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Obama wants to revisit PAYGO, while House Democrats weigh a new tax on health benefits. Plus: The first Guantanamo detainee arrives on U.S. soil to face trial.

White House: Obama To Propose New Spending Rules

• "With the budget deficit soaring toward a record $1.8 trillion, the Obama administration is planning to propose tough new rules that would require lawmakers to pay for new initiatives -- including an overhaul of the health system -- or face automatic spending cuts," the Washington Post reports. "The new rules, which could be rolled out as soon as today, come amid growing anxiety among the nation's foreign creditors and some of its top economic policymakers about the tide of red ink."

• "The Obama administration is backing away from seeking a major reduction in the number of agencies overseeing financial markets, people familiar with the matter say, suggesting that the current alphabet-soup of regulators will remain mostly intact," the Wall Street Journal (subscription) reports.


• "Secretary of State Hillary Rodham Clinton forcefully rejected" Monday "Israeli claims that the Bush administration had secretly agreed to expanding Jewish settlements on the West Bank, deepening the impasse between the two countries," the Washington Post reports.

Congress: House Dems Consider Taxing Employer-Provided Benefits

• "Despite a less-than-rousing reaction from the Obama administration, House Democrats are considering a new tax on employer-provided health benefits to help pay for expanding coverage to the uninsured," AP reports. "Several officials also said an outline of emerging legislation envisions a requirement for all individuals to purchase affordable coverage, with an unspecified penalty for those who refuse and a waiver for those who cannot cover the cost."

• "House Democratic leaders are expected to include a 'cash for clunkers' provision in a war supplemental spending bill after the House passes the legislation as a stand-alone bill today, according to Senate Interior-Environment Appropriations Subcommittee Chairwoman Dianne Feinstein, D-Calif.," CongressDailyAM (subscription) reports. "The House bill, by Rep. Betty Sutton, D-Ohio, would give drivers a voucher for up to $4,500 to buy or lease a fuel-efficient car if they trade in a less-efficient vehicle."


• The Senate's Democratic "leaders are having to contend with the prolonged absence of two of the most senior and famed members," Robert Byrd of West Virginia and Edward Kennedy of Massachusetts, "as key summer votes approach," the Washington Post reports.

Politics: Virginia Primary Race Tightens

• "Thanks to a late surge of undecided voters in his direction, state Sen. Creigh Deeds appears to have moved ahead of former Democratic National Committee Chairman Terry McAuliffe and former state Del. Brian Moran on the eve of Virginia's June 9 Democratic primary," Politico reports.

• "Elected judges must disqualify themselves from cases involving people who spent exceptionally large sums to put them on the bench, the Supreme Court ruled on Monday in a 5-to-4 decision," the New York Times reports. "The decision, the first to say the Constitution's due process clause has a role to play in policing the role of money in judicial elections, ordered the chief justice of the West Virginia Supreme Court to recuse himself from a $50 million case against a coal company whose chief executive had spent $3 million to elect him."

Auto Recovery: Supreme Court Sidetracks Chrysler Deal

• "The U.S. Supreme Court threw the sale of Chrysler LLC to Fiat SpA into uncertainty while it decides whether to hear an appeal of the deal," the Wall Street Journal (subscription) reports. "The move, disclosed in a one-sentence order by Justice Ruth Bader Ginsburg, leaves the fate of the auto maker and the Obama administration's historic restructuring of Detroit unsettled for at least one more day."


• Meanwhile, "on Capitol Hill, hundreds of lawmakers threw another wrench into the works when they formally asked the Obama administration to get Chrysler and General Motors to put the brakes on plans to close hundreds of local dealerships across the country," The Hill reports.

• "Auto parts suppliers are planning to ask the Obama administration for an additional $8 billion to $10 billion in federal aid," the Washington Post reports. "The Motor and Equipment Manufacturers Association is preparing to present its proposal for several aid programs tomorrow during a meeting with the president's autos task force."

Economy: Treasury To Let 10 Banks Buy Back Shares

• "The Treasury is preparing to announce today it will let 10 banks buy back government shares, people familiar with the matter said, signaling confidence some of the largest U.S. lenders won't again need a taxpayer rescue," Bloomberg News reports.

• "After just a few months of relief at the pump, cheap gasoline is disappearing. Gas prices have risen 41 days in a row, to a national average of almost $2.62 a gallon. That is a sharp increase from the low of $1.62 a gallon that prevailed at the end of last year," the New York Times reports.

• "President Barack Obama is promising some exciting coming attractions for his stimulus plan. But it turns out they're just summer reruns," AP reports in an analysis. "Obama promised Monday to ramp up spending from the $787 billion stimulus fund and create or save 600,000 jobs by the end of the summer. It was an effort to shift the focus away from persistently rising unemployment and beat back criticism that the money isn't flowing quickly enough. Those promises aren't new."

World: Resurgent Violence In Zimbabwe Could Peak With Elections

• "Zimbabwe could be heading for a new wave of violence, a minister in the country's unity government has warned. Sekai Holland, a member of the former opposition MDC, told the BBC opponents of the power-sharing government were drawing up assassination lists. She said she believed the worst violence was being planned to coincide with elections due in 18 months."

• "There were many domestic reasons voters handed an American-backed coalition a victory in Lebanese parliamentary elections on Sunday -- but political analysts also attribute it in part to President Obama's campaign of outreach to the Arab and Muslim world," the New York Times reports. "The American-aligned coalition won 71 seats, while the Syria-Iranian aligned opposition, which includes Hezbollah, took only 57."

• "Brazil's military recovered wreckage from Air France flight 447 that may indicate what caused the jet to plunge into the Atlantic Ocean last week, as search teams pulled more bodies from the water," Reuters reports. "Brazilian and French teams" on Monday "pulled eight bodies from the ocean, taking the total to 24."

National Security: First Guantanamo Detainee Arrives in U.S. For Trial

• "U.S. authorities have brought the first Guantanamo Bay detainee to the United States, flying him into New York to face trial for bombing U.S. embassies, the Justice Department said," AP reports. "The department said Ahmed Ghailani arrived in the early morning hours" today "to be held in U.S. law enforcement custody until his trial in federal court in lower Manhattan. Ghailani was expected to make his initial appearance in Manhattan federal court later" in the day.

• North Korea's sentencing of American journalists Laura Ling and Euna Lee "was only one strand in a much larger and more complex web of issues the Obama administration is facing with North Korea. Any one of those issues could be the tripwire to a dangerous confrontation," NPR reports.

• "Up to 60 Taliban militants died in Afghanistan during the past week as more U.S. troops arrived in the country, Afghan security officials said," UPI reports. "The militants, including some key commanders, were killed in the heightened anti-insurgency offensive by local and foreign forces in the southern Zabul province, the Voice of America reported quoting the security officials."

Technology: Feds Seek Public Input On Broadband

• "Federal internet regulators" want "your help coming up with the first ever, national broadband plan -- which they must deliver to Congress next February," Wired reports. "At stake are billions of dollars in government funds, the nation's standing in world broadband rankings, the digital divides between rich-and-poor and town-and-country, and perhaps even the future of the U.S. economy."

• "Consumer advocates are urging the FCC to reclassify high-speed Internet access as a telecommunications service, a major change that would have sweeping implications for cable and phone providers of broadband," CongressDailyAM (subscription) reports. "Telecommunications offerings are more heavily regulated, which can mean price controls, allowing competitors access to infrastructure and tighter control of network architecture."

• "The Obama administration's 2009 strategy for curtailing drug trafficking along the Southwest border includes plans to deploy surveillance, detection and inspection technologies, but offers little detail about coordinating those efforts with existing border security programs," Nextgov reports.

Health Care: Kennedy's Absence Felt In Reform Talks

• Though Kennedy "continues to work closely on the unfolding" health care overhaul "legislation and is in constant touch with staff members and colleagues, he is not expected to return to the Capitol as formal debate begins this month, either for committee hearings or when the legislation moves to the Senate floor," the New York Times reports.

• "As health care reform takes shape in the House and Senate and shows signs of veering decidedly left, business lobbyists are considering joining their Republican allies and mounting a public relations offensive to put the brakes on" Obama's "overhaul plans," Roll Call (subscription) reports.

• "Senate Budget Chairman Kent Conrad," D-N.D., "pitched a compromise public insurance plan that resembles a co-op to leading healthcare senators Monday afternoon as they met on the upcoming healthcare overhaul," CongressDailyAM (subscription) reports. "He hopes the idea would assuage some Republicans who say they are worried about a government takeover of health care under a public plan."

Lobbying: EFCA Would Funnel Millions To Unions, Business Group Argues

• "Passing the Employee Free Choice Act (EFCA) would result in millions in additional political funds for organized labor over the next 10 years, a business group opposed to the legislation will argue in a report to be released" today, The Hill reports. "Unions would stand to gain an additional $320 million more to spend on political activities in the next decade, according to a report put together by the anti-EFCA Workforce Fairness Institute."

• "With the House gearing up for a potential vote on climate change legislation before the Independence Day recess, major interest groups are preparing the latest front in the public relations war," CongressDailyAM (subscription) reports. "Groups on the left want to boost the bill's requirement for electric utilities to produce renewable electricity and to reduce their energy consumption. They do not want the bill to prevent the Obama administration from regulating carbon dioxide under the Clean Air Act."

Commentary: Applauding 'Impartial Justice'

• Editorialists support the Supreme Court's decision in its case on campaign contributions to judges, but one commentator sees it as a blow to the First Amendment, in Earlybird's Pundits & Editorials section.

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