The Note: Ganging Up: GOP shows its hand — and Baucus may yet take the pot

ABC News’ Rick Klein reports:

If Sen. Max Baucus’ bill — with its smaller price tag, no employer mandate, and no public option — doesn’t draw at least a few Republicans, what will?

And the bigger question that’s loomed over this debate from the start — a question that’s nudged to the fore with Republicans lining up on the other side: Would liberal voices really kill health care reform when it comes up for a vote in Congress?

We’ve seen shrinking gangs and lonely press conferences, angry Democrats and Republicans, and one highly anticipated bill that isn’t going to change everything.

Here’s one other change worth noting: In the time it’s taken to work through health care reform, Republicans have learned to work as an opposition party. And that means, well, opposition.

Between ACORN and czars, they’ve found some messaging to push — and the missile-defense shift being announced Thursday figures to put some foreign-policy meat on those bones.

Maybe this is where Democrats needed to be, ultimately, to find some clarity on health care.

In the meantime, for all its many critics, the Baucus plan is what’s closest to the vision articulated by President Obama last week. Baucus was alone at the podium Wednesday, though many of the key folks with seats around the table have chosen not to give them up just yet.

“On the surface, it appears that no one is happy with Sen. Max Baucus (D-Mont.) — and that may be the best news President Obama has had in months,” Ceci Connolly reports in The Washington Post. “behind the rhetorical fireworks was a sense that the fragile coalition of major industry leaders and interest groups central to refashioning the nation’s $2.5 trillion health-care system remains intact. As they scoured the 223-page document, many of the most influential players found elements to dislike, but not necessarily reasons to kill the effort. Most enticing was the prospect of 30 million new customers.”

“There will be a lot of horse-trading, and it will not be pretty,” said one White House aide.

“The Baucus bill moves us closer to consensus,” former Sen. Tom Daschle tells Bloomberg News, per Kristin Jensen and Laura Litvan. Daschle, D-S.D., said the plan has “a lot of issues” yet offers “the opportunity to draw moderate Democratic support and perhaps even at the end of the day one or two Republicans.”

There may be fewer partners to trade with: “Republicans said his plan spent too much on insurance subsidies for low-income people, Democrats said it did not spend enough,” Lisa Wangsness writes in The Boston Globe. “Lawmakers in both parties said it was unaffordable, particularly for low- and middle-income people. Republican leaders, who have panned the Democrats’ plans from the start, pronounced it ‘dead on arrival.’ ”

“[Baucus] stood, looking lonely, in front of a backdrop that could have accommodated his entire so-called Gang of Six — if, that is, the talks had worked out. As it was, he showed up as a Gang of One,” Salon’s Mike Madden writes.

“The plan faces two instant hurdles: House Democratic leaders prefer an income tax surcharge on wealthy taxpayers, which would raise an estimated $544 billion over 10 years, and the House legislation has considerably less in Medicare savings,” McClatchy’s David Lightman reports. “In addition, Republicans will oppose almost any tax increase. Senate Republican leader Mitch McConnell of Kentucky quickly set the tone, saying the Baucus bill would ‘put massive new tax burdens on families and individuals.’ ”

“Changes intended to bring the centrists and conservatives in line could drive away progressives, while any move to draw in the more liberal elements could end up alienating the centrists. There is little margin for error,” Carl Hulse writes in The New York Times.

This is all that’s left? “The major new health-care overhaul bill that landed in the Senate on Wednesday sets the lines for a fall showdown over taxes, spending and coverage for millions of uninsured Americans,” The Wall Street Journal’s Greg Hitt, Janet Adamy and Jonathan Weisman report.

“I’m gettable but not there yet,” Sen. Ron Wyden, D-Ore., tells ABC’s George Stephanopoulos. He reports: “Wyden’s also expecting a ‘pretty rollicking’ meeting when Senate Dems caucus behind closed doors [Thursday]. Talk about understatement.”

Sen. Jay Rockefeller, D-W.Va.: “I have made clear I cannot vote for this bill in its current form.”

Starting points? “While this draft bill is a good starting point, it needs improvement before it will work for Nevada,” said Senate Majority Leader Harry Reid, D-Nev., per the Las Vegas Sun’s Lisa Mascaro.

The messaging memo, from James Carville and Stan Greenberg’s Democracy Corps: “Be on the offensive . . . Reject the status quo . . . Reassure . . . Explain specifically how the Obama plan works to give peace of mind and keep costs down.”

Would you move to the center, or to the left? “Baucus has no Republican votes for his legislation,” Ezra Klein writes at his Washington Post blog. “Conceding so much in return for so little isn’t just bad politics — it’s bad precedent. Why should Republicans sign onto Baucus’s proposals in the future if they can simply adjust the bill to their liking and then withhold their support at the end?”

Markos Moulitsas, on his Twitter page: “Only Democrats ‘compromise’ and get zero in return.”

Is it time for Democrats to be Republicans? “Whatever makes it to the Senate floor, it would be exhilarating to see Democrats present a united front and get it done. It is so rare that they show the kind of discipline that Republicans are famous for,” Jill Lawrence writes for Politics Daily. “Simply put, stick together in the crunch. It’ll pay off for the party and the country.”

Too late for that, writes Karl Rove, in his Wall Street Journal column: “It’s now becoming clear that Mr. Obama’s speech failed to rally voters and failed to inspire Democrats to follow their president’s lead. And while the fissures are small now (Mr. Dean’s worry seems to be that triggers would give too much away to Republicans), they will likely widen unless the president shows that his policies will do what his campaign did expand the pool of voters in favor of Democrats.”

(Seriously?) “Mr. Obama will appear on five news shows on Sunday. His time might be better spent praying for more public support,” Rove writes.

From the left: MoveOn.org calls the Baucus draft a “dream come true for the insurance industry.” Health Care for America Now says the bill “gift to the insurance industry that fails to meet the most basic promise of health care reform.”

Back on the road (though barely outside the Beltway) for the president Thursday. He holds “a rally on health insurance reform” at 11:40 am ET at the Comcast Center at the University of Maryland in College Park. “The White House will stream the rally live through an innovative Facebook application that will allow students nationwide to both watch the event and discuss it with others as it is happening.”

New weapon in health care wars: “Pushing for health care reform didn’t turn out so well for the last first lady in a Democratic White House. But with a retooled staff, and an under-the-radar summer behind her, Michelle Obama plans a packed autumn that aides say will include a ‘dedicated focus’ on health insurance reform — the same issue that brought such headaches to Hillary Clinton,” Politico’s Nia-Malika Henderson reports.

What the White House really doesn’t want to be talking about (but can’t avoid, thanks to former President Jimmy Carter):

“President Obama has long suggested that he would like to move beyond race. The question now is whether the country will let him,” Jeff Zeleny and Jim Rutenberg report in The New York Times.

Said senior adviser and longtime friend Valerie Jarrett: “He could probably give a very powerful speech on race, just as he did in the course of the campaign. . . . But right now his top domestic priority is health care reform. It’s difficult, challenging and complicated. And if he leads by example, our country will be far better off.”

“Barack Obama, the man who broke through America’s final racial barrier to become the nation’s first black president, has been unable to escape the country’s awkward dialogue about race during his first months in office, a conundrum that has been imposed by members of the political left and right who increasingly appear to feel comfortable using the race card to score political points,” Joseph Curl reports in the Washington Times.

“At the White House, the official line is: Race issue? What race issue?” Anne Kornblut and Krissah Williams write in The Washington Post. “On Wednesday, [Press Secretary Robert] Gibbs told reporters that Carter’s remarks did not merit a broader discussion about why protesters had grown so hostile toward the nation’s first African American president. And in the Oval Office, Obama declined to respond to a reporter’s question about Carter’s comments.”

Firing back: “There is not a racist bone in my dad’s body,” said Alan Wilson, who is running for attorney general of South Carolina, told the New York Daily News’ Brian Kates. “He doesn’t even laugh at distasteful jokes.”

Another dose of Joe Wilson fallout: “Rep. Luis Gutierrez, D-Ill., hammered President Obama on Wednesday for announcing over the weekend that he would not only block health care subsidies from flowing to undocumented workers, he would also block them from using their own money to purchase health coverage through the proposed health insurance exchange,” ABC’s Teddy Davis reports.

ACORN’s falling: “In the wake of a series of embarrassing hidden-camera exposes and mounting congressional pressure to cut off its federal funding, ACORN announced on Wednesday it would immediately stop accepting new clients at its offices across the country,” Politico’s Michael Falcone reports.

“I must say, on behalf of ACORN’s Board and our Advisory Council, that we will go to whatever lengths necessary to reestablish the public trust,” said ACORN CEO Bertha Lewis, per ABC’s Jake Tapper.

New on ACORN Thursday, a research document from House Minority Leader John Boehner’s office, asking whether Democrats will support efforts to deny funding for ACORN: “ACORN’S ENABLERS: HOUSE DEMOCRATS’ LENGTHY RECORD OF PROTECTING A TROUBLED ORGANIZATION.”

New on Czars Thursday, from the Democratic National Committee: a Web video, featuring Glenn Beck, counting up President Bush’s czars. (It’s called “Dancing with the Czars.”)

Reports ABC’s Jake Tapper: “At the AFL-CIO convention in Pittsburgh, President Obama referred to what has been called in the past a Manufacturing Czar as his ‘new point person to jumpstart American manufacturing.’ The presidential change in diction — from joking about it to almost pulling a muscle to avoid using the term, in just one Summer — morphed into White House combativeness today.”

Driving the foreign policy day: “The Czech prime minister says President Barack Obama has told him that the U.S. is abandoning plans to put a missile shield in the Czech Republic and Poland,” per the Associated Press. “Czech Premier Jan Fischer told reporters in Prague on Thursday that Obama phoned him to say that Washington has decided to scrap the plan that had deeply angered Russia. Fischer says Obama confirmed that Washington no longer intends to put 10 interceptor missiles in Poland and a radar system in the Czech Republic.”

Defense Secretary Robert Gates briefs on the strategic shift at 10:30 am ET. (And the race is already on to define this as more about security or appeasement.)

“Among the options being considered are the construction of missile launching pads or radar installations in Turkey or the Balkans, while developing land-based versions of the Aegis SM-3, a ship-based anti-missile system,” per The New York Times’ Judy Dempsey and Nicholas Kulish. “The changes, they said, would be intended not to mollify Russia, but to adjust to what they see as an accelerating threat from shorter-range Iranian missiles.”

Senator Dukakis? The Boston Globe’s Matt Viser reports that former Gov. Michael Dukakis, D-Mass., was uncharacteristically silent when asked about whether he’d be filling Ted Kennedy’s seat on an interim basis: “I’m not commenting,” he said. “Why not? ‘Cause I don’t want to comment.”

“Meanwhile, the Legislature’s Joint Committee on Election Law passed the bill last night by an 11-to-6 vote, sending it to the House floor today with a favorable recommendation,” Viser reports.

New leadership for Big Labor: “Union members say Richard L. Trumka will bring excitement and a new, more aggressive approach to broaden the labor movement and make it more relevant to workers young and old as the new president of the nation’s largest labor federation,” Joe Napsha reports for the Pittsburgh Tribune-Review. ” Trumka, 60, a third-generation coal miner from Nemacolin in Greene County and the former president of the United Mine Workers, was elected Wednesday by 700 delegates to the AFL-CIO’s annual convention at the David L. Lawrence Convention Center, Downtown.”

From the fact-check desk, The Wall Street Journal’s Jonathan Weisman: “President Barack Obama, seeking to make a case for health-insurance regulation, told a poignant story to a joint session of Congress last week. An Illinois man getting chemotherapy was dropped from his insurance plan when his insurer discovered an unreported gallstone the patient hadn’t known about. ‘They delayed his treatment, and he died because of it,’ the president said in the nationally televised address.”

“In fact, the man, Otto S. Raddatz, didn’t die because the insurance company rescinded his coverage once he became ill, an act known as recission. . . . Obama aides say the president got the essence of the story correct. Mr. Raddatz was dropped from his insurance plan weeks before a scheduled stem-cell transplant.”

From the investigative annals: “The Justice Department is investigating whether former Interior Secretary Gale A. Norton illegally used her position to benefit Royal Dutch Shell PLC, the company that later hired her, according to officials in federal law enforcement and the Interior Department,” Jim Tankersley and Josh Meyer report in the Los Angeles Times. “The criminal investigation centers on the Interior Department’s 2006 decision to award three lucrative oil shale leases on federal land in Colorado to a Shell subsidiary. Over the years it would take to extract the oil, according to calculations from Shell and a Rand Corp. expert, the deal could net the company hundreds of billions of dollars.”

From former Vice President Dick Cheney’s office Thursday: “Former Vice President Cheney went to The George Washington University Hospital this morning for elective surgery to deal with lumbar spinal stenosis. Dr. Anthony Caputy, Chairman of the Department of Neurosurgery, will perform the operation.”

The Kicker:

“Use that picture properly.” — First Lady Michelle Obama, fearing a YouTube moment when her husband picked up a foam sword in an attempt to get his wife to spar with him.

“Washington needs fresh faces, it needs some new blood.” — Pro wrestling executive Linda McMahon, announcing her Senate candidacy in Connecticut.

For up-to-the-minute political updates check out The Note’s blog . . . all day every day.

ABC News' Kristina Wong reports: This Sunday, White House advisers and lawmakers previewed a big week ahead for President Obama, who will attempt to take the lead on health care reform, and regain momentum after a summer marked by heated, partisan and confusing debate.

White House Press Secretary Robert Gibbs and senior White House adviser David Axelrod sounded confident ahead of Obama?s big speech to Congress this Wednesday evening, to be televised live to the nation. In the speech, they said, Americans would hear exactly Obama stands on health care reform.

?They'll leave that speech knowing exactly where the president stands, exactly what he thinks we have to do to get health care reform done this year,? Gibbs said on ABC News? ?This Week.?

The president has an opportunity on Wednesday to speak to the nation and the Congress on this,? said Axelrod on NBC?s ?Meet the Press.? ?We've been through a long debate now.All the ideas are on the table.It's time to bring the strands together and get the job done for the American people here.?

Liberals, Conservatives Unwilling to Back Down Over Public Option

So far, consensus has been difficult to achieve, with lawmakers divided on multiple party and intraparty fault lines over the best way to lower private insurance costs, and how to pay for health care reform in light of an economic recession and a skyrocketing budget deficit.

The president is stuck in the middle, between Senate Republicans that could block much of what the President wants, and liberal supporters who want it all. Republicans reject the president?s idea to create a the public option ? a government-run insurance exchange intended to compete with and lower the costs of private insurance. House democrats overwhelmingly favor the idea. Progressive democrats say they will not pass a bill without it.

?We support what the president has said all along he'd like to see, and that is a robust public option. He campaigned on it. He continues to talk about his support for it. And we're going to stand behind him. Nancy Pelosi has said that nothing is going to pass that floor without a public option,? said Rep. Maxine Waters, D-Calif., on ABC.

Howard Dean,former Democratic National Party chair said compromise on the public option is unacceptable.

?If, for whatever reason, he chooses to go in a different direction [than the public option], then I'd scale back the bill. I wouldn't spend 5 cents on it,? Dean said on Fox. ?I'm very hopeful that he will stick to his guns and that we'll have the reform we were promised in the campaign.?

Despite the White House toning down insistence on the public option in recent weeks, Gibbs said the president would continue to support a public option in his speech Wednesday.

?He will talk about the public option and why he believes and continues to believe that it is a valuable component of providing choice and competition, it helps individuals and small businesses, at the same time provides a check on insurance companies so they don't dominate the market,? Gibbs said.

Critics Says Public Option Alternatives Won?t Work

Lawmakers have floated compromise alternatives to the public-option, such as an insurance co-op ? a group of private insurers that would be set up by the government, but controlled by its members. But Gov. Tim Pawlenty, republican governor from Minnesota and oft-speculated 2012 presidential candidate, said a co-op was not a viable solution.

?To say that that is the solution, I think, defies what we know about the experience with co-ops already.It hasn't substantially altered the trajectory of health care costs,? Pawlenty said on CNN?s ?State of the Union.?

Another alternative to the public option, recommended by a bipartisan group of former lawmakers including former republican Sen. Bob Dole, is the idea of a public-option trigger that would give private insurers time to reform the industry and lower costs, but trigger the public-option if they failed to do so by a deadline.

Sen. Ben Nelson, R-Neb., said he supported the idea.

?If there's going to be a public option, it has to be subject to a trigger, Nelson said on CNN. ?In other words, if somehow the private market doesn't respond the way that it's supposed to, then it would trigger a public option or a government-run option, but only as a fail-safe backstop to the process.?

However, Dean rejected the notion of postponing the public-option.

?The problem is it won't work. It doesn't add anything. If you're going to do that, just do the insurance reform,” Dean said on FOX. “Don't pretend you're doing reform.?

And Pawlenty rejected the idea of any type of public-option, now or in the future.

?The trigger option simply kicks the can down the road,? Pawlenty said. ?All it does is delays the inevitable, and for a lot of reasons, it's a bad idea. I think, if the Democrats embrace the public option, even in the form of the trigger, they're going to shoot themselves in the foot.”

Republicans Warn Against Using the Reconciliation Process

Despite these battles awaiting Congress when it returns from recess Monday, the president is determined toachieve health care reform this year,fueling speculation that with a large Democratic majority in the House, and a Democratic majority in the Senate, democrat lawmakers would resort to the budget reconciliation process, by which a bill could pass the House and Senate on an up-or-down vote, avoid a Senate filibuster, and require only a simple majority of 51 senators in order to pass.

Former democratic senate majority leader Tom Daschle said Congress should not rule out invoking the reconciliation process.

?If we can't do it any other way, we shouldn't be bound by this process. I think both parties have used it. We used it to pass a single most important health bill ever in the last 20 years, the Children's Health Insurance Plan. We used reconciliation to do that,? Daschle said on ABC.

?The Republicans tried to use it to pass the Alaskan National Wildlife Refuge,? Daschle continued. ?And they've used it for every tax cut so far. There's no question both Republicans and Democrats have used it in the past.?

But Sen. Alexander warned democrats of the consequences.

?One, it would create a bad health care bill because under the provisions in the rules, the parliamentarian would write the bill, so all the senators would be voting on are tax increases or Medicare cuts, and you wouldn't get to put in the bill things like pre-existing conditions or buying insurance across party lines.So it would be a bad bill,? said Alexander.

?Second, it would be thumbing your nose at the American people who have been trying to say to Washington for the last several months, ?Slow down.I mean, too many Washington takeovers, too much debt. You're meddling with my health care,?? Alexander sad. ?So thumbing their nose at the American people by ramming through a partisan bill would be the same thing as going to war without asking Congress' permission.You might technically be able to do it, but you'd pay a terrible price in the next election.”

Failed Health Care Reform Could Hurt Democrats

Some analysts are predicting democrats could lose up to 25 seats in the House if health care reform fails.

?Democrats are on a dangerous slide. And when we see this kind of sea change in public option take place, it should be a flashing warning sign,? David Wasserman, House editor of the Cook Political Report, said in an interview with ABC.

Indeed, since the beginning of the president?s push for health care reform, his popularity has dipped according to the daily Gallup polls, from a high of 68 percent early this year, to 50 percent last week.

Stuart Rothenberg, editor of the Rothenberg Political report, said health care reform was now critical for the president?s credibility.

?If he is perceived to fail on health care, it is going to raise significant questions about leadership, his leadership and really when you get down to it, that?s what the presidency is about,? Rothenberg said in an interview with ABC.

Still, democrats remain hopeful the president can recapture a largely-runaway debate over health care reform, and improve his standings by taking a strong lead over health care reform.

?I think he's got to stand up and lead and be strong,? said Dean. ?What people value more in a president than anything else is strength, and that's what we've got to see on this week.?

ABC News? David Kerley contributed to this report.

Paging the Obama Army — Take Two

ABC News’ Rick Klein reports:

While President Obama continues his foreign trip through the weekend, his so-called “army” of supporters will be running through a fairly important drill — on his top domestic priority.

On Saturday, Organizing for America — the arm of the Democratic National Committee charged with putting the Obama campaign’s supporters into action — is holding house parties across the country, in support of healthcare reform.

DNC officials are promising in the range of 2,500 events in all 50 states. They’re not getting into specifics about what kind of turnout they’re expecting, vowing only that the number will be in the “10s of thousands.”

“We simply can't wait any longer to act,” OFA Executive Director Mitch Stewart said in a statement.

This is the heralded “Obama army,” the 13 million-plus supporters on the old campaign e-mail lists that many observers thought had the potential to remake American politics.

It’s safe to say that hasn’t happened yet. The first OFA effort around a major piece of legislation — the president’s budget proposal — netted in the range of 200,000 pledges from supporters asking members of Congress for their support.

(This number was a bit embarrassing to organizers — in part because they initially claimed 642,000 pledges were delivered to Capitol Hill. It was later revealed that the pledges had been copied in triplicate, to deliver one to each pledgee’s House members and two senators.)

Democrats point out that it’s not fair to compare the number of pledges for a piece of legislation to the number of supporters for a political campaign. Indeed, there’s little really to compare it to, since this is something that’s never really been tried before.

In any event, this time around, organizers aren’t asking supporters for pledges. Instead, volunteers will share their stories about healthcare woes at house parties, and will watch a recorded video message from the president.

Then supporters will brainstorm how to spread the word. In some cases, according to a party official, they will make plans to call other supporters, to reactivate the old campaign network.

How will they fare? One early indication isn’t that promising. The video message from the president recorded to lobby support for the budget had nearly 500,000 views as of today, on the Organizing for America YouTube channel.

The message distributed last month to publicize Obama’s healthcare reform principles, meanwhile, had barely 100,000 views.