jim DeMint, R-S.C., who has taken a particular glee in pushing the argument that health care could be Obama's unraveling, did little to calm the rhetoric between him and the White House on Sunday.
Appearing on 'This Week,' the South Carolina Republican said the president was 'out of control' and offering false promises and panic in an effort to get health care legislation passed.
"'This is not personal against the president,' said DeMint. 'I like the president. But he is out of control and he is leading a stampede of more spending and debt and taxes and government takeovers. He has taken a bad economy and made it worse. He used a lot of false promises, and bogus numbers and panic to push through the stimulus. And the promises have not panned out. And now he is using the same strategy on health care. And what I'm trying to do, and I think even Kent [Conrad] has reservations, is say, lets slow down and get this right.'"
Los Angeles Times' James Oliphant and Noam N. Levey, "How a healthcare overhaul could affect you"
Kaiser Health News' Julie Appleby, "In the healthcare debate, a long list of ways to pay is considered"
NY Times' Leslie Wayne and David M. Herszenhorn, "A Bid to Tax Health Plans of Executives"
NY Times' Robert Pear, "Reach of Subsidies Is Critical Issue for Health Plan"
Politico's Jeanne Cummings, "President Obama faces crucial test"
"A crowd of more than 5,000 people, by the governor's office estimate, loved her sharp tongue, offering a standing ovation to Palin's off-the-cuff retort to a heckler and to her challenge to the media to 'quit making things up.'"
"Palin didn't disappoint her supporters, tossing out rhetorical grenades at the federal government, the news media, animal-rights activists and the people whose ethics complaints she has said helped to drive her from office," adds the Anchorage Daily News' Sean Cockerham. "Palin launched the first salvo of her speech at the media, saying democracy depends on it.
"'That is why our troops are willing to die for you. So, how about, in honor of the American soldier, ya' quit makin' things up?' she said to hoots, hollers, and sustained applause from the crowd. She didn't say what she was referring to.
"'And one other thing for the media: Our new governor has a very nice family too. So leave his kids alone,' Palin said, again to enthusiastic applause."
"It may be that, after 11 difficult months in the spotlight, Palin longs to feel some of that freedom she wrote about Saturday. But does she have a second act in her repertoire?" asks the Washington Post's Dan Balz.
"'Palin Year One was the introduction of a persona, and the construction (and destruction) of legend around it,' Tucker Eskew, a senior adviser to the Republican during her 2008 vice presidential bid, wrote in an e-mail Sunday. 'I think she believes in an America of limitless possibility, so let's see. Year Two and beyond will be defined by her capacity for reinvention."
CBS News' Scott Conroy and Steve Chaggaris, "Palin's 'Mad as Hell' Speech"
Politico's Jonathan Martin, "At picnic, First Dude mum on Palins' plans"
Wall Street Journal's Jim Carlton, "Palin's Next Step Is Still a Mystery"
PRESIDENT OBAMA TODAY: Today, President Barack Obama will address the opening session of the first U.S.-China Strategic and Economic Dialogue in Washington.
"Obama was set to inaugurate the two-day dialogue, part of the US president's push to build a broader relationship between the biggest developed and developing economies," reports Agence France-Presse's Shaun Tandon.
"With China increasingly uneasy about its massive exposure to the US economy, Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner made a joint appeal to Beijing to work together to spur global growth."
Hillary Clinton and Timothy Geithner, "A New Strategic and Economic Dialogue With China"
"'I think he understood that the debate was veering off in the wrong direction and as he said, that his words may have contributed to that, so he felt a responsibility to step forward and kind of cool the situation,' Axelrod told CBS' Bob Schieffer.
"Axelrod noted that when President Obama said the Cambridge Police Department acted 'stupidly' during a press conference Wednesday night, 'he calibrated his words poorly.'
"He applauded his boss for addressing the issue during a surprise visit to the daily press briefing Friday.
"'I think it has had the desired effect. I think people are talking more constructively now and I think the steam has gone out of this,' he told Schieffer."
Meantime, the Boston Globe's John R. Ellement and Matt Collette report, " The woman whose report of a possible house break-in led to the arrest of Harvard professor Henry Louis Gates Jr. said she never mentioned race during her 911 call and is "personally devastated'' by media accounts that suggest she placed the call because the men she observed on the porch were black, according to a lawyer acting as her spokeswoman.
"The woman, identified in a police report on file in Cambridge District Court as 40-year-old Lucia Whalen, saw the backs of both men and did not know their race when she called 911, said Wendy J. Murphy, a Boston lawyer from New England School of Law. Whalen phoned police, Murphy said, because she was aware of recent break-ins in the area."
Wall Street Journal's Naftali Bendavid, "Obama Tries to Move Past Gates Furor"
NY Times' Don Van Natta Jr. and Abby Goodnough, "2 Cambridge Worlds Collide in Unlikely Meeting"
ALSO TODAY: President Obama has a couple of sports-related meetings: one with the head of FIFA, the international soccer organization, and another with the WNBA champion Detroit Shock. Tonight, the president and First Lady Michelle Obama host a reception for ambassadors.
This afternoon, Michelle Obama will cut the ribbon at a new community health center in Bowling Green, Va.
LA Times' Paul Richter, "Clinton calls Russia a 'great power' after Biden's earlier, harsher remarks"
Tribune's Mark Silva, "Hillary Clinton: 'Advisor,' team player"
Associated Press, "Clinton says she has no interest in White House"
NY Times' Choe Sang-Hun, "N. Korea Says It's Open to Dialogue"
Associated Press' Jim Abrams, "Senate warns against concessions on nuclear treaty"
Associated Press' Anne Gearan, "Israeli official: No option off table on Iran"
Associated Press' Jeannine Aversa, "Bernanke had to 'hold my nose' over bailouts"
Wall Street Journal's Sudeep Reddy, "Bernanke Feared a Second Great Depression"
NY Times' Edmund L. Andrews, "Forget Aloof, Bernanke Goes Barnstorming"
USA Today's Susan Page, "Session vows third GOP vote against Sotomayor"
Politico's Martin Kady II, "Three in GOP say no to Sotomayor"
SEN. JOHN ENSIGN
Politico's John Bresnahan and Manu Raju, "Aftershocks still linger in John Ensign saga"
NEW JERSEY CORRUPTION
Wall Street Journal's Brad Parks, "Poison Ivy in the Garden State"
New York Times' Michael Barbaro, "In New Jersey, Ideal Conditions for Corruption"
2009 NJ Governor: PolitickerNJ's Matt Friedman, "Pinkett shows up to Weinberg's party"
2009 VA Governor: Washington Post's Frederick Kunkle, "In Gubernatorial Race, It's About Who's More Pro-Gun"
2010 MA Governor: Boston Globe's James Vaznis, "Patrick hastens to rebut poll, but his foes sense an opening"
2010 IL Senate: Chicago Sun-Times' Abdon M. Pallasch, "Giannoulias joins Senate race"
2010 KY Senate: Louisville Courier-Journal's Joseph Gerth, "Bunning contributors go to Grayson"
2010 NY Senate: NY Daily News' Michael Saul and David Saltonstall, "Politicos wonder if Gillibrand or Maloney have star power for vaunted New York Senate seat"
2010 OH Senate: Toledo Blade's Jim Provance, "Battle takes shape for Republican nod"