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GE quietly included in bank bailout. Plus: Honduran president ousted in military coup.

Congress: Gay Rights Could Move Up Agenda

• "President Barack Obama and Democratic leaders adopted a strategy early in his presidency to avoid hot-button cultural and social issues, fearing that doing so would bog down their agenda as it did to then-President Bill Clinton in 1993 when fights over gays in the military and gun rights divided the party and gave Republicans fuel for their 1994 revolution," Roll Call (subscription) reports. "But House Democratic leaders are starting to show signs that they are now ready to push key aspects of the gay rights agenda."

• "With California's state government deadlocked over a $24 billion hole in its budget, the Golden State is hurtling toward financial apocalypse," Politico reports. "But the Obama administration and the state's powerful congressional delegation say they just can't hold the state's hand through this one."


Energy & Environment: GOP Senators Vow Fight On Climate Bill

• "Leading Republican Senators on Sunday blasted the climate change package that cleared the House late last week and suggested it stands little chance of success in their chamber," Roll Call (subscription) reports.

• Obama "on Sunday praised the energy bill passed by the House late last week as an 'extraordinary first step,' but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution," the New York Times reports.

• "Cash-strapped states are considering raising taxes on oil production to plug yawning budget gaps, but they face strong resistance from oil companies, which warn the moves could lead to lost jobs and higher energy prices," the Wall Street Journal reports.


White House: Obama Could Request Second Stimulus

• "Obama could discuss a second stimulus package to boost the economy if needed, but at the moment no more new money looks necessary, a top White House adviser said on Sunday," Reuters reports. "Senior adviser David Axelrod told NBC Television's Meet the Press program... 'we have not broken the back of the recession.'"

• "On CNN's 'Reliable Sources'... the Washington Post's Dana Milbank and Huffington Post's Nico Pitney squared off over the latter's controversial question to President Obama at" a press conference last week, Politico reports. "Because the White House reached out to Pitney the night before about possibly asking a question submitted by an Iranian over the disputed election protests -- a topic the HuffPo reporter has been doggedly covering -- Milbank dismissed the exchange as 'arranged,' 'planted,' and an example of 'stagecraft.'"

Politics: Graham Backs Sanford, If He Can Fix His Marriage

• "The godfather of Mark Sanford's [R] youngest son, Sen. Lindsey Graham [R], said the embattled South Carolina governor should serve out the rest of his term as long as he reconciles his marriage," the Washington Times reports. "'My main focus, right now, is: Can this marriage be saved?' Mr. Graham said Sunday on NBC's 'Meet the Press.'"

• "Still stinging from back-to-back weeks in which their policy messages were knocked off the front pages by sex scandals involving Republican Sen. John Ensign (Nev.) and" Sanford, "House and Senate Republicans are hoping to use the recess to regain some of the footing they lost," Roll Call (subscription) reports. "Using the Independence Day break to malign the work of the majority party is a time-honored tradition in Washington, and Republicans hope to live up to tradition by branding Democrats as a 'far left' party intent on 'big government takeovers,' 'bringing terrorists to the U.S.' and purposefully inflating the debt through 'wasteful spending,' according to recess messaging documents prepared for House and Senate Republicans."


• "As both parties gear up for the high-stakes midterm elections, Republicans are keeping a close eye on North Carolina's 8th district, where freshman Rep. Larry Kissell (D) rode the 2008 Democratic wave to victory over five-term Rep. Robin Hayes (R)" but could be vulnerable in 2010, Roll Call (subscription) reports.

Economy: GE Benefits From Bank Bailout Funds

• "General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks," the Washington Post reports. "The company did not initially qualify for the program... but regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE."

• "The government's plan to enable banks to dump troubled assets is facing troubles of its own," the Wall Street Journal (subscription) reports. "Markets initially rallied when Treasury Secretary Timothy Geithner announced in March a two-pronged plan to offer favorable government financing to entice investors to buy bad loans and toxic securities from banks." However, "that initiative... has lost momentum."

National Security: Justice Department Warns That Detainees Have Rights

• "The Justice Department has determined that detainees tried by military commissions in the U.S. can claim at least some constitutional rights, particularly protection against the use of statements taken through coercive interrogations, officials said," the Wall Street Journal reports. The confidential memo explaining the conclusion "could alter significantly the way the commissions operate -- and has created new divisions among the agencies responsible for overseeing the commissions."

• "Gen. Ray Odierno, the American commander in Iraq, said Sunday that Iraq's military and police units were ready to operate on their own, ahead of Tuesday's deadline for the withdrawal of American combat troops from the country's cities and towns," the New York Times reports.

World: Honduran President Ousted By Military

• "Soldiers stormed the presidential palace in the Honduran capital of Tegucigalpa at dawn Sunday and forced President Manuel Zelaya into exile in Costa Rica," the Washington Post reports."The military-led ouster sparked a regional crisis that thrusts the impoverished banana-growing country onto the international stage and revives painful memories of coup-fueled turmoil in Latin America."

• "With the opposition visibly weakening in Iran amid a government crackdown, President Mahmoud Ahmadinejad and his supporters have begun to use his disputed victory in this month's election to toughen the nation's stance internationally and to consolidate control internally," the Washington Post reports. "In recent days, they have vilified President Obama for what they call his 'interventionist policies,' have said they are ready to put opposition candidate Mir Hossein Mousavi's advisers on trial and have threatened to execute some of the Mousavi supporters who took to the streets to protest the election result."

• "Israel would be open to a complete freeze of settlement building in the West Bank for three to six months as part of a broad Middle East peace endeavor that included a Palestinian agreement to negotiate an end to the conflict and confidence-building steps by major Arab nations, senior Israeli officials said Sunday," the New York Times reports.

Technology: Obama To Hold Online Town Hall For Health Care

• Obama "on Wednesday will stage the latest in a series of events designed to drum up grass-roots support for his health care plans, holding an 'online town hall' meeting from Annandale, Va.," Roll Call (subscription) reports. "The session will include a live audience and feature questions from social-networking sites like Facebook, YouTube and Twitter."

Health Care: Liberal Activists Worried About Fate Of Public Option

• "Liberal activists are concerned that Congress will leave out what they see as the most important element of healthcare reform: a government-backed insurance program," The Hill reports.

• Obama "is open to taxing employer-based health benefits, though he prefers to limit itemized deductions to pay for a comprehensive healthcare overhaul," Health and Human Services Secretary Kathleen Sebelius said Sunday "on 'Fox News Sunday,'" CongressDailyAM (subscription) reports.

• With Obama "and lawmakers in both parties continuing to struggle for a bipartisan health care reform deal, sweeping legislation -- pushed by a bipartisan Senate duo -- that would fundamentally restructure the way Americans get their health insurance has been gathering dust," Roll Call (subscription) reports.

Lobbying: Kazakhstan Still Trying To Outrun 'Borat'

• "Kazakhstan refuses to let Borat have the last word on its image," The Hill reports. "The Central Asian republic's foreign affairs ministry inked a $1.5 million deal with a Washington lobbying firm, according to records recently filed with the Justice Department, with a partial goal of combating the image presented in the blockbuster film 'Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan.'"

• "The intensifying health care debate is following Members of Congress home to their districts during this week's recess," Roll Call (subscription) reports. "A long list of industry and interest groups have taken out advertising spots, are activating grass-roots networks and are planning Member meetings outside the Beltway."

• "Horse trading in Washington is infamous. But it's rare to catch a glimpse of the horse in the midst of the trade in real time," Politico reports. "Friday was one of those rare exceptions when the powerful lobby for seniors, the AARP, sent a memo to Senate officials threatening to yank support for the chamber's health committee's version of reform if it didn't get what it wanted on another provision in the bill related to biogeneric drugs."

Commentary: A Climate Of Debate

• In Earlybird's Pundits & Editorials section, Clive Crook calls the Waxman-Markey energy bill a "travesty," while Paul Krugman disparages the House lawmakers who voted against the legislation on Friday.

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