McCain to Aides on Palin Book: This Will Pass

ABC News' Kate Snow reports:

So what does John McCain really think of Palin's book?

Sources tell ABC that there was a conference call on Friday between McCain and many of his top former aides.

On the call, McCain essentially told them that he would prefer that they stay out of the Palin book coverage and not engage in a public debate with Palin. But he told also them he understood if they needed to refute factual errors or protect their own reputations.

Says one aide in the know: “He apologized to everyone on the call for people having to go through this. Said something like ‘You are all my dear friends. This will pass. It’ll pass faster if everyone will just stay out of it.’”

He talked about being proud of the campaign they ran and said he’s moved on, they’ve moved on and he was sorry that the aides were having to go through this.

McCain himself received a signed copy of Palin’s book on Friday. Aides say the Senator hasn’t actually spoken with Palin in months.

Peace Group: If Obama Deserves Prize He Will Stop ‘Surge’ in Afghanistan

ABC News' Teddy Davis reports:

Peace Action, a liberal anti-war group, has issued a statement saying that if President Obama deserves the Nobel Peace Prize he will stop the “surge” in Afghanistan.

“It is ironic that this award comes on the same day that the Wall Street Journal is reporting that the administration is considering sending as many as 60,000 more troops to Afghanistan,” said Peace Action's executive director Kevin Martin.

“President Obama needs to prove that he really is a force for peace. He can do that by refusing to put more troops in Afghanistan, and instead committing to a non-military solution that doesn't destabilize a nuclear-armed Pakistan like a surge would,” the statement continues.

The group adds that the president is moving in the right direction on
nuclear disarmament but hasn't done “nearly enough” yet to warrant a Nobel Prize.

While Obama is being criticized by Peace Action on theleft, he is also being pummeled from the right.

“This little man child who has not done diddly squat,” said Rush Limbaugh on hisFriday radio show. “He knows exactly why he was given this award … man of peace not to … take on Iran!”

ABC News' Steve Portnoy contributed to this report.

Hatch: Don’t Believe Republicans Will Support Obamacare

ABC News’ Rick Klein reports: The boldfaced GOP names being rolled out as supporters of President Obama’s health care reform efforts aren’t changing many minds among their counterparts on Capitol Hill.

On ABCNews.com’s “Top Line” today, Sen. Orrin Hatch, a leading Republican on the Senate Finance Committee, told us that he expects the support offered recently by Republicans such as Bill Frist, Tommy Thompson, and Arnold Schwarzenegger will evaporate as the final bill comes into view.

“I know that [Frist] believes that it should not be exactly the way the Democrats are coming up with it, and I don’t believe these other Republicans are going to be for it when they see the final bill that’s being written in the back rooms right now,” Hatch, R-Utah, told us. “But the Democrats do have the votes. They have 60 votes in the Senate, they’ve got a super-majority over in the House, and they can pass almost anything they want. But they’re going to have to live with what they do.”

Though the version of the bill set to be approved by the Finance Committee does not include a “public option” that would compete with private insurers, Hatch said it’s important for Republicans to realize that draft won’t represent the final version of the bill.

“The final bill’s being written right now in the White House, in dark rooms up here in the Capitol . . . and it’s being written by partisan Democrats,” he said. “And we’re just going to have to see how it turns out in the end. But that’s what’s really going to happen here.”

Hatch also attacked Democratic plans to cut Medicare as part of efforts to limit the program’s cost: “Medicare is facing $38 trillion in unfunded liability, so we’re going to take another half trillion dollars out of there? That’s nuts — that’s just nuts.”

On Afghanistan, he applauded Gen. Stanley McChrystal for advocating an Afghanistan policy that isn’t particularly popular in Democratic circles, and criticized the president for not making up his mind more quickly.

“I think we want straightforward language on what needs to be done over there, and McChrystal I think is just saying ‘Look, if you’re gonna put our young men and women at risk over here, we’ve got to have the right type of equipment, we’ve gotta have the right type of forces, we’ve got to have more support from back in the country, and it’s just a matter of fact,’ ” Hatch said.

“And it just seems like it’s taking a long time to make a decision that really ought to have been made a while back. And we’re putting — every day we’re putting a lot of these young people at risk, and we saw what happened last week.”

Click HERE to see the interview with Sen. Orrin Hatch.

Also today, we chatted with Republican strategist Kevin Madden, who said the administration’s handling of the Afghanistan debate is showing some presidential growing pains.

“What we’re seeing right now is a sort of snapshot of just how inexperienced this president is when it comes to managing a chain of command,” Madden said.

We also got Madden’s take on Rep. Mike Castle’s Senate bid in Delaware, the latest in the health care debate, and Levi Johnston’s latest star turn in … a pistachio ad.

Watch the discussion with Kevin Madden HERE.

Gov. O’Malley: Health Care Reform ‘Good for States’; Will Mean Paying More to Save in Long Run

ABC News’ Rick Klein reports: With Republican governors warning that President Obama’s health care plan will foist new costs on states, a leading Democratic governor is pushing back, arguing that health care reform will help states shoulder growing health costs in the long run.

“In fact, if we do not change the status quo, there is no way that any state in the union is going to be able to afford the constantly escalating 7, 8, 9 percent annual increases,” Gov. Martin O’Malley, D-Md., said today on ABCNews.com’s “Top Line.”

“We do not mind, for example — I would not mind as governor as I looked at the status quo, which would add $3.6 billion to our expenses for health care both on the Medicaid and employer’s side, if instead we only had to pay a billion additional over the next five years. One would have to say that that’s a step in the right direction. So really a lot of this is about cost avoidance.”

“We have to pay a little bit more in order to realize the long-term savings and bring down the cost curve. And that’s what the Obama administration is doing, and I’m very much encouraged by the direction in which it’s going,” O’Malley said.

“The truth of the matter is that both the Senate versions and the House versions are actually moving to something that’s good for states,” he added.

He also said “thank God” President Obama pressed to pass the stimulus package, arguing that the current unemployment race would be much worse without it.

“None of us likes 9.8 percent unemployment, but I will betcha that it would have been more like 16 or 17 percent had President Obama not acted,” he said. “So we are far better off because of the recovery and reinvestment dollars, despite all the people saying that we could not possibly spend it or apply it the right way. We are applying it. And the other good news is these dollars are creating new jobs that are actually going to benefit the economy for many years into the future, and it absolutely had to be done otherwise we would have headed into a depression.”

O’Malley, the vice chairman of the Democratic Governors Association, also said he would “guarantee” Democratic victories in the 2009 gubernatorial contests in Virginia and New Jersey. He said he doesn’t believe national Democrats or President Obama will be a drag on Democrats running for governor in 2009 or 2010.

“I don’t think it’s a matter of running away [from] or running to — I think it’s a matter of governing well,” O’Malley said. “People in their chief executives, especially when we’re facing unemployment and home disclosures, they want men and women that are going to make the tough decisions regardless of politics. And so governing well is really the best political advice that any of us incumbents had, and it’s the best advice that we can give to those that are challenging.”

ClickHERE tosee the full interview with Gov. Martin O’Malley.

We also chatted with veteran GOP pollster Frank Luntz about his new book, “What Americans Really Want…Really.” Watch that interview HERE.

Will Health Care Bill Raise Taxes? Finance Committee Debates

ABC News Z. Byron Wolf reports: Republicans on the Senate Finance Committee have taken delight this morning in pointing out that if Democrats can enact a health carereform bill that mandates Americans buy health insurance or pay a fine, they are, by definition, enacting a new tax that would break President Obama’s campaign pledge.

And they have taken the opportunity to read Sen. Obama’s pledge as he was running for the White House.

GOP Sen. Mike Crapo of Idaho, quoting Obama, said, “If you're a family making less than $250,000 a year, my plan will not raise your taxes — not your income taxes, not your payroll tax, not your capital gains tax.”

Sen. John Ensign of Nevada quoted a different riff on the same sentiment.

“But let me be perfectly clear,” he said, quoting candidate Obama. “If your family makes less than $250,000, you will not see your taxes increase one single dime.”

Granted, the penalty for not obtaining health insurance would be a penalty and could be avoided by purchasing insurance, but the effect of the bill– the government exacting a fee from uninsured families who make less than $250,000 — cannot be denied.

Republicans have offered several amendments today that would exempt families making less than $250,000 from the individual mandate to buy health insurance that is at the core of the reform bill.

“If we want to keep the president's promise of not raising taxes by one single dime,” said Ensign, the pledge should be a part of the reform bill.

“We need to settle down and find ways of living within the promises that have been made,” said Sen. Orrin Hatch, R-Utah.

The author of the bill, Max Baucus, D-Mont.,was frustrated at times, arguing against the amendments.

“If we're serious about this, we have to have shared responsibility,” Baucus said, raising his voice. He called the amendments not serious and designed simply to send a message by Republicans about taxes. They would have the effect, said Baucus, of gutting the provisions in the bill that keep health reform from adding to the deficit.

Baucus had lowered the penalty in half at the outset of the markup. A family of four making more than four times the poverty level– about $88,000– would have to pay a fine of $1,900 for not having insurance. The penalty is lower for families making less money.

Other amendments, also turned back, would have scaled back an excise tax Baucus would place on insurance companies that offer high-value “Cadillac” insurance plans. This is a back door to taxing the people who receive those plans, which often include no co-payment and are thought to drive up the cost of health care. And Republicans argued that insurance companies would simply pass the excise tax along to people, many of them union members, who receive the plans.

Baucus had raised the value of the plans that would be taxed at the outset of the markup and exempted many people in public service who receive them.

The amendments were repelled with largely party line votes. Sen. Blanche Lincoln, D-Ark., who faces a tough reelection fight in 2010, sided with Republicans.

This is the seventh day of the markup. Tomorrow, it will become the longest markup staffers on the committee can find.

There probably will not be a final vote on the health reform bill in the Senate Finance Committee until next week, when the CBO can come up with its best guess cost estimate. We are entering the final stretch of the amendment process, which Baucus predicted would end either late Thursday or Friday.

UPDATE: Eagle-eyed Republicans point out that Baucus’ own bill refers to the penalty for not having insurance under an individual mandate as an excise tax. Check out page 29 HERE.

White House Press Secretary RobertGibbstoday referred to the tax as more like a speeding ticket.

The IRS says an excise tax is what is paid on something like motor fuel.

But the point remains that health reform will leave people who make less than $250,000 paying a new tax to the government. It's clear that Democrats and the White House are comfortable living with that if they can enact health care reform.

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.

UPDATE: The Treasury Department said late Thursday that the Obama administration plans to terminate the Cash for Clunkers program on Monday at 8 p.m. ET, according to the Associated Press. “It's been a thrill to be part of the best economic news story in America,” Secretary Ray LaHood said in a statement. “Now we are working toward an orderly wind down of this very popular program.”

ABC News? Rick Klein reports:

The popular government ?Cash for Clunkers? program will be shut down before Labor Day, but every dealer who?s sold a vehicle under the program will be reimbursed as promised by the federal government, Transportation Secretary Ray LaHood said today.

On ABCNews.com?s ?Top Line,? LaHood said the department needs to wind down the program — which provides vouchers of up to $4,500 to those who trade in older cars for more fuel-efficient models — to be able to guarantee that all dealers will be repaid for the discounts they gave buyers.

?This is the most popular stimulus program going in America today. It?s put show rooms — it?s made show rooms look like Grand Central Station,? LaHood said. ?We have enough people on board now, processing paper to get the backlog cleared out. Every dealer who has a deal in the pipeline will be paid. We have the money to pay them and they will be paid and we?re committed to doing that.?

A formal announcement on how and when the program will end will come from the department later today.

?Look — we don?t want to run out of money. And I want to be able to substantiate what I?m saying here. If you do a deal with us, you submit the paperwork, you will be paid,? LaHood said.

?I?m telling you all and everybody that I can talk to: They will be paid. They?re going to get their money,? he added.

The program was authorized to last through October, and LaHood himself had said an infusion of $2 billion in additional funds should have been enough to keep the program on track through Labor Day.

But the entire $3 billion allocated by Congress for the program is now in danger of running out, with well more than 450,000 claims already having been submitted to the government. The Obama administration has indicated that it will not seek a third round of funding.

Car dealers have expressed frustration with the slow pace in processing reimbursements, and some have even said they aren?t participating in the program any longer because of fear that they won?t get the money they?ve been promised by the federal government.

LaHood said those concerns are unfounded — and pushed back at suggestions that his department wasn?t prepared for the deluge of claims.

?Nothing went wrong. This is a wildly successful program! In four days, when we had a billion dollars, we sold 250,000 cars. Now who?s to say that?s not successful?? he said. ?That?s loans that have gone out to credit unions and banks and salesmen that are making commissions, and it?s the car manufacturers particularly — GM that?s saying they?re going to call back people to make more cars. This is a win-win for people all over America. And for the economy.

LaHood also talked about a summit he?s organizing to find ways to ban texting while driving.

?What I support is the elimination of texting while driving. If it were up to me and I could wave a magic wand — and I can?t — that?s what I do, that?s why we?re having the summit. So we can explore all of these ideas, some that have been introduced as legislation, others that have been talked about, but we should not allow people to text while they drive or allow them to be on a cell phone while they — this is a distraction that has caused accidents, caused fatalities. We?re in the safety business and we?re going to really be about very strong safety measures.?

(LaHood also guaranteed that he won?t update his Fast Lane blog from behind the wheel.)

The secretary also said a Transportation Department inquiry into an incident where passengers on an ExpressJet plane were held on a runway overnight will wrap up tomorrow.

?This is an untenable situation. All of us that fly don?t want to get stuck overnight and into the morning on an airplane. Some measures were taken but look, we?ll have a lot more to say about this in the next day or so,? he said.

You can watch the full interview with LaHood HERE.

Also today, we chatted with Sam Youngman, a White House correspondent for The Hill, about President Obama?s attempt at energizing his campaign army,Sen. Ted Kennedy?s extraordinary letter to state leaders about his Senate seat, and the possibilities of political reconciliation for Sen. John Ensign, R-Nev. (Youngman, a die-hard University of Kentucky fan, even slipped in a dig at Louisville coach Rick Pitino.)

To check out our discussion with Youngman, click HERE.

UPDATE: The Transportation Department announced this afternoon that the program will be cut off Monday evening, August 24, as of 8 pm ET.

?This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work,? LaHood said in a statement.

UPDATE: A senior administration official told reporters this afternoon the Cash for Clunkers program was ?an overwhelming, overnight success? that has driven ?positive outcomes across the industry.? But there are currently no plans for an extension or another installment.

?Right now we are focused on winding down the program in an orderly way, providing a soft landing and getting the applications processed and the dealers paid. There?s no plan to seek additional funding to have an additional extension of the program,? the senior official said in a conference call after the Transportation Department announcement.

The administration?s goal now is ?to provide a soft landing for consumers and for dealers and ensure the program ends in a successful way.?

This official said there were no worries that the program would be overwhelmed by a surge in demand between now and Monday night, as consumer race to get in on the program before it closes, and they are
confident that their economic projections will allow the program to operate through 8pm on Monday in an orderly way.

In “major” speech Clinton will warn Iran about engagement timeline

ABC News' Kirit Radia reports:

Secretary of State Hillary Clinton will deliver what her aides are touting as a “major” foreign policy address this afternoon, a day before she leaves on her first foreign trip since breaking her elbow in a fall last month.

Some view the speech as Clinton's attempt to “elbow” her way back into the administration's foreign policy limelight. The injury sidelined her for much of the past month, causing her to cancel trips and meetings and miss President Obama's recent trip to Russia, Italy, and Ghana.

The speech is likely to focus on the “big picture” foreign policy approach, according to State Department officials.

According to excerpts of her remarks provided this morning, Clinton will hold the door open for talks with Iran despite Tehran's crackdown on political protestors following last month's election. But, she will warn Iran the offer will not be on the table for ever.

Clinton will call the political crackdown in Iran “deplorable and unacceptable” but adds that “We remain ready to engage with Iran.”

“The opportunity will not remain open indefinitely,” Clinton will say, though the excerpts do not define how long the Obama administration will keep its hand extended to Iran.

Steele: Palin ‘Will Be Helpful’ in ’09 Gov’s Races

ABC News' Rick Klein reports: RepublicanNational CommitteeChairman Michael Steele tonight said he plans to get in touch with Alaska Gov. Sarah Palin soon — and indicated that he wants her help in the off-year gubernatorial races in New Jersey and Virginia.

“I plan on talking to Gov. Palin very soon,” Steele said in a written statement. “She is an important and galvanizing voice in the Republican Party. I believe she will be very helpful to the party this year as we wage critical campaigns in Virginia and New Jersey. I am certain this has been a difficult decision for her to step down as Alaska's governor. She has been a good governor for her state and I wish her and the Palin family the best during this transition.”

Adviser: Palin Will Be ‘Friend and Force’ for Other Republicans

ABC News’ Rick Klein Reports: Fred Malek, a veteran Republican operative and a key political adviser to Gov. Sarah Palin, tells ABC News that Palin intends to continue to be helpful to other Republicans – and is leaving her political options open even with today’s announcement.

“She’s not going to go hide in a cave,” Malek said in a telephone interview. “She’ll continue to be a major friend and force for Republican figures in this country.”

Malek said Palin is not ruling out a return to politics, though she has no plans on the horizon to seek another office. He said he expects that she’ll raise money for other Republican candidates in the months and years to come.