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Senators pessimistic about health care compromise, while farm-state Democrats win concessions on energy bill. Plus: Iraq to welcome back Big Oil.

Iran: Obama Takes Harder Stance

• "President Obama hardened his tone toward Iran on Tuesday, condemning the government for its crackdown against election protesters and accusing Iran's leaders of fabricating charges against the United States," the New York Times reports. "Mr. Obama used unambiguous language to assail the Iranian government during a news conference at the White House, calling himself 'appalled and outraged by the threats, beatings and imprisonments of the past few days.'"

• Behind Obama's "toughened but modulated response to the Iranian election crisis is a calculation that when the dust settles, the United States will still face an unpredictable adversary that gets closer every day to producing nuclear weapons," AP reports. "No one can say whether the unrest following disputed presidential elections will yield an Iran more willing to cut a deal over its disputed nuclear program. But as Obama sees it, the United States must be ready to talk no matter who sits on the other side of the table."


• "Iran's supreme leader says the government won't give in to pressures over the disputed presidential election, effectively closing the door to compromise with the opposition," AP reports.

Health Care: Bipartisan Deal Looks Shaky, Senators Say

• "Senators conceded Tuesday that it appears increasingly unlikely that Congress will reach a bipartisan consensus on health care reform this year, with a rift growing over whether to include a government-run insurance option in the legislation," Roll Call (subscription) reports. "Senate Democrats, charging that Republicans are unwilling to compromise, are sending strong signals that they have no intention of settling for weak reforms just to achieve bipartisanship."

• "Health and Human Services Secretary Kathleen Sebelius" tells lawmakers today that Obama "is willing to listen to suggestions on how to pay for a health care overhaul, as long as they don't increase the deficit," AP reports. "Although lawmakers are considering an option Obama has opposed -- taxing employer-provided benefits -- Sebelius' testimony," prepared for the House Energy and Commerce Committee, "indicates that the administration is ready to be flexible if Congress can deliver a bill."


• "A majority of Americans see government action as critical to controlling runaway health-care costs, but there is broad public anxiety about the potential impact of reform legislation and conflicting views about the types of fixes being proposed on Capitol Hill, according to a new Washington Post-ABC News poll," the Washington Post reports.

• "The Senate Finance Committee shaved $400 billion off" the Congressional Budget Office's "previous $1.6 trillion price tag associated with the panel's healthcare overhaul proposal and is able to provide healthcare coverage for nearly every American, Senate Budget Chairman Kent Conrad said Tuesday," CongressDailyAM (subscription) reports. The North Dakota Democrat "said the cost cutting came mostly in the form of lower subsidies and tweaks to the affordability index."

• "As the Obama administration seeks to determine who uses electronic health records and for what purposes, some health information technology specialists say it is critical that the public provide feedback on the issue," Nextgov reports.

Energy & Environment: Midwestern Democrats Win Concessions On Bill

• "Key Democrats reached a deal Tuesday that its supporters hope will lead to House passage of the biggest environmental bill in decades," AP reports. "Farm-state Democrats won concessions that will delay the Environmental Protection Agency from drafting regulations that could hamper the ethanol industry and will hand the Agriculture Department oversight of potentially lucrative projects to reduce greenhouse gases on farms. The House is expected to take up the legislation on Friday."


• "The League of Conservation Voters (LCV), an environmental group that is an active player in political campaigns, said it would not endorse any member of the House who opposed the climate bill," The Hill reports. "The bill would create a cap-and-trade system to reduce greenhouse gas emissions by 80 percent over the next four decades."

• "Speaker Nancy Pelosi (D-Calif.) has shown repeatedly that she can rally her troops on tough votes, but she faces her toughest test yet this week in passing her signature cap-and-trade energy package," Roll Call (subscription) reports.

Politics: GOP Comeback More Feasible, Polls Say

• "For the first time since their 2006 election drubbing, top Republicans see signs -- however faint -- of a political resurgence over the next year," Politico reports. "Polls show that the GOP is wise to focus most of its attacks on spending, government intervention and job losses.... And just as importantly, GOP leaders on Capitol Hill privately recognize the need to distance themselves a bit from George W. Bush, Dick Cheney, Sarah Palin and Newt Gingrich -- even though they've done poor job of doing so thus far."

• "South Carolina Gov. Mark Sanford [R] plans to return to the office" today, "aides said, after a five-day absence during which his wife and allies said they didn't know where he was, state leaders weighed transferring power to another official, and his staff eventually said he was hiking the Appalachian Trail to clear his head," the Wall Street Journal (subscription) reports.

• "Senate Democrats and Republicans on Tuesday engaged in the first tentative skirmishes in the war over the nomination of Sonia Sotomayor to the Supreme Court, trading shots over whether she should be judged on her experience or philosophy during the confirmation process," Roll Call (subscription) reports. "Republicans also remained adamant that if they do not have enough time to review Sotomayor's judicial record before her hearings begin in mid-July, they will push to have them delayed."

• Sen. Edward M. Kennedy, D-Mass., "is now appearing in an unusual ad for perhaps his closest friend in the Senate, Christopher J. Dodd, a fellow Democrat whose stumbles have left voters in his home state, Connecticut, unsure whether they want him to return for a sixth term in office," the New York Times reports. The commercial, "in which Mr. Kennedy praises Mr. Dodd's leadership on 'the cause of my life,' health care, underscores the gravity with which Mr. Dodd and his allies view his predicament."

Economy: Bernanke Has Stealthily Lobbied For Greater Fed Power

• "During the debate over financial regulation, the Federal Reserve chairman, Ben S. Bernanke, has been surprisingly quiet," the New York Times reports. "But behind the scenes, he has been a forceful proponent of giving the Fed more power, both defending his management of the economic crisis and arguing that more authority would help the agency act more decisively to reduce the chances of a recurrence, according to interviews with lawmakers and officials from the Fed, the Treasury and the White House."

• "The Organization for Economic Cooperation and Development raised its forecast for the economy of its 30 member nations for the first time in two years as the U.S. slump shows signs of easing," Bloomberg News reports. "The combined economy of the world's most-industrialized countries will shrink 4.1 percent this year and grow 0.7 percent in 2010, the Paris-based group" said today.

• "The recession-driven shift to eating at home more often is giving new life to grocery stores' most basic offerings, and upending a multiyear strategy of using coffee bars, fancy bakeries and exotic products to attract shoppers," the Wall Street Journal (subscription) reports.

World: Iraq Plans Auction For Big Oil

• "Next week, Iraqi officials plan a welcome-back party for Big Oil," the Wall Street Journal (subscription) reports. "The government intends to auction off oil contracts to foreign companies for the first time since Iraq nationalized its oil industry more than three decades ago. If all goes according to plan in the first round, foreign oil companies will move in to help Iraq revive production at six developed fields that have suffered from years of war and neglect."

• "President Obama has decided to return a U.S. ambassador to Syria after an absence of more than four years, marking a significant step toward engaging an influential Arab nation long at odds with the United States," the Washington Post reports.

• "An underground magazine -- and its undercover North Korean citizen reporters -- is undermining the North Korean government's efforts to control the flow of information out of the country," NPR reports. "The reporters take huge risks to report on topics banned in the official press and then smuggle their recordings, writings and videos out of the country."

National Security: Gates Creates New Cyber Security Command

• "Defense Secretary Robert Gates created a new military command dedicated to cyber security on Tuesday, reflecting the Obama administration's plans to centralize and elevate computer security as a major national-security issue," the Wall Street Journal reports. "In a memo to senior Pentagon officials, Mr. Gates said he intends to recommend that Lt. Gen. Keith Alexander, director of the National Security Agency, take on the additional role as commander of the Cyber Command with the rank of a four-star general."

• "An airstrike believed to have been carried out by a United States drone killed at least 60 people at a funeral for a Taliban fighter in South Waziristan on Tuesday, residents of the area and local news reports said," the New York Times reports.

• "House Oversight and Government Reform Chairman Edolphus Towns," D-N.Y., "finally got his hearing on the performance of the Marine Corps' MV-22 Osprey on Tuesday, expressing his 'strong reservations' about the hybrid tilt-rotor aircraft at the beginning and announcing at the end he would recommend that the House Appropriations Committee cut its funding," CongressDailyAM (subscription) reports.

• "Homeland Security Secretary Janet Napolitano announced" Tuesday "that she will kill a controversial Bush administration program to expand the use of spy satellites by domestic law enforcement and other agencies," the Washington Post reports. "Napolitano said she acted after state and local law enforcement officials said that access to secret overhead imagery was not a priority."

Technology: Pentagon Wants To Learn More About Social Networks

• "Top Defense Department officials, noting the importance social networking has played in detailing events surrounding Iran's disputed elections, acknowledge that the Pentagon needs to take a closer look at social media technologies," Federal Computer Week reports.

• "Former Rep. Tom Davis, R-Va., said Tuesday that he does not want the job of President Obama's cybersecurity coordinator despite recent rumblings that he was one of the top contenders for the position," Tech Daily Dose reports.

Lobbying: Compliance With Obama's Ban Inconsistent

• Obama's "executive order banning lobbyists from joining any areas of the executive branch that they might have lobbied in the past two years appears to have sparked several public interest group terminations under the Lobbying Disclosure Act," Roll Call (subscription) reports. "But not all nonprofit advocates are shy about registering to lobby."

• "Lee Geisse bound the stack of letters supporting the House climate change bill in baler twine, a symbolic, back-home gesture to reassure Ohio Democratic Rep. John Boccieri the measure wouldn't hurt his rural constituents," The Hill reports. "Geisse was one of around 50 union officials on Capitol Hill this week to persuade members from agriculture and industrial states who are wary the climate bill will increase energy costs and drive jobs overseas."

• "This development bears watching, as the left wing of the Democratic Party keeps going after top lawmakers within its own realm," the New York Times reports. "MoveOn has begun urging its sizable membership to hound Senator Dianne Feinstein, Democrat of California, criticizing her for cautionary remarks she made on CNN on Sunday about overhauling the health care system."

Transportation: Metro Crash Becomes Issue In Debate Over Bill

• "Public transit advocates seized on Monday's commuter rail crash in Washington to make the case for overhauling the country's transportation system," The Hill reports. "Authorities were still searching the wreckage Tuesday when Transportation for America, a coalition of interest groups and local officials, cited the deadliest crash in the Metro's 33-year history to make the case for advancing a new transit authorization bill on Capitol Hill this year."

• "Amid all its other budget woes, the Obama administration now estimates it will need $20 billion in new savings or revenues to shore up the finances for the highway trust fund until after the 2010 elections," Politico reports.

• "Italian automaker Fiat SpA, the newest entrant to the American car market, is taking a low-key approach to its lobbying strategy, deciding for now against opening a K Street outpost and relying instead on a tractor-making subsidiary to make its case before lawmakers," Roll Call (subscription) reports.

Commentary: The Right Notes In Iran

• The president's rhetoric on Iran Tuesday revived the debate about what his approach should be. Read more in Earlybird's Pundits & Editorials section.

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